General Contractor Recommendations

16 Replies

I am looking for some really good general contractor recommendations that are used to working with investors, do good work, have reasonable rates, finish on time and budget, and don't require babysitting to keep the work moving and get it done. I know, a very tall order, but any recommendations would be appreciated. Thanks!

I’m seeking the same and can’t seem to get any recommendations! I have a front porch roof that needs repair and I need someone that won’t charge me an arm & a leg!

@Bob Prisco I am slowly building the team. I have all of my specialists figured out, plumber, electrician, HVAC, etc. It is that general contractor/carpenter and handyman person that proving to be more elusive. I have some potentials, but nobody I have actually tested on a project yet that I would feel solid recommending. I know this stuff takes time so eventually, it will get there.


@Michael Temple be very careful do not pay anyone a dime upfront. I am assuming Toledo ( maybe worse ) just just like Cleveland, loaded with low life contractors . It took me years to find guys that  say, " high high when I say jump :) . 

@Bob Prisco Totally agree. I might be willing to give a small amount upfront for materials if I know and have worked with the person before, but if it is a new person I don't know, not one cent upfront. I learned that lesson by listening to other investors including @Brandon Turner talk about his experience of being ripped off by a contractor.

However, in my case I am actually leaning towards purchasing all the materials myself for most jobs, certainly all the big stuff.

@Michael Temple   another scam , I have seen it all !! The materiel is delivered or they they pick it up , guess what , they sell it for 50% , pocket the money, This is the mindset of poor broke *** so called contractors, 

Good Luck

Originally posted by @Bob Prisco :


@Michael Temple be very careful do not pay anyone a dime upfront. I am assuming Toledo ( maybe worse ) just just like Cleveland, loaded with low life contractors . It took me years to find guys that  say, " high high when I say jump :) . 



 

Toledo is tough.

Probably the worst I've ever seen.

We have lost millions to contractors...

Sucks but it's the cost of doing business

Originally posted by @Bob Prisco :

@Engelo Rumora I will not touch Toledo or Youngstown. I maybe wrong but I have not seen any growth/ appreciation there in many years..... I will stick with what I know best, Cleveland,,,,, all the best Engelo 

 

There is no significant appreciation anywhere in the Midwest.

It's strictly a cashflow play.

Toledo has been great to our investors and us.

We are super grateful for the market.

Much success

@Bob Prisco @Michael Temple - Contractors are the limiting factor of Toledo real estate investments, I would suspect that Cleveland has the same arrangement. Deals are relatively simple, equity is basic and predicable with rehab, once good quality housing is offered for rent it rents very consistently. The fly in the ointment is you can't predict contractors!

The only way I have resolved this situation to any point of scaling (we renovate about ten properties a month as property managers) is to have a fully stocked 20,000 sqft warehouse complete with forklift where contractors only bid their labor pricing on jobs. I have employees whose sole job is to bid jobs with contractors, dole out supplies incrementally through out the project, check on the quality and progress, and approve the office to pay out draws on the job. The project management overhead is part of the price we pay to have success.

That said I have been completely unsuccessful in loaning out contractors to other investors. I've had angry members of my own REIA come to me with an attitude after "the guy you said was a good contractor screwed me". I now let everyone find their own contractors and draw their own conclusions - nothing burns my butt more than trying to be honestly helpful only to have it thrown back in my face like their inability to prevent scope creep and excess material consumption or payment-to-progress ratio is my fault.

I treat my contractors well, pay every time like I say my organization will, and identify issues early so I'm not telling a contractor of simple means they are about to take a multi-thousand dollar haircut. Have enough work to keep them exclusive and you have just solved the contractor problem...that's the only way I have figured it out.

@Engelo Rumora , any tweaks you'd advise?

@Andrew Fidler I am a small player so keeping a huge warehouse of supplies and an exclusively paid contracting team is not an option for me. I have to try and compete by doing good background checks, checking referrals, buying my own supplies, payments for work completed and verified, and aggressive project management.

@Bob Prisco I appreciate your comment about not paying for ANY supplies in advance. I always knew this was a potential scam area. In my business (digital marketing) I need to collect fees upfront to people I haven't worked with because my only recourse is a lawsuit to get my money after the fact. At least contractors have the option of filing a mechanics lien and while they may not get their money right then they can be assured that they will probably get paid someday if anyone ever wants to sell that property with a clean title. So I see your point completely about not paying anything in advance, including supplies.

@Michael Temple - The best advice I can give is stay connected with your potential contractors, let them know well in advance that you have a project coming up (pending eviction, new purchase closing, etc) and match the work needed to the best-priced and qualified contractor in your Rolodex. 

Since 2009 my success has been founded on the stability of taking calculated risks on new contractors, giving them each a small project to prove themselves, and if they can't perform then hand them a healthy check to move on and focus on improving your system to have better success next time. Some investors have no stomach for failure and even worst no patience for the hand holding and allowances that come with dealing with poverty...face it, if these guys could be part of the Carpenter's Union or employed by a custom home builder that's where they'd be and you'd never hear from them to start with. 

Still, their skills are much needed in the business and when you have people who can come in every day to work on a renovation you have half the battle already won. 

Major point here, I only got myself into small $5k renovations for most of my young real estate career...that way a contractor only has to show up for 14 days to get paid and for you to rent it and make money. I STILL have very very few contractors I would turn a $25k reno over to handle on their own...it's an elephant to eat and many people don't have the organizational skills to digest such a job. (They get scattered, inefficient, lose track of priority, and finally end up realizing they are losing money on the job which is the death-nell of the entire relationship) SO- stay away from the classic Toledo $10k house in a $50k neighborhood selling by a wholesaler for the low-low price of $22k that needs $30k in work.

Final major point...my success with contractors is because I have a 20 yr project management background paired with an MBA - my contractors are all part of my business and I understand their business very well. I make sure I tweak the stupid-low bids since they were mistakes to start with, make sure I have a tailgate conversation if I feel the contractor's crew is screwing them or they are making poor decisions, and ultimately understand WHY a job may be longer, harder, and ultimately more expensive so we can adjust the scope and pay. We make enough money on rental income that when an unforeseen issue is identified in a foreclosed home (novel concept, right) I roll with the punches and make sure the quality of work is maintained and the contractor is properly compensated...regardless of whether the cash is coming from my own portfolio or I get to call an owner with bad news.

Conclusion - you will have loyal contractors so long as you aren't trying to get over on them...they want regular work, drama-free bids, and want to be able to go home to their significant other confident the kids can be fed and bills paid. Ultimately what I'm telling you is you get to add their worries and aspirations to your plate as well as your own, that's the way I've found works best.

Originally posted by @Andrew Fidler :

@Bob Prisco @Michael Temple - Contractors are the limiting factor of Toledo real estate investments, I would suspect that Cleveland has the same arrangement. Deals are relatively simple, equity is basic and predicable with rehab, once good quality housing is offered for rent it rents very consistently. The fly in the ointment is you can't predict contractors!

The only way I have resolved this situation to any point of scaling (we renovate about ten properties a month as property managers) is to have a fully stocked 20,000 sqft warehouse complete with forklift where contractors only bid their labor pricing on jobs. I have employees whose sole job is to bid jobs with contractors, dole out supplies incrementally through out the project, check on the quality and progress, and approve the office to pay out draws on the job. The project management overhead is part of the price we pay to have success.

That said I have been completely unsuccessful in loaning out contractors to other investors. I've had angry members of my own REIA come to me with an attitude after "the guy you said was a good contractor screwed me". I now let everyone find their own contractors and draw their own conclusions - nothing burns my butt more than trying to be honestly helpful only to have it thrown back in my face like their inability to prevent scope creep and excess material consumption or payment-to-progress ratio is my fault.

I treat my contractors well, pay every time like I say my organization will, and identify issues early so I'm not telling a contractor of simple means they are about to take a multi-thousand dollar haircut. Have enough work to keep them exclusive and you have just solved the contractor problem...that's the only way I have figured it out.

@Engelo Rumora, any tweaks you'd advise?

Pretty much nailed it mate,

After many years, we have found a few "goodies" and we just stick with them.

Same as in-house maintenance personal for PM.

From day 1 of my business endeavors I rarely offer referrals as I don't want to put my name behind anyone.

Not just in Toledo but in general.

This approach has saved my reputation on many occasions.

Much success.

@Andrew Fidler well said. I too do not lend my crews to anyone. I PM about 250 props, 350 by years end . Doing also about 5- 10 jobs a month .  Thank goodness we are at 93% occupancy so just repairs daily . Continued  success, all the best to you 

@Andrew Fidler Great advice! I have a similar background, but a different industry. I run a digital marketing agency and have managed large web development projects and also have an MBA so I understand the general principles to apply here. What I don't have is the specific construction/remodel experience to know how much a job should cost or how long it should take to do or if they can cut corners in ways that will hurt me down the road that may not be apparent when I sign off on the job. That is some of what I am trying to learn. I also am pretty used to dealing with professionals that can write code. They may have their quirks but are generally solid people. I am not sure how well I will do trying to manage the guy that is doesn't show up for 10 days and when he does he is still half in the bag from his latest binge. That will definitely be the harder thing for me to personally figure out.

I figure I will stick to the people I know, try new contractors out with small jobs and try and manage it myself as best as I can until I learn more. Also, thanks to @Bob Prisco won't pay them a penny upfront.