Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Construction of Improvements in a Ground-Up Development

When hiring a general contractor, it is important to interview several prospects. As in any hiring process, it is helpful to obtain references, but I have never had a prospect give me a bad reference. The most important question is one you ask of yourself: Do you feel you can get along with this individual?—since the construction process is usually long and involves interfacing with the contractor often in terms of decisions that must be made. Fostering a dialogue that results in good communication is paramount.

Another key question to ask is how the general contractor works in terms of staffing versus contracting out various services. Does the general contractor have a crew that performs some or all or the work, and to what extent does the general contractor use subcontractors? There is not necessarily a negative taint on billing out some or all of the work to other parties, but the key is to know what you are getting. By meeting with several contractors and obtaining bids from those parties, you will be able to compare costs and quality. Your education starts with inspecting and comparing the bids and asking why the line item for a specific trade, for example, carpentry, is so much higher here than in the other bid? Is it because one bid is based upon custom cabinetry while the other is based on off-the-shelf items from a hardware supply store? If the painting bids differ dramatically, does that mean that one party is using ...