7 Things to Never Say to a Contractor

You're about to discover 7 things that you should NEVER say to a contractor; or said another way; here are 7 common ways that contractors can screw you. Whether a big or small job, hiring a contractor is serious business and you must adhere to the following guidelines in this video or else you stand a good chance of being taken advantage of. You'll learn real world wisdom on hiring and dealing with contractors as well as get free access to a contractor agreement which can help you avoid some of the pitfalls that so many other investors experience.

Contractor Contract Template Download

 

If you're looking to hire a contractor for a job, big or small, you need to read this blog. I am going to educate you on how to develop a fair relationship with your contractor. Contractors can be a source of a lot of stress and anxiety in the world of real estate. They can be masters at extracting the maximum amount of profit, while putting in the least amount of work.

I want to share some important information to ensure that you're in a mutually beneficial and fair relationship with your contractor. This information might offend some contractors, but that's a small price to pay, for sharing the truth. I have been a part of transactions involving hundreds and hundreds of different contractors. I have also been screwed over by a ton of them, which makes me uniquely qualified to educate you on what not to say to contractors.

 

Seven Things to Never Say to a Contractor

 

1.  Never Tell a Contractor They are the Only One Bidding on the Job

Always get a minimum of three bids, in fact, the more bids you get the better. Separate each bid into the cost of materials and the cost of labor. This will help you tremendously when comparing each contractor.. Don't ever tell a contractor that they're the only one bidding on a job, because that gives them too much power. You need to lead them to believe that you are considering many contractors for a job, so that they are held accountable for their bid.

2. Don't Tell a Contractor Your Budget

If you tell a contractor that your budget is $20,000 they will find a way to make their bid $20,000, even if it should be lower. Instead you should have them provide a bid for the work you need done, so you can compare the cost of material and labor with other bids, to make an informed decision.

  • Cost of Materials

Be aware that many contractors will upcharge you for the cost of materials. It is important to independently verify the cost of materials after receiving a bid. I have had contractors look me right and the eye and inform me that material cost is $850, when I know for a fact the cost is only $550. I refuse to hire anyone tat will lie to me about the cost of materials, so I always verify costs.

 

3. Never Ask a Contractor for a Discount if You Pay Upfront

It is an extremely stupid to offer to pay a contractor the entire amount owed upfront. If you pay a contractor upfront, they can end up not doing a good job, or some will even take your money and disappear.

I have actually seen some real estate traders on Youtube teaching people to do this in order to save money. It is very dumb advice, because you have to be very careful about payments to your contractor. You will have to pay some money upfront to cover the cost of materials, but I actually try to work out deals where I am purchasing the materials myself. I dont trust contractors to buy the materials for me, because in the past I have had issues with contractors using leftovers from prior jobs, or purchasing cheaper materials then requested, thus scamming me out of money.

Now, there might be some attorney's reading this, that would argue that the moment you purchase the materials, you are crossing the line, and the  contractor can now be considered an employee. I find this theory completely bogus, because the contractor owns a contractor's license, and work with many other clients. I have the right to purchase my own materials, so that I know they are purchased correctly.

  • Paying a Contractor

Personally, I give my contractors a little bit o money upfront, and then pay them over the course of the job as it is completed. I always save the final payment for after the job is finished, in order to protect myself from being scammed.

About a month ago, a hurricane began to approach Florida so my family and I decided to evacuate early, in order to get ahead of traffic. I own a large home, so I hired someone to put approximately 50 hurricane shutters up around my house. When it came time to leave, he was only about 3/4 of the way done, so I ended up paying him before he was finished.  This resulted in me being screwed, because he never put up the rest of the shutters once we left. I had to get real serious with the guy I hired, and was able to get some of my money back, but I consider myself lucky for that, because some contractors just disappear after they screw you over.

So be advised that if you pay somebody upfront, there is no guarantee that they will finish the job. Don't give a contractor their final payment, until after the project has been completed.

 

4. Don't Tell a Contractor That You Aren't in A Hurry

If you tell a contractor that there's no rush to complete your project, they will give your job the lowest priority possible. They will take on other jobs and spend their time doing other things, besides getting your job done. You need to communicate timelines, and actually chart out the weekly expectations you have in terms of job completion. Be sure to set dates and deadlines, and let the contractor know that they will lose money if the job is not completed within a reasonable amount of time.

Never tell a contractor that you're not in a hurry, or else your project can end up delayed more and more, until you are pissed off and losing money. 

 

5. Do Not Let a Contractor Choose the Materials

It is very important that you make the decisions on the exact materials you use for your project. With each type of material, there is a high end product, low end product, and something in the middle. Educate yourself on the difference between each type of material, so that you can choose based on your needs. If you allow the contractor to make all of these choices for you, they can really screw you over. They could use materials from other jobs, choose materials that are too expensive, or even too cheap.

In my contract with my contractors, I specify which materials they are to use. Picking the right materials can make all the difference in the world.  If a contractor picks the wrong materials, the project is bound to go wrong.

I need you to choose the materials. Be specific on what materials they purchase, where they purchase it, and the price they pay for it.

 

6. Never Hire Anyone Illegally 

Some contractors might offer to bring in people that aren't legally licensed to work on your jobs. You should never hire anyone that does not legally have the ability to do the job. If you are not diligent when hiring a contractor, you risk a huge liability if someone is injured.  Make sure that the contractor is licensed and insured, and has evidence of an insurance policy. Be aware of any subs brought in by a general contractor, to ensure that they are covered under their policy.

  • General Contractors

You must be critically careful that the subs hired by the general contractor are getting paid.I always pay the subs directly, because if you only pay the general contractor, there is no guarantee he will pay the subs. If the general contractor does not pay the subs, you could end up with a lien filed against your property. Always pay the sub contractors yourself.

 

7. Don't Agree to a "Gentleman's Agreement"

Always, always, always put your agreement with a contractor in writing. I don't care if it is a simple, one page piece of paper, just get the deal in writing. I have a link where you can download a copy of a contract I use with contractors. It is very simple, and ensures, that you and the contractor both understand what you are agreeing to.

Having everything in writing has nothing to do with trust. It helps ensure that everyone is on the same page and remembers what the agreed terms are.  So that months down the road, we don't start arguing to what we agreed to in the beginning. I write out very detailed contracts, with my exact expectations and a list of all expenses.

If you decide to let the contractor purchase the materials, have them provide receipts to prove each material cost.

 

Conclusion:

Those are the seven things to never say to a contractor. They all might seem like pretty simple guidelines, but they're a lot more difficult to practice in real life. Oftentimes, we get busy, and try to take shortcuts in life. Do not take shortcuts with contractors or you will regret it. Take the time to do things right, and be very careful when working with contractors.

A lot of contractors actually have a criminal background. This doesn't make them bad people, it is just important to know someone's history from an ethics perspective. If you do not fully understand how serious working with a contractor is, you will get taken advantage of.

On the opposite side of the coin, don't try to screw over your contractor. It is very important that the people you hire make a profit.  I actually have a great video that further explains why making a profit is a good thing in business.. I encourage contractors to make a profit, just not at the expense of you.

 

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Comments

  1. Carolyn says

    This is all great information; unfortunately I found it too late. We survived Hurricane Michael 2018. When we started the process of finding a contractor they all wanted to see the insurance claim 1st—is this normal they don’t know how to write an estimate. The contractor we hired seemed sincere and stated he had worked with hurricane claims (found out later he was a storm chaser working under a local contractor’s license) and wanted to be sure all damage was covered. After almost 18 months we have just okay repairs. The contractor increased the costs of things quoted because he did a really bad job on the drywall and spent an extra 10 days trying to repair…doesn’t look any better. He never completely finished window installation, window trim, door trim, told us it was cost effective for him to paint the house or install the rock on the gable. What a lesson this has been…. Monday through Friday we work on repairing the things he did and completing the things he did not do. We are in our 60’s and so tired we try to get a breath on Saturday & Sunday. More times than not we wished we would have just walked away like some people did. Never thought dealing with a contractor would be worse than dealing with the insurance company.

  2. Derek McDoogle says

    My friend told me that he would like to build a house on the bare land that he owns but he wants to have in mind how much he would need to set as a budget. I like how you suggest asking for different quotes from different companies so that he can have an idea.

    • Phil Pustejovsky says

      First, he needs a list of home builder that are active in his area. To do that, he needs to research the building permit records for the County that his land is located in, to collect the names of all home builders that are building a house in the County, say within in the past 6 months. Next, he needs to Google their names and research reviews from people who have worked with those home builders. Next, using the building permit records, he needs to drive by those houses that were built by builders with the best reputation. Then, he can reach out to at least the top 3 builders to find out what it typically costs per square foot for them to build a house (or the level of quality that he is considering). If your friend references a few houses that he drove by that the builder had done in the past, that would be the easiest way to get a gauge on what it cost to build for the houses he saw.

  3. I did all I could think of to protect myself from getting screwed before hiring a person to add on to my already existing retaining wall — but got screwed anyway. Well I found someone to do the work. I hired the guy and he and two other guys built the wall. It turned out a mismatched color, not straight, broken bricks, loose bricks, feels like it could fall over, bricks don’t align and it’s tipped. I am so dissapointed. I asked a lawyer what recourse I have to get my money back and he told me probably none. Seems the law favors the side of the contractor. I can’t imagine looking at this unsightly sloppy job they did for the next ten years. I don’t know what I’m gonna do.

  4. Mrs. Jones says

    Excellent written article! I have been put in a horrible situation with a paving company. I called them on 3/27/20 to come out and give me an estimate to blacktop my driveway. On 4/1/20, said paving company met with my husband and informed him of the cost. He told my husband the cost was only good for this day since he had another job in the area. My husband told him okay, we will get back with you. Husband called me and said estimate was way too expensive. I called the guy back within 5 minutes of him meeting with my husband and relayed this information to him; and also that we were getting other estimates. He said okay. Roughly three hours later, I get a phone call from the paving company telling me he has completed my driveway and asked if I could leave a $4,000 check in the door. I thought it was an April fools joke, but it was not. I’m appalled that what should have been an estimate, turned into a $4k decision made for us. There was absolutely zero written, nor verbal authorization given to do the job. All talks and correspondence were done with the same individual. While I am a fair person, I do not appreciate being forced into something I did not ask. I have no clue on what we should do. The only feelings I do have is anger and feeling taken advantage of.Thanks for reading.

  5. I truly wish I’d of seen this video before I had signed a contract. I made everyone of those mistakes. People insured feel immune from being screwed. I’m living proof that anyone can be screwed.
    Please add a #8 to your list about Contractors who tell you their over charging to cover something denied & using the term “Legal Loophole” that screams they’ve probably sued other home owners & have been sued many times. Suffering a significant loss from a hurricane makes people an emotional wreck & we just want our home repaired. Realistically like taxes were responsible to know what we’re signing even though I though my insurance company had my back. They should of informed all their customers that the fastest way to getting a claim paid was by having a Contractor do an estimate of damages & the cost to repair.
    My entire claim almost ended up being denied after my claims representative told me I was purposely dragging the claim out to maximize payment. Fortunately I paid for my roof out of my own pocket once I realized it was gonna take months for them to pay this. I was hurt & pissed. The 1st contractor got in over his head taking on to many homes on at one time. The 2nd took me 45days & many calls to find since most were booked solid & even their waiting lists were far into end of 2019. Then I found another contractor who had several locations I was happy now the work was going to finally be completed. Wrong! Other than a small pack out in June nothing else was done. The contractor told me that due to who my insurance company was they’d need to wait on approval to repair. Once again my insurance carrier said the claim was being dragged out causing further damages to maximize the claim. Then the estimate & cost to repair issues began. Later I found out my contractor was trying to maximize the amount to rebuild & put in rooms that were unaffected. From July till October there were 4 more estimates that kept having to be revised before some of the approvals were given. The contractor showed up in November to start demo work but then they left it uncompleted. They insisted on all approvals before they’d return. I asked what was missing he said the approval to rip out the entire kitchen & I about died. The kitchen had no damages! Plus he mentioned as of November they were owed $77,000 on work done at my home. What work?? Seriously the 3 worst rooms cost $5450.00 to demo right after the hurricane so all they did was a little more drywall, floors & ceilings. Plus they weren’t getting paid because they didn’t send in the 1099 etc to my bank & nothings getting paid without that. Finally 2wks ago I received a check for about 65% of the entire approved claim which has to go to my mortgage company. I let the contractor know the money is there. Still he hadn’t turned in his paper work after I’d asked many times. The contractor got mad at me because he wanted the entire check upfront & I told him even if I could do that I wouldn’t. Seriously I can’t force him to do his paperwork & I made him tell me how long it would take to finish my job he said 6-9months most likely a year depending on payment & the missing approvals. I said why can’t you at least complete the upstairs & he told me it’s all or nothing. Thats when I told him I was calling my attorney.
    I have a handicapped daughter that I take care of & we’ve been living in a camper behind my home since the hurricane. She attends school & a special center designed to help people with disabilities. My daughter freaks out when not in her own home & will escape during the night. I did what was in her best interest & got an RV my insurance refuses to pay for. I have No regrets about doing that but the money came from my retirement. The night mare just has to end. My home is 1 of 3 others in my subdivision who are still waiting on repairs & guess what? All 3 of us are using that same Contractor. Makes you wonder what their doing & how their staying in business. No ones been rebuilt & we all have different insurance carriers.
    Can this contractor file a Lien on my property if he didn’t do what was needed for payment? Several months back I offered to pay the 1st 25% just to get this started but he refused that as well. I’m very grateful now but it makes me wonder what the end game & what’s it gonna end up costing me? I guess that’s another of their legal loopholes.

  6. This is very good information. Question, I did everything that is suggested in this article. We got to the end of the bathroom remodel, they removed the toliet for the new flooring. Well, the found that the toilet needed a new flange, so the sales rep wanted to install it himself, since his plumber quick due to Coronavirus. He bought 2 flanges and neither worked. He asked that I contact my plumber to install. My question who should pay my plumber for his service?

    • Phil Pustejovsky says

      It’s a very tiny aspect of the job. The General Contractor remodeling the whole bathroom should pay for it but the cost will be minimal either way.

  7. We hired a contractor 14 months ago to build our custom home. Although the completion date estimate was 4 months ago, our home is still not complete. He has taken 3 vacations during this time period, two two week vacations to Hawaii, and one 1 month vacation to Africa with his wife to go surfing. His workers are all under 30 years old, are not supervised by a licensed contractor since he spends almost no time at the job site, therefore have made many mistakes in the building of our home. His excuse is “They can always reach me by phone”. We have had to monitor the situation daily to prevent disasters. The job site is always a total mess inside and out. The errors we caught were somewhat “corrected” per our request, but have reduced the “beauty and balance” of our home. They have spent countless hours building and tearing out and rebuilding.
    We live in a gated community that requires us to give permission to those who are directly involved in the construction of our home. We’ve “caught” these workers bringing their friends, wives, children and office staff over to see our home without our permission. As gated community owners, we are deemed responsible for any problems these uninvited guests may cause. Our builder has a copy of the CC&Rs, but chooses to ignore them in so many ways.
    We have had several houses built throughout our lifetimes that have gone well, but this one as you can imagine has been quite a challenge.
    As seniors we really feel like victims here. Do we have any recourse? There is one draw remaining and we don’t want to pay it until all of the work is complete and correct.

  8. Random success story about this. Needed to rip out carpet and put in engineered wood, about 1800 square feet worth. Found a contractor online. Got pricing and all that, but they wanted 100% upfront. We were literally just going to get a quote from them, but that upfront payment business wasn’t happening.

    So we put it out to bid. We got I believe four other quotes, ranging from $21,000 to $30,000. The original contractor wanted $25,000. We went with the $21,000 guy, saved $4,000 and he actually told us which flooring supplier to call to order the material ourselves. We paid in three installments. He finished in two days.

  9. The contractor I have, we were in a relationship he was doing the work I paid him all of the money. Then he found a lame reason or excuse to get mad at me, so to make a long story short he keep saying he is sick. He got most of the Materials that is needed for the job, but it is taking forever & a day to get this job finished. Tell me what Iam suppose to do. To get him to Finish the job. Please e-mail me and let me know what steps to take. This job started jan 10, it is now march 1, and he keep bringing the stuff, but he never gets back over here to Finish up! Iam not happy at all with the way things are going.

  10. Thanks so much for all of the awesome videos you post! We have followed for a couple of years and are doing great with investing.

    Right now, I have a contractor who is asking for $1500 for a remodeling estimate for my personal home. He says it is to cover the cost of creating a 3-D walkthrough and detailed plan for the project. How common is this?

  11. Tyson Coolidge says

    I like what you said about never telling a contractor your budget so that you can get a better deal. My sister has been telling me about how she wants to get a new store location built soon. I’ll share this information with her so that she can properly work with contractors.

  12. Shaylee Packer says

    I can see how getting multiple bids would be a good idea. It would allow for one to see what the average cost in the area is. I will have to keep this in mind for the kitchen remodel I want to do in the spring.

  13. Great advice. I needed some concrete contracting done, and even though I have trust for the contracting company, it’s always better safe than sorry! And honestly I don’t think this article paints a bad picture, I think that it just reflects how people are always gonna be, wherever you look. It’s just reasonable.

    Thanks!
    -Jamie

  14. Hi Phil
    How is the contractor paid with a construction loan? I want to buy my own materials.
    Please advice Thank you

    • Freedom Mentor says

      Application for a construction loan is submitted with the Contractors bid, draw schedule, cost allocation and timeline for project. The bank will release money based on those schedules. The borrower typically pays interest only during construction.

  15. Megan Adler says

    These are helpful tips on how to work with a contractor so the project goes as smooth as possible. I want to remodel my home and we need to find a contractor that shares our vision.

  16. Contractor Los Altos Hills says

    Really Impressive, Thanks a lot for sharing such a helpful post.

  17. Taylor Anderson says

    I like how you mentioned that one should get at least 3 different bids when looking for a contractor. A lot of relatives are building new homes, so these tips could help them. Thanks for all the tips on interacting with a contractor.

  18. Great stuff Phil. I am a GC and have found this to be an extremely awesome selling tool. May I ask your permission to include a few of these details on the FAQ section of my website? I will definitely cite my sources to include your page. Thanks in advance.

  19. It was worth reading

  20. Diane Frediani says

    There are good and bad people in every walk of life. I am a GC and we almost never participate in multiple bidding – it costs thousands of dollars. We have been in business 40 years and there are enough completed jobs to show prospective clients and lots of past clients willing to discuss the experience they had with us.

    • My son is a GC.I cant tell you how many times customers have not paid my son his last payment! They always make excuses or simply just dont pay it.My son is a very kind person and people take full advantage of that.Its pitiful.How does he ensure getting his last payment.He is super honest.

  21. All that you have said is what is leading to major collapse of high rise structures in Kenya .

    Trust is very important in any deal concerning construction.

    I have undertaken several projects worth millions to the end and no such day have ever disappeared with client nor workers money.

    Lastly we say God provides and what is meant for you no one can take it.

    If you can downplay the roles of a contractor the way you have done I do bet that you count the egg shell at your home before stocking..

  22. Phil, you are so right. And it hits home to know these slick bastards have screwed you, too. Am going back at it after twenty years, and am not looking forward to it. A person really has to figure out how to work on his own property.

  23. Hi there, I have very similar issue like June 2 2018 Margaux situation, my contractor now leaves text messages with lien threats and still wants to come to my house for the balance on estimate paper, NO contract because second claim was filed. Need help, please. I am uncomfortable with the contractor coming over my house uninvited.

  24. Lana scott says

    I must be honest and say when I first started listening to your video I thought you were a crackpot but after listening to your whole 7 things you should never say to your contractor I am so glad because I am one of those people that just speak before thinking sometimes and I can just see me getting into trouble the contractor and getting ripped off so thank you mr. Phil for all this great information I have actually wrote it down and going to pin it to my wall when I go to have my Foundation fixed on my property thank you so very much I plan to look into the rest of your videos God bless she’s looking out for you

  25. Kenneth Lofstrand says

    All good and fair advice. Im a contractor and agree with all these points . I agree one should never lie to a customer but if i buy materials i upcharge for my time and work retrieving them… around 20% above cost.. i give the option for them to purchase parts themselves. If negotiations are fair and a customer is willing to pay what i need for labor i will pick them up for them no charge . Its a give and take and alittle give goes a long way with me. Its a 50/50 deal. I do a job for you to your satisfaction and you pay me money… if i have to negotiate to a lower price i dont expect to be asked to do extras .. its bad etiquette imho. alot of people seem to feel you owe them more because they are paying you like only giving access to a place when its convienient for them or expecting nights or weekends only or ” can u throw this little thing in ” after negotiations are finished . That means if you want something done in a resonable time you have to make the sl
    Space available and make some consessions with your normal life…
    just wish people would get multiple estimates more so they get a real sense of the avergae and what they are getting. Its equally frustrating for both sides. In my experience in doing things with integrity its way more of hassle on my end than it ever is for the customer.. get informed. Reseach your products and job you want done. It will make it easier gor all involved and help your bottom line in the end. Ty .

  26. Phil,

    Great advice. I’d like to get your advice on something … what are my options if a contractor screws me? E.g. when is it time to lawyer up or simply cut my losses? Also, at what point in time can I get out of my contract? What are some things that breach a contract? Curious what your and even some contractors thoughts are? Thanks warm regards, Chris

  27. WOW! This is EXCELLENT advice. I am getting ready to reno kitchen and have already had one guy run when I asked for itemized break down between labor and materials. Thank you for this invaluable info.

  28. LynnAnn McBride says

    Phil – You hit it on the head and bold, I like it! Excellent information to use!! Thank you for your insight!
    from an Interior Designer, by trade.

  29. Edinson Rosales says

    Phil when you laughed in the video you made me laugh. Everything you said is true. I had been in the construction industry for while and i worked for different companies. Hopefully i’m working on a construction Start-Up here in Penn State.

  30. Suzanne hollandsworth says

    I’m just an individual trying to have a house built and it’s good to know how to deal with contractors so you don’t get screwed

  31. Johnny Bilby says

    Many of the issues discussed in this could be eliminated by simply hiring a contractor with great referrals from friends or aquaintances. If you have the word of mouth from trusted sources regarding their integrity there is no reason to fret over most of the process.

    • Phil Pustejovsky says

      I completely disagree. You need to apply these tips no matter how good their reputation is. These are fundamental to dealing with contractors.

  32. Laura @ LNJ properties says

    Great info! Thanks so much, very helpful. Common sense stuff but really important to avoid slip-ups.

  33. I would love advice. I hired a guy for a simple bath renovation- new tile, electrical and fixtures. He sent an estimate and said it would be about 3 weeks at most. second day on job I asked for a contact- with dates, etc. He refused. He brought in a guy who barely spoke English and left him to tile. The work was sloppy. Many tiles had to be replaced. The contractor has been disrespectful and unprofessional . Numerous mistakes and he lies about them. What should I do?

    • Freedom Mentor says

      When you hire the next contractor check his references thoroughly. And review the contract thoroughly as well.

  34. good blog!

  35. Royal Davis says

    Many great comments. Yes I have bought and sold houses on a small scale and have also worked as self employed contractor. If it’s not in writing I don’t do it. Thanks Phil you are the best!

  36. Jess Castillo aka Jess DeCristo says

    Hi Phil, I love your videos! You are down to earth, honest and sincere. I ran across your videos by mistake, but I’m glad I did,. Thank you for your wisdom and sincerity. God bless.

  37. So excellent! Thank you so much for your honesty

  38. wow ..Thanks a lot …

  39. Barbara Pollard says

    Great video (my husband is an Electrical Contractor, but only does Commercial), and have seen this type of activity first hand. I am in the process of doing a partial Reno in our kitchen. I researched/purchased all the materials, and hired a GC to act as the Project Manager. Doing it this way saved me several thousand dollars. Totally agree, buy as much of the materials yourself.

  40. Avery Birchard says

    I was almost laughing, it so painfully true on so many levels. Like give the answers on test to 5th grader 5 minutes before test time… They will use it and then tell you they passed honestly, it helps no one in the end. And we can file this under control the deal and don’t spill your candy in the lobby.

    In short, excellent video on common sense.

  41. Lisa Phillips says

    They can SNIFF the newbie on you. And will always align it so it is maximized for themselves, NOT for you.
    There is a monetary amount that determines how much you should pay up front, and there is a science behind it. But as you said, they will always make it better for themselves AND have a straight face when they tell you someting BS that lines their pockets more than yours. Good video, I approve.

  42. Kim Daskam says

    🙂 love this guy~ LOL

  43. Ruth Woods, Realtor (Needing this good guidance for Investing side says

    Put in a new kitchen upgraded faucet while getting repair of a kitchen sink leak not even a month after husband, very qualified engineer always kept house in good repair.

    Found out leak was coming from need of a new garbage disposal. Found a very good resource from Home Advisor who put in a new garbage disposal. I checked around many other internet resources like mentioned above for comparables first. This was a hard decision to make but the Home Advisor person did do a good job & also gave me a so many years guarantee. I am lucky in one way, the person who guaranteed for years has ownership of a home not far from me. I think I could take him to small claims court myself if he does not stand up to the guarantee? Since he does have a home legally as an asset of his, then I could file a lein against his home for the total lein that might become in my favor against him to be paid before he or anyone could sell his home, even though I would upfront have to pay for court filing & recording of the judgement (not that much compared to a possible total judgement. Very worth doing a study by any individual plus, for individuals to check person/company/contractor, etc assets in same state.

  44. Peter Lopez says

    Phil! You will lose the rest of your hair if you keep hitting yourself like that! I’m a fan of yours, this may be the funniest and at the same time most powerful video ever… Thanks for sharing your wisdom…

  45. Peter Pasquale says

    Great video, every word of it 100% true. In my experience (one top to bottom remodel of a duplex), top tier (read expensive) contractors give you a fairly professional and detailed estimate, but then again you are paying TOP dollar.

    Almost everyone else writes the estimate in sloppy hand writing or in a cryptic email. I’m overstating it a bit, but to get 3 half way decent estimates you have to call 30 guys.

    Any tips on where to find a good contractor? I’ve tried Angies list, Yelp (totally unreliable, they virtually force businesses to pay monthly to get the good reviews to appear) and grabbing guys out of Home Depot.

  46. I own 3 houses from your advise you are a blessing to me! Keep up the good work! God bless you

  47. Phil your the man I love your energy and use all your advice !!love ya Gabriella

  48. That was great! Thank you.
    I can relate.

  49. Love your talk so much, your points are always very helpful and honest. Thanks Phil!!!

  50. Thanks Phil! I really appreciate your sentiment. You expressed yourself how I feel. I’m going through a similar situation, although not by my own volition. I have partnered with someone who hired a contractor who on the start date failed to show up; and in between does not return calls and is in my opinion, at face-to-face, one of the nicest guys -right?, but out of sight is atrocious. Already I don’t like him.

    The funny thing is that there are many suspicions that run around in my head about contractors about there unscrupulous ways and this (your) video confirms many of them.

    Thanks Phil for the video. That’s real service.

    by the way, I also appreciate your integrity in your overall business approach. This world is crawling with cockroaches…

  51. This is why you’re on top. You’re not kidding. You’re the Bob Munden of real estate.

  52. Can you do a video on how to develop the materials list?

  53. I’ve experienced paying based on completion of a project in increments (20% 40%, etc) from the balance of the amount. Can I stipulate in the contract if the I have to pay for corrections based on an inspection, the cost be deducted from the balance of the contracted amount.

  54. Jonathan Passey says

    Phil, I am a contractor. I love your passion and would love to work with you.

  55. Jerry Hofrock says

    Wow. Great information and even better presentation. I’ve done this business for more than 20 years and appreciate the accurate information. Another “con tractor” trick is to overorder materials, later the contractor takes materials back and gets a refund. Makes you value the honest contractors more. Thank you Phil.

  56. felix mlaki says

    Thanks for the great insight. I shall be having a conversation with my contractor next 2 weeks and have picked useful new insights

  57. J. K. Ross says

    Hi Phil, Almost every point you made has truth in it. I am a small contractor. I remind people / potential clients, all the time to be careful. However when you go shopping and have people bid jobs for you over and over and you go for the cheap price, you will get what you pay for or possibly worse. A Legitimate contractor in my state ( FLORIDA) is registered with the state and must adhere to the LAW. This costs $$$$$$ the ones you find on craigs list or other cheap ad places are usually fly by night bozos.They will underbid work to get it. Now after someone has had me bid for them a few times and they keep giving the work to a low ball, and call me up to FIX THIER screwups, ( THE CLIENT ) that is, I say the client , because they did not listen to me in the first place,and hired the BOZO, who thinks they know what they are doing. I tell them No THANKS. I gave you a proper bid. I do not fix client mistakes. The client is the client. It is their responsibility to Hire a REAL Contractor not a Con Artist with a clip board and a tape measure in a work truck. Make sure you are working with legitimate HONEST contractors and look for a bid somewhere in the middle and yes SPECIFY the quality of the material and the quality of the workmanship you are looking for. And yes YOU BETTER have a BUDGET in YOUR MIND or you will probably find out to do a good job is going to cost more than you think. Just like going to auto repair or a Dr. or lawyer or accountant. Accept those professionals do not come do the work at your house you go to theirs. It costs $$$ to go to pick up materials that can not be delivered and if they can, They usually charge for that service. Note…. Nothing is FREE. Sorry you are so jaded. I suggest you change your contractor referral source to the one that offers Legitimate contractors. Other than that I agree with most of what you say. Good luck with your students. I am also a real estate investor. My brother and I buy fix flip etc. As well as my installation business. My Brother is an Attorney, in CT. We had a General Contractor business in Westport, Ct. back in the 70’s & 80’s. He got tired of chasing Clients and Contractors for our $$$$$.So he went to Law School and became a lawyer instead. He and I were raised by our father, a former Officer in the U.S. Army who was born into the depression and served his country during the Korean Conflict.He was also a manager for A.T&T. & an entrepreneur of many labels as well as a Deacon in our Church. Oh I forgot to mention, my brother also attended West Point Military Academy Yes Phil, there are Honest Contractors out there. It’s a shame there aren’t more of us. As I said before good luck with your continuing investment strategies. I just think you might want to tell your students, that there is an acception to the rule, they must look in the right places for us. We do not advertise in cheap or free ad services if we advertise at all.We come highly recommended and do not have to look for work ,( usually) & we do not go looking for cheap work. We do not provide cheap work. The services we provide cost $ for our offices, help, insurance, tools trucks office equipment , accountants Lawyers as well as our registration fees and license fees etc. Sounds like you may need a handyman. Not a Contractor for a lot of your needed projects. There is a vast difference between a Legitimate Contractor and a handy man with a clip board. Research the Contractor and make sure they are a Real Contractor. I noticed this was near the end of your lesson on how to deal with Contractors. I think the first part of the lesson should be this POINT….:) Have A Nice Day
    J.. R. in Fl.

    • Rev. N. A., Washington State says

      Your video on contractors is very helpful. My older son is a small contractor in Colorado, doing jobs that cost the client about $1800 per job. He, as a practicing Lutheran Christian has alerted me to some of the points that you have made.

      The Word of God, His Law) states many of the same things: First, regarding a contractor’s temptations: “Thou shalt not covet” (9th and 10th Commandments (Exodus 20; Romans 7). Regarding motivations, which apply to contractors and clients, “The love of money is the root of all sorts of evil” (1 Timothy 6). Consolation both for client and contractor: “God works in all things for God, for those who love Him and are the called according to His gracious purpose in the Savior of sinners, Jesus Christ, the crucified and righteous One, through faith in His blessed Name” (paraphrase, based on part of Romans 8)

  58. Percy Gilmore says

    I think it’s better that you hire a manager to over look the subs. Skip the contractor thing all together… what’s your thoughts?

  59. I am a contractor / investor .
    Was a contractor for 30 years before starting to invest. Can tell everyone one thing.” Walk a mile in a contractors shoes .”
    and then you will know.
    Another point I will make , I am considered to be fairly intelligent .If there were such great profits in being a contractor , I wouldnt be phasing out the contracting part of my business . I would not be moving towards full time investing .
    I dont leave good deals to get a bad deal.
    I am an investor and can say this will all certainty .Some not all investors but alot, have ruined the whole residential housing game. Budget is important, but lets not forget there is a buyer that will have to deal with the shoddy work that is performed.
    They have driven everything towards price. Well I am a custom home builder and a third generation one at that. “Good work aint cheap and cheap work aInt good” .
    I dont work for the seller or the buyer. I work for the property. Then booth sides win.
    Regards , Todd
    Cutting Edge Renovation & Design LLC

    • Phil Pustejovsky says

      Other videos of mine handle the issues related to investors screwing contractors and customers. That is certainly horrible too. I appreciate your comment.

    • Todd, I am not an investor yet. Still lurking around the fringes trying absorb some knowledge. But I do know one thing….

      Good Work Ain’t Cheap and Cheap Work Ain’t Good is a mantra I could get behind!

  60. Thanks again Phil!

  61. Eugene Povolotsky says

    Thank you Phil. Great lesson

  62. What about when all of these things are followed, you know where the guy lives, he is a maintance man at a local apartments complex, has no contractors’ liscense, and drags on and on one to two hours per week (we are on month 3 and still trying to do the work he was paid for) The job: Tile, Granite, and Cabinets / new can Lighting, move laundry room to the garage, and install a gas line / water line to the kitchen for gas stove and modern fridge ($4,000 flat).. I paid him $1,000 to start for tile he kicked ass but didn’t seal it. After that he delivers the large slabs of granite and on that day he did not break it but actually set it flawlessly cutting the pieces and setting them in place.. no sink hole.. he asks to get the next check and I oblige after all tile is done that is a huge job and alone worth $2,500 – $3,000 so I write the check gladly. From that day he flies to Denver. HA HA HA dissappears 2 weeks doesnt reply to a phone call or email and seems to have jipped me. However i had a gut feeling he was in some sort of trouble. He calls on the 15th day stating he was back in town and ready to continue. SO seriously 1 month passes he misses the deadline.. so we redo the contract again this time he promises to complete it by August 30th, he comes and completed the can lighting in both the office and kitchen in a day (with electrical for everything, following day demo the cabinets, install the new ones I bought. 4 days later comes in and asks for the 3rd check. I am pissed. SInk aint cut and tile is not sealed. Still pending was the 1/3 the work so I say noway but he insists and threatens to not complete the job stating that he underbid thinking I was a good guy.. I feel bad as he was right that he was doing a lot for a little and write him the 3rd thousand although at the time we only had $1,300 in the bank. He completely disappears again for a week just having assured us he would be completed by Sept 10th (his 3rd promise and that was the day before my wife’s birthday) to think that not 1 day he worked between that check and her birthday save him breaking the granite while moving it to cut the sink hole.. I feel assured when he tells me it broke where right where the sink hole was so no one will see that tiny crack in the front and the back of the sink (2″ or whatever). For my wife that was the end but i was so convinced he could buff it out. Still hasn’t. SO I add on some work to make up or it and have him knock down a wall to the kitchen to make a pony wall capped delivery style open concept to the dining table. I tell him I will call it even if he builds the pony wall and pantry for the $1400 slab was not to be cracked and I didn’t want him to have to pay to replace it over such a hairline crack. A new pantry and open concept kitchen would surely shut up my wife and bring him back to favor with her. Which it did. However he realized this $4,000 job a rip off when I told him the final $1,000 is paid when all things are completed. He has not been back for 13 days now. He came today though I dont know what to do but I like the idea of never paying him the final $1,000 the job gets finished.

    • Phil Pustejovsky says

      Contractors always show up on payday

    • John ronald says

      LOL the same issue is going on with us. Someone else who has been involved with the same contractor (no license) has had work completed by them took out the entire check for the deal before the job was completed causing them to have to pay him extra. DO NOT make the same mistake they did. Pay him only on the day the job is completed or this could give you a serious headache.

    • Jay Williams says

      Your doing the righ thing-just like Phil says, NEVER pay all of the money until the job is complete. Also don’t let them guilt you into paying ahead of schedule either. I’m a real estate investor and a contractor, so I’m fortunate in knowing both sides. Contractors are also masters of story telling, to make you feel sorry for them and pay them in advance. Only pay for what has been completed. You seem like a good and good hearted person, but you made several mistakes. Don’t compound them.

    • J. K. Ross says

      I think you are inexperienced in remodel work. Please work with real professional contractors. Not maintenance men trying to moonlight full remodel jobs involving electric, plumbing, etc. You do not know his background and or his training. He may just be a basic handy man that is barely qualified for the job he has. If you are going to take on projects of this nature, do not hire someone who already has a full time job. YOUR PROJECT will be a second job and be treated as such. A SECOND JOB, not his primary focus. Good Luck and Better luck next time.

  63. john e gibson says

    As always phill killer contentt!!

  64. Thanks. Very helpful and smart ideas when dealing with contractors.

  65. Michael Vinson says

    You hit the nail on the head. Thank You..

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