How To Perform Due Diligence On Contractors

If you would like a copy of our Due Diligence Checklist, click HERE.

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On today’s show I’m sharing the story from this past week of someone who is in our investor ecosystem. She owns several properties in a tertiary market about an hour outside Toronto. She is in her 70’s and her husband has several physical limitations. She is her husband’s principal care giver.

She has invested in several of our projects over the years and is someone who our team holds dear in our hearts. One of her properties is over 100 years old and was in need of some exterior brick repair.

She hired someone who was "in the area" performing masonry work. They had a business name that sounded big and impressive. They listed an address in Toronto and their website had plenty of testimonials and photos.

I got a call mid way through the week with an urgent request for help that the contractor was asking for a large up front payment. I made it clear that she should not every pay in advance and should only pay in tranches as work is completed.

There was no contract. The price changed part way through the job, and the demand for payment was a huge red flag.

By all accounts, the work was well done. This is one of those stories that has a relatively happy ending. But the entire engagement was built on a foundation of lies and it could have been a real problem.

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