Remodel contractor - Posted by John - Ohio

Posted by Jen-LA on May 17, 2000 at 16:22:08:

I’m not necessarily an “experienced” rehabber, but the contractor I use has never asked for any % of the profit. I’m confused here, why would they ever be entitled to a % of your profit?? They get paid to do what they do, period. Now, my contractor does do his own rehabs now after seeing how much I make on them.
But thats his own business- I know I’m not helping here, and maybe it’s common practice in other places to do this, but this doesn’t sound like a good deal at all. Do you HAVE to use this person??? Just my .02.

Remodel contractor - Posted by John - Ohio

Posted by John - Ohio on May 17, 2000 at 08:03:32:

As am experience rehabber, I am always looking for ways to do a better job. I am considering using contractors for my projects instead of employees. The contractor I am after wants paid for his work(of course) plus a % of the final profit per house. He is only doing the remodel. I am finding, funding and selling. Do any of you have a suggestion on how to compensate him and include a % of net profit after sale?

Re: Remodel contractor - Posted by d.henderson

Posted by d.henderson on May 17, 2000 at 21:27:56:

We have a construction company and we use cost plus (meaning cost of labor, materials and a percentage of total job) only on new construction like a home or commercial property. On rehab or remodel we usually bid these, unless they will be a headache meaning so many changes or historic homes that you don’t know what you are going to get into.
If you have foundation problems or other severe problems hire the best and get the problem taken care of. If you are just doing cosmetic, painting, siding, some repair find a handyman (someone that has been in the business for a long time and knows all phases…paint, plumbing, electrical, framing, etc)pay them well after you have determined that they really know what they are doing and you will have someone that will take care of the rehab while you find more properties.
Good luck,