Most of the time we’re working with multiple contractors either on a fix & flip or just repairing a property. Even though we’re constantly working with contractors we still make mistakes & learn valuable lessons.
I remember talking with an investor/friend a while back. He said, “Tell me.. am I doing something wrong? Everybody who said they’d have something done from Friday til Monday fell through on their promise!”
His cleaning crew, agent, dumpster guy and a couple of other folks didn’t come through when they said they would. It was extremely frustrating because he’d worked so hard to get a house finished quickly to get it on the market.
Then, a handful of people – who were all going to benefit financially from his work – basically let him know they didn’t care much about his effort. One said they forgot and went to the lake instead. Disappointing to say the least!
I told him that I feel his pain! We’ve both dealt with this more than we’d like to remember.
At the same time I was waiting on a painter, a handyman & a yard guy (who spread pinestraw) to finish the jobs they were paid to do.
What went wrong for both of us?
For me it was certainly that the contractors were paid before finishing. The pine straw guy was paid a week ago, the painter paid 2 weeks ago and the handyman a MONTH ago!!
Nothing that needs to be finished is major (each are looking at maybe 1-3 hrs).. which is even more concerning about the character of these particular contractors.
The problem is there is no longer a carrot at the end of the stick. They’re already munching the carrot and have now chosen to move on to other jobs to get that next check instead of taking care of what they’ve been paid to complete.
Between being busy and each of these contractors pushing hard to get paid I let my guard down & just wrote the checks.. and now I’m paying for it.. in more ways than one. Not only did I pay for the completed job (yet to be done), but now I’m losing time following up with the contractors about the unfinished job at properties we are marketing!
This is completely my fault and I’m sharing this to both remind me that I CANNOT do this again AND to make sure that YOU don’t either!
For my friend, it was more that he was giving them steady business and the contractors took him for granted.
It was an easy payday.. they knew he was a good guy, loyal and willing to pay for a good job.
The problem is they got a bit lazy thinking they could let off the gas pedal and coast with him vs. working harder for a repeat customer who not only consistently provides income for them, but recommends them to others as well.
Getting back to the overall picture.. what are the lessons my friend and I can learn from our experiences?
- Talk with others about who they use. This is HUGE! I talk with a bunch of different investors – all of us have several things going on at any time. And guess what.. we all share who is doing an awesome job for us (because we want the contractors to do well & help our friends connect with great contractors). On the flip side.. when someone treats one of us bad they typically lose business from MULTIPLE REPEAT CUSTOMERS (along with all the referrals we would love to give them).
- Get 2-3 quotes up front if you’re working with new contractors.
- Be wary when working with contractors who need a lot up front or push to get paid immediately – “I’m done.. drop what you’re doing and meet me now!” These are probably contractors who are not well established.
- With that said.. I understand paying for a portion of work completed if it’s a good sized job, but ALWAYS keep enough of the total back to keep the contractor motivated to finish your job.
- Get firm commitments on timeframes & expectations. It may be worth outlining this in a simple document (even just writing it on a notepad and both reviewing it).
- You may consider making it a performance-type agreement..knocking off so much of the labor fee per day past the committed finish date. Of course, make sure you’re not punishing a painter for an exterior paint job when it’s rained for a week straight.
- Have multiple contractors for each type of job. A successful high-end remodeler shared one of his secrets in a mastermind meeting a few months back. He rotates various contractors as projects come up to make sure they don’t depend on his business for all of their work.. which prevents them from taking him for granted.
- When you find someone good.. stick with them! It’s tough to find good contractors who will do what they say they’ll do, HOW they’re supposed to do it and WHEN they say they’ll do it. When you find them be willing to pay a little extra.. trust me, it’s well worth it!
Hope that helps someone out there. If you have any suggestions, comments, horror stories or awesome experiences working with contractors please share them with us!
If you’re thinking of buying or selling a house..let’s talk!
REALTOR® & Real Estate Investor
Maximum One Greater Atlanta Realtors
Call/Text: 770-766-SELL (7355)
Office: 770-919-8825 x 1188