1. When you get your blueprints, get the spec book. Make copies for each subcontractor. Highlight his responsibilities from that spec book in a highlighter and mark a # by it. Write this into his contract. Include as many photo examples as possible. You will sometimes have to get very specific. For example: "Douglas Fir 2x4 #2 for interior walls, and 2x6 #2 for exterior walls." "12/2 Romex cable to room A outlets #2, 5, 6, and 14/2 cabel to room A outlets 1, 3, 4." "Bull nose finishing for all corner tiles and trim. All grout work to be sealed. Roof shingles are 20 year fire rated from supplier X Y Z. Walls should contain insulation X. Ceilings should contain insulation Y."
2. Get a line item listing. There are often specialized builder codes for each task. You will need this for the building loan.
3. Establish firm dates, and penalty dates. (The point in which is contract starts to drop in value for being late) After all you will pay interest on that construction loan.
4. Establish accounts for all suppliers. Pay the supplier directly. Do not pay the sub contractor. A reputable sub contractor will actually appreciate you did this because then he knows he's not out the material money.
5. Have all the lead sub contractors meet on site at once so they can discuss timing and concerns (ie: Cutting a floor joist to make room for a pipe)
6. Maintain a very detailed excel spreadsheet of all cost and who's been paid and when.
7. Ask for Federal Tax ID, Lien Release (A document that claims the sub contractor has been paid in full), and if you plan to flip it or claim deductions, invoices of work and payouts.
8. Ask for and validate all sub contractors liability insurance. Make sure you have a waiver for any onsite injuries. (Make sure he has workman's comp) And see if he has performance and delivery bond insurance. Be sure to get his contractor license.
9. Have your contracts reviewed by a lawyer who specializes in housing or construction work.
10. Be sure you have all the permits necessary.
11. Be sure all your contracts have the clause that all building has to meet all federal, state, and local safety codes. (ie: NEC)
12. Be prepared to be on site at least 3 days a week. Some less reputable builders may try to skip steps when you aren't there. For example, I saw one sub contractor put on a shingles without an underlayment/roof felt. If I saw a sub contractor pull this @#$@# to cut corners I would fire him right there.
13. Never pay a subcontractor up front for anything. Material supplies will be paid by you. If it's a very large job like framing, you can pay them labor based on percentage work done and work that into the contract. But hold out the last 25->33% until the work is deemed complete and passes inspection.
14. If you have no building experience, hire an outside master carpenter or gc for a flat fee to inspect the property on a regular basis. If you want to give him incentive to do the job right, tell him he will earn a bonus for what he finds wrong that you get the sub contractor to fix. He can spot when a wall is crooked, or out of plumb. He will know if insulation is safely rated for it's application. (ie: Attic, or next to can light outlets) These are things you will not know.
15. If a sub contractor comes back to you and says "I need more money" seriously consider firing him there. He should have known his cost in advance and may be trying to hustle you. Now sometimes things do go wrong. For example you might have a massive granite boulder the excavation sub contractor wasn't expecting. He might have to hire an explosives specialist to remove said rock. Or they might find asbestos on the pipes during a remodel. Or they might find an old oil tank in the ground that was abandoned long ago, but codes require you remove it. So use some common sense.
16. Don't forget hook up fees. You are responsible for these unless you specify them in the contract.
17. Don't forget you have to supply workable conditions for your sub contractors. They have to have a bathroom, water, and electricity at the very least. But treating your sub contractors well (ie: Offering free food and coffee on a regular basis) will certainly go a long way to help keeping them happy.
18. Obviously check references. Have them warranty their work (A year is a good time)
19. Know the difference between up front expensive versus long term savings. For example solar panels can take about 8 years to pay off, but after that you save money. Or a geo thermal pump with radiant heat is certainly very expensive initially but much cheaper to run. The exception being when the system breaks. An experienced sub contractor can direct you which way to go.
It is a tremendous amount of work, time, and responsibility. That is what you are paying for. If you are not working, and smart, you might be able to do it. But I guarantee it will be stressful.
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Taj Mahal
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