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McCallum Real Estate

 2515 Ashland Ave , IL. 60201

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How to cover your ASSets when dealing with Contractors!!!

January 4, 2017

 

I won't tell you my sad story (boo hoo, I'm an idiot), at least...not in this blog. I need some positivity right now and what better way to do so than teaching you from my errors.

 

Anyways, I made a mistake, I'm paying for it and I want you to NOT DO THE SAME. So, I thought I would very plainly spell out how NOT to lose you ASSets when dealing w junk contractors. These are just a few things you should think about before your next project.

 

1) Solicit bids only to licensed, insured, and bonded individuals - repairs are for handymen...THEY SHOULDN'T be your next GC, even if they just got their lic.

 

2) When soliciting bids get all bids for exact and well communicated work that is directly comparable to the next contractor's bid (sometimes a bid will be high by one contractor because they don't need the work, they have to come too far, or...they just don't want to deal with you...yeah...that's a thing)

 

3) PAY FOR THE PERMITS - believe it or not, get these done...especially if you are hiring individuals who have never done work for you...what am I saying... ALWAYS get permits. It seems as though it saves you a little upfront not to, but if you are doing a sizable project and your contractor bails, stinks, or just wants to do the minimum or is hungover and doesn't care...the city can help get it done right (at least testify on your behalf)

 

4) In the contract you have with the contractor (and you better have a contract finely detailing the job, even include that all work will be done to code (I had a contractor yell at me when I called his attention to his lack of performing a porch replacement to code specifications...and yes a permit was pulled, he bailed and is my most recent inspiration for this post)

 

5) Agree on a payment schedule, clearly define what 25% of a project is to completion or whatever other miles stone is set at the signing of the contract

 

6) DO NOT PAY A CONTRACTOR WITHOUT THEM SIGNING A LIEN WAIVER FOR EVERY

PAYMENT TO INCLUDE SUBS< AND SUPPLIERS...the latter bit me in the ASSests

 

7) Ensure your GC or Contractor has scheduled a permit inspection (depending on your city) as work is done and after work is completed (during won't work in a big city, but smaller towns or suburbs may get and extra look from the inspectors along the way and avoid a major headache at the end of the project)

 

8) Be present- either you, a partner, a project manager or your dad. Someone should check in here and there. I left town once for Christmas and I returned to find the project just as uncompleted as it was the day left. GC blamed the sub, sub blamed the GC...

 

9) DON'T TRUST YOUR GUT, OBEY YOUR GUT. There is a good excuse now for having one. Intuition isn't something we are born with, we see repeated patterns and formulate outcomes. What's that? This contractor was just as panicky about getting paid in advance as your buddy who used to need to borrow gas money in HS and would steal from his parents or any locker to get it? Hmmmm...contractors have to feed their families. Bad contractors can't balance their business budgets, or bid jobs, or have addictions they can't afford...be it ladies or liquor. A bad contractor can often give you a bad feeling. Don't be afraid to stop work and reanalyze the situation...especially if his grandmother died a third time on the project.

 

10) WHEN YOU FIND THE GOOD GUYS, KEEP THEM HAPPY - they feel the same way about you. Their are lame miserly investors who want to squeeze every dime from every lime, if you are a good investor, buy well, and trust your gut there is plenty money to be made by everyone. 

 

This is my list, and many of you may disagree, we all have different experiences.

 

I do not think all contractors are junk (like, my father in law and brother in law...they are amazing). I LOVE my good contractors. Where I invest now I just haven't been so lucky and I'm pretty sure that all of the last three I hired are in jail, facing jail time, or soon will be for their actions...some of which are the well documented laws they broke working for me. But that's for another blog. Look next for " Suicide by Contractor"

 

Thanks for reading and I'd love your feedback!!! 

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