How Much do you pay a contractor

[Oscar Moreno]

I am fairly new to the world of real estate and I am still trying to learn the basics on how to start a house flip! How do you go about paying a contractor? If I do a rehab of $30,000 does the contractor take a percentage of that $30,000? And should that percentage be including in my total rehab? 

[Jeff C.]

Originally posted by @Spencer Cornelia:

I'm in the process of completing my first two flips at the moment.

Contractor 1: he buys majority of small material items (I bought floors, cabinets, appliances), does the work, then I use the draw money from HML to pay him.

Contractor 2: he wants $15k upfront for labor then I cover all material costs.

I'm new to this so I operated on their terms.  With flipping, always estimate that there will be more expenses than expected.

 I would absolutely never hand any contractor $15k for services not yet rendered. Recipe for disaster.