Charge the contractor a penalty when they don’t finish on time #81 - 101 Street Smart Cash Flow Accelerators

Lou Brown

Dec 04 2019

It's Lou Brown, I'm back with another 101 cash flow accelerators to help you be more successful in your real estate business. In this section we've been talking about renovations and boy I tell you what, I've done a bunch of those. I've done whole subdivisions and it's been really interesting to learn about working with contractors and getting them to behave the way you want them to behave as Austin Powers would say and they won't unless you penalize them. Well in my contract called independent contractor services agreement, it's available in volume 11 renovations under streetsmartinvestor.com. One of the things I have is a contract for the contractor and an important thing to have in there is penalties when they don't complete on time. So typically we go through a list of things that need to be done. I provide that to them. It's a contractor, it's actually all the scope of works and it depends on which contractor I'm talking to, whether it is the general contractor or it's plumbing, heating and air conditioning, electrical roofing, painting, carpentry, general.

Each one of those have their own scope of work and then attached to that scope of work is a terms and conditions or mice call it rules of engagement and one of the things that we will do before we start the renovation and before I pay them any money is we will enter into an independent contractor services agreement. In that agreement we have agreed to a certain deadline, a certain date that bow means the property will complete. Now what happens is there's a penalty after that date and so there's a daily penalty or costs for them exceeding the deadline. Well, why is that? You have to understand you have expenses each and every day. You have your cost of funds, you have your insurance and you have your property taxes, plus you have your opportunity costs. That house hasn't been sold. If the contractor's delaying that project. It is an age old situation that people run into dealing with contractors. It's very important that you have a deadline in there and you have a penalty on a per day basis. I've built that into my independent contractor services agreement. Hopefully that has been helpful to you. Like it. Love it. Share it, and I'll see you soon.

101 Street Smart Cash Flow Accelerators

Lou Brown has been buying, selling and holding property for 40 years and you are about to discover what a lot of so called gurus are missing.

* How to buy all the property you want without ever visiting a single bank or needing to qualify for a loan…

* How to have a buyer or renter before you even buy property…

* How to have them already pay you money before you sold them anything…

These are exactly the kinds of deals he does day in and day out. Most 'investors' are getting it wrong. It's not about the property, it's about the buyer. Buying right and buying cheap is what you'll do after you have the buyer.

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Web Site:https://millionairejumpstart.com/ and https://streetsmartinvestor.com/

Real Estate investors in all fifty states across Canada and fifteen foreign countries including as far away as Australia and New Zealand, have long regarded the training, systems and forms created by Louis Brown as the best in the industry, Quoted as an expert by many publications and authors, “Lou” draws from a wide and varied background as a real estate investor having been buying property since 1976.

He's invested in single-family homes, apartments, hotels, developed subdivisions and built and renovated homes and apartments. Each of these experiences has given him a proving ground for the most cutting edge concepts in real estate today. He's widely known as a creative financing genius with his deal structuring concepts.

Being a teacher at heart he enjoys sharing his discoveries with others. He has served the industry in many volunteer positions such as past President and designated lifetime member of the Georgia Real Estate Investors Association, the world's largest real estate investor group.

He is also founding President of the National Real Estate Investors Association, which serves as the umbrella association of local investor groups.