Q: Hi Gerald, I need to find a good contractor to do some property renovations. The last time I hired a contractor, he took forever to do the work and never finished even though we paid him in full. I’d do the work myself, but with our new baby and the increased hours I have to work on my new job, I just don’t have the time. What should I do?Steve, Hartford, Connecticut.
Gerald: Hi Steve, first of all, don’t beat yourself up about what happened with the last contractor you hired—it’s water under the bridge and is something you can learn from. We all make mistakes and unfortunately even the most seasoned real estate investors have had bad experiences with contractors—I certainly have. There are some things that you can do to prevent what happened from happening again. For any job you hire a contractor for, you should have a detailed scope of work, a payment schedule tied directly to completion of specific milestones and a timetable for completion with penalties for non-weather-related delays. I normally ask a contractor how long a job will take him and use his answer to come up with the timetable. You should do all your negotiating before you sign a contract, pay any money or allow your contractor to begin work. Another key is to make sure your contractor’s work stays ahead of your payments so that if for some reason he stops working you owe him money not the other way around where you’ve paid him and he owes you labor. In my personalized one-on-one coaching program, I go into even more detail about the contractor scope of work, timetable and payment schedule and give helpful tips on negotiating with contractors.
Good luck, Steve.