Excellent advice especially on paying after job is done. A good rule of thumb is to have the scope of work and contract set up for draw payments after each project is successfully completed. Also, as a flipper NEVER pay for materials out of your account. Have it in the scope of work and contract for the licensed contractor to pay for everything. That way materials won’t get stolen because the contractor will watch over it a lot better.
I am a contracter and I agree with your analysis! Excellent points. There is a vast difference between contractors so far as quality of work and materials & finishes. So, when considering bids quality should be considered. One should not expect the lowest bid to do high quality work. Low bids usually mean that the contractor made mistakes and left tasks out of his scope of work, if a scope of work was even produced. Loved the video, all good points! Thanks for keeping people informed and keeping the trades out there in check! A great baseline standard practice reference.
Hi Ryan, thank you so much for your comment! It means a lot to me coming from you as a contractor! I’m glad you agree with my analysis. You are absolutely right that the bid quality should be taken into account, not just the price. Unfortunately many homeowners/investors don’t realize that and fall for cheaper bids. Hope we can help educate them. Let me know what else you’d like to see on my channel 😊
Everything you said is correct. I am a estimator for a big HVAC company. The most important thing is clarifying the exclusions and the inclusions. We are full mechanical contractor. That means we have multiple sub contractors under our contract. Controls, insulators, sprinkler, plumbing, craning etc. I always ask them to clarify there exclusions - what there not including. Therefore they cannot ask for an extra if they did not included in their exclusions list. Example: If they tell you that they don’t include scaffolding in there quote then it’s up to me to carry the rental of scaffolding in my price. But now the onus is on them to clarify. Always ask for inclusions and exclusions. It’s rare not to have exclusions. Part of the strategy is to get you sign to the low quote and then extra you death. Good luck.
Thank you! This was extremely informative & helpful. I recently found your channel & subscribed after watching just a few minutes of a video. I appreciate that you are thorough in your explanations & are concerned with delivering meaningful information. Your channel is entertaining but, more than that, it is thoughtful & educational. This makes your videos stand apart from others I've seen. Your succinct & deliberate approach is uncommon, giving your videos a uniquely fresh appeal. The only negative is that there are not more videos! I look forward to additional content (hopefully there's lots more on the way). I can see you becoming a hit show one day .. just please don't change your explanatory/instructive approach. It really sets you apart.
Your videos have been so helpful in motivating me to finally starting my real estate business. Thank you for your straightforward, easy-to-follow tips! I wish you much success.
I would love if you could share a contract with a contractor or make a video explaining what is important in a contract with contractors. regarding work and materials, should the contractors' proposals ask them to write material and work separately?
This video is so helpful. This is my first time looking for a GC and im nervous. Now I know what im looking for. THANK YOU FOR THIS VIDEO!! New subscriber!!
Learned a lot from your channel. Would you be willing to talk a bit more in depth about coming up with SoW and writing contracts in another video? Maybe share a contract template or some examples?
Could you please recommend a contractor. We are buying a fixer upper and looking for a contractor. Also thanks for your videos. They are very informative and well structured. Great work!
Great pointers. I have been burned in the past and is still looking for a decent one in my market. Thanks for the video. Some new video ideas would be on how to look for a mentor(getting them interested in your value add or joint venture maybe), a broker for loans or how to form a dream team really lol
Thanks! Good contractors are so hard to come by, but they do exist :) Thanks for the ideas! If you watch my new video: ua-cam.com/video/T60x5BSbI1g/v-deo.html I actually share information on how to get mentorship by adding value to experienced investors. You can also check out my video on Hard Money Loan as I always use hard money to fund my flips. I'll work on the dream team idea, it more through trial and error and then you grab onto the good people you find and keep working with them lol
great information!! I'm in the process of finding a good contractor. I was wondering do you draft the contract yourself or do you sign the contract given by the contractor?
Great tips!! When you set up the payment plan how do you decide when and how much you pay? How many payments do you usually make during the course of a project? Do you usually have the contractor buy the materials or do you buy them or a combination of both? Thank you so much for sharing your tips!
Usually the contractor asks for payments. About every two weeks, depending on what work is done. I don’t really know how many times per project. I just review every time when contractor asks for payments. Contractor buys most materials, but I order stuff that I’m particular about online or in the store.
Should a bid from contractors be itemized? I made the mistake of telling the contractor my budget and he gave me a flat quote in the bid with a list of work to be done but no breakdown, so I am wondering if he just used my budget as the general estimate.
Yup. My mom went with her sister and her husband. They presented a job 150K over what my parents wanted to spend. They did really good work, but still kept suggesting up the price.
hi Elisa, thanks again for the video, very informative. you mentioned about pay the contractor for the work they have done. How about if they ask for prepaid to buy material because they are short of funds? should we buy the material and deduct from the payment? any suggestion? Thanks in advance.
Glad to hear that, Nancy! If you have to prepay, just pay as little as possible (maybe for 1 week's worth) and have the contractor put it in writing what the payment is for. Most contractors use their own money to fund the work first, and ask for reimbursement.
@@loserplanet exactly. Good reliable contractors have money to complete jobs. If they are paid draws on completion of work, then they need to get the task done to get paid.
Yeah, when the market is good, contractors are very busy. If you can't find a GC to start work soon, you can also try to get some subcontractors to do work too. Good luck!
@trasform real estate That is exactly what I had to do. Disaster. Grrr. I wish I had not started this. I didn’t want to live in a development where every house is alike and even the same color. And I wanted a garage. So I bought a garage with a 50’s house attached. I didn’t realize how much hidden renovation was required. I also didn’t know that Lowe’s and Home Depot don’t install tile in bathrooms any more. I got a homeowner / contractor permit for projects under $30K. I didn’t have any leverage to get my subs to show up regularly for me so that first 30k part of my renovation took 6 months. In the meantime I waited patiently to get to the next phase but I still don’t have a contractor and there wasn’t that much done in the first phase: plumbing, electric and some floor and stairs repair. I want to open the family room area by the kitchen to a screened room with French doors. I wanted to pay someone to design the renovation but all the designers I hoped to work with are part of design and build companies. In fact, one designer who seemed good did draw up a plan (not free) but when I showed it to a contractor who didn’t have time to do the job he said the plan didn’t make sense and was neither practical or an interesting point of view.
Watch Next: House Flipping for Beginners Playlist:
ua-cam.com/play/PLth4sDjOXnLXR2wUFLQkwd67Wuxx9lKRG.html
Excellent advice especially on paying after job is done. A good rule of thumb is to have the scope of work and contract set up for draw payments after each project is successfully completed. Also, as a flipper NEVER pay for materials out of your account. Have it in the scope of work and contract for the licensed contractor to pay for everything. That way materials won’t get stolen because the contractor will watch over it a lot better.
What if you're a homeowner? How does it work with paying for labor and materials?
I am a contracter and I agree with your analysis! Excellent points. There is a vast difference between contractors so far as quality of work and materials & finishes. So, when considering bids quality should be considered. One should not expect the lowest bid to do high quality work. Low bids usually mean that the contractor made mistakes and left tasks out of his scope of work, if a scope of work was even produced. Loved the video, all good points! Thanks for keeping people informed and keeping the trades out there in check! A great baseline standard practice reference.
Hi Ryan, thank you so much for your comment! It means a lot to me coming from you as a contractor! I’m glad you agree with my analysis. You are absolutely right that the bid quality should be taken into account, not just the price. Unfortunately many homeowners/investors don’t realize that and fall for cheaper bids. Hope we can help educate them. Let me know what else you’d like to see on my channel 😊
Everything you said is correct. I am a estimator for a big HVAC company. The most important thing is clarifying the exclusions and the inclusions.
We are full mechanical contractor. That means we have multiple sub contractors under our contract. Controls, insulators, sprinkler, plumbing, craning etc. I always ask them to clarify there exclusions - what there not including. Therefore they cannot ask for an extra if they did not included in their exclusions list.
Example: If they tell you that they don’t include scaffolding in there quote then it’s up to me to carry the rental of scaffolding in my price. But now the onus is on them to clarify.
Always ask for inclusions and exclusions. It’s rare not to have exclusions. Part of the strategy is to get you sign to the low quote and then extra you death. Good luck.
Thank you! This was extremely informative & helpful. I recently found your channel & subscribed after watching just a few minutes of a video. I appreciate that you are thorough in your explanations & are concerned with delivering meaningful information. Your channel is entertaining but, more than that, it is thoughtful & educational. This makes your videos stand apart from others I've seen. Your succinct & deliberate approach is uncommon, giving your videos a uniquely fresh appeal. The only negative is that there are not more videos! I look forward to additional content (hopefully there's lots more on the way). I can see you becoming a hit show one day .. just please don't change your explanatory/instructive approach. It really sets you apart.
Wow! amazing analysis Lisa:) Thank you very much for all your advice!
Thanks for all the tips! You are a really smart person!
You are so kind, thank you!
Very valuable information! Finding a good contractor is my biggest concern, so thanks for this video!!
So glad to hear that!
Great advices
this is great advice always get multiple bids and complete work and price breakdown for scope as you mention.
Definitely get these agreements in writing! Watch out for liens from GC or subcontractors too. Thanks for sharing
Yes, good point! It's important to make sure that your contractors are not going to put a lien on your house.
these tips are excellent and relevant to any business! thank u 4 sharing❤
OMG ! You are a gem 💎 and so true of all the things anyone would want .
Your videos have been so helpful in motivating me to finally starting my real estate business. Thank you for your straightforward, easy-to-follow tips! I wish you much success.
This was extremely helpful!! Thank you for directing me to this video. So informational!
Saw a few of her video and another very insightful video.
I would love if you could share a contract with a contractor or make a video explaining what is important in a contract with contractors.
regarding work and materials, should the contractors' proposals ask them to write material and work separately?
I’m ready to renovate my house but it all feels so
daunting. I will get this done someday.
Thanks, this was very informative and helpful.
Southern Cali, my step dad is great, now working on commercial buildings! Desert and pacific enterprise
Thanks for the information. I'm only in the Bay Area for now, but I'll keep that in mind
So informative. I learn a lot from your vids.
Great video I thank you for what your doing for the community queen I’m a big fan
Wow, Thank you so much..
Very informative and great tips, learned a lot from you on this field.
Like we always learn from each other..
Thanks for sharing the lessons learned based off your experience!
Yeah, my experience was painful and I hope by sharing it, others don't have to go through it :)
This video motivated me thank you
My dad and I got rip off from a contractor like that from one of my cousin too at the end...Thanks for your information.
I like the way you think.
Love the tips! Have you ever come across the "finish early get a bonus" incentivizing them to rush the job and not finish with quality work?
Hi thanks for the excellent tips. Can you make a video on how to write up the scope of work . Perhaps share a sample. Appreciate it thanks
Check out this video on scope of work: ua-cam.com/video/cBziAVdJBNc/v-deo.html
So helpful!
This video is so helpful. This is my first time looking for a GC and im nervous. Now I know what im looking for. THANK YOU FOR THIS VIDEO!! New subscriber!!
Thanks! So happy to hear that!
Learned a lot from your channel. Would you be willing to talk a bit more in depth about coming up with SoW and writing contracts in another video? Maybe share a contract template or some examples?
Great to hear! Here is a video on scope of work: ua-cam.com/video/cBziAVdJBNc/v-deo.html
Could you please recommend a contractor. We are buying a fixer upper and looking for a contractor.
Also thanks for your videos. They are very informative and well structured. Great work!
Great video! Thanks for the tips!!
Thanks! Glad it was helpful :)
Great pointers. I have been burned in the past and is still looking for a decent one in my market. Thanks for the video. Some new video ideas would be on how to look for a mentor(getting them interested in your value add or joint venture maybe), a broker for loans or how to form a dream team really lol
Thanks! Good contractors are so hard to come by, but they do exist :) Thanks for the ideas! If you watch my new video: ua-cam.com/video/T60x5BSbI1g/v-deo.html I actually share information on how to get mentorship by adding value to experienced investors. You can also check out my video on Hard Money Loan as I always use hard money to fund my flips. I'll work on the dream team idea, it more through trial and error and then you grab onto the good people you find and keep working with them lol
How about payment schedule? If the contractor ask 50 percent upfront, is this considered a huge red flag?
great information!! I'm in the process of finding a good contractor. I was wondering do you draft the contract yourself or do you sign the contract given by the contractor?
Great tips!! When you set up the payment plan how do you decide when and how much you pay? How many payments do you usually make during the course of a project? Do you usually have the contractor buy the materials or do you buy them or a combination of both? Thank you so much for sharing your tips!
Usually the contractor asks for payments. About every two weeks, depending on what work is done. I don’t really know how many times per project. I just review every time when contractor asks for payments. Contractor buys most materials, but I order stuff that I’m particular about online or in the store.
Transform Real Estate Great!! Thanks so much!
Do you look for a contractor to evaluate the property before you purchase the property or after?
I am curious on this as well.
Great tips!
Tatsiana K thanks, glad you liked it.
Should a bid from contractors be itemized? I made the mistake of telling the contractor my budget and he gave me a flat quote in the bid with a list of work to be done but no breakdown, so I am wondering if he just used my budget as the general estimate.
Tip #7 Don't hire friends or families unless they have exceptional character, or you could destroy a relationship.
Yup. My mom went with her sister and her husband. They presented a job 150K over what my parents wanted to spend. They did really good work, but still kept suggesting up the price.
Do you have examples of scope of work you could share?
Check out this video on scope of work: ua-cam.com/video/cBziAVdJBNc/v-deo.html
Great video! Do you use your own contract or the contractors?
Justin thanks! I usually use their contract and review and add my own terms before signing.
hi Elisa, thanks again for the video, very informative.
you mentioned about pay the contractor for the work they have done. How about if they ask for prepaid to buy material because they are short of funds? should we buy the material and deduct from the payment? any suggestion?
Thanks in advance.
Glad to hear that, Nancy! If you have to prepay, just pay as little as possible (maybe for 1 week's worth) and have the contractor put it in writing what the payment is for. Most contractors use their own money to fund the work first, and ask for reimbursement.
If they are "short on funds" that may be a sign that they are disorganized. Just my opinion.
@@loserplanet exactly. Good reliable contractors have money to complete jobs. If they are paid draws on completion of work, then they need to get the task done to get paid.
Do you hire a general contractor who hires the varios contractors?
Yes
The best contractors are on Craigslist..lol jk
I agree with you a 💯 percent
I can’t find any contractors who are available for 6 months or more, even a year.
Yeah, when the market is good, contractors are very busy. If you can't find a GC to start work soon, you can also try to get some subcontractors to do work too. Good luck!
@trasform real estate That is exactly what I had to do. Disaster. Grrr. I wish I had not started this. I didn’t want to live in a development where every house is alike and even the same color. And I wanted a garage. So I bought a garage with a 50’s house attached. I didn’t realize how much hidden renovation was required. I also didn’t know that Lowe’s and Home Depot don’t install tile in bathrooms any more. I got a homeowner / contractor permit for projects under $30K. I didn’t have any leverage to get my subs to show up regularly for me so that first 30k part of my renovation took 6 months. In the meantime I waited patiently to get to the next phase but I still don’t have a contractor and there wasn’t that much done in the first phase: plumbing, electric and some floor and stairs repair. I want to open the family room area by the kitchen to a screened room with French doors. I wanted to pay someone to design the renovation but all the designers I hoped to work with are part of design and build companies. In fact, one designer who seemed good did draw up a plan (not free) but when I showed it to a contractor who didn’t have time to do the job he said the plan didn’t make sense and was neither practical or an interesting point of view.
Thanks for the video. Currently reading the book on estimating rehab costs
Glad you liked it. What's the name of the book and how do you like it?
Penalties for late work may cause a contractor to inflate their bid to cover their risk. Best to go with incentives for early completion.
Contractors are turds