A Document You WILL NEED in Real Estate
Wouldn’t it be great if every remodel and prehab went without a single complication or hiccup. Yeah, that’s not gonna happen! But there are some ways you can keep things running smoothing with your contractors (most of the time).
So, this week John, founder of Systems Saturday, shows a couple methods he uses to keeps his contractors motivated to get things done on time. Plus, John shares one very important document he uses to cover his a**, in the event that a contractor should ever claim they weren’t paid.
If you work with contractors, this is a must watch.
0:00ok so guys are now always make sure 0:03yeah always make sure that 0:08I mean I'm gonna miss think done 0:14I did everything myself and here that is not 0:17how'd he do the business and that right there is a house that I have already 0:22fled 0:22as well already know that I can flip this house to a bar on my buyers was 0:26like a strong buyers list in this area 0:33hey guys today it is system Saturday I will be your host john cochran in on 0:36today's 0:37system Saturday session I'm bring you right back 0:40June 1937 Commonwealth Drive this is a HUD home that I purchased 0:45know about two weeks ago I was going to wholesale off at full price contracts on 0:50and what not but then I decided to do a pre have on it which is what you saw 0:53last week 0:54in the system Saturday session is the three homes that we went 0:58I and show you how we do Fri have gone to increase our numbers into 1:02increase our profits now this this particular deal I we're going to also 1:06off to the 1:07to the actual public however we decided to free have a in on today's 1:11system Saturday session I want to show you 1:14what to do whenever a contractor does not get 1:18a job done on time because time is money time is money need to know what to do so 1:23this particular home was supposed to be done 1:26yesterday so you're gonna go inside that you're gonna see that 1:29obviously it is not done okay but I'm gonna show you 1:33contract wise what we do in order to make sure that stuff 1:38you know we're penalizing them we r bomb making sure that certain things are 1:43always still going well so that we keep 1:45those contractors on you know on schedule I don't really wanna say the 1:49word penalized but that's that's really the way that it is so 1:52let's go inside of Commonwealth here I was gonna show you 1:55again this was supposed to be done yesterday they were supposed to be done 1:58they're supposed to be mulch right here and know the cool thing about this is 2:02that everybody always shows you 2:04you know things are I kinda picture-perfect they don't ever show you 2:07what happens when the deal didn't go 2:09you know whenever I a property was not supposed to be here when you're supposed 2:13to be done and it didn't get done so 2:15here's what we do here's what we do whenever something doesn't go 2:18picture-perfect so that was not done on us found is actually be in 2:22we're actually lane a hardwood flooring here if you remember right all along the 2:27the second half of this are the file over aspect to this 2:31on there was a hardwood floor threats were taken at home before and and Elena 2:35right here 2:36you can see that there's no bannister here so that was not done as well 2:40I'm so no passion there's definitely not claimed comment anytime that were pre 2:44having a home 2:45%uh the homes need to be cleaned from the contractors and when I say clean 2:49I mean these one does clean we do make all the other contractors go through and 2:54do all that stuff so that we know 2:56that so we don't have hired quickly occur in their typically the contractors 2:59were always higher 3:00at the creek cleaning crew to Corpus bin Laden all that's great 3:05um 10 limbs done however there's no countertop 3:09right here so there's still no carrots also I in reality there's really not a 3:14lot of work 3:14to be done in here probably about another day 3:17a day and a half work but I just 3:21wanna show you kinda what we do bathroom 3:25pretty much done just need to set the toilet back up their Premier up there 3:30and then put the light 3:31I'm right there the three bedrooms are done done done done so there's nothing 3:35to be done there except from to have them clean 3:37okay once we go downstairs you're gonna notice that there's 3:42and be careful because there's obviously no handrail 3:45right here I'm we've got a drop cloth ago right here so we need to put up 3:51a little railing right here to go down for safety issues 3:54comp so the back seater the 3:58a the basement is just about done as well everything has been painted 4:02Corbett has been laid smells a lot better in here I 4:06looks like we're putting a door right here's why also the store 4:10needs to be shaved off a little bit as well this bedroom 4:14is done positive dont this bedroom 4:18is done as well and we also have 4:21right here the door to hang in right here so if you didn't catch that sucks 4:25I'm sorry episode we 4:27we turn this into a from a four bedroom one and a half after a five bedroom 2 4:32bath I 4:33and it only took about 78 days 4:37to do this because it was a lot of cosmetic stuff so 4:40I am here in the bathroom obviously this 4:43%uh mommy's be done right here you put the sink in 4:46right there toiletries be put in know we need to put the hardware in here 4:50figures well future our get out here 4:55but anyways and then there's pain is a little bit be right here so this 4:59obviously needs some touch up paint so typically anytime that so you go 5:04and oMG carpet laid in a property I'm there the painters are always going to 5:08have to come back and do some work because when they lay carpet 5:12you know they they lay the carpet has to be bigger than the actual room 5:15so they come in late up and then you are going to see some Scots 5:19okay see you are going to see some scuffs stuff in the wall so 5:23a typically 10 times out of ten as soon as the car gets laid the painters will 5:28have to come back here 5:29on hand I'm you know do some touch up from 5:32you know the car because carpet on the other side 5:35I love the actual nice parts the carpet is 5:39like same thing it is literally like sandpaper when they take this carpet 5:43and they weigh it up like this 5:46ways how gets laid and then they push it down it 5:50same papers going on your wall that's how it's being done and then that same 5:53paper 5:54technically will take off the paint and then the painters what come back 5:59and obviously touchable wall so 6:02you see this is not is not dot okay see you can see this isn't done and 6:06you also know that's time is money 6:09time is money so the time comes money to us the people that are fully solved 6:13and then a time is when he also to these contractors because the more 6:17I'm time to their spending and here they cannot go into other job so we just 6:21what do we do i'm for small we have a contract 6:24case we have a contract right here and in every single one of our contract we 6:28have we have 6:29a date and a date for this project has to be done is agreed upon 6:33from me the owner the home fans also agreed upon 6:36with the I'm contractor in fact 6:39this is going to be done in eight days handshake you got under contract 6:43and then everybody signs exact now 6:47if they go beyond that day 6:50okay so they go beyond that days we have to charge that we charge them one 6:55hundred dollars today 6:57okay 4 actually shot having 7:00the job not so every single day is it goes beyond that date 7:05I'm charging them one hundred dollars okay per day 7:08so today it's not going to be done today there's just no way that all this work 7:12is going to be done today 7:13with I happen to be one here I'm so today is not gonna be done 7:17so today I will be charged in one hundred dollars a day tomorrow I'll be 7:21charged in one hundred dollars today 7:22and then the next day it should actually be complete so I should be charging into 7:26a ruck 7:26now I'm not doing this to make money I'm not doing this to make money I'm doing 7:30this to hold them accountable 7:31I'm doing this so that they understand that these time frames 7:35are vitaly crucial okay they are crucial to 7:38us making money because now I cannot put this property on the market 7:42I cannot go through and bring a fire through here even though we have buyers 7:46from our list that are literally wanting to come in here we will not show them 7:49this property it is 7:51om you know it is %ah crucial 7:54that if you have a fire before the home is complete 7:57and they wanna see it you do not show it 8:01guys I can tell you it is toxic to show property that is not 8:05finished because when they even say that they can visualize it 8:10they cannot that ought to be tough I can personally guarantee that's ok 8:14this particular deal here we're not gonna be shown its ok I'm not only these 8:17two days hold us up 8:19you know from putting on up on the market now I cannot show to these buyers 8:22on now I I can I get my hands on are twenty four thousand of profit that we 8:26have generated with here 8:27so that's what we do contract wise which are some one hundred dollars per day 8:32okay in here that is not done and done I don't do that to make money on it I do 8:35that too 8:36of really keep them on track so they know there is a deadline that is coming 8:40up his profit 8:41that is coming now the contractor profit the last thing that we do whenever this 8:44probably does get done as we always have them sign a final 8:48income unconditional waiver of lien case showing that they have been 8:52paid of and Paul this thing right here 8:56this contract right here has literally by not doing it 9:01has cost me two years okay on another deal it has cost me two years 9:05and about thirty thousand dollars in legal fees from not having this stuff 9:10meet a little story about this ok com once he does get this job done 9:14I will go through and I will have him signs this final unconditional waiver 9:18believe 9:19while I go through here and it is okay to me 9:23I've checked everything off much homework is done it looks good 9:26now i cant take fire service frosty I will have him sign this 9:29between we waver right here he will sign it your day that 9:33right there now I have this thing and then I will hand him his last and final 9:37chapter 9:38okay on the drawl and then we are good and done 9:42not not doing this final unconditional waiver love when guys 9:46om you know has cost me top thirteen thousand dollars 9:50and a legal fees early on because I did not have this done somebody actually 9:54got paid in full for one of our jobs and then they file a mechanics lien on it 9:58because 9:59I fired him on a on a trip on a job after that 10:02you know that I was gonna be makin money on on this particular deal that he had 10:06just finished this contractor 10:08and then he decided not fired him on the next job because he just was not showing 10:12up 10:13I'm so he filed a of you know 10:16I'll alina mechanics lien against my property and 10:19if I just would have had that document signed from that contractor saying that 10:23he got paid off on this he could not have put a lien on the property so 10:26costly two years 10:28and thirteen thousand dollars I love legal fees by not have not done so 10:32I've by Lee crucial so I guys I just wanted to show you that not every deal 10:35is picture perfect you can see here that this deal is not done 10:39okay and it was because the guy was lazy is because he on I just kinda just 10:43estimated wrong pack I with your three contractors here so I just wasn't done 10:47so 10:48make sure that's how you're holding your contractors anytime your free have worry 10:53have your voting their contract 10:55contractors to the contract make sure that you always get the final in on 10:59Commissioner 11:00waiver %uh between sign so are really really big 11:04you guys need this document the the unconditional waiver a lien waiver if 11:07you guys need that 11:08I'm just go through hands-on comment on this video I will give you this freeway 11:13versa you do not have to go 11:15through health like I had to go through what I did not have any money 11:19to pay thirteen thousand dollars in legal fees so on the guys need that 11:23comment on this video let me know what you think the system sorry sign up for 11:27the system sorry said you keep getting these nuggets 11:30I love bring them to you but you gotta sign up for the system Saturday's 11:33right over there to my lap with your right on the strain 11:37and I would give you this lien waiver right here I will deliver that to you on 11:41facebook 11:41always make sure that you shoes good contractors you get your wing waiver 11:45signed so these do not have to 11:47to deal with anything that I did in the past I'm out guys sign up this is a very 11:50nice 11:51I'm out