Recently I have connected with a gentleman over BP and I have to say I am absolutely impressed by his vetting process and the questions he asks. He never asked a "silly" questions and only clarified when he needed to. I wish more people would clarify even if there is a hint of confusion so that way everyone is on the same page and no one feels like they are taking a hit from left field. I want to share some questions he asked and answer some of them and explain why they should be asked with every general contractor when you are selecting yours. Now if you do enough vetting and truly find someone you like I always say stick with them, pay them quickly on the agreed upon price and do not try to nickel and dime them to death. I also believe that you should work their pricing scheme into your calculation or communicate with them through the entire process from identifying the property, the initial walkthrough, the offer, and the acceptance. If your general contractor is annoyed by this then I say move on, there are plenty of fish in the sea.
1. Q: Are you licensed and insured?
A: Always make sure they are licensed and insured. In my market (Cincinnati), you do not need to be licensed as a GC unless you are dealing with plumbing, electrical, and HVAC. You have to be registered with the individual cities in order to apply for a permit. Always make sure the general contractor has a general liability policy as well so you are not held liable for any injuries or if the property is damaged.
2. Q: Do you carry a warranty with your work?
A: This one seems to be hit or miss if they do, at Gear'd Development we do back our work for 1 year but also offer a lifetime guaranty that a flipper can offer to the home purchasers and use it as a marketing tool. This lifetime guarantee is also great for investors doing the BRRRR method an can cut down on your maintenance costs.
3. Q: Do you have references?
A: We always offer references but the problem with this is it is very easy to offer you 3 references and they could be the only 3 references that liked the GC. We offer references but we also like to send you pictures of our work. We are constantly building our portfolio of work at different phases to show the quality of work being done.
4. Q: How long have you been in business?
A: this one is misleading because the company could be new but the contractor's experience could be 10 years. So I would always follow up with how long have you been doing this kind of work.
5. Q: Ask questions about every detail of the work such as who supplies materials, obtains permits, contacts the architects, and ensures the municipality in doing the inspections when needed.
A: This can all be handled by your GC and should be handled by your GC with emailing you updates every step of the way, if a week has gone by with no update then an email should be sent saying there is no update because that is still an update. The only thing a GC cannot handle is setting up draw inspections with lenders, that should be laid out in the beginning and the owner being notified when that draw inspections can take place, preferably scheduled 1 week ahead of when it should take place.
6. Q: What jobs are you working on currently that could affect mine?
A: A GC should never schedule a start date unless they are sure that they will have the manpower to take on all jobs. If they have a lot of jobs currently going they should be upfront that we plan in hiring in order to take this on sooner or they should schedule the remodel to take place when one of their jobs are complete. You should always have at least two people on your job on a daily bases.
7. Q: Do you provide lien waivers upon payment?
A: A GC should have no problem providing you a lien waiver upon receipt of payment for a set phase of the scope of work. For instance, the overall scope of work can be broken down into categories that are done on a weekly bases and when payment has been received a waiver is signed for the mini-scope of work. We actually have our own waiver we are able to provide flipped to send to them when payment is received.
8. Q: What ways do you communicate?
A: We have noticed email is the best way to communicate with a follow-up phone call. This way the main conversation is saved between both parties and can be referenced easily later. The follow-up phone call is to ensure there is no confusion and all questions are answered.
9. Q: Do you have an end of workday procedure?
A: This is very important because this can make or break a project. The end of workday procedure should include how to secure all materials, tools, and the premises. The premises should have all doors and windows locked, all flammable liquids stored in a fire approved container, the heat should be turned up to or down to the appropriate temperature, a light should be left on in at least one room to give the appearance the house is occupied.
10. Q: How will unexpected items be dealt with?
A: This is always a tricky thing to deal with, we like to call the owner and inform them of the issue and give them at least two options with the cost and the possible outcomes of the decisions. For example, you have termite damage after opening up a wall. The owner should be made aware of this issue and worked stopped on the area until the issue is dealt with. The owner is given the option of removing all the damaged wood with the given cost and added time letting them know there could be damage elsewhere and the house could fail inspection. The other option is to continue to open up walls around the affected area letting them know the additional cost and time frame and letting them know this is the best option to ensure the home passes inspection.
These are some of the big-ticket items that every GC should discuss with their client to ensure there is always a great working relationship. What questions do you ask you GC's? What do you wish your GC's would do differently?
