Updated over 5 years ago on . Most recent reply
Keeping GC accountable
Curious to see what systems & processes you use to keep your GC accountable during rehab phase.
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#5 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
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#5 Multi-Family and Apartment Investing Contributor
- Cincinnati, OH
@Liz Barcelos, hiring reputable contractors. Admittedly, this takes time and many projects, but nothing beats a contractor that actually WANTS to do a good job and cares about their reputation. You can typically find these contractors because they are the ones that are NOT available to start tomorrow. In general, I have found that the contractors that properly schedule their time at the front end, are also the ones that care about all aspects of the job.
Second, a fairly sizable part of the total cost should not be paid until everything is complete. And no draws based on percentage of work complete. Ideally at least half of total bill is due upon completion, but could be 1/3 depending on size and scope of job.
Other options, which can be combined with the other two, are sticks and carrots. Let the contractor create their timeline based on your scope. Then just like your budget, build in a buffer. If they are done on or before THEIR date, they get some bonus. But if they are not complete within a certain time after THEIR deadline, there are daily penalties. For example, if the contractor says it will take 4 weeks, their bonus is paid if they are done on or before 4 weeks and penalties start once 6 weeks has passed.