I'm working through some cosmetic repairs and painting on a unit with a solid team that can do a good mix of stuff. They were eager to get started and have been very honest hard workers up until this point and they are doing great work.
We got started fairly quickly and while we discussed price, we didn't talk about when and how much they would get paid throughout the project.
My question for BP'ers:
1) Do you reimburse for materials right away if they purchase materials? I don't want to string these guys out with a huge line of credit, but I also want to incentivize them to find better deals on materials and wait until the end of the project if there are exchanges and returns.
2) Do you pay a certain percentage up front (20,30,40%) and then pay the rest at the end of the job? I'm curious to know how people have worked out their milestone payments with their contracting team.
I pay for materials direct to the supply houses and or Home Depot/lowes and have them delivered to the job site. I usually pay for everything including fasteners ect. I get better volume pricing and I absolutely refuse to pay markup when I could go off the shelf at Home Depot for a better price.
I then usually split payment half way through pay half and remainder when done. If it’s a longer job then maybe break it out over a few more payments.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Join the Largest Real Estate Investing Community
Basic membership is free, forever.