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The HMO Podcast

How To Secure The Best Contractors At The Best Price For Any HMO Project

May 07, 2025 • Andy Graham • Episode 307

Whether you're personally investing in property or not, most people understand just how challenging it can be to find reliable builders and contractors. And we all know – regardless of our experience in property – how difficult it is to keep project costs sensible and under control.

But as HMO investors, we recognise that this is a crucial part of building a successful business. We need to be able to secure the best contractors at the most competitive prices.

In this episode, I’m going to share exactly how I go about doing this.

Topics covered in this episode:

01:23 - The Importance of Finding Good Contractors
03:26 - Planning Ahead for Contractor Engagement
12:04 - Building a List of Potential Contractors
20:35 - Preparing the Information Pack
31:04 - Understanding Contracts and Agreements
37:39 - Building Long-Term Relationships with Contractors

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Andy Graham (00:02.67)

Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio. And what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses. I've raised millions of pounds of investment and I've managed thousands of tenants. Join me and some very special guests to discover the tips, tricks and hacks, the ups and the downs, the best practice and everything else you need to know to start, scale and systemise your very own HMO portfolio now.

Andy Graham (00:40.705)

Everybody knows whether they're investing in property themselves or not, just how difficult it can be to secure and to find good builders, good contractors. And everybody also knows whether they're in property or not, how difficult it can be to bring projects in at good and sensible costs. But as HMO Investors, we know that this is an essential part of how we are going to be able to build a successful business. We need to be able to secure the best contractors at the best possible price. And today I'm going to share with you exactly how I do this. Please sit back, relax and enjoy today's episode of the HMO Podcast.

Hey guys, it's Andy here. We're going to be getting back to the podcast in just a moment, but before we do, I want to tell you very quickly about the HMO roadmap. Now, if you're serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one-stop shop. Inside the roadmap, you'll find a full 60 lesson course delivered by me, teaching you how to find more deals, how to fund more deals and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future.

We've also got guest workshops added every single month, we've got new videos added every single week about all sorts of topics, we've got downloadable resources, cheat sheets and swipe files to help you, we've got case studies from guests and community members who are doing incredible projects that you can learn from, and we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co.uk now and come and join our incredible community of HMO property investors.

Andy Graham (02:33.155)

OK, welcome back, gang. So today we are going to be discussing how to find the best contractors and how to secure those contractors at the very best possible price. As a HMO investor, as a property investor, this is an essential piece of the puzzle that you have to get right if you want to build a successful business. And dare I tell you just how bad this can go if you don't get this part right, if you work with the wrong contractors and you don't get the pricing right, then everything can go sideways. And trust me, that can happen very, very quickly.

Now, one of the things that really surprises me on the topic of finding builders and costing projects is how little effort so many people actually put into getting this bit right. It is unquestionably one of the pillars of getting this whole business right. But for most people, finding a contractor is a bit of an afterthought or finding a contractor is something that they just trust somebody else's opinion on often, in fact, a single contractors. Today, I'm going to explain why that is such a poor strategy and actually a few changes that you can make. And yes, a bit of time invested to get this just right. How to make sure that you do secure and find the best people and how you can ensure that you get them at the very best possible prices.

Not only can this save you a lot of money, but it can save you a huge amount of time. There's nothing more of a time drain than a bad relationship with a contractor, trust me. But also you'll get a better product at the end of it, which is in today's market, such an important part of getting this whole business just right. There's nothing worse than a contractor doing all of the stuff sort of behind the walls and then rushing the last bit or not being able to deliver a quality product at the end.

It's really, really important that your finished product is of the very highest possible quality. Well, today I'm to walk you through how to find the right contractors and how to make sure you don't get stung with bad pricing, bad service and bad timelines. Most people don't think about this early enough. That is the honest truth. Most people think about contractors at the point they need a contractor. If you're relying on one bloke and a chat, you are absolutely asking for

Andy Graham (04:55.225)

trouble. And if you've never done this before, if you're about to embark on your first refurbishment projects, then the sort of trouble and the amount of trouble that you have absolutely no idea. It can be a really dark and deep hole getting it wrong with a contractor. So you've got to make sure that you get this bit just right. Now, the good news is today I'm going to cover the full journey, the planning ahead, the method to build a list, how to tender properly, how to get the best pricing from contractors, but it's not rocket science. Actually, it's just a process and I'm going to give you my process and share my template today so that you can do exactly the same. Then there's no excuses and this way you can get it right every single time.

Now, what I'm not going to be able to guarantee is unfortunately that the best contractor is going to be available exactly when you need them. And I'm certainly not going to be able to guarantee that you get the job done at a price that you think is reasonable. Unfortunately, cost at the minute are just pretty crazy. Material costs, labour costs, it really has hurt us in the pocket.

Well, we've just got to make do with what we can. And in fact, to be quite honest, that's why this is more important than ever, because costs are high and you need to make sure that you're doing the very best you can in what is actually quite a difficult market at the minute.

So today I'm going to walk you through my eight step plan, the process, if you like, the procedure to finding better contractors and trying to secure them at the best possible prices. I thought what I'd do is kind of summarise what we're going to be covering in today's episode. And you might actually want to grab yourself a pen and a pad today, because there's quite a bit to get through, but I think it's going to be really, really useful. The first thing we're going to talk about is planning ahead. And we're to talk about the timeframes and timelines often involved in this process. Then we're going to talk about building a list. We're going to start to talk about how to make early contact with contractors and how to manage those relationships early on. We're going to talk about preparing information packs, such a critical part of this part of the process that so few people understand how to do. It's actually really easy. I'm going to teach you how to do it. We're going to talk about the tender process. We're going to talk about contracts, type of contracts and how to manage that part of the process with your contractors. We're going to talk about how to decide who you will appoint and bit of a spoiler, it's actually about more than just the price.

Andy Graham (07:16.2)

And finally, I'm going to talk about building long-term lasting relationships with contractors, which is of course, going to help you build a really successful business over the long term. So let's get kicked off today with planning ahead and why is this so important? Well, the process of finding contractors and then giving them and preparing the information for them to accurately cost against and then appointing them and getting them ready to start.

All of these moving parts take a certain amount of time to happen. And if you add it all up, that can actually be quite a bit of time. It's not unfeasible at all that it could take you six months from the start of the finding a contractor, a journey to actually appointing someone and having them on site, which if you're doing nothing with your property could just be six months of interest costs. And that's why I really want to highlight this in today's episode, because if you understand this and you plan ahead, you could avoid a lot of that time as just kind of dead and wasted time. And you could actually get contractors started much more quickly on your schemes. But you've got to be ahead of the curve. And that's the really key thing here. So why does it take a certain amount of time? Well, as you're going to find out as we progress through today's episode, the process of actually scouring the market and meeting contractors and building an initial list takes a bit of time. The creation of an information pack.

That requires experts and professionals. Now, you can provide a schedule of works. You could provide even some sketched floor plans yourself. But depending on the type of project that you want to do, you might need more information and that information might need to come from somebody like an architect. You might need optimisation studies done. You might need then your floor plans deciding on and drawing up accurately. You might need measured surveys to enable all of this to happen in the first place. You'll then probably need building regs, drawings and other information, information about the specification and so on and so forth.

And you can imagine for a project, even of a medium or small size, there's quite a lot of information there to consider. Architects and these sorts of experts, they themselves tend to be quite busy. It would be unusual to be able to walk into an office or even reach out to our architects like Andrew and Mary and expect that they would just be able to jump on something in the same week. Usually there is a bit of a list, a bit of a queue because they've got a lot of other clients that they work with. So you need to...

Andy Graham (09:41.499)

Keep that in mind, there is a lead time just to working with the experts that can then get the information together for you. You then need to allow a certain amount of time for contractors to actually price a job up for. If you ask a contractor to do it in a week, put them under lots of pressure, you'll probably find that they're not able to give you the best possible price. And that's actually not in your interests. You need to be able to give contractors that time so that they can come back with the most competitive costs that they can. Sometimes they need to go out to different packages like electricians, like plumbers, like roofers, and they need to assimilate all of those costs so that they can prepare it and come back to you with a total cost.

You could package some of it up yourself if you're not thinking about appointing a main contractor. You could go and do all of that stuff yourself, but you still need to wait for all of those contractors, those different people to come back with their pricing. And that itself can take a certain amount of time. And you really don't want to rush people on the process. Once you've got your costs, let's say you've decided who you want to appoint and you've agreed a price with them, just mobilising them and the site, getting ready to get started, that can all take a little bit of time as well. It would be really, really surprising to me if a good contractor could start in anything less than three months. So just be mindful.

So there's easily six months there. So the first thing that I want you to take away from today's episode is that you want to plan well ahead, ideally six months ahead of when you think you want to start that process. That's when you should be doing all this stuff. Now, the good news is if you do this once and you get it right and you find the right contractor at the right price, you may not need to ever do this again. You may just be able to go back to the same person every single time. But if you've not got the best contractor, if you're not getting what you think are the best and most competitive costs or package, then this is definitely something that you want to do. So as a new investor, you definitely want to be thinking about doing this. Please, please, please don't just think that you can get all of this stuff done and then just walk up to a contractor, them their plans and ask them to get started the following week. That is not likely to be a successful way to deliver your project.

So let's move on then. And I think that this timeline, I think will give this more context as we progress through the next seven steps. The first thing you need to do is build a list. You need to build a list of potential and suitable contractors.

Andy Graham (12:04.787)

Often when I work with people who have never done this before, they'll usually have one or two names, usually someone that they met in passing, maybe someone they bumped into, a viewing, got talking to, something like that. They've not really actively gone to the market and done a wide and deep research exercise on finding contractors. And that for me is such a big mistake because it's very easy to get led down the garden path, by somebody who's appointed someone and thinks it's going well only to later find that it doesn't go well, or maybe to actually strike up a relationship with a contractor who says all the right things, but in reality doesn't or isn't able to deliver the right things as well. You need to do a big body of due diligence and it starts now. It starts six months before you think you are going to need to get a contractor started on site. For me, that starts with building a general list.

Now, in the olden days, we would do this by flicking through the other pages or going on Google, maybe even going through my hammer or something like that. Now, and this is the way that I have done it more recently. I employ the services of AI and I get AI to help me build a list. So actually you can do this stuff pretty quickly. I get AI to build me a list. I give them the brief of the sort of contractor I'm looking for and where I would expect that they will be based. You probably want a contractor who's fairly local. If the contractors are going to be traveling over an hour to get to your project, you're going to find that they're additional cost factored in for travel and fuel costs and things like that.

So probably within an hour, an hour's radius drive of your project is where you want to be looking. You're probably not looking for firms that have maybe 20 or 30 guys on the payroll. You're probably also not looking for a one man band building service. You're probably looking for a team of sort of maybe between five and 10. This, by the way, is on the assumption that you would like to appoint a main contractor who's responsible for delivering the whole project.

Get AI to give you a bit of help, build a list, and in that list, get the information summarised about the contractors, the location, a bit about their business, the contact details, phone numbers and emails, and then I would add a little section for note keeping on there as well. Now, how many contractors should you be reaching out for? Well, this is from experience only, but what I would say is that at the end of the day, you do want a good handful of people.

Andy Graham (14:24.849)

that you think would be suitable and appropriate and that you would like to get, or be happy to give the job to, actually quoting for it. So let's say that that is five. I think that that'd be a really good number. To get to five, I think you'll probably need to at least have five times that number of possibilities on the list at the very beginning. And it's a little bit like recruiting. When you go out to the market to recruit someone for a job, you tend to approach a pretty big marketplace, knowing that some people are just putting the feelers out for things that that might be on offer.

Some people's plans could change quite quickly. Some people might get invited to an interview and won't turn up. Some people will get invited to an interview, get offered the job, and then we'll still decline it because something else has come up. So it's similar in this sense. You'll approach a lot of contractors that will have a lot of stuff going on. They may just not be interested. They may be interested, but be really busy. Some people are really poor at communicating.

You’ll find through the process of meeting contractors that maybe you don't want to work with them. There's just a whole host of reasons why you might start with a list of about 25 and only end up with about five who are actually going to price the job for you. If you start with five, you can almost guarantee you will only have one if you're lucky to actually price on the job. And that is not helpful here because that is a non-competitive tender scenario, which is absolutely what you want to try and avoid. You want to try and make sure that there is a bit of healthy competition in the process of quoting and costing for jobs. You need to get the best contractor at the best price. And it is a process like this that helps you determine that.

So try and start with a list of sort of five times the number of people that you think you would like to quote for. And I guarantee that by the time you start doing what I'm about to tell you to do, you'll find that that list very quickly gets reduced down. So let's start with, first of all, where you can potentially find some of these contracts as well.

Personal recommendations, absolutely other investors, maybe agents that you know, letting the sales agents, they tend to know a lot of people locally. Go down to the trade counter. I think this is a really good one. I always thought this was obvious, but builders and contractors are often down at the merchants and the merchants and their suppliers often have lots of details and sometimes it's actually just public boards down there with loads of contractor details on. So you can go and check out that. Obviously things like Facebook groups, LinkedIn. think LinkedIn is actually a great resource for this.

Andy Graham (16:51.185)

because contractors and builders on LinkedIn tend to be, in my experience, a little bit more organized than the sort of contractors you might find advertising on Facebook. Checker trade, my hammer rated people, those sorts of things. In my experience, I have found that the talent in there is pretty limited. Usually there's a reason why they're having to use those sorts of services. That's probably not completely fair to say that, but just in my experience, that is what I have found. I found the best contractors on LinkedIn with good profiles.

And I have found the worst on like Facebook groups and those sorts of check and trade type of websites. But look, here's a bit of a reality check. Only a fraction of people that you note down and try and reach out to will actually respond. That is just normal in this world. You'll send emails out, you'll make phone calls, you'll leave voicemails, and most people simply won't get back to you. That is just the reality of this industry. This is one of the reasons why you do this process as well and where you start with this. Some people will come back and they'll respond on the first reach out. And then when you try and have subsequent conversations and arrange subsequent meetings, you'll find that it's very difficult to arrange things with them. And for me, they are the really, really important yellow and red flags that you are looking for. And that's absolutely why we do this at this stage. Now that brings me on nicely to step three, which is making early contact.

Once you've got that list, you're reaching out, you're making those phone calls, dropping those messages, trying to get in touch with potential contractors. But there will be people that don't come back to you. Now, the people that you do get through to at this stage, at this very early stage, this is before you've got plans and design spec for the project. At this stage, you're just introducing yourself and the type of project and asking a little bit more about them, their workload, typical project size, the areas that they cover, the types of projects they've done, have they or haven't they done any HMOs before. That's all you're really doing. You're feeling things out. You're just kind of testing the waters. Do they sound professional? Did they actually come back to you? Did they come back to you when they said they were going to come back to you? Did they have the time for you? Did they seem organised? Did they tell you and give you reassurance and confidence that they could do the sort of thing that you might need them to do? It's important to understand that at this stage, you're not

Andy Graham (19:12.239)

asking for a quote. It is simply just too early without any drawings or spec or design. It's impossible for them to quote accurately. And you should remember that asking contractors to price jobs up is something that takes a lot of time. So they don't want to do it unless they think there's a good chance that A, they get the job and B, that they think that it's even worth doing in the first place. OK, so don't ask for quotes at this time. Simply just reach out, try and start building those relationships. It's soft introductions, it's absolutely no hard sells and you're not trying to pin anything or anybody to the wall just yet. But pay attention to responsiveness, communication style and professionalism. They would be my three kind of big tips on that.

Now, at this stage, you've probably found that list of 20 or 25 has whittled down to perhaps 10 or something like that. And hopefully during that process, and it will have taken a bit of time to get through and have these conversations, hopefully during this time you've also been working on the pack of information that you need to actually do and deliver the project. So the schedule and the drawings and the floor plans, but there's other stuff as well. There's M&E drawings, mechanical and engineering drawings. It's like your plumbing and the heating and where all of those things are going to be located and run. Where your radiators are going to be, where your boiler and the cylinder, where they're going to be, how the toilets and the sinks and the waste and the soils are potentially going to get out of the building into the drains.

You've got your FF&E fixtures, fittings and something else, schedules as well. More design detail, really important stuff that if you want to get a job accurately priced, you're going to need. You're going to need quite possibly building rigs, drawings. So these are slightly different to floor plans. If for example, you're going to convert a garage space or a loft space or knock down some walls or take things back to brick and do certain structural changes. You'll need building regs drawings, drawings that are going to be compliant to show a building control officer and let your contractor follow so that they actually get signed off. They're quite complicated drawings. In there, you might have details about floor builds up, insulation, or roof or wall builds up. You might need acoustic separation, the amount of insulation, all sorts of detail goes in there.

Andy Graham (21:31.195)

And it's really important and it's really accurate. And somebody like you or I, who's not an architect or a specialist, wouldn't be able to do it. You need that sort of stuff from a specialist. So it's like an additional layer of detail on top of just floor plans that you need. So ideally, the sort of pack that you would prepare to give to a contractor would include the floor plans. It would include building regs drawings. It would include M&E and FF &E detail. It would include a spec sheet. So for example, that spec sheet might be the tiles, the kitchen type, the lighting type, know, spotlights and or pendant lights. might be the type of flooring or carpets. Everything you can imagine that you would go in and see that needs to be detailed on a spec sheet. Anything that's not there or anything that's a bit of a placeholder means that it's going to be difficult for a contractor to price on. So for example, if you're not sure whether you're going to have carpet throughout the house or hard flooring throughout the house, there are two very different prices there.

If you're not sure whether you want underfloor heating or just a normal standard wet system radiator system, there are two very different prices there. So you need to design that spec out and it needs to be built into this plan. And for example, the type of radiators, well, you can spend a little or a lot on radiators. And if you want the really nice fancy radiators, you need to spec that now so that it can be priced appropriately. Otherwise, what will happen is you'll end up with lots of provisional sums and that makes it really difficult for you to get an idea of it what it's actually going to cost. So the more information you can provide into this pack, the more accurate the cost you're going to get from your contractor will be. And the easier it will actually be to compare costs like flight between contractors. So that's so important. But as you're probably starting to gather now, there's a lot of information there. There's a lot of people that need to feed into that sort of stuff. And it can take a lot of time, a long time to get it all together. I have just done a couple of very big tenders.

Well, one was really big for a large scheme of flats. One was actually just for a single residential house. And I did the spec sheet for my residential property and it took me a long time. I think it took me about three weeks just kind of going back and forth on it to get that together. It was really, really hard and it takes a lot of time. Furniture, all of that stuff that you might want, you would potentially put into here as well. So build in enough time into your timeline to do this. I would say that it would

Andy Graham (23:57.665)

as an absolute minimum, take you two months to get all of that stuff together. It can definitely take a bit longer. With a really, really good wind, you might be able to get it together a bit quicker, but it really does depend on the complexity of the scheme that you're doing. If it's just a light refurb and there's a few changes here and there, you can probably do it much quicker. If it's heavy, if there's a lot of structural stuff, if you're doing extensions and lofts, there could definitely be a lot more that takes a lot more time. So without this, your quotes are going to be full of assumptions and those assumptions are basically just risks to you. They are unquantifiable financial and time risks that you ideally just want to iron out completely.

Now you can't iron everything out. It's impossible. There are always going to be some extras, but the way that it should work is that, and ideally this is the way I would recommend you do it. You appoint a main contractor on a fixed price based on all of this information and then understandably, anything beyond the contract or this spec that you agree will be subject to an additional cost that would usually be agreed in writing before the actual work is done and delivered on site. You agree it, then it's done. And then there would be an additional charge for any of that work. I think that that's perfectly fair. And that's how it would usually work. The great thing about this is that you're not having to manage the electricians and the plumbers and the roofers and the ground workers. You just manage one person doing the project. And I think that that's really, really important.

By pulling this pack together as well, it's much easier to see what's actually involved and that makes it much easier for contractors to determine how long it's actually going to take them to do the scheme as well, which again, that is a big, unquantifiable risk. There's a big difference between something that might take you six months and something that might take you 12 months. You might have to draw down from a bank and raise finance and pay interest on all of this. So it's really, really important that you get this just right.

Now let's assume at this stage you've got all of that information pack or let's call it a tender pack ready. At this point, you're ready to actually tender or to get the price quoted for. Now, I'd be really careful using the word tender or actually treating it like a tender. For big schemes, multi-million pound schemes, absolutely a tender in a formal process is what you would want to do. And it creates a transparent and method of fair comparison. But with smaller contracting firms, which you would typically be using for

Andy Graham (26:22.214)

residential HMO projects between let's say three and eight or 10 beds. It could set alarm bells off for contractors. I think that's what I'm trying to tell you. It can be worrying. It can seem like you're incredibly organised and that might make it a really difficult scheme for them to deliver. You as a client could potentially be overbearing and just costing against a detailed tender pack can be really, really difficult. A lot of contractors of this sort of level would prefer just to probably look at some rough plans and provide a rough price on this and then adjust things as it goes.

But what I'm saying is that this is absolutely not the best way for you to do it. So it's not necessarily a really formal tender, but getting that whole pack together and then asking people to go and cost it properly, I think is perfectly fine. You don't necessarily need to do it under strict formal tender type of conditions. You can manage that in a way that you think suits you and the contractor's best. But I do think that that's how you need to do it.

At this point in the process, you're going to give them that pack. You're going to ask a deadline for them to respond on. Can you come back to me in sort of three or four weeks on this? Don't rush them. Give them time to figure it all out. And then I would suggest you ask for a fixed price and a program of works. So how long is it actually going to take to deliver this? And what does that roughly look like in month one, month two, month three? How far do you think you'd progress through the job and so on? And a breakdown of major costs. So I don't necessarily want to see the cost of every screw.

But I really would like to understand how the big costs have been determined. Labour, okay, well, where's all that labour going? What is the painting and decorating as a package? Can you help break down the M&E? Like what's that mechanical and electrical cost? Where's it coming from? The plumbing and central heating. Okay, what's the cost of the boiler? What's the cost of the labour? It's useful to get some breakdown of major costs where you can, but you probably don't need it line by line. This way you can compare apples to apples, you can ask other contractors to do the same and you can compare it effectively side by side. You could even give contractors a spreadsheet that you want them to fill in and cost against certain line items and they could come back and you could literally compare one contractor to another side by side. The big, big, big advantage of this is that when you've got five quotes based on the same information, you can spot patterns and you can spot outliers and

Andy Graham (28:43.604)

When you don't have that, you're just completely blind. When you've got it, what you can do is you can go back and you could have conversations with contractors. Let's say the cost looks really good, but something, one thing in there just looks really, really high and you don't think that that necessarily needs to be as high as that. Ask them to help you understand why. And that is a really great way of being able to then negotiate because what you don't necessarily need to do is try and negotiate on the whole contract. You might think 80% of it looks great, but 20% just looks a little bit high.

What can we do? Help me understand this. Okay, well maybe actually there's a different way that you can consider maybe achieving the same result. There's lots of stuff that you could spend a lot of money on, but won't necessarily change as far as you're concerned, the outcome of it. We call that engineering stuff as well, you know, value engineering stuff. So once you've got a price, you can then start to chip away at it by not just asking the contractor to come down on their price, although that might be part of the conversation or the negotiation, but also by swapping some things in for other things where you can achieve the same result but do it with a product or through a method that just costs less to get there. And that's incredibly important because that is exactly how you get to the very best possible prices. So only by doing this process, only by going to enough people to get enough comparisons and getting enough of a spread, and then by getting enough detail to actually be able to breakdown costs and negotiate over certain items. Only then are you able to get the very best possible cost.

Now, contractors have got to make money. This isn't about drilling them down to the point at which they can't make money. That's not the purpose at all. This is just so that you can make sure that when you're looking at an open market, a fair market, you're getting the best possible value for your money. And the contractor should still feel like they can do exactly the same. Some contractors have got higher overheads than others. That's not necessarily your concern, but it might well be a feature of the cost that you get, that's up to you to then ultimately decide. But hopefully that helps you understand how to manage a tender. And I would suggest when you're asking contractors to price, you do give them three or four weeks, ideally, if you can. And again, that's just time where you need to be doing other things with the project. You could be using that time to actually get other stuff ready and sorted. Step six then, the contract. How do you actually appoint

Andy Graham (31:04.498)

a builder or a contractor. It's really important that you protect yourself. It's really important actually that the contractor protects themselves as well. It's really important that there is a piece of paper that everybody understands and everybody knows what it says on it, but then it can just go in the drawer. That's the way that you guarantee something gets done the way that you agree that it's going to get done. Without that piece of paper, what I would say to you is things get forgotten very, very quickly.

So I would, from the outset, starting with those early soft conversations and calls with contractors, I would let them know that you would want to use some sort of a contract on this. Even if it's a small project, I would recommend you put some sort of a contract in place. That outlines the terms and the conditions and the responsibilities and the liabilities and everything to make sure it's safe for anybody. It would really concern me if a contractor didn't want to use this. The big question I would have is why?

Now I'll let you answer that yourselves, but if you have it, then everything is black and white. Everything is watertight and you are much better protected and you are able to much better quantify and to a large extent mitigate any financial risk that you might otherwise have going into the project. So typically speaking, a JCT contract, which you've probably heard of is the type of contracts you would use.

There's design and build contractors. You could do a JCT contract with the contractors design portion. So a design and build is where basically you would have your pack of information, but then with, for example, the M&E and the plumbing and the drainage and the building control stuff, all of that design, you would expect the contractor to figure out exactly how it needs to work. Sometimes you would need consultants to determine that and they would have to go to consultants, get prices from consultants, and then do the work in the way that the consultant says to make sure it's compliant.

Sometimes you won't need that. Sometimes that might be overkill. So for example, drainage. If you're adding one or two on switch, you need to get the drainage out to the manhole outside or wherever it might be under the building. It might be quite simple and it might be quite easy to determine how that is. On some projects, it's really not. Some projects it is much more difficult and you need a bit of a drainage design. Same with electrical and things like that. A JCT with a contractor's design portion is sort of somewhere in the middle where

Andy Graham (33:21.674)

There's elements of it that you're going to ask the contractor to take responsibility for designing and the rest of it you're always prescribing. Now I would definitely recommend you get someone like an architect or a contract administrator to help you put a contract in place because it can be a bit complicated, especially if you've not done it before and it can be a bit complicated, but it's really important because a verbal agreement, just, it isn't worth anything. It's quite frankly worthless when things go wrong. So getting a contract and agreement in place will just, first of all, filter out any time wastes. That's why you have those conversations early on. But secondly, it just gives you all of that assurance and protection that I mentioned.

Now, the contract that you have will also determine how and when your contractor is paid. And that will be determined in line with the cost and the quote that they've put together and also the program, the timeline of delivering those works. So it might be a six month program and the budget might be a hundred thousand pound that you agree. The cost might be a hundred thousand pound that you agree.

And usually the way that the contract works is that it will ensure that you pay out against measured works. So if it's a six month project, it's not necessarily that every month they get a sixth of the total cost, a hundred thousand. Actually, it might be that in the first month, the costs are quite low because some of it's just been on site set up and then a lot of it's just been on some cheap labor, such as stripping out and ground works. Through the course of the project, it might ramp up a little bit as you start to then do more structural work and then M&E and then fixtures and fittings.

And so the drawdowns might increase month on month. you might have a 50,000 pound drawdown in month one, 60,000 in month two, and then it might jump to 100,000. Sorry, that example would be on a that was worth more than a hundred thousand pounds. But I think you get the idea. And a JCT contract or a contract will determine all of this. Now you could manage this contract directly with your contractor, or you could have an expert like your architect or contract administrator to do it for you again.

If you're just getting started, and this is how I always recommend my mentees do it, if they're doing this for the first time, I would recommend they just get a in, pay a few quid just to have someone make sure that this is administered, set up, and then run in the right way. And your contract administrator will usually look at a payment request from a contractor. They'll maybe come and measure the works. They'll say, yep, we agree you've done that much. Or no, we don't. We think actually it needs to be a bit less. Here's what we think.

Andy Graham (35:44.104)

And ultimately that's administering the contract. And obviously if anything goes wrong, either they're falling behind on the program or there's been an issue on site, whatever it might be, that contractor is there to administer the contract to execute certain things in the right way as per the contract, which you might just find a bit difficult. So I know I've labored this point around contracts here a little bit, but it is really, really important. And I think that if you are just getting started, you should absolutely think about using it.

Number seven then. Look beyond the price. When it comes to appointing a contractor, it isn't and shouldn't just be about the price. It should be about payment terms, delivery timelines. It should be about the team structure. Are they using subbies or guys on payroll? It should be about the quality of that past work. You need to do site visits and get references. You should be looking for yellow and red flags over promising vague answers, poor responsiveness like we've discussed from the outset.

You know, these sorts of things should all feed into the decision. Ultimately, you want the best contractor at the best price, but you might have to find something that sits kind of in the middle. Perhaps not the very best contractor who has the very best team and setup. Perhaps it's a contractor that doesn't quite have that, but that contractor, the other contractor does give you the best price. And that might be the perfect or the better scenario for you.

Alternatively, you might be prepared to pay a little bit more for the comfort and almost guarantee of a contractor who knows exactly what you want and is able to deliver it and has shown and has got multiple examples of that. That again reduces your risk, but it might cost you a little bit more. So I think looking beyond the price when you appoint someone is incredibly important.

The last step here is number eight, which is about building long term relationships. This process starts from that very first phone call in step one. Your contractor roster is a huge asset for your business. Some contractors will disappoint you and you'll have to go out to market and find someone else. Some contractors will end up moving on to different things and not be able to work with you. Some contractors, for whatever reason, their business might just not work and they have to close it down. There's many reasons why having a number of relationships with contractors is a really good thing. And I would make sure that you manage those relationships from the outset. So if someone gives you a price and ultimately it's not quite right, don't throw it in their face.

Andy Graham (38:08.32)

Have a really positive conversation. Take the time to explain it. They've gone to the time of actually costing it all out for you. Help them understand. Give them positive and constructive feedback. You don't know. You might have to chuck contractors off a site and bring somebody else on. And trust me, you will want to be able to go back to those other contractors on the best possible terms. So keep those relationships warm. Take every chance you can to meet contractors and grow that bank. Pay people fairly. Pay people promptly when it's appropriate.

And prioritise building long-term lasting relationships because if you've got a plan to build a successful property business, you're absolutely going to rely on these guys. They really are the difference of being able to do it or ultimately not being able to do it.

So there we go guys, eight steps to find the best possible contractors at the best possible prices. So a quick recap on that. Start way earlier than you think. Build a good pool to choose from. Get your drawings in your full information pack sorted as soon as possible. Go through a good tender process, whether it's formal or informal, but make sure you're asking a good number of contractors, at least five I would say, to price on the same package. And then use a good contract to protect yourself and protect everybody involved. If you get this process right, you will be building the foundations to a really good and successful and professional property business.

And that will make your life so much easier. It will ultimately cost you far less in the long term. It will ultimately take you far less time in long term as well. And trust me, I've heard so many horror stories and myself experience really difficult things with contractors. This is absolutely without any shadow of a doubt worth every second and every penny you invest into the process. Please don't rush into starting a relationship with a contractor because it's the first person that you met and because all of this sounds like a lot of work, that is not the right way to do it.

That is it for today's episode, guys. I hope that this has been a useful episode. I did say that it was gonna be quite a lot to unpackage today, slightly longer than usual episode, but I think a really, really important one. If you've got any questions about anything that I've discussed in today's episode, coming over to the HMO community, that's our free group in Facebook. There's over 10,000.

Andy Graham (40:31.86)

people in our community now, and it's a great place to ask the questions that you want to find more guidance and support. I'm often in there and I and our members will be happy to answer any questions that you've got about this or anything else. If you want to take your learning to the next level, then there's a lot more about this stuff inside the HMO roadmap. Plus you'll get access to the DealStacker, nearly a hundred case studies from our community members sharing their projects, the highs and the lows. And you can hear lots of horror stories and read about them in there as well.

You can get access to all of my downloadable templates and resources, including things like a schedule of works, which would be really useful as part of this process. You can go and get your hands on my schedule of works inside the HMO roadmap right now. And it'll all cost you less than the price of a cup of coffee every single day. Trust me, when we're investing and spending the sums of money that we are and taking the risks that we are with the costs and timelines, it is an absolute no brainer.

It's the one thing that I really wish did exist when I was just getting started. It would have helped me achieve twice as much in half the amount of time. That is it guys. Thank you so much for tuning in today. And don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO podcast.