Rehab Contract With Contractor
I currently have an LLC for my real estate investing deals. I am wondering if anybody out there has a contract outline that will make an agreement between my LLC (me) and the contractor for the amount of work needing to be done, price, timeline, quality, etc?? Where is the best way to get one besides getting a lawyer to draw one up from scratch??
Any suggesions/contracts/ help/questions/etc are welcome.
Thank you,
Matt 
Matt,
Is this for one rehab project or is this to be the start of a working relationship from here-on-out? The contractor should have some system in place such as providing a Quote or an Estimate, which eventually leads to a Proposal or a Contract. I work for a high-end custom home builder/remodeler. We do remodel work on a "cost plus" basis (typically whatever it costs us for materials/labor + 20 or 25% for overhead/profit). We do new homes on a contractual basis which involves allowances and a lot of estimating (a fancy word for "guesswork", educated guesses though they may be).
Here's the point: if the contractor's doing work for YOU, they should be the one that sets the price and you either agree to it or figure out some way to cut costs to get them down on their price. And they should have some kind of Contract including Scope of Work (which will include timeline, quality/warranty, price, etc.)
It may be as simple as calling them and asking them how they typically set it up. Regardless, please call at least one other contractor to get a quote/estimate on the work. It's bad business to not do your homework. Getting Bids is what makes this capitalist country so great! If your contractor knows you rarely pit him against someone else, he/she will get soft and not "sharpen his pencil" on his numbers. Keep them honest.
I've probably generated more questions... bring em on.
Happy hammering,
aslan
ps...i don't think geography will make the situation much different, but check around.
Quote:
On 2004-02-26 15:29, aslan wrote:
Matt,
Is this for one rehab project or is this to be the start of a working relationship from here-on-out? The contractor should have some system in place such as providing a Quote or an Estimate, which eventually leads to a Proposal or a Contract. I work for a high-end custom home builder/remodeler. We do remodel work on a "cost plus" basis (typically whatever it costs us for materials/labor + 20 or 25% for overhead/profit). We do new homes on a contractual basis which involves allowances and a lot of estimating (a fancy word for "guesswork", educated guesses though they may be).
Here's the point: if the contractor's doing work for YOU, they should be the one that sets the price and you either agree to it or figure out some way to cut costs to get them down on their price. And they should have some kind of Contract including Scope of Work (which will include timeline, quality/warranty, price, etc.)
It may be as simple as calling them and asking them how they typically set it up. Regardless, please call at least one other contractor to get a quote/estimate on the work. It's bad business to not do your homework. Getting Bids is what makes this capitalist country so great! If your contractor knows you rarely pit him against someone else, he/she will get soft and not "sharpen his pencil" on his numbers. Keep them honest.
I've probably generated more questions... bring em on.
Happy hammering,
aslan
ps...i don't think geography will make the situation much different, but check around.
Thanks Aslan!
Ok, your reply is greatly appreciated!
This is going to be for a working relationship from now on with thie contractor. I would like to work with the same contractor on my rehabs from her on out... Just because once I know how he works we will be able to get the "well oiled machine" effect, you know? I see your point about the comparing quotes from different contractors, but wouldn't that need be eliminated with cost plus the 20/25% profit way of going about business?
Ok - so i should expect them to come up with a quote/proposal leading to a contract? That makes sense. I just want to protect myself and ensure the work gets done in the timeframe allowed.
Thank you for you reply, keep the info rolling!!
Matt
on the other side of things is me! hahaha. i'm by no means a high end guy, i have a team of guys who aren't licensed in anything, they're just in thier 40s and 50s and have been doing it nearly 30 years and know about everything, new and old. they walk in and can almost guess within $100, what it would cost based on what you want. from there, they work for that. even if they run over, they don't take more money, b/c they already promised that price. done deal. great guys if you don't need to see a bunch of paper and certificates, etc. ... you just want your house done very well (and cheap), they're your guys!
by the way, i have an independent contractor's agreement i can send you to fill out. very basic and to the point - i get it notarized and that's that. give me an email addy and i'll shoot one to you, OR check my profile and email me and i'll send it back to you in reply.
take care!
Jackman, so do you have each member of the crew sign the independent contractor contract?
Are you at all concerned with the liability of them not being insured, or do you handle that in your contract?
Thanks
yes they all have to sign. it may be a bit light in the injury on the job part. this could be a bit reckless for me to not cover well, but truthfully, i don't cover it well. i haven't had any probs. these guys get bad backs after every job! haha. but they come right back for the next one.
oh wait, you mean, am i worried about thier liability, meaning the "quality" of the work? no. i've seen enough to know better. i'd walk them into millionaire's row just as fast as the ghetto and feel comfy either place.[ Edited by jackman on Date 02/26/2004 ]
Jackman you had it correct at first. I was wondering about your liability if one of the crew breaks his back on the job.
I think the most important thing for me right now is to try and find my own crew, contractor or whomever.
Originally I stated that I would use a mixture of freelancers & contractors. I am not sure of this anymore.
My financing most likely will be hard money loans while I am starting out. I will need work done quickly and using only one company will be better.
[ Edited by tahuti on Date 02/27/2004 ][ Edited by tahuti on Date 02/27/2004 ]
that's cool if that's how you feel but think about that one a bit. i've seen a rehab team work and they scared me from using them (in general) because they showed up at the property every OTHER day and worked about 4 hours and jacked off the other 4. hahaha. they did great work, but just didn't come enough for me.
if my handy guys slip, they get replaced with someone from the 100 ads i read everyday for "handyman available. no job too big or too small. have own tools and truck", at least for the day/week. it's so easy to find that kind of help, i just can't justify paying someone and being on thier clock. i have my own schedules to meet. i'm sure everyone won't agree with me on that, but i have no regrets with how i get stuff done.
i wish you well with however you choose!