Contractor Expectations: 5 Misconceptions Debunked

Sunday, February 25, 2024

The Larossa Workshop Blog/Contractor Expectations: 5 Misconceptions Debunked

Contractor Expectations: 5 Misconceptions Debunked

Clarifying what your contractor won’t do for your project.

In this article I'm going to tell you the five things you should NOT expect from your contractor.

When I first started out as a real estate investor I was constantly disappointed by the performance of the contractors that I hired. So much so that I ended up becoming a general contractor and starting my own construction company. After years of frustration and experience I learned that maybe the contractor wasn't the problem, maybe it was me as the investor.

Before my days as a real estate investor and contractor I worked in the corporate environment where I learned about building relationships based on trust. This industry makes it easy to forget those lessons. The most important thing for me to remember from those days is that the burden is on me not the other party in gaining respect. The best way to do that is to work to understand what they expect from themselves and make sure that we can align. Unfortunately, when us house flippers deal with contractors we make a lot of assumptions about who is responsible for what. In my experience, those assumptions are often wrong.

The bigger problem yet is that when I was expecting that my contractor was responsible for these things, they were assuming that I was responsible for those things. That means that nobody was responsible for those things. And that’s how you end up getting a house painted lime green. Yea that actually happened. And of course I was mad about that. But could I blame the contractor? I told him to pick whatever color he thinks is best. This, among others, is the basis for the long muddied customer to contractor relationship.

My goal is to make sure that you, as the real estate investor, understand the five things that your contractor doesn't think they're responsible for that you might think they are.

If you stick around to the end, I'll give you the ONLY three things you should automatically expect from any contractor.

ONE: Understanding Your Vision

I can still remember standing in the kitchen of one of the first real estate investments I bought back in Denver. It was a nice B to A class residence in a nice neighborhood where the other houses selling had granite or quartz countertops, shaker cabinets, stainless steel appliance packages and subway tile backsplashes. This was the biggest project I had done to date and I was going to hire a contractor for the first time and I wanted to build a strong relationship based on trust and I remember saying, as we looked at the oncoming renovation “just do whatever you think fits. You’re the expert.” Well, fast forward to several weeks later when the kitchen was remodeled and I was staring at the same old cabinets with slick paint job, Formica countertops, white appliances and some trimmed down 18x18 inch tiles that were the exact same ones used on the floor.. They happened to be the ones I saw earlier that week on a Home Depot end cap for $.50 per square foot.

You need to realize that what a finished project for a real estate investor looks like versus most of the other types of projects that a contractor does is totally different. In fact, all projects are totally different. Also the vision from one contractor to the next is never the same. If you leave any ambiguity in your plan and expect that the gap will be filled by your contractor you are setting yourself up for disappointment.

TWO: Be at the Job Site Daily

You and the contractor have agreed upon a scope of work, you’ve agreed upon a price and now it's game time. You're so pumped about this project that you go to see how the guys are doing a couple days later. But where are they? I thought after I hired them they would be here every day?

That's not how it works. These guys are independent contractors or 1099s. They are not W-2 employees where you tell them where to be and when to do it.

THREE: Be a Home Inspector

Rewind to that same kitchen back in Denver and that contractor called me a couple weeks into the project to tell me that the GFCI outlets in the kitchen weren't grounded properly and the hot water was not working. One of my first times dealing with a change order, I was livid. “How didn't he see this when he gave me my initial bid?” “ Is this guy trying to screw me over?”

Well the answer is actually yes but not because of those things. See, he's not a home inspector he was giving me a bid based upon the scope of work that we had agreed upon. He's also not a professional estimator, there are companies who do just that, where it is on them to find absolutely everything that possibly needs done on that project.

Now a great contractor will help you see some of the things that you may not have when making your Scope of Work, but understand that there are other services out there that will be more aligned in helping you with a comprehensive scope of work or you can learn to do it better yourself (check out my other content). You see, your contractor is keenly aware that they are bidding against other contractors so it’s not clear that it’s in their best interest to add everything possible to the initial bid.

Note: this applies when you are hiring a crew for multiple jobs inside of a project. If you have hired, for instance, an electrician you can expect a more thorough scope of work.

FOUR: Be an Engineer or Architect

In the code book there are tables that tell anybody building anything exactly what size headers, beams, or girders should be and what should be holding them up. Those tables only go so far; anything beyond that requires load calculations based on the exact scenario you are in. That is the job of a licensed engineer not a contractor.

If you are doing the type of project that requires large structural changes and/or layout changes you will also need plans to turn in to get your permits. This needs to be done by a licensed Architect. Most likely with an engineer in tandem.

2 Things to Note:

  • ​If you have hired either an Architect or an Engineer, they are the boss now. The contractor is going to do exactly what they say even if it’s wrong.
  • This is why I avoid these types of projects as an investor. Costs will soar.

FIVE: Be Your Admin

Do you have your spreadsheet that you downloaded online to be able to better manage your contractor? Do you have a hard money loan or a construction loan from the bank that requires a bid in a specific format? Well that's your problem not your contractors. They have their way of doing business and let them do it that way. You want their bandwidth focused on other things than your administrative tasks like delivering a great construction project.

- The Bottom Line -

Take all of this with a grain of salt; there's always a balance. Over time you will find contractors who, after a few projects, understand the vision that you have for the properties that you buy. They will start making you aware of issues and potential change orders that they foresee. Heck, they may even change the way they write bids for you so it's more convenient for your processes.

Now the reason that you want to be extra conscientious of those “five things you should NOT expect” is so you can take the things that do matter and should be the responsibility of the contractor and set very clear expectations about them and therefore hold ruthless accountability to them.

Here are those three things:

  • ​Delivering the Scope of Work EXACTLY like you discussed and agreed upon in writing. 
  • ​Delivering the project fully completed on or before the timeline that was agreed upon or communicating prior to that date with a shift in schedule. 
  • ​Any job they do must be able to pass a codes inspection.

Remember, this industry is tough and it's just as tough for the contractor. The more you can align, the more both of you can have successful and PROFITABLE organizations. This is how long term relationships are built in business.

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Hi, I'm Ross Paller

CEO Of Larossa

After flipping over 300 houses, holding a portfolio of 150 properties, and creating a successful construction company for over a decade, I felt compelled to pay it forward by sharing the wealth of knowledge and experience I’ve accumulated on my journey.

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