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5 Must Haves in Screening and Hiring a General Contractor
By Kris Sawyer, Redlands Construction Inc
It's no secret that one of the most effective ways to flip a real estate
investment is to purchase a fixer-upper or distressed property, invest in
strategic improvements, and then sell at a profit or rent at an attractive
rate.
In practice however, it's not quite that simple. Which improvements
should be made and in what order? Which improvements are not worth doing
at all? How much money should you expect to spend? And, most
importantly, how to you manage the projects from start to finish to ensure
that the end result comes in on time, on budget and as expected?
If you've got the time and experience necessary to answer these questions
and coordinate the simultaneous work of several teams of subcontractors,
you may be able to do this on your own. If not, one option is to hire a
general contractor (GC).
The role of the GC is to help you answer the questions above, as well as
oversee the work in an efficient, responsible and timely manner. Not only
can a good GC help you prioritize what needs to be done (i.e. help you
decide where you get the most bang for your buck) he or she can also help
get the job done quickly - a key consideration if carrying costs are
significant.
* Next 37 17 investors only!
That said, how do you make sure that you don't become one more person with
a GC "horror story" to tell? Tales of GC's who don't return phone calls,
don't show up when scheduled, or leave jobs midstream are widespread, and
you'll never hit the numbers you need to turn the profit you want if you
can't depend on this critical player.
And so with that in mind, I offer five, time-tested, battle-hardened "must
haves" for screening and hiring a GC:
- Make sure the GC is both licensed and insured. In Massachusetts, this
is a regulatory requirement. Ask to see (not just hear about, see) a
current "Home Improvement Contractor" certificate or registration with the
state. If there is structural work involved, ask for a Massachusetts
Construction Supervisor License.
For your protection, make sure the contractor is fully insured with both
General Liability (which protects your property, among other things, from
any accidental damage during the remodeling process), and Workers' Comp
(which covers the trades people who are working on your project in the
event of an accident). Without both of these in place you could be on the
hook for significant expenditures.
- Insist on a free initial consultation. Any reputable GC should be
willing to meet with you and invest an hour or so to talk about your
project. This will give the two of you a chance to get to know each other
and review the scope of work to be done. Ask the GC to bring a portfolio
with pictures of past work (if they don't have this, you may be dealing
with a GC who hopes to learn on your nickel).
Pay close attention to the GC's professionalism and communication skills.
Big projects always (always) have tense moments; ask yourself if this is
the kind of person you will be able to work with through both good and
bad. Depending on the scope and complexity of the project, the GC should
be able to give you a ballpark estimate at the end of the consultation (or
within a few days).
- Ask for and check references. Most people know enough to ask for
references, but few actually bother to check them out. This is a big
mistake. Many excellent salespeople are lousy at execution, and the only
way to really know whom you're dealing with is to speak with past clients.
References should be easy to contact and it's up to you to be prepared
with questions. Don't just get "a general feel" for the GC's work... ask
specific questions. Was the GC reliable and responsive to their questions
and concerns? Did he or she return phone calls promptly? Did the quality
of workmanship meet their expectations? Did the workers respect the
property and clean up? Were they pleased with the completed project and
did the GC stay within the expected schedule and budget? Would they hire
the GC again, and if not, why not?
Remember, you've got a lot riding on this person and you want to minimize
any surprises down the line.
- Get a written, detailed quote. An initial, free, ballpark estimate can
help you decide whether the costs for your remodeling ideas fall within
your budget. An estimate, on the other hand, is a detailed specification
of the project, including breakouts for major portions of the job. Having
one of these will ensure that barring unforeseen conditions, you will have
your project completed within your budget.
Keep in mind that unless it is a simple job, you should expect to pay for
the detailed specs and quote. Many GC's will bill this up front (in case
you decide not to move forward), and then apply it to the project when it
gets underway.
- Get a written, detailed contract. The written contract should include
full specifications for your project, as well as the approximate start
date and time frame required to reach completion. It should also include
the progress payment schedule.
Massachusetts law MGL c 142A requires every "Home Improvement Contract" to
include certain items. You can get a copy of it here.
All in all, working with a capable GC can save you time, money and
headaches, as well as ensure that the improvements you want are done in a
professional and timely manner. Take the time necessary up front to make
sure you hire the right person for the job... you've got a lot riding on
it!
Kris Sawyer is president and founder of Redlands Construction Inc, a
residential remodeling company serving the Greater Boston & Metrowest
Area. She can be reached at 617-469-9012. www.redlandsconstruction.com.
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