How To Find Contractors With Up-front Cash
I am trying to start my first rehab. Based on my lender's request, I need a general contractor that can front the money (they will be reimbursed at 50% completion). What is the best way to find one that understands the expedience of completing a job?
He needs to be decent sized and not a one man operation. He will have an operating line of credit that he will be eager to pay off as well.
Get references and don't expect to get the cheapest bid as they are carrying the risk.
[addsig]
I have never paid a contractor until they are 100% finished with the work and I am satisfied. I have never given money up front for materials either.
The difference is that you are looking for a general contractor. These guys, although sometimes needed, do charge you at least a 30% premium on the work you can hire out to subs.
The contractors that I use are paid in progressive payments subject to my approval of all labor and material releases. I have had a few arguments during the course of a job, but I find this method fair and reasonable. I will not allow heavy advances it removes the stimulae of money on delivery of task.
We did a 14 unit condo with sub parking. It was a bear. It is convertable to28 units if so desired. So the design was a little different. Big skylights with sliding blinds to shut them off. Fireplaces. Like Townhouses up and down stairs. The parking was underneath of course and
extensive so that if you needed three car parking it was available for an extra sum. The best I ever did. Everybody got paid on presentation and it came in two months prior to schedule. Now thats a goody out here in LaLa land.
Cheers Lucius
myfogger
I am curious where you find these contractors that will not only front the materials but do all the labor before ever being paid? Most contractors I have known or been associated with (and that has been many) are aware that they need to be just as prudent in their business practices as their clients, because they are just as susceptible to predatory practices. With all work being done before payment is made, it opens up that proverbial "Pandora's Box" in allowing an unscrupulous buyer the opportunity to try to renegotiate the costs or performance after the fact. And in this particular situation, it's very clear that the buyer would have a considerable advantage. Not saying it would happen, but rather, it could happen. And I suspect any GC's doing this type of business have never been "stung" yet.
Otherwise, they would operate accordingly.
Just curious where and under what pretenses you are able to get them?
It seems to me that your problem is originating from the contractor not finishing the job in a timely manner.
That can be rectified in the contract,
bonus for early completion, penalty for x amount of days late.
Find GC that will fit large portions of the contract in all likelihood will be the larger GC's, which in turn have larger fees to offset their expenses.
You may look at also doing some sort of a split in the profit, percentage thereof....etc.
NC_Yank