Mar
12
Updates, Regress, and a Little Progress
March 12, 2008 |
Not even sure where to begin with getting caught up on the doings at House #2, but here’s the short version:
1) Contractor #1 is gone as of last Friday. Contractor #2 is now on the job and finishing up the last bit of framing, door casing, and odds and ends that Contractor #1 was supposed to finish two weeks ago.
2) Inspection situation isn’t as bad as I thought. I talked to one of the city inspectors and because we didn’t add any new foundations or any major new framing (other than the two walls we added to sub-divide existing space), there was no need to get the framing inspected, and everything else (mechanical, electrical, plumbing) is up to speed and fine. All we need to do is call in for our final inspection when we’re ready for it.
3) Everything should be wrapped up in a week. (Hah).
I’m too tired and worn out for a detailed accounting of all the fun, but things had been heading south over the last month with Contractor #1. He and his crew were good at framing and similar nuts-and-bolts work, and I was happy enough with his work over 80% of the project, but I never should have let them tackle the sheetrock and other finish work, as it became pretty clear they weren’t experienced with that. I didn’t want to switch contractors mid-job so I kept listening to assorted excuses and promises that it’d get done for too long.
He also insisted on trying to get by with hiring family members, friends of family members, etc., for his crew, even if they weren’t that experienced. It became pretty clear that a lot of the delays were due to him not being willing to pay top dollar for fast, experienced men on his crew. Again, I should have let him go a month ago, as all the signs of trouble were there.
When he showed up on Friday with yet another set of extended family members, telling me that his son-in-law (who had been the only really productive person on the job site for weeks) had quit and was off the job, that was pretty much it, and I told him to finish things up and that we’d call it quits. Tried to keep things fairly civil, and told him that I’d be bringing in Contractor #2 to finish things off, as well as possibly his son-in-law to help me with the remaining tile work, as he’s still the general contractor on the permit, so I felt like I was obligated to let him know.
I ran off to haul some trash off, came back 15 minutes later, and he was on his cell phone. Turns out he was calling Contractor #2 and his son-in-law (who’d he nearly gotten into a fist-fight with twice the previous day on the job site), asking them to come give him bids as sub-contractors to finish the work. That’s about when I semi lost it, and said something along the lines of: ”Dude, you’ve got awfully big balls to try to sub the work out that you couldn’t get done at this stage, right after I tell you you’re basically fired and that I’m bringing other people onto the job to finish your work.”
He said he was just trying to watch out for me, that he felt bad about not finishing the job so he called them as a favor, that he’d stay on them and make sure they got the work done, yada yada yada, with absolutely no sense of the irony that was pretty thick in the air.
I finally managed to pry him out of there late last Friday and things have been rolling along ever since. Obviously pretty disappointing and frustrating, but, like much of this, a good learning experience. Pushing hard to just get the damn house done now, so pretty long nights, but the end is in sight.
We’ve got a good lead on renting House #1 and are just waiting for the lady to return the application. Again, kind of disappointing that we didn’t get it sold but them’s the breaks, and renting it out should cashflow a couple hundred bucks a month, and hopefully I can refi it after House #2 is sold and get some of the repair expenses out, and have a decent little rental property.
Comments
5 Comments so far
So I’m confused. Did you have a contract with the original contractor? Does this mean that you have to pay him off for the work he didn’t get done? Are you essentially ponying up twice now that you’re bringing a new guy in?
PS> Love the blog! :)
John,
Contractor #1 was working for me on an hourly basis (which is a whole other ball of wax as far as mistakes to avoid next time around), so no, he hadn’t been paid for the work left undone.
That’s not to say that it hasn’t cost me money, as it has due to holding costs and delays in getting the house back on the market, but I’m at least not paying for the work twice.
By the hour?! Ouch. Talk about lack of incentive to get things done. But like you said, lesson learned. I may be mistaken, but from my amateur perspective, flat rate is win-win in that (1) you only pay the balance once your entire job is completed and (2) the timeline is helped along by the contractors desire to get paid. Now, the mistake *I* made (twice!) has been paying once the job was done but BEFORE the touch-ups were completed (because there will always be a touch-up list). Trying to get the contractor back to the site once he got paid was like trying to wrangle cattle with a shoe-lace. Not Fun.
Seth,
I’ve very much been enjoying reading your blog entries and perusing your site. Your well-grounded level-headedness and self-effacing outlook seem to me to be contributing factors to your success!
Keep posting frequent updates, won’t you please? Through your words and experiences, I’m learning a great deal about the nuts-and-bolts part of this ‘flip’ game - one I plan on entering soon. (Voice of husband from the back of the room: “Yeah right; and using exactly what for money?”)
Hi, Seth! I just got caught up on your blog again.
It just so happens that I wrote today again about not paying contractors by the hour. Our experience with it was far worse than what it sounds like you’ve been through, if that makes you feel any better. We not only lost a $35K profit–we had to work in the house ourselves to finish over five months, nights and weekends, and still came out negative in the end! I’m proud of you being able to just shove your boot right up that contractor’s you-know-where to get him out of there. He lost his gravy train–and, it sounds like he knew it!
Would you be able to just flip the house as a rental to another investor? Sounds like you might be able to if you’re going to cashflow $200/month.