Hiring a General Contractor | 10 Tips To Ensure You Find the Right GC

Property ownership comes with various tasks and fixes that require a construction expert to manage and, in some cases, execute. General contractors (GCs) will help oversee projects on your property and ensure that they are done correctly, efficiently, and to code. 

Knowing how to hire the right GC for your property isn’t always easy, but we’ve compiled a tip list to help make the process a bit easier. 

Here are ten tips to help you find the best GC for the job.

1) Checking qualifications

The licenses and permits a GC may need will differ depending on where you live. Check with your state, county, or local government to understand what’s required from a GC. 

Do your own research on the potential GC. Google their name and business name. See if any reviews are listed on public sites like Google My Business and social media. This will ensure you don’t waste time with a GC that receives poor reviews. Angi (formerly Angie’s List) is another great place to look for reviews on contractors.

Finally, make sure the GC has the necessary documentation and reputational pieces to get the job done. This includes: 

• Relevant work experience

• Required permits 

• Positive reviews from recent clients 

• Liability insurance

• Workers compensation insurance

• Property damage coverage

• Vendors and subcontractors that carry the same insurance and credentials listed above*

2) Ask for referrals

Hard skills aside, the most crucial thing when vetting a potential general contractor is finding someone you can trust. 

As an beginner investor, reach out to other property owners and investors and ask for referrals of good GCs they’ve worked with. If you get a great referral, take that potential contractor out for a beer or coffee so you can pick their brain and get to know their character a bit more. 

A great question to ask a past client to get the real inside track on a general contractor and their team is, “what was your percentage overrun on the job?” 

On a recent episode of the Breneman Blueprint podcast, Eric Weber, Principal & Co-Founder at Cubed Construction, discussed this at length. Click the clip below to learn more: 

Finally, it’s essential to vet GCs before you close on your first property. This will ensure that you have some established relationships with GCs avoiding the last-minute scramble and can hit the ground running once you acquire the property.  

3) Sample questions to ask a potential GC

When you’re having that initial conversation with a potential GC, here are some sample questions to bring to the table: 

• How long have you been in business? 

• Do you have a contracting license? 

• Do you have a certificate of insurance? 

• What is your payment schedule? 

• Do you obtain the necessary permits and inspections for each job? 

• Will I have a dedicated team for my project? 

• What are your preferred methods of communication? 

• It’s essential to keep the job site clean. Do you have end-of-the-day clean-up procedures? 

• How and where do you store your team's tools? On or off the job site? 

• What steps will you take to protect the property from burglaries and workplace accidents? 

• Do you have a process for dealing with additional charges and cost overruns? 

• In the past, how have you resolved disagreements? 

• Can you send me two or more referrals of past clients that I can speak with?

4) How to vet a contractors team 

Contractors with weekly meetings are more on top of the project. Most of the time, these meetings happen on-site, giving the GC a chance to see the work progress and get in front of issues before they develop. 

Talk with the job site superintendent and understand their expertise and approach to solving issues with subcontractors.

Who's going to run the painting crew? Probably more important to talk with them than the salesperson for the contractor's company. 

5) How to protect yourself when paying a contractor 

Pay through a title company to ensure the contractors get paid and you avoid mechanics liens. This way, the owner is always protected. 

• Any individual or company providing materials or labor to a property that isn’t paid can place a mechanic's lien on the property. 

• When paying through a title company, they will check to see if there are any active liens on the property. 

• Don’t pay for work in full before it is completed. Also, make sure the work is in line with payments, so pay as you go after the deposit. Deliver the last payment once the work is 100% completed and checked over by you.

Drew and Eric speak about mechanics liens and paying through a title company at length in the clip below:

6) Best practices for communicating with your contractor

Be in constant communication with the GC and superintendent. In some cases, you may be dealing directly with a vendor so ensure you have a point person on the ground to communicate with, especially in long-distance settings. 

Any change in scope or cost overrun needs to be approved by you. Do not let your GC change the scope or budget without your explicit approval.

This is a two-way street. As the client, you need to be on top of communications with the contractor and their team to ensure no delays to the project. So take the approach of making one touch point with your GC daily. This can be a text message or a short call, nothing overly formal. 

7) Strategies to avoid surprise change orders

A change order is an industry term for “an amendment to a construction contract that changes the contractor’s scope of work. For there to be a valid change order, the owner and contractor must both agree on all terms.” — definition sourced from the American Bar Association

All change orders need to be approved in writing by the property owner. Do your best to visit the property as often as you can in person during essential project work.  

Try your best to find a GC that does not view change orders as a profit center but as a place where both the owner and GC lose. You can hear Breneman Capital Founder and CEO Drew Breneman talk more about this in detail in the clip below. 

Another option is to move to a cost-plus contract model with your GC.

8) Handling disputes with a GC 

According to Eric Weber, Principal & Co-Founder at Cubed Construction, there are only two significant construction disputes: money and time.  

If you find yourself in a situation where you're handling a dispute on one of these factors, do everything in your power to not completely lose it on the GC. This could have reputational issues for you as an owner on the future hiring side, and it also may cause costly litigation and further delays if you kick the GC from the job site. 

Instead, approach the situation professionally and be open with the GC that it is better to see the project through to the end for the sake of the partnership and the property.  

That said, there are situations where you simply cannot work things out with the GC. 

Drew and Eric Weber talk about this at length on a recent episode of the Breneman Blueprint podcast, tune in to the clip below:

9) Breaking up with a bad GC

In the scenario that you need to break up with a bad GC, lead with communication and the data. Ask the GC to meet on the state of the project and come equipped with all the facts on the progress of the project and detailed receipts of all the payments made. If both parties agree on the facts presented, you should be able to agree on a payoff to terminate the contract with the current GC freeing you up to work with someone new.  

10) The grass isn’t always greener… 

Before you terminate the original contract, price out what it will take to complete the project with a new GC. Cost overruns could reach a critical level with a new GC if the work progress is not as far along as initially thought, or even worse, the new GC audits the property and finds poor workmanship that might need to be redone.  

Eric Weber, Principal & Co-Founder at Cubed Construction, shared on the Breneman Blueprint podcast that over the course of his career, he has separated from 3 GCs and resolved disputes with over 30 subcontractors. The ones he didn’t resolve turned out to be cost overrun nightmares.

So to best protect your property and your pocket, avoid terminating a GC during a contract if possible. 

Why Breneman Capital?

Want to expand your real estate investment portfolio, but you’ve been burned by a bad GC relationship in the past?

Breneman Capital is a data-driven multifamily investment firm pushing the real estate industry into the future with a modern approach to direct real estate investments.

We focus on providing our investors with the best risk-adjusted investment opportunities in carefully selected markets across the U.S., researched and underwritten with extreme detail from our headquarters in Chicago.

The best part, you can diversify your investment portfolio into real estate without the normal time commitments of managing a complex web of vendor and contractor relationships.

To begin receiving high-quality investment opportunities from us, sign up here today: