Aug. 6, 2020

3 Steps to Prevent a Bad Contractor Experience

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I've been actively investing in real estate since 2005 and have had countless experiences with contractors.

Some of the most common things I hear from people when it comes to getting started flipping houses is around contractors: how will they find a good one, how will they make sure they don't get screwed, etc.

In this episode, I'm sharing the 3 things I do with contractors to prevent those "bad contractor" experiences.

I think you'll be surprised...


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You're listening to the flip houses like a girl podcast where we educate, empower and celebrate everyday women who are facing their fears, juggling family and business, embracing their awesomeness and wholeheartedly chasing their dream of flipping houses. Each episode delivers honest to goodness tools, tips and strategies you can implement today to get closer to your first or next successful house flip. Here's your spiky haired breakfast taco loving host house flipping coach, Debbie DeBerry.

Debbie DeBerry  00:38
Hey, I hope that whatever you're up to today, you're having an easy one. And thanks for hanging out with me for a little bit. So before we jump into today's episode, I want to do a listener shout out. So this goes out to burn strong. She said, Debbie is the real deal info you can use and no testosterone, yay. I'm learning all I can from her before I jump definitely an asset for anyone interested in learning more about flipping for good reasons and not just to become rich quick in quotes. Yes, I appreciate that feedback so much, because you nailed it. Like, that's exactly what I want you to take away. So flipping for good. And not just to line our pockets is such a better vibe to be living life at. And, man, I can sleep better at night just for that reason. Okay.

All right. So about 12 months ago, one of my realtor friends was having a really hard time managing

her contractors on a flip she was doing. And this was like the main contractor running most of the project, right. And maybe you've had a similar experience, or you've heard similar experiences. He started out really strong. And, you know, Johnny on the spot, right, showing up every day, making awesome progress. And then when it got probably like three quarters of the way through, he kind of just stopped showing up.

And stop answering text messages and stop returning phone calls and was like, seriously just ghosting her. And I could 100% relate to that feeling of Oh my God, is he ever going to finish this job? And is this ever going to go away?

So yeah, I found myself in a very similar situation. Pretty No, not early on in my career, like, four years into my house flipping business. Okay. Things were going great. It was the same main contractor that I had been using since 2008. And we did a really big project in 2012. Really high price point. Just huge scope. It was just a massive project. All right. And about halfway through, maybe that's what happened. Like I was totally being ghosted. And it was just really weird, because I had spent the previous four years like project a project, right? Typically 30 to 45 days, right, in and out, in and out, in and out.

Moving on to the next one. So I was very confused. And we had a great relationship. And it was just odd that I couldn't find him. When I did hear back from him, it was like, you know, I'll be there tomorrow. My guys will be there tomorrow and nobody would ever show up.

Man, that's such a bad feeling. And I'm going to share with you the moral of the story, but you got to sit tight. All right. So how did I come through that? What did I learn from that? You've got to sit tight. Okay,

first, let's talk about basically three things that you're considering when you're choosing a contractor, or three things that you're looking for, right? So you want speed, quality and cost, right so you want fast speed you want high quality and you want low cost? Generally speaking as a human, that's what we're searching for when we are searching for a contractor,

right? fast, great quality, low cost. Okay, that doesn't exist. So you're going to be training one of those things typically. So if you've got three levels of contractors, because you're, you're, you're basically qualifying them on these three things, right? So if you've got a fast contractor, then

typically, the quality isn't great.  But the cost is great. Right? So fast contractor, lower quality, lower cost. Okay. medium speed, contractor, medium quality, medium cost, super slow contractor, high quality,

high cost, right. So you're trading those things. So that was one of the first awarenesses I had to have, I had to have that understanding in mind. Okay, so probably what happened on that project was that it was high end. All right. So the quality really needed to be higher quality. Well, that wasn't the caliber of contractor that I had. So it was a million plus dollar home, back in 2012. At the time, the most expensive project we had done was probably like 450 or so. So it was a pretty significant jump. That's a whole other podcast episode in and of itself,

lots of lessons learned. But I put him into a project he was not qualified for. So I pretty much set him up to fail, which honestly really sucks. It really sucks. When I realized that I should have had more awareness. And I should have been more mindful about that. I just wasn't putting the wrong team in the project can really mess things up. That was one of the biggest lessons that I learned. The second lesson I learned is always have everything in writing. I have them sign my contract, my independent contractor agreement, which includes scope of work, payment schedule, everything very clearly and explicitly outlined. It protects both parties. I let that slide. Dang it. I started out so strong, I was doing it the right way. But it was my main guy. And I probably had already done 60 projects with him. But I got lazy. And I totally dropped the ball. So there wasn't an agreement in writing. There wasn't a payment plan in writing. There wasn't anything in writing. I pretty much like screwed myself there. Because I didn't have a clearly outlined process that had already been agreed upon. for breaking up, right, I needed to break up, I needed to move on. And I needed to find another contractor. But I didn't have that clearly written out. And so like so many things, I did so many things wrong on this project. Because of that, I didn't fire him quickly enough. It was absolutely 100% my responsibility, all of the delays, the project costs going over budget, literally making $9 and I think it was like 27 cents on this deal. It should have been a significantly more than that. But all of that was my fault. But it wasn't just that I didn't have the contracts in place. The real thing that I screwed up on was not standing up for myself and doing the hard thing of going out and finding a replacement. So I assumed that you know what he'll show up eventually. And at least I know what to expect from him. Now, you know, do I really want to go through all the effort of vetting another contractor getting him on board. getting him up to speed doing all of these things? And what if he does the same thing? What if he disappears and ghosts me? The see what happens there. It's not about them.

It was about me, I did not take full responsibility. And I did not step into my power of being the freaking CEO of my business, making hard decisions and doing hard things. That's what we have to do as entrepreneurs every single day, if I'm not out of my comfort zone every day, I am not doing it, right. I know that for a fact, I put myself out of my comfort zone every single day, I should have replaced that contractor way sooner than I did. Instead, I let three months of really high carrying costs, a crew going into a season that wasn't great for selling that price property. It was just so many things across the board, it was all my fault. I couldn't blame anyone.

And when I hear stories of other people complaining about contractors, my gut instinct says, It's not about the contractor. Not all the time. Okay. But what I can tell you from experience is that when I feel like a contractor has quote, unquote, screwed me or a vendor or whatever, I can absolutely trace it back to being 100% my responsibility, I either dropped the ball on communication. Or I dropped the ball on following through on consequences that I clearly outlined, or both. But it always comes down to me not communicating properly, not standing up for myself, and not following through on what I said I would do if that thing was done, if that breach happened, right. So if this happens, if you don't show up, you will get fired, and you will get replaced. And then I have to follow through on that. So I have a really hard time with how much of a bad rap that contractors get. Because I really wholeheartedly believe that it isn't always them. We have a responsibility to communicate clearly over communicate, and follow through on what we say we're gonna do. Because every time there was a situation where a contractor didn't do something, right. Or I could think back and be like, Oh, yeah, he was terrible. The common factor in all of those situations was me. Man, I kind of sucks to realize, but it's also really free. That kind of awareness, lets me up level my life in so many different ways. Because I can step into that space of being a strong communicator, over communicating, setting expectations, and following through on those. So the next time you hear somebody complain about how awful contractors are, and how they've had all these terrible experiences, I would just urge you to think about the fact that the common factor in all of those situations was that person who's complaining. All right. So those are my lessons. Those are some of my lessons from that project. Alright, so let's get back to my realtor friend and see what happened in her situation. Guess what, she did something pretty similar. So she did not have a contract in place. And she did not replace the contractor soon enough, because it was a friend of a friend and she felt uncomfortable. So let's stop avoiding feeling uncomfortable. Let's start doing the hard things and start standing up for ourselves and protecting ourselves using contracts, communicating clearly. following through on the consequences we lay out based on our expectations. All right. I get it. It's hard sometimes adulting is hard. I wholeheartedly agree with that. adulting can be hard. But doing the hard thing, doing the uncomfortable thing is usually a lot less painful in the long run than not been there, done that, right. So, okay, go communicate, go stand in your power and go follow through. Okay, until next time, go out there, flip houses like a girl. Leave people in places better than you find them and make it a great day. Bye.