How to Manage General Contractors

The Contractor Problem

Most fix and flip projects go over budget or over timeline because contractors:

• Start, then move to another job when it gets bigger
• Underestimate scope and material costs
• Don't communicate delays until you find out
• Negotiate price up after starting work
• Don't have the right licenses/insurance

The fix: Clear expectations + written contracts + regular accountability.

Before You Hire: Vetting

• License & insurance: Verify with Florida Department of Business and Professional Regulation (DBPR). No license = no contract.
• References: Call 3+ past clients. Ask about timeline, budget adherence, communication.
• References check Google: Look at their reviews. One negative review is normal. Multiple "didn't finish" reviews = red flag.
• Bonding: Ask if bonded. Protects you if contractor disappears mid-project.
• Payment history: Ask if they've had liens filed. Multiple liens = payment problems.

The Contract Must Include

A solid contract prevents 90% of contractor problems:

1. Detailed Scope of Work

Not "remodel kitchen." But "remove existing cabinets, install new cabinet doors (specify brand/model), install quartz countertops, paint walls, install new lighting, etc."

2. Timeline with Penalties

"Project starts 6/15, substantial completion 8/15." Include $X per day penalty for delays past completion date.

3. Fixed Price (or Maximum)

"Total cost: $60,000. No additional charges without written approval and change order."

4. Payment Schedule

Example: 25% down, 25% when framing complete, 25% when inspections pass, 25% at completion. Never pay in full upfront.

5. Insurance & Licensing

"Contractor maintains current FL license and $1M liability insurance throughout project."

6. Permit & Inspection Responsibility

Clarify who obtains permits and pays for inspections. Usually the contractor.

During the Project: Accountability

• Weekly check-ins: Call or visit. See progress, ask about obstacles.
• Photo timeline: Take photos weekly. Documents progress for your records and lender (if you have a draw loan).
• Respect timeline: If work slows down, call immediately. Don't wait until end of project.
• Document changes: Any scope change = written change order with new price/timeline. No verbal agreements.
• Don't pay ahead: Never pay for work not yet completed. Follow your payment schedule strictly.

Red Flags During Work

• Crew not showing up on scheduled days
• Contractor asks for more money mid-project
• Subcontractors report not being paid (they might file a lien)
• Work doesn't match contract scope
• Contractor stops answering calls/texts

If you see these: Stop payment, call attorney about lien risk, consider replacing contractor.

Contractor Management Tips From Experience

Get contractor recommendations and financing insights from Sean Bailey. He's funded hundreds of renovations and knows which contractors deliver.