To All Contractors

August 4, 2008 · 7 comments

I don’t know if I have any contractors reading my blog, but now that I’ve started getting General Contractor (GC) bids on my first house, I have some recommendations to all the contractors out there who want to step up their game when it comes to doing a walk-through and bidding on a project. Don’t get me wrong, there are plenty of GCs out there who do everything right (I’m hoping I’ve found a couple of those as well), but I’ve now seen a few that have about zero chance of ever getting my business because they’ve done everything wrong.

Personally, I go out of my way to make my projects as easy as can be. I created a Scope of Work with everything I want done, I create a material list that has my materials right down to the store, the brand and the specific SKU number. If people are honest with me, there’s very little that I will ever get upset about. And if you get my business once and do a great job, I’ll make sure you get plenty more business from me and everyone I know who might need you.

But, if you really want to earn my business (and create a strong partnership), here are some things I recommend focusing on when we meet:

* Show Up On Time, or Call. Remember that I’m in Atlanta where it’s around 105 degrees, sitting in a foreclosed investment property that probably doesn’t have the electricity turned on (and therefore no air conditioning) waiting for you. So, if you’re going to be more than 10 minutes late, please call. I realize that things come up, you probably live an hour away, and traffic is horrible, and I really have no problem sitting in my truck with the AC blasting waiting for you. But, I want to know that you haven’t forgotten about our appointment, and that I won’t be sitting in my truck until I run out of gas. So, if you’re going to be 30 minutes late, just pick up the phone to let me know, and all is forgiven.

* Take Notes. It amazes me that when doing a walk-through to get a bid on a project, some contractors don’t write anything down. Most of my walk-throughs last one to three hours (I was surprised by this at first, but good GCs want details upfront), and unless you have a photographic memory, I have little confidence that you’re going to remember every detail I’ve mentioned during our walk-through. And the last thing I want to do is have to repeat everything again when it’s time to start the job (not that you’re likely to get the job). Oh, and if you’re not taking measurements at some point (after the walk-through, or even the next day is fine), how can I believe that you have any idea what your materials cost will be, and therefore whether your bid is reasonable?

* Ask Questions. Sure, I’ve provided you with a Scope of Work that lists everything I want done, but that list is far from detailed enough to allow you or any contractor to complete the job (I’m just not that good). I can’t be so thorough that you have no questions about the property or the job, so not asking questions tells me that you are not very detail oriented or don’t really care about the details of my project.

* Make Suggestions. Most of the contractors I’ve dealt with, I’ve told them upfront that I don’t come from a construction background. And I’ve also told them that my properties are investments and I’m on a budget. So, when I say things like, “Let’s move the kitchen sink back 3 feet,” I expect you to remind me that it will probably cost an extra $500 in plumbing to do so. Maybe I’ll still want to do it, but at least I can do so with the knowledge of where my money is going and how I can keep costs down. Even better, if you have some good ideas for how to design that basement we’re finishing as inexpensively as possible, by all means, let me know. You guys have done this a lot more than I have, and I wouldn’t have made that fact clear if I didn’t want some expert advice along the way.

* Remember That It’s My House. Just don’t push the last tip too far. I don’t mind if you throw out a million suggestions, and have a better way to do every little thing I ask (in fact, I appreciate it), but remember, in the end, the decision is mine. To the GC that came in and basically told me that he had flipped a lot of houses and that I should just write him a check and let him rehab mine exactly like all of his, thanks anyway. Again, I love lots of suggestions and advice, but in the end, unless you’re paying for it, it’s my decision.

* Don’t Quote a Price On the Spot. Whenever a contractor does a walk-through, I can’t resist asking if he has a ballpark estimate for me before he leaves. Some will say, “I don’t like to throw out estimates before I can sit down and put the numbers together.” I respect that. Some will say, “I can give you an estimate, but I have to run the numbers and it very well may come in higher or lower.” I respect that too. What I don’t respect is, “Yeah, I’ll do it for $40,000…do I get the job?” No, you don’t. If you’re going to make up numbers now, I have no idea what else you’ll be making up later to get even more money out of me.

* Break Down Your Bid. When you eventually get me your bid, please, please, please don’t just give me a list of things you plan to do (often just parroted back from my Statement of Work), along with a final price. This is just as bad as quoting me an estimate on the spot. It’s great that you list “Replace countertops” in your bid, but unless I know whether you’re planning to replace them with laminate, granite, or phone books, how am I supposed to know if I’m getting a decent price or not? Also, if you come in with the lowest bid but it’s still $2000 too high, I’d like to be able to see a breakdown of costs so I can say, “I see that replacing the countertops will be $4000, can we shave $2000 off of that by just refinishing the cabinets that are there?”

* Give Me a Materials List. Along with above, if I don’t know what materials you’ll be using (or at least a quality level), how can I evaluate your bid? For one thing, I want to use the same materials in all of my houses, so ultimately I’ll provide the final list of materials (and we can negotiate who buys them, if you have a preference). Second, I want to know if your materials will be more or less expensive than mine, so that I know whether your bid might be affected by my materials list (if I you had planned for laminate countertops, and I want granite, I’m going to make sure you get paid enough to cover the difference, and vice-versa). And lastly, don’t say things like, “I use my own materials, and if you tell me what colors you want, I’ll try to match them as best as possible.” That guy won’t be getting my business.

I’m sure I’ll have more suggestions once I get to the point where I actually hire some of these guys, but keep in mind that a walk-through is a first impression, and if you screw up the first impression, it can be hard to recover. All it takes is a little common sense…

7 responses to “To All Contractors”

  1. ezra udoff says:

    How can you expect a general contractor to be specific? That would be a specific contractor… or is it a pacific contractor?

  2. A little piece of advice, you need to find a contractor who’s goals for the future ARE PARALELL WITH YOURS.

  3. Chris Reilly says:

    Great piece. Stick to this advice and you’ll avoid 95% of problems with contractors, be they GCs or subs. Only thing I would add is this — and you’ll likely run that number to 98%: Licensing & insurance, waivers of liability, and release of mechanics lien liability.
    Nobody is asked to quote that doesn’t get these conditions from me first, and I won’t waste either of our time if they won’t or can’t comply…
    1) Everyone must have had their license and insurance validated, or be working under someone that has been cleared.
    2) All, even the lowliest ‘you’ll see him for just a day’ helper, has individually signed a release of liability with me, lest they be injured on the site and the sub or GC bail on him.
    3) Everyone, including all subs, signs a mechanics release before getting final pay, even if that’s through a GC. I’ll provide them proof of the payment at that time, prior to it’s being sent or literally handed to the GC standing next to him.

  4. J Scott says:

    Dominic, Chris,

    Agreed with both of you. This article was written a year and a half ago, while I was doing my first flip…

    If you browse the site, you’ll see that I’ve written plenty of other articles about contracts, waivers, payment schedules, insurance, etc. In the 17 flips I’ve done since this was written, I’ve realized that this stuff is even more important than I first thought…

  5. JACOB says:

    Hey J Scott,
    My GC told me he’s been charging me $1,000 per month to rent a dump trailer for all of his dump runs on our pojrects. He said that if I were to get one of my own he’d be able to chop some expenses from his bids.

    I was wondering if you invested in a uhaul or box truck to save on dump fees and furniture staging hauls. If so, how did you structure it in your business with your GC’s/staging etc?

  6. J Scott says:

    Hey Jacob –

    In my area, a 30 yard dumpster (including delivery, pickup and dump fees) runs about $350. So, for that $1000/month you’re paying, you could rent about 3 big dumpsters.

    For our typical project, we use one 30 yard dumpster, so unless you’re doing much bigger projects or many more projects than we are (more than 3 per month), the $1000 is probably way more than you should be paying for haul-away fees.

  7. JACOB says:

    Okay, well after doing a ton of research on dumpsters and everything else we decided on buying a 8×12 dump trailer of our own for $3,500 on craigslist.

    We figured it’d be well worth it to have our own dumpster that we can also use for staging items.

    Hey Scott, have you outsourced your acquisitions yet? I’m finding myself spending A LOT of time hunting down deals. While I like it, it doesn’t seem to be the best use of my time.

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