From the course: Virtual Investing in Real Estate

Managing contractors

From the course: Virtual Investing in Real Estate

Start my 1-month free trial Buy for my team

Managing contractors

“

- [Instructor] So evaluate the bids and hire the contractor, sign all six critical documents. We used to require a list of all of the subs on the job and the contact information on the first page for our contract. If they did not want to give it to us, okay, fine, you don't get to work with us. It's my way or the highway, pretty much, right? That's how we run our business. It is our business. It is our reputation on the line with the lender. So you do it my way, or we don't do business. Which way do you want to go, right? Require a list and then require a final waiver of lien before any trade is paid. So sometimes we would have contractors, especially if they were new, "Hey, I'm not going to send you a final waiver of lien until you've paid me." Okay. So let's figure out a way we can get this done. So sometimes we would send a check to our boots on the ground and say, here, make sure it's an even exchange at the same time. We used to prepare to begin the renovation the day after closing, and we usually use to hit it every single time. Because while we were waiting to close, we were doing a ton of preparation to get the property started the day after closing. Why? Because we don't want to pay unnecessary money to our lenders, right? 'Cause that just eats into my profit. So that's what we did after the due diligence. Then we close and rehab the property. So we used to make payments based off of draw schedules. And the draws were at the end of a week, right? What would we do? We would set up the standard for a contractor up front. This is how we work. If that's not okay with you, we'll find someone else. Right? So draws at the end of the week and draw requests at the beginning of the week. Why? Just because we wanted sufficient time, 'cause while we are running multiple rehab projects, we need to manage our money, right? That's really what my job was, make sure that we were managing our money properly and making phone calls on a relatively regular basis, right? Like once a week, at least talk to our boots on the ground.

Contents