Choosing the Right General Contractor for Your Real Estate Development Project

Choosing the Right General Contractor for Your Real Estate Development Project

In the world of real estate development, the role of a general contractor cannot be overstated. They are the linchpin in the design and permitting process, playing a vital role in coordinating and providing construction-focused insights to streamline project costs effectively. Selecting the right general contractor is a critical decision that can make or break a project. So, how do you make this crucial choice? Here are some insights based on our extensive experience.

Key Considerations for Choosing the Right General Contractor

Avoid the Temptation of Cheap Contractors: Quality in construction doesn't come cheap. Beware of contractors who undercut the competition significantly. Often, such contractors may initially bid low to secure the project and then increase costs through change orders or even abandon the project halfway.

Investigate Their Background: Conduct thorough background research on potential contractors. Visit their offices to ensure they have a robust team, including project managers, estimators, and qualified site engineers. A well-structured team is crucial for successful project completion.

Seek References: Don't hesitate to contact previous customers and visit their most recent projects. Gather feedback on the general contracting firm and assess the strength of their team.

Financial Stability: Evaluate the contractor's financial strength. They should have the resources to procure materials and equipment in advance, ensuring smooth project progress even before payments are released.

Subcontractor Relationships: Many general contractors rely on subcontractors for major trades. Ensure that these subcontractors, such as earthwork, utilities, concrete, and framers, have a solid history of collaboration with the general contractor and have successfully completed recent projects.

Soft Skills Matter: Effective communication and soft skills within the general contractor's team are essential. They need to manage subcontractors and labor effectively to ensure timely project completion with high-quality results.

Project Management Software: Inquire about the construction management software the general contractor uses. Effective software helps optimize, automate, and communicate daily construction activities, reducing delays. Request to review daily logs from their most recent projects for insight into their management approach.

Provide a Complete Construction Set for Bidding: Start the bidding process only when you have a 100% permitted construction set. This enables general contractors to provide accurate estimates based on labor and materials, facilitating precise bids.

Keep Your Construction Budget Confidential: Never disclose your construction budget to general contractors. Some unreliable contractors may tailor their bids to match your budget rather than the actual construction requirements.

Thoroughly Validate Bids: Carefully scrutinize the general contractor's bid. Conduct a deep evaluation, verifying quantities and corresponding prices. Be wary of front-loaded bids that charge more for initial development activities and less for later stages.

Validate Past Work: Visit the contractor's most recently completed projects to verify their authenticity and quality.

Set Clear Timelines: Ensure that project timelines are explicitly outlined in the contract agreement. Delays can have significant financial implications, so specifying deadlines is crucial to project management.

In the world of real estate development, choosing the right general contractor is a decision that requires careful consideration and due diligence. By following these key tips and conducting thorough research, you can enhance the likelihood of a successful and cost-effective project.