Two Tips to Avoid Handing Your Contractor a Check Before the Work Begins

Managing contractors can be one of the most challenging aspects of being a real estate investor. Even when you find a good one, my experience has been that they may do three or even five great jobs for you and then suddenly ghost you like a bad Tinder date and poof your profits disappear.

That’s why I do my very best to avoid giving my contractor a deposit to get started.  Instead try these two options first before you even think about writing them a check.

Payment Over the Phone: For smaller purchases, you can ask your contractors to go to Home Depot to pick up the materials and check out at the Pro Desk. This way, they can call you to pay over the phone. This approach not only ensures that your phone number is used for your Pro discount but also ensures that your email is on file, so you receive a copy of the receipt.

Just make sure your contractors know not to splurge on tools or gear under your account.  As a general rule, If it's staying on-site (like tile or windows), it's my responsibility to buy. If it's something they'll reuse elsewhere (like saw blades or tools), it's their job to handle.

Materials Delivered to the Job Site: For big-ticket items like lumber or sheetrock, I opt for the royal treatment: delivery straight to the job site. This saves time and cuts down on those endless trips to Home Depot. Just ask your contractor for a shopping list and let them know when the goods will arrive.

By using these two options, you can practically eliminate the need for contractors to ask you for a deposit. Furthermore, it helps to foster good relationships with your contractors, although it's important to note that trust takes time to build.