Replace or motivate a contractor?

11 Replies

I have an extremely complicated, difficult and large project of restoring a 1900's duplex.  It has been gutted to the bones and needed significant structural repairs.  It needed the center beam running under the party wall to be replaced and the roof was incorrectly built.  It was originally a slant roof, but along the way they decided to get more room and built a hip roof on top of the old wall of the slant roof.  The roof repair is significant and involved due to the way they added the hip roof.  Several new supports need to be added and all the floor joist needed to be upgraded from the orignial 2x4's in order to safely use this space.  The property was acquired for such a low price it justified these repairs.  The contractor I eventually found via another investor contact.  He is knowledgeable and definitely competent however...prior to his working on my project he came with financial baggage.  He also is a poor estimator on both the contract price and time.  He gives bids that are too low but will stick to his word and complete the work.  This causes a majority of his financial issues as his contracts exceed his original time frame then he loose money.  I have additionally compensated him in some of these cases on my project to make it more fair for him.  

He eventually completed the 40' long steel beam repair and lifted the house 4+ inches back into place.  It is amazing and perfectly done! He then started on the attic framing, truck issues sprinkled with these financial difficulties sent him off looking for other sources of income.  He would find hopeful in-out work that was always more complicated and set my project back weeks.  Finding another contractor able to complete the complicated attic repair at this point would be difficult and I have no other leads and not sure even where to find such a contractor. My question is does anyone have suggestions on where to look for a good structural framing contractor? or is there a way I can keep my financially burdened contractor on my project and incent him to not take any other projects until mine is complete?  The original contract date was not upheld due to his poor estimating skills and transportation issues.  He is still committed and comes to work but keeps taking other jobs to supplement which always end in setting him back even further and delaying my project.  I can't move on until this framing is done so I'm a bit stuck.  Any suggestions as to what to do to keep my project moving would be appreciated.   

@Grant Liddle

Can you pay him more and get him to roll through the project quicker?

Or, can you have an honest conversation with him about bringing someone else in to handle a chunk of it, to let him move on for a stretch?

The other thing I think of when reading this post, is - based on what you're describing I'm wondering if engineering may have (or might still) save you time/effort/money in the whole scheme of things.  If you get a good set of plans to build from, you can get just about any with a little construction experience to build it for you.  

@Grant Liddle I have been in a situation like yours before; had a great finish carpenter restoring my 1921 craftsman who happened to have a little drinking problem. Because he was a nice guy and an awesome carpenter I kept him on my job even though he would dissapear for weeks on end and totaled 4 trucks in the two year span I have known him.

It ended up costing me both financially and strained my marriage. Being in the business of charity may feel good, but can end up having negative effects

Maybe offer him a certain bonus if he can work only on your attic and complete it by a certain date?   Just tell him you understand that he is getting other supplemental jobs to help his finances, but you are willing to pay him a bonus of XX if he finishes your job by YY and does not take any other work until after your job is done.  Explain that the delay is costing you money as you can not rent/resell or whatever until the house is done.

You will pay him more than you planned, but if he truly is under estimating and does good work, it will be less than the time lost finding another contractor or waiting on him.

And finding a good contractor who can list these old houses is someone you do not want to burn bridges with.  I  have had to do that on 3 of my houses and its hard to find someone who will want to work on these old houses and replace original 12' x 12' x very long boards!

Sounds like you're happy with quality of work but he under bid the job. You're going to lose this guy if you don't get him back to finish up. Call him and offer a decent size bonus If he finishes in a fixed time span. It'll cost you more to change contractors at this point. Also if you fire him you'll probably never get him to work for you again. 

@Grant Liddle As others have mentioned if you have faith that money will resolve he temporary issues enough to get him to show up, complete the job on YOUR timeline, and to a point that allows you to move on with the rest of the work with or without him, then do it. Otherwise, I count it up as a sunk cost and reach out to 5-10 structural engineers in the areas and ask who they've been supplying designs to. Call each of the referrals you get from the engineers and select the one that matches your timeline and financial goals the best. Of course, do all of the other due diligence work necessary to vet them, but that's the idea.

Then, once this project is over and regardless if you make a profit or not, make a promise to only use vetted contractors who've been doing it long enough to know their numbers AND "the" numbers for any given job. If this is an issue the contractor continually faces then history will repeat itself on your next project with him. Learn your lesson, get a handful of bids for the same scope of work, and don't go the guy who isn't able to to control both his time and resources.

@Jim Goebel  That was exactly one of my thoughts to do both of what you mentioned.  Both give him an incentive and see if I can bring in another carpenter that could work with him.  I need to get this project done asap.  Every day cuts away from making profit!

@Lynnette E. I agree also my fear that it is very difficult to find someone willing to work on repairing these old houses.  A lot of the structural repair tasks are grueling to say the least and most contractors are looking for easy reno finish work.  New construction dudes don't even want to look at something relatively minor like a joist replacement on an old house and therefore ask for way too much.  I feel as though I need to better manage how much he is paid to make sure it stays profitable for him and I get my tough task list completed.

@George W. Yes I'd rather not start over looking for someone at this point being I'm 2/3 done.  What would you suggest would be a large enough incentive/bonus?  The total for the attic work is around 12K? 

Id say maybe a 5-10% bonus at end of completion if he gets it done in a certian time period maybe $600-1,200 upon compl

@Parker Eberhard   Thanks for the reply, I definitely see what you are saying and I have developed a friendship with this contractor as well.  He does have a kind, helpful spirit but his finances are dragging him down in the same way a bad habit would.  I do think in this case if I do a better job of challenging him on time and price then this project can finish.  

@Gabriel Graumann   Thanks for the excellent suggestion of acquiring a structural contractor.  I will definitely utilize this approach in the future!  Also thanks for the excellent advice for moving forward.  

 At this point I'm 2/3 complete in the attic so I'm going to try to give him an incentive to complete the structure work. I'm planning to have a discussion with him on how this can be accomplished as quickly as possible with no interruption and if he can do it the bonus is his on top. I'm also planning to find another carpenter to work with him to help speed it up.  I'm loosing out on 3k+ of revenue every month it remains uncompleted so I'm considering offering 2K-3K bonus.  I estimate there is a months worth of structure work remaining.  Once the framing is done I already have 4 different teams ready for Plumbing, HVAC,Electric and drywall.  What's your thoughts?

I came here to suggest the bonuses for completing on time also. However, since this is a big project, I think you should give smaller bonuses along the way instead of one big one at the end. If he needs money NOW and the bonus comes at the end of a 2 month project, I doubt it will give him much motivation.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

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.

We hate spam just as much as you