An associate of mine claimed this title during a private message conversation between some of us that have gotten caught in that impossible place where there is no place left to go with the contracting arrangement except to fire the contractor and start with another – an awkward time that always proves very expensive, upsets the budget, hit’s deep into your projected profits, and sometimes even means a loss on your project. It was a painful and eye-opening revelation on how we, as rehabbers, set ourselves up for this terrible moment…that moment when you realize the contractor has most of your money and hasn’t delivered the products or services.

Yes, we set ourselves up for that.

“But wait, how is it MY fault?”

In this case, the rehabber/developer bought a property that had a slim margin.  He dictated what the rehab bid had to be, so the contractor matched that bid so he could get the job.

You see what’s happened, right?  WE dictated the budget.  WE didn’t give the contractor a choice.

We need to be aware that contractors submit proposals so they can get work.  They skim where they can and hope to get the job.  But guess what, shit happens.  The pricing of supplies is a little off here, and a subcontractor decided to raise his rates, his normally dependable worker got sick and he had to hire someone else, and darn it, there’s that overdue bill from the last job that never got paid.

“But HE LIED to ME!”

Did he really lie?  Is it every contractors intention to underbid, under deliver and steal your money?  I don’t think so.  I think most contractors want to do a good job and want to have repeat business.  Just like most entrepreneurs, we get paid when we deliver a product or service, and often times we don’t always know where our next paycheck comes from.  Can you really blame him for wanting the work?

“OK, I take responsibility for my decisions.  What is my recourse?”

According to my contractor/rehabber expert, there is a bond associated with a contractor’s license.  I still don’t know all the aspects of this issue, but I do know a lot of people that have been taken by their contractor.  The associate that was helping us is starting a consulting firm to help guide people into making sure the agreement between you and your contractor is realistic, and will help find your recourse if things go south.

Given my unfortunate experience with contractors in the past, I can say this is a good service to have in your court. I have again found myself with a contractor I absolutely LOVE and I have faith in his ability to get the job done quickly, plus he came with references and we all talk about how much we love this contractor.  I’m so excited because it’s been years that I could say I have a great contractor.

So my associate says, “Jean, do you have a scope of work, an agreement in place, his contractor number, his insurance information?”

“Uh, No.  He said he was going to email that to me.”

This particular contractor has a “get it done” attitude.  He knows what he’s doing and don’t stop him from doing his job.  He gutted the property in a day, got the tile guy lined up, delivered the cabinets and is ready to roll this out FAST.  He totally understands that time is money for us.

So I started to have that conversation with this bulldozer contractor, that was ready to roll.  “Um, how do you spell your last name again?”, I asked.  “And what is that contracting company I wrote that check to?”.

My position clearly not in a position of control, in fact, the subservient position women often find themselves in.

“I told you Jean you will get an email with all the information you need.  Now the guys are coming to blah blah blah…”  Yes, that shut me up. I think you can imagine the dynamics  here.

“Your Hired!  I’ll be your first customer!”

I know what you’re thinking – “who is this guy?”  Who can provide this type of service that can vet the contractor, review the contract, understand the bids, draw schedule, and even promise some kind of recourse if things go bad? What will it cost?  Can I afford it in my budget?  Can I afford NOT to have it in my budget is more the question.

I’m still waiting for that next phone call with the contractor, the one where I will insist on getting all of this necessary information and do my best NOT to be intimidated by him.  I mean, he’s working out really well as it is, right?  I’ll pay my associate for his services, even though I’m confident my “handshake deal” with my contractor is hopefully the first of many successful projects.

I’ll pay my associate because I can still be myself, the easy going touchy feely sensitive business woman that I am, but now I have my bad-guy in tow.  I’m ready to say, “My associate is a real stickler for getting all of this information in order before we proceed with the project.  He insists and I have to follow his advice.” I have to admit there is some level of relief knowing I can safely upset the dynamics of the relationship with this contractor, merely by having someone else to blame.

Often times hard money lenders can take the blame – “Oh, I can’t pay you until you sign this lien waiver, it’s my hard money lenders rule”.  But some lenders are more trusting than others.  In fact, I can see where hard money lenders may insist rehabbers have this as a service for their borrowers.  Still, we are all entrepreneurs and the contractor is supposed to have a professional license.  We shouldn’t need that extra service, and I agree, but I’m going to pay for the extra service anyway.

So now I can have my very own bad guy in my back pocket.  What do you think that is worth?