Things to ask your contractor or renovator before you sign

By Bruce Firestone | Uncategorized

Apr 27

The biggest issues in the real estate investment business seem to be: cost overruns and delay during construction as well as securing proper and sufficient financing then getting decent appraisals and loan to value ratios upon completion.

Before you sign on with any contractor or renovator, here’s my checklist of items to go over with them:

1. Start Date

2. Expected Completion Date

3. Initial Deposit Required

4. Progress Payments Expected/payment schedule/plan

 

5. Performance Measurements/meeting milestones/joint monitoring project schedule/critical path analysis

6. Gross Max Price, GMP/Costing/Bonding

7. Contingency allowance… to be used for quality assurance

8. Cost and time savings incentives/sharing

9. References including former clients/experience with projects similar to this

10. Safety record/daily clean up

11. Person(s) in charge/communications with client/after hours emergency

12. Dealing with change orders

13. Termination 

14. Choice of designer/architect

15. Acquisition of building permit/responsibility

16. Union Participation (mostly for commercial jobs)

17. Choice of sub-trades

18. Sub-trade contribution to project sponsorship (mostly for commercial jobs)

19. Contractor contribution to project sponsorship/other project support and influence

(mostly for commercial jobs)

20. Financing—intros to lenders, investors, penfunds, funders (mostly for commercial jobs)

21. Financial Guarantees (mostly for commercial jobs)

22. Process for and cost of dealing with post-project deficiencies 

23. Future Business 

WIP, list of work-in-progress/schedule/plan/next steps

Finally, lay out next steps and who is doing what/when over the:

-next 30 days
-next 60-90 days  
-beyond 90 days 

Make sure you ask for and receive a complete project schedule and, if possible, ask them to play it out using critical path scheduling software. 

I show what that might look like in a youtube video, critical path methodology & scheduling explained, which you can find here, https://youtu.be/hA5G4KvVmnk?list=PLd3QdcBlEm9-b9B3sAnGd86s79M8ib_P3.

Bruce M Firestone, PhD
Century 21 Explorer Realty Inc broker
Ottawa Senators founder
Real Estate Investment and Business coach
613-762-8884
bruce.firestone@century21.ca
@profbruce
profbruce.tumblr.com
brucemfirestone.com
making impossible possible

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