Matirials for Rehab


I’ve been told that you should never give your contractors money upfront for a rehab job. So I was wondering what is the best way to work out the cost of matirials (ie. Who picks them out, how they are paid, who picks them up) as they cannot begin to work without them.

Its a gray area for me so any advice would be appriciated.



I have learned that lesson the hard way, not giving any money up front. Luckily I learned without losing too much money. I have gotten a lot of advice on these boards about how to manage contractors.

Pay them in draws, maybe on a weekly basis as work is done. As far as parts go, I pick out lights, faucets, counter tops, cabinets, paint, ceiling fans, stuff like that. I pick them up and deliver them to the property. Anything that the contractor needs that is beyond me (plumbing, electrical, etc.), I give them gift cards and have them bring receipts. Until I work with a contractor enough that he or she knows exactly what I want in my houses I will continue to work like this.

Hope this helps and I’m sure there will be a lot of great answers that follow mine.


p.s. If you find a good contractor, KEEP HIM!

I’ve been burned before by contractors :slight_smile:

Depending on the contractor, I may give them some upfront or I may meet them at the store and pay for the material. Get an invoice everytime you pay them.

Go to home depot or wherever with them pick out the materials yourself pay for them then have them load, drive, and store them for you.

have a contract.

contract specified what quality and grade of materials are to be used. model numbers are provided if available.

contract provides for draws as work progresses. draw schedule is based on materials needed as the job progresses.

get a lien release for each progress payment

get a final lien release when inspection and final payment is made.

contractors who have a real business (as opposed to the guy who decided to be a roofing contractor this week) understand that contracts are the language of business.

I do what Monte7101 does.

Contractors only need money for 2 things. #1 for materials #2 to pay the guys that work for them. Since nobody has done any work yet, they don’t need money up front. What they do need is materials. I buy the materials for them. I store the materials at the house because I have the builder’s risk policy.

I do contracting work like you are talking about and have been doing business for a long time. My policy is that I do not take a dime until the project is done and do believe that any reputable contractor will d the same. If a job is over 15K and going to last more than 3 weeks I will do a 3 draw contract of 30/30/40. A good contas one that can carry some cost becuase if he has money thenhe does a lot he must do gooork aneat his customers fairly. Thats just me hope it helps.

This is great information. Thanks guys