How to choose a general contractor

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Many forms of real estate development nowadays are done without the owner of the property present. As an owner-to-be, all you really need is capital – the rest will take care of itself.

How? Well, each build site needs to have its ‘chief’, or general contractor. Essentially, this person will take care of every part of the construction process for you: gathering the materials, finding the right personnel to work with, hiring any subcontractors needed and more. This video goes a bit further into the various responsibilities that general contractors have and what makes the job so difficult.

Choosing a general contractor is easily the most important decision you’ll make past the decision to actually build something. Make no mistake about it: he or she can make or break your project, so take your time and play it steady.

The initial steps

After making known what it is you’re looking to build, you should get bids from contractors fairly soon. Each of these contractors will suggest their own price for the project: how much they need to get the structure up and running for you, even in your absence.

You will likely feel no small amount of compulsion to pick the lowest bidder: the differences in suggested prices for these projects can reach tens of thousands of dollars and you’re perfectly within reason for wanting to save a decent-sized sum of money.

Yet trying to save money on the general contractor is an easy way to have one ‘break’ your real estate project as mentioned above. General contractors know that lower bids mean higher chances of getting picked, so they’ll pull out all the stops when looking to reduce the projected cost. As it is, the ‘savings’ won’t come from their own compensation but rather things that are vital to the project’s success.

Wondering how a general contractor can offer his services so affordably, at least relative to his competitors? There’s a good chance he intends to use materials of a far lower quality that will cause multiple issues with the building, or that the builders he will contract are sloppy or unskilled. Maybe it’s just a case of the contractor managing the costs better, but why take the risk?

Don’t be one of those owners who immediately pick the lowest bidder – structures can stand tall for decades, so do your best not to focus on the short term.

Other things to look out for

Maybe you have one or a couple of contractors in your sights. Their bids are reasonable, and each of them looks like a good person to do business with.

Now come the checks: try and get as good of an idea as possible about the contractor’s past work. Everyone wants someone with a lot of experience, but picking someone with only a few successful projects under the belt can be just as sound.

If possible, try to visit the actual structures that your potential general contractor raised – while there, examine the build quality in every area of the structure and look for feedback from the tenants. Is the building still great to live or work in? If so, yours will probably hold its weight years from now – truly responsible general contractors make sure to get the most out of every structure they work on.