128 – When Is The Right Time To Replace a Contractor?

I want to talk about when the right time is to replace a contractor. Not all contractors are created equal. Sometimes, it becomes necessary to fire one under certain conditions. The timing can be important and should not be taken lightly.

I was listening to a podcast today when the topic of firing the contractor came up. It got me thinking: when have I ever fired a contractor and how did I do it? Fortunately, I’ve never had to fire a contractor mid-job, but I would definitely do it under certain circumstances. This led me to wonder what it would take and what it should take for you to consider doing that. You have to remember at all times that you’re running a business. You can’t let your emotions get the better of you, and you do not need a contractor disrespecting you and your business.

So when is it a good time or an appropriate time to fire a contractor? For me personally, I would fire a contractor if halfway through the job they kept adding  costs for things that they said “popped up.” I give my contractors plenty of opportunity to quote the job thoroughly. I  understand that things can and do come up over the course of a job. However, after so many years of real estate investing, I  have a good sense of when someone is trying to scam me or pull the wool over my eyes. I know that certain things are hard, if not impossible to know prior to getting into the job. I also know that contractors take that into account when quoting a job.

If a contractor is any good, they will absolutely account for minor things that could come up over the course of the job, and that will be included in the price. I’m not talking about tens of thousands of dollars worth of add-ons, I’m talking about a couple hundred dollars here and there. I have been doing this too long to be completely pulled when a contractor starts talking about add-ons. Again, I don’t have a problem with add-ons when they’re appropriate and legitimate. But I do not want my contractors trying to take advantage of me. If that were to happen over the course of a job, I would most definitely fire the contractor and pay them for what they had done up to that point.

Luckily, I have not had to do this yet. I’m sure it would not only be an uncomfortable experience, but it would also probably be pretty messy to determine the dollar value of what had been done to that point. You should not let the uncomfortableness or the likely confrontation stop you from doing the right thing for your business. At the end of the day, you’re there to run a business and make money. If your contractor is standing in the way of that ultimate goal, it’s time to find a new contractor. I do not enjoy looking for new contractors, but it does become necessary from time to time. I have had to change contractors, but it was never so bad that I did it in the middle of a job. I have stopped using certain contractors after the job was finished, and just moved onto a new one with the next job.

Any good real estate investor that I have ever known learned early on that, if you are afraid to make decisions or can’t handle confrontation, this is going to be a difficult business for you. That is not to say that you should be a confrontational person, but you have to be ready, willing and able to defend your company’s best interests whenever necessary.

Going back to the original question: when is the right time to replace your contractor? When it starts being detrimental to your business either in lost time or excessive cost overrun. If either one of those things is happening to a level you are uncomfortable with, that is the right time. If that happens in the middle of a job, so be it. You’re better off cutting your losses and moving on with a better contractor.

Don’t be afraid to do what is right by your business. After all, if you won’t defend your own business, who will?

About the author, Mike

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