7 Things to NEVER say to a Contractor

seven

things

you should

never

say to a

contractor

or i could call this video seven common ways

contractor

s can screw you take advantage of getting the best out of you if you are looking to hire a contractor for a job big or small you need to watch this video because I am going to share with you information about the wisdom of the truth of smart street sign that can help you against these powerful giant contractors because they are the source of so many anxiety and stress problems in the world of real estate that they are masters in to be able to extract the maximum amount of profits, materials and resources from them and give back the least amount because this is what they do all day, they negotiate agreements whereby they are the ones ahead, so what I hope to do in this video is to educate you and put you in a position, not so that you can take advantage of contractors.

I'm a big fan of people making profits, but to make sure you don't get screwed, this is almost like a defensive workout rather than an offensive one. training and as you can see I will probably offend some contractors, that is a small price to pay to share the truth with you. You see, I have been a part of transactions with literally hundreds and hundreds of contractors. I've been screwed by a lot of them I know almost every trick they have in the book because I learned them the hard way, but also indirectly through mentoring and coaching from those across North America.

I've been a part of thousands of other contractor worlds, so I've seen their tricks and am therefore uniquely qualified to educate you on how to avoid getting screwed by a contractor. I'm Phil oski, by the way, I'm a real estate investor, but also, as I just mentioned, the mint at Coach. throughout North America, author of a couple of books, my first book was a real estate investor. I'm giving it away for free in the top right corner of these videos. My second book, more for intermediates and experts, is called real estate investing gone wrong. where I share with you what not to do.

I actually have a story or two about contractors on there and this is the number one real estate investing YouTube channel in the world and the reason is because I share with you the wisdom and knowledge that they have. I won't listen anywhere else and part of the reason I can is because I have as much or more experience than literally any human being alive in this particular niche of working with residential real estate investments and the work of contractors plays a role huge in our business as a real estate investor and also as a real estate professional, so learning how to work with contractors is as important a skill as anything else you can learn as a real estate professional, so these are seven

things

that should

never

be said. to a contractor and when you follow these rules you will be much better off and will ensure that you don't get screwed first for telling a contractor that you are the only one bidding for the job always always always always get a minimum of three but see the more the better five seven twelve, make sure they are apples to apples comparisons, which in itself can be a challenge because each contractor will present maybe a little bit all the numbers or the next one will break it all down, you need to at least separate the materials from the hand of work and that alone will be a big help and you will be able to compare apples to apples, but always get a minimum of three bits and just when you think you have it all figured out and you have the perfect electrician, the perfect HVAC still.

Receive at least three offers. I'd rather you get more, but never tell a contractor that he's the only one on a job you do and that you just gave up a lot of power in a lot of positions. Tell them, hey, there are no other contractors here that do what you do. Never say that they need to think that there are always others you can hire who will keep them accountable. Never give them the idea that they are the only ones. one out there number two my budget is and you tell them what the budget is never tell a contractor what your budget is don't say hey I hope to do this job for a total of twenty thousand dollars no they I'm going to figure out how to make that Your bill is twenty thousand dollars.

This is something basic. I know I can't tell you how many times I've worked with people who have done this. Keep your mouth shut about what you want the budget to be. What you tell them is this, I have hired you to give me an offer because I need to know how much it will cost to make these things and you want them, as I said, to divide materials and labor, now on the subject of materials, this is a big problem for Many contractors will charge you an increase for the cost of materials, so when you receive a bid, you will want to independently verify the cost of materials.

I've had contractors even in the last few weeks, staring at me. the eye and they tell me the cost of the materials is 850 and I look it up on my cell phone when I show them it is 550 and I tell them they can get out of here for lying to me never lie to me about the material because I can verify that it is much more difficult to verify the hand of construction, you have to sit there and you know, time them, so anyway, if you could tell you a little more about this, I don't tolerate this crap with contractors and they try to pull. this shit about me, I can't imagine what the rest of this world is trying to do because they know who I am, most of the people I work with, okay, so never tell them the budget, make them come back to you and make sure .

It is in such a way that you can independently verify certain things, such as the materials, and also be able to compare them with the other offers you received third in the US. Can I get a discount if I pay you the full amount up front? Oh that's nonsense because if you pay a contractor up front they just won't do a good job, if they do any work they just take your money and disappear, that's how it works in the contracting world, they just laugh at you. agreements like that. I've seen real estate dealers on YouTube teach this.

I feel dumber for even telling you that's so stupid, so you have to be. be very careful with the payments yes you have to pay some money up front usually I want the money up front to buy the materials and they want some money just to put it on their calendar now I try to buy the materials directly because I never trust them to buying materials, there are so many material scams that these contractors do, whether they use materials from a previous job that were extra, where they buy cheaper materials, so you and Rosie talked about whether they steal the materials, which has happened and all those things in between, so I like to be one of the ones who buys the materials and I know there are some lawyers out there who would argue that the moment you buy the materials you cross the line and now all of a sudden that contractor could be considered an employee, but That to me is completely false because the contractor has a contractor's license, they have other clients that they are working with.

I have the right to buy my own materials and that's never surprised me before so I like to buy my own materials because then they know it's been bought correctly, it's the right kind of materials trying to make a lie oh we can get a discount greater than what you can offer. I can get as good a discount as they can just call it the materials supplier they can. Work it out so that if I give them a little money up front, not the full amount, then I do it and then pay them during the course of the job and they don't get the rest of the money until right away.

So a few weeks ago, during the last hurricane, we had to evacuate and we decided to leave a little early because we wanted to get ahead of the traffic and the person who was enduring the entire hurricane. shutters around our house, his huge house, certain hurricane, there are like 50 hurricane shutters finished, it was about 3/4 of the way finished and we have to leave, so all the doors are closed and I said, "Well, here "Man, hello, here's the money, please finish." Don't fuck with me about this job because if you do I'll come looking for you, you better believe he fucked with me, you little prick, he didn't put up more shutters as soon as we pulled out of the driveway, at least that's what I assume when I came. at home and half of the shutters closed three quarters and the Ron shutters another quarter were not up.

I got my money back for the extra things I paid him that worked, but that was because I was in a very serious relationship with him, so yes, you pay someone. up front, they won't finish the job, make sure you don't give them the full amount until they're done, others, they won't finish, it's that simple, that's how contractors work. I know you're thinking, yeah, Phil, what's up with Angie's reviews? List and Homeadvisor, don't they want to serve the customer well? That's funny. Contractors serve the client. No, no, they usually can't look past Friday afternoon and what they usually do is go from job to job.

I don't think about all the consequences of screwing people over, they just do it. I know it probably offended a lot of people, but that's the real world. I've worked with hundreds and hundreds of contractors, that's how they operate and I'm tired because that's how they operate. the real world this is not Fantasyland this is what happens when you pay upfront you don't do the work the job isn't done number four tell them I'm not in a hurry never tell a contractor that you're not in a hurry because you know what they're not They will be in no hurry and you will find that they will be in less of a hurry than you, they will go get a lot of jobs among yours, they will go fishing, they will go do whatever they are doing besides helping out and doing their job, be sure to communicate schedules, you should say, look well, we're going to have to map this out and we're right now. is that you can't get involved for three weeks, okay, that's reasonable, but you have to set dates and deadlines, you always have to set deadlines and I always put that in my contract with my contractors, now what will happen is if they don't comply with this. deadline they start losing money now I give them a buffer zone so I don't set too strict a deadline but I set a deadline and if they are not done by then then they start losing money it's the only way get them out of bed fast enough to do the work, chances are you, as a real estate investor, will work infinitely harder day after day, month after month, than they do now, they're going to go out and give it a try. to four hours and then they'll finish them so when I lived in Tennessee I was going to get some materials from this material supplier and these material suppliers team up with contractors so they're nice.

I guess in the same area it was a Friday at one o'clock and I walk into the office and I'm waiting for the materials to come off the forklift and you get on the truck and the phone rings. and then it rings again and no one answers, but there are people in the office, so at some point when I am signing the invoice and giving my payment, I asked the person and told him why this phone keeps ringing and no one answers. and they said, well, Phil, that's a Tennessee tradition. We finish at 1 o'clock on Fridays and I said, but the phone keeps ringing, why aren't you answering?

Oh, well, yes, because then that might be a little more work for us. this afternoon, in fact, you're delaying this, we have to move at one, Tennessee tradition, so if you don't tell the contractors they're in a hurry, they won't be in a hurry and that ultimately pisses you off at some point, even If it's not a deadline investment you're doing, even if it's a remodel of your own home, nothing is more frustrating than a construction project that's delayed, delayed, delayed, so set schedules and stick to them. number five, tell the contractor, oh go ahead, choose the materials, take care of me, you're the professional, oh boy, do that and just expect a screw, so I've been talking about materials for these other four, but this fifth one. one, I am talking about the choice of the exact materials themselves, it is very important that you dictate now, get educated from them on what the differences are and usually you will buy a high end product, there will be a low end product , there will be in the middle, you need to educate yourself even if it takes time, even if it's a little complicated, educate yourself on what needs to be done with those particular materials, find out and specifically choose the manufacturer and everything else, because if not they won't cheat , they will use materials from other work materials that they have in their house, they will change it suddenly and that is why in my contract with my contractors I specify the material that they must use, you know, sometimes I pay. a little more because I am very anal with materials, as you can see in this video, but you know what it makes all the difference in the world that they don't put the wrong materials because sometimes they do do it wrong.

At first it never gets better, in the end it's because I use the wrong materials at the beginning, so you have to be precise with this. I know it seems a little contradictoryYou tell them they can choose, but I guess you should put them. I need you to choose the materials. You have to be specific about what they get, where they get it from, in the prices where they get it from, because they will mark those things up and I will laugh about it. I've talked to a lot of contractors and I'm like oh yeah oh yeah that cost me 250 but I charge 500 for it lol yeah these are real conversations I have with contractors they think it's funny I think it's horrible so that's the number five, you have to choose the materials number six, then the general contractor tells you, hey, me.

I have this group that can do a great job, they are not legal and they just come and go, but what do you think and say the phrase I don't care who doesn't? It doesn't work as long as it's done right, yeah, you don't want to be a part of that, not only because of the patriotism and legal aliens kind of conversation, but also because of the gigantic amount of responsibility that could fall on your shoulders if one of these people gets hurt , you have to be very diligent and whenever a contractor works on your job and has evidence of an insurance policy, it usually says a co Rd at the top like a lanyard and then at the bottom it has additional insurance and the name of your company is there, you should be named as the additional insured or whoever owns the property in case someone is injured and you should be very diligent to know if they are a general contractor and what substitutes they are going to hire.

Make sure everyone is covered too or at least covered under that umbrella blanket g c-- policy you need to be diligent, especially on dangerous jobs like roofing work, like painting with ladders, anything where there is a large amount of risk . that could potentially affect what happens with the trees' work. You have to be careful here and you may pay a couple of dollars extra because you are working with someone who makes sure it is worth every penny because it helps you from a liability standpoint and also brings this point up when working with general contractors , you have to be very careful to make sure subs get paid personally.

I always pay the subs directly if I'm going to have a GC I pay them but I always pay the subs directly. because if you pay GC and they don't pay the subs underlined now you have two invoices you paid for the same job twice it happens every day of the week or GCS gets the money and they don't pay the subs and they call you You're always on the phone. Very sorry. I am working on it. All those subs are crazy. Oh, he drinks a lot. You have no idea about his coke addiction. Phil, uh, no, none of that crap.

I work directly with the subs and directly. with the GC that way there is no way for the sub to come back and say I am pursuing a lien against this property because I did a $3,000 electrical job and you didn't pay, that is very serious so you care who does the work and you need to do it. Be very diligent about how they get paid. My vote is to pay each contractor separately, even if you have a GC who guarantees there is no way they won't get a pay raise, and by the way, sometimes the GC will say all of which. you're too busy to pay I have news for you I have several businesses I make a huge amount of money I have a very large asset base I pay all my bills for all my businesses because that way there is absolutely no way accountants can come in and rip me off I know What do you think I'm being paranoid no, it's the real world go look in the annals of history the oldest trick in the book is the accountant the only guy you know looking at the books stealing the money that's what it was happening back in the year 3000 BC C., that's so old school, so I pay all the bills now.

I automate a lot using Bill Pay and those other features with online banking, but I always have time to pay a subcontractor. Always have time for that, so that's an important feature, as well as making sure you work directly with the right people, pay them directly, and that they're insured correctly. Number seven, a gentlemen's agreement, also known as a handshake agreement, never do it. I always always always put it in writing I don't care if it's a simple one page piece of paper it doesn't have to be complicated it doesn't have to be long and drawn out in fact I have a link where you can download a copy of a contract that use with contractors, very simple, very easy, that you can use to make sure that at least it is written down what your understanding was, if for nothing else, so that you both don't do it.

Don't forget what you agreed, I tell allied contractors that this has nothing to do with trust, although I don't trust contractors, but really it's because I want to make sure that you and I, on the same page, know that We will be two months later. down the road or a month from now and you and I are arguing about what we agreed to at the beginning, so be detailed, put in writing what it is that you agree to do, what the cost of the materials is, what the labor cost. estimate and all that in between and by the way a small tip if the contractor is going to purchase the materials then just ask him to provide receipts to prove the cost of each material, they can still screw you up by forging receipts but it's a little harder and it's a little more lying in writing, which obviously becomes more criminal activity, but if you get it in writing, at least you know a starting point and you can always add an addendum if things change, but keep it in writing , there are no handshake agreements with contractors. you do that, you're looking for a screw, so those are seven things you should never say to a contractor, and even though I detailed it a little bit, this is kind of simple, right?

It's much harder in the real world. Do all this because it takes time and many times we are in a hurry in life when we try to take shortcuts. Don't take shortcuts with contractors. You will regret. You have to take the time to do this right. My mentor was great. In this, he instilled this in me. You have to be very careful when hiring contractors. Believe it or not, many contractors have criminal records. I know that doesn't mean they are bad people, there are many wonderful criminals. but when it comes to carrying out commercial transactions, it is at least important that you know the type of history they have from an ethical perspective, that you know from their morals and their actions, and that is why many times, when people are released from prison, there is no a lot of work. opportunities for them, but everyone can become a contractor.

You wouldn't believe how often this happens. How often do I ask a contractor what they hire. Hey, have you ever been to jail? Yes, but that was like four years ago. It was a DUI. I am totally clean. now filling them much better, so this is very, very real. You often have a Freudian slip and as I try to refer to contractors I call them criminals, they are not that bad but you have to understand how serious they are. What this really is is that if you don't take this as seriously as you should, at least they'll take advantage of you, they'll get the best of you, and again, I'm not looking for you to try to screw them over, neither are they.

I need to make profits. I have a great video on why making a profit is such a good thing in business, so I encourage you to make a profit, but not do it at your expense, where they go so far beyond. I just got a bill from my electrician, for example, ninety-five dollars an hour, the guy has time, he takes pictures of me or the latest monster fish, he just called it his fly rod and then he sends me that bill this morning 95, has been charging $75 an hour for at least the last two years, as you can see even the people you work with are always trying to get to you so you have to be on your toes, this is the not so fun part of being a real estate investor. contractors, yes, you will have thick skin.

I used to be a lot nicer in kindergarten until I got screwed around a lot and now I'm tough, I can't stand it and that's what I want you to be. at the end of this video I want you to be tough I don't want you to put up with this crap I want you to say as little as possible to make sure you close these deals and make sure everyone keeps their promises. Well, I'm Phil Bustillos, feel free to mentor a little more intensely than usual. I hope you learn a little. If you have any questions, write them here.

I'm all ears. I love talking about contractors, it's a big part of our job. business want to learn more about how you can become a world-class real estate investor and so you can overcome all those years of headaches and anguish from making mistakes and want to have that fast track to success, feel free to search our apprenticeship program where we are my team and I work with people one on one and transform them into money making real estate machines. Many of my apprentices these days Ramon, the best in America, I mean, they are leading their respective markets and they are already finished and you can also be one of them, so thank you again for watching this video.

See you at the next one.