What to Do When Your Contractors Disappear in the Middle of a Project! - ...

What to Do When Your Contractors Disappear in the Middle of a Project! - Noam Segal - Entrepreneur of the Week - Post 4

#EntrepreneuroftheWeek #RealEstate #Flips #BuyAndHold #BRRRR #Mortgage #Investors #RiskManagement #NewConstruction

Hello everyone,
Continues today in the weekly series of posts
And this time a story about a contractor I worked with.
I will start by saying that this was not just a business relationship, he is a contractor I knew at the beginning of my entrepreneurial path through a broker from Meckler Williams.
And the truth is it looks like I found pure gold, we started with two lightweight flips that worked great, opening brackets in my opinion an entrepreneur should be most careful if he is very successful on the first projects it leads to carelessness.
Going back to the story, the contractor came to me and said: Listen in new construction you will have the opportunity to earn much more....
I told him straight, let's go for it. After two weeks he came back to me with a 14-lot project in Atlanta,
An entire street. Of course I was shocked at first but after doing my tests that were not enough at the time (because my knowledge of the subject was not enough) I purchased the plots and we started the project with 2 houses. The construction of the houses was incredibly fast and was completed after 6 months including the building and sale permits, really amazing and I was in the clouds.
From here the relationship really developed, I met his wife and eldest son, we would have dinners together, the level of confidence in the contractor was high, I trusted him he did a relatively good job on time and on a set budget.
We bought another 15 plots together and on the way we also made improvements and then suddenly the pace of work started to go down, at first he had all sorts of excuses and later the delays started to get more significant and then the corn came to us ….
He stopped working for 3 months and almost closed the business. At this point there were 7 projects that were in the middle of construction of course at different stages. From here there was no choice but to roll up my sleeves and dive into the depths of things, I traveled for a month and a half to the USA.
Here also in my personal growth, not only in understanding the construction process itself but also deepening to understand what inspections he has to go through, I talked to the officials in the district construction offices to understand all kinds of issues related to permits, I talked to sales people representing building materials suppliers, I checked the prices of the various works to understand if I get good prices and much more that the sheet is short...
I learned a lot from the whole process. One of the issues that helped me overcome this hurdle was managing the budget in the face of progress and times respectively.
Here I put my biggest emphasis. No matter how long you have known each other and how much you have become friends forever but forever
Manage the payments only according to progress and my warm recommendation is: Separate the work materials and the contractor's fee.
Today we have 2 last projects left with the contractor, the ones in the attached pictures, we are really there already in the last quarter of the project and it is going to be a stunning house, but I know that after he finishes the houses I finished working with him (hope he is not subscribed to this forum) I already have a new team in Atlanta and I'm doing more projects in Alabama… ..
So overall I learned a lot, my real estate teachers would say it's all RELATIONSHIPS and it's true but it's not related to managing the construction project itself, I delved into the field of construction and my understanding today is much better. I also learned how to manage crises and deal with them….
This is indeed not a cliché - to be successful you must experience crises and failures, they are the best teachers there are.
And if not - then at least consult with someone who does experience

Continue reading on our site…
https://www.forumrealestateusa.com/2021/07/choose-the-right-district-noam-segal/

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