Contractor is a month past deadline and not even half way done with job. (Only demo..rough plumbing and some rough electrical).
On my last visit to the site about 10 days ago there wan no progress from my previous visit 2 weeks earlier.
Looking for suggestions on how to monitor his progress from a distance making sure he even get to the job-site.
I found the GC through the PM I hired with understanding they will check on him periodically which doesn't seem to happen as often I expected (what I discussed with them originally) and they obviously don't seem to have any influence on him sticking to schedule...contract state the deadline but doesn't specify what happen if job is not done by then.
I know renovation often go off schedule...at the same time it's hard to finish job without showing to the site!
This is my first out of state investment and had very hard time finding contractors...had about 10 contractor come and bid...some forgot to even show for their appointments...two where literally on drugs...one gave a bid 2x higher then the rest and equal to the cost of the house.
Any advise appreciated.
Learn from every single mistake and build a system so that mistake won’t happen again. I think it was a mistake to have 10 contractors bid the job. The economy is better than its ever been. Contractors are busy they don’t need you. May have bitten off more than you can chew with the rehab. Perhaps it’s not the contractors fault?
Why it not turn it into a flip instead of buy and hold and hope you don’t lose money in exchange for the learning experience?
Has to be some silver lining here!
We are having this issue with a local contractor, so it can still happen even if you are local. We had some shipping delays on some of the supplies, then storm damage, sub contractors getting sick, etc. So we are at the point where we are texting every morning asking for the daily plan and pictures of work that was completed the day before. It's annoying for everyone involved, but sometimes you just have to stay on people until the job is done. The quote "the squeaky wheel gets the oil" is the most accurate statement to describe this.
It's easy for a contractor to justify picking up an "easy money" job and putting yours on the back burner if they know you aren't checking up on it regularly. Once you put out a sense of urgency, things will start moving forward. I would start asking for regular progress reports from the contractor and/or PM. I would ask for updates at least 3 days a week, if not daily. Once you start pestering, it will be hard for them to justify why they are getting things completed for days/weeks at a time.
I would recommend a gps ankle monitor. :)
Maybe some jobsite web cams. Easy enough these days then you will be able to tell when people are coming and going. Many times we set them up on site for surveillance and to deter theft. So you can use that argument and then also use it for progress monitoring.
I've read the note about the PM recommending the contractor many times on BP. You need to make sure the PM and the contractor aren't in the game together playing you for a fool. Kick backs, fake work orders, fake work reports... all make the world go around.
@Emilio Ramirez Any brand in particular for the GPS ankle ;) ...I'm afraid I'll discover more then I actually want to know!
Will definitely research the camera option..at the moment there is no internet service..and since we got stuck at the electrical roughing no electricity either so some logistic hiccups but probably could figure something in this direction.
The PM and GC are somewhat closer then would be desirable but I don't feel that this is the issue...I am grateful the PM did bring this guy since the 9 I found by various means all didn't work out...this are busy time and so I is hard to find good contractors...I think he is just busy with other jobs and since he figured we missed our deadline (it is student housing) then he just work on my project on his off days from his other promised deadlines...I am an architect myself and paid very close attention to prevent change orders...contract some is agreed and so far he received about 40%.
@Cassi Justiz Will take your advise and start squick even more...it is against my nature...but I guess this is also a trait one need to learn to keep on track in this business.
Being an architect I made sure everything is lined up and so far happy to say none of the delays were caused by me...yet still 1 month behind with no end in sight...weather was part of his excuses so far...'was on another job...needed to close framing before rains'...etc..
@Lucas Carl Didn't bid all GCs at once...had 1 come during inspection period...come closing guy stopped returning calls...had 3 more which I found through my RE agent an Homeadvisor...all came very expensive...obviously since Homeadvisor is geared towards home buyers not investors...drove around town found 3 more GCs...two were on drugs...
Deal is good enough that even sitting empty for a semester I still feel it's a good buy and hold...I am more on the Rehab and Hold type...not really into flipping...which particularly with the market now seem to me like a game of hot potato!
Daily phone calls to both guys at the beginning and end of the day, everyday, asking what they're going to do and then if they did it and what they'll do tomorrow. Set deadlines for work to be completed.
No more payments until progress is made and significant work completed or all work completed. You say you've paid forty percent but they are not past half way? Are you in front on payments? Or have you over paid based on work that has been done?
You need to find out why they are not coming to the jobsite. Ultimately you may have to fire these guys if they won't perform.
@Emilio Ramirez The situation is somewhat complected as I think the GC took the job more as a favor to the PM then really needing me as a client...he is still getting a fair deal out of it as 4 other bids all came around the same number which was slightly higher (but still close to what I calculated)...He was behind on his previous commitments and started my job about 3-4 weeks later then promised...he then had to go close another full framing job before a week of rain hit the area...and then he relaxed while his plumber and electrician were taking their time doing the roughing...so he jumped to another job...Since the house is intended for student housing and by this stage we already missed fall semester...I guessed he relaxed even further.
Generally as an architect I always feel contractors are too optimistic...don't know if you agree as a GC yourself...and I guess one have to be to stay sane doing this.
Daily phones are not an option as the guy practically respond selectively to my phones...lets just say he is not going to be on my next job which is a pity since he does look like a good contractor (work wise)...unfortunately from 100 miles away good communication skills are a must.
Payment is an issue since I am doing it through the management company and they seem to have just approve his draws automatically...but I stopped them just before 2nd draw...firing him though is complected since I still don't have any other GC alternative...do you know any one in Allentown PA?
In my opinion, you always risk situations like this when you work on "smaller" projects. For these smaller projects, it becomes very difficult to make the numbers work to hire a proper GC/subcontractors. So you often end up with a construction crew that has serious deficiencies. That's typically where you would have to step in as the owner to offset such issues.
Unfortunately, I think you are in a tough spot. Based on everything you wrote, I don't think you have a very good fit. The GC might be good when it comes to workmanship but you might be their least valuable customer. It's virtually impossible for a contractor to aim for 100% satisfaction from their customers. So if you are on the bottom end of their priority, that's generally not a good place to be.
If you want the safest option, you may have to show up at the job site once or twice a week until the project is complete. It sucks but it is what it is. You may also want to start looking for an alternate GC since the GC may just decide to walk away from the job.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
Cameras are great but since you have no internet you can put Simply Safe alarm system. Each trade gets a different code. No internet needed just power. System is mobile so you can use at future jobs and no contracts. I started using this alarm on jobsite a years ago and has been helpful for both protecting property and tracking contractors.
Now when plumber says he has been there since 7am everyday u can tell.
As many pointed out in this market trades have more work than they can handle so any customer that they can lock in but can do work when they can they will.
So basically you need to do some damage control to finish this property by next semester then you can figure out new GC and systems for future work. First of all, I'm 88 miles from Allentown which is 1 hr 46 mins. If your 100 miles your 2-3 hours so you need to be there a couple time a week. Even if you just go there mid week and rent a room and stay for a couple days. If work won't allow you middle of the work you can go on weekends to inspect and make sure progress is being made. I would say to have a meeting with your GC and tell him what you want. I would start with daily pictures and reports about what has been completed and a game plan for the next day. If issues arise which cause delays it needs to be noted. Like some others have said on this thread if they aren't performing you'll have to fire them and move on. I would also not release draws until I knew for sure the work has been completed. Even if that means them waiting a couple days to get there money until you inspect.
You could also build a relationship with the neighbor or if its a college town find a college kid and offer him money to do daily checks at the site to make sure work is being completed. He can send pictures so you can see what is done and make sure it matches what your GC is telling you.
For future I would have someone there to inspect and let your contractor or GC know this person will be reporting to you on the progress so they know they are being watched. I'm sure the contractor assumes he can get away with it since your far away. I would try to renegotiate the contract and add a clause with per diem for everyday over scheduled completion date. Re-set the entire project like your starting new from today. Introduce your inspector and put some heat on the contractor so he knows hes being watched.
One thing I like to do for contractors I hire and work that I perform for homeowners is 80/20 rule. 20% of labor paid after 20% is completed and 80% paid at the end. I know this isnt always possible but I try to keep the larger payments for the end of the job so there is an incentive to finish. I know this isn't always possible but its just how I like to operate.
Moving forward I would try to structure the contract to have some penalties for delays and try to find someone closer to work site to be able to inspect regularly so you know your not getting stiffed.
@David London write into the contract if project isn’t completely finished by this day that the contractor will lose XXX every day past the completion date.
@David London I send pictures and updates daily when the owner isn't on site. In the future put that into the contract along with a penalty for being over schedule unless it is beyond their control (inspections, special order items showing up broken, etc.). If he still has 60% of the payment to go and hasn't shown up, you might be waiting longer than another semester because he found jobs that pay more and you're going to be waiting until those are finished now
@David London GC was hired by the PM, then you should hold the PM accountable. Tell PM it is unacceptable and that you are looking for a new PM that can handle managing rehab projects because your current PM clearly cannot. Remind PM how much lost income you have by missing the fall semester deadline - how much you are paying EACH DAY in holding costs. I'd be looking for a new PM right away. Also, don't sign PM contracts that don't allow you to cancel without 30 days notice.
Fire your PM
Fire your Contractor
Tell them under what circumstances you're firing them, and what circumstances you will keep working with them. If they don't meet your expectations, fire them. Don't be a liar. Follow through.
Then, deal with the pain of long distance investing. This doesn't get 'simpler' as you're going to have the same sorts of issues in the future with future PMs and contractors. It's the nature of the beast.
@Emilio Ramirez dang smart guy. You know what contractors are scared of.. camera monitoring on site.. can’t beat that. Also, I’ve heard that about PM coalitions too. Makes total sense they’d work it from both ends. I like the ankle tracker the best though
@David London Talk to your PM and the contractor and find out what is up. Explain that you know delays happen, but you need to be in the loop. Tell them that you need it done as you can't continue to have it vacant and need it rented.
Did you call 10 GC and only heard back from 1 or did you get quotes from all 10? The latter seems excessive. If it is the former, then there is that much business that contractors will be flaky because there are some who don't know what they are doing.
I can't even keep on track with my contractor working on my project 15 min from my house. Its easy, tell him that if it is not done by a specified date you are calling your attorney. Or you can be a real mean and report him to the state licensing commission for Negligence, violating the agreement and misrepresentation or whatever other BS you can come up with to nail him to the wall. These guys will bleed you dry its insane.
I just had a roofer do half my roof and leave the other half unfinished with large holes in it. One week he couldn't come because his truck broke down, next week it was the bad weather and every DAY it was some other BS. This past week we had perfect weather and he never showed. I told him very clear that if he does not finish the roof within the next two (2) days since we were having perfect weather in the forecast, I was going to call my attorney. He responded to me text immediately and finished the job within 48 Hours. Its unfortunate and makes me feel terrible that i have to do that but there is no other way. Contractors are NOT out for your best interest
@David London you’ve had some good input. This is for future GC planning. Ask for at least 5 references. Call all 5 and ask them if they have references for the GC you want to hire. You will always get the best references from the GC so you have to dig deeper to get the scoop on them. Also make sure they are licensed, insured, and bonded. Call state licensing agencies to see if any complaints have been filed against them. If someone is injured on your property while working it could be trouble for you. Demand copies of their workman’s comp policy and GL. Get named as additional insured and get a copy of their policy. Call their insurance carrier to confirm policies are paid up. Trust but verify.
You might contact wegolook.com. They will go to the property and take pictures. This would put the GC on notice he is being watched. Several on this thread mention setting up cameras but it’s hard to get them to work if you don’t have electricity.
On another note. I’m looking to invest in off-campus university housing and would like to hear what you’re planning. Please send me a way to connect so we can chat more. I’m on the West Coast.
Need to hire local owner rep and sometime architect offers these service
For the next job have a tight contract with no pay until the job or a portion of the job is done and pay in installments. Put a deadline and penalties if not completed in time.
Thanks to all for your great input and ideas.
GC now say new electrical inspection going to happen tomorrow..PM will be there as well...some salty Saturday morning texts managed to at least establish a new attainable milestone...have to wait and see.
@Chris K. Totally agree..for sure this GC was not the right fit unfortunately apart from another GC who's senior crew member was on opioids none of the other GCs even showed interest so the one I ended up with still seemed to be the better choice...I started this weekend combing through the License lookup website of the Pennsylvania attorney general making a list of local GCs to start lining up alternatives.
@Luciano A. Will surly look into the Simply Safe cameras...was actually hoping people will respond with specific brands and system they use..as both you and Chris point out as an investor it's hard to get the best of the best so we must compensate in other ways..Thanks.
@Justin Sullivan Unfortunately multiple trips are not an optioned...more then maxed my vacation days this year and working also in AEC have to tend to my boss clients here in NYC..some of which floated the idea of firing us for similar reasons :) ...the college kid is an idea I like a lot...especially since there are both architecture and civil engineering dept in that university...will make sure to give them a visit on my next visit.
@Jermell Shavers Do this clauses really work?...in my mind they will only scare contractors from even bid on the job...at least the kind of GCs that will even pick an investor reno...I preferred a more carrot approach which obviously didn't work.
@Bryan Devitt ...Are you open to bid projects in NE Pennsylavnia ;) weather is nicer...photos? the guy practically respond to 50% of my text messages...photos will be too much to ask...
@Caroline C. Agree on the no more then 30 days exit from management clause...I do have that...it is a fairly large PM company so my next move is to go and start contacting the higher levels within the company...it is also very hard to find PMs obviously...and yes I did start to work on the list again.
@Theresa Harris Had actually 10 guys to come and bid the job...over a period of 2 month...not all at once...the whole area is going through a little boom so it is a GC market unfortunately.
@Angelo Mart Noted..don't really want to go that way..but if worse come to worse then for sure...did started to document and organize my various communications with both GC and PM if I will have to go that route.
@Robert Saunders The wegolook option is great...Someone coming on my behalf to the place every 2-3 days should help make the pressure more real...similar to the student option mentioned above but require less leg work on my part. Will definitely do more due diligence next round...being very short on time I relied a bit too much on PM which didn't really worked for me...
@David London They have worked for me in the past and for GC I don’t trust. If they don’t want to bid then it’s probably for the best because they know they were trying to screw you. If he can do that and sign a contract then he is on the up and up my GC is a long term friend of mine so I don’t need to worry about him playing around. But a GC is only as good as you can trust him if he doesn’t finish on time he doesn’t get paid and is losing money if he quits sue him and report him to the licensing board. My friend knows we’re friends but when it’s time for business it’s time for business. Don’t be scared a GC won’t even bid on your Reno find someone else. Because at the end of the day it’s YOUR MONEY!! It’s not his and if he doesn’t fit into your plan then he isn’t for you. Imagine this was a hard money loan ?? You’d be losing your property by now. PM if you need to I’ll respond when I can
@David London i have managed rehabs etc from many states away/1500 miles. i require a lot of pictures. i also have a trusted third party (relative/friend) go and take pictures too. i also never front a contractor more than the cost of materials, and would do even less than that if the contractor is not well known to me. if work is not getting done then you’ve got to bring the hammer down. demand they get moving or cut your losses and find someone new.
happy to explain more. feel free to message me.
@David London What kind of contract did you have with this GC ?
You could try the dewalt mobile lock system. No cameras but uses cell service, motion sensors, doors sensors that would allow for tracking jobsite activity.