Countering Contractor Bullshit That Can Cost You Millions in Real Estate
When I was a child, I was confounded by the reality that interpreting the real meaning of what other people said sometimes has little to do with the actual words they use. As someone who spent their younger years in another country, the inability of many Americans to deal with even the slightest level of confrontation put me in many uncomfortable situations where speaking truthfully was not the socially accepted way to navigate the situation. It took a few years of navigating American culture before I understood that only your true friends will tell you the shirt you are wearing is ugly when you ask about your outfit.
For most people, the discomfort of having to tell a stranger something that could be perceived as a negative comment is enough for them to tell persistent and pervasive white lies like “you look great in that!” This behavior can be generalized to a rule of thumb: if a stranger has no personal stake in expressing their opinion, they will tell you what you want to hear, not what they actually think. It turns out that asking people for an opinion that may cause them some perceived discomfort, no matter how small, is nearly always answered with the respondent’s best guess at what you want to hear. Maybe I’m not normal, maybe I’m on the autism spectrum, but separating the truth from convenient white lies became an exhausting exercise in trying to understand the people around me.
In a home where parents of European and Middle Eastern descent set the tone of communication, being direct, pointed, but always nice, made it very easy to understand what people meant. It was simple, they told you what they meant. Living in a culture rife with conflict aversion, the American northeast, and most of American culture in general, made finding success in business environments far more difficult than it needed to be. The compounding effect of everyday truth bending along with a seeming inability to take constructive criticism unless it is couched in a ton of caveats, in hopes that the audience is not offended, leads to an everyday fog of uncertainty around everyone’s intentions. I have found I often need to pause and take the time to think over personal interactions, recalling the words, body language, motives, and incentives of people I am doing business with. It is in this reflection time that I evaluate the motives of those I am doing business with.
There are too many people out there who believe any way to make money that is not explicitly illegal is in play. In other words, they believe that if you are too naive to know better, they can and should take financial advantage of the situation. It is precisely because there are too many shifty characters in the construction industry that nearly every interaction has to be handled with a great deal of care. If you think things are any better for the contractors, think again. There are just as many dishonest customers as there are vendors. That means every single contractor is going to have their guard up just as much as you. It’s sad, but because of a small number of bad actors that are very hard to weed out, the level of care and caution needed to vet vendors before handing over money is far greater than in most other business environments.
So, what does all of this mean when it comes to real estate investing and property development? It means that estimates will generally be much more than the real cost, it means the project timelines will almost always be too optimistic, it means that anything not explicitly specified in the contract or blueprints is not included in the price. You should assume that everyone you are paying money to is telling you what you want to hear. There are very few in this industry who do enough recurring business with any individual vendor for them to see you as little more than a passing opportunity to make a buck. I know this sounds like I am super-jaded, maybe to an extreme, but I have found that the sharply dressed smiling faces are far more likely to take advantage of you than the callous-covered hands of a grouchy plumber or electrician. The less they care about how the truth makes me feel, the more I want them as a vendor on my team.
Here are five strategies to use when starting your vetting process:
Start with a smaller job - Giving a vendor the opportunity to show you their true colors does not require more than a small project. Going through all the phases of a small project is like doing some dating before getting married.
Push for concrete details - Very detailed design specifications, line-item budgets, deliverable dates, and quality warranties are critical to ensuring the expected deliverables are defined.
Meeting small commitments - Throughout the introductory process, the contract negotiations, and the design review process, look for on-time deliverables. Showing up on time, bringing a full crew to the job, and being on-site every day until the job is done are critical to delivering a project on schedule. Vendors that can’t nail a small project will cause mayhem on a larger project.
Watch for change orders - There is always something unexpected. While most projects will require contract change orders to accommodate work that was not covered by the original project proposal, change orders are the place where unsavory vendors frequently find an exploit. They underbid the project, but once they are embedded and the project gets rolling, they begin to push for change orders that dramatically impact the budget.
Ask for line-item breakdowns and invoices - Honest operators will show you. Detailed budget breakdowns provide opportunities to effectively renegotiate and reallocate budget, particularly when a large collection of work is canceled due to scope changes.
At the end of the day, real estate is about people. And people, as we’ve experienced, rarely hand you the unvarnished truth. They hedge, they soften, they tell you what they think you want to hear. That’s not cynicism; it’s human nature. The trick is learning to read between the lines, to separate the polite nods from the genuine commitments, to recognize when someone’s “yes” is really a “no” wrapped in social padding, and to quickly adjust our expectations.
The investors who thrive aren’t the ones who demand perfection or expect everyone to play fair. They’re the ones who build systems to uncover honesty: testing small promises before trusting big ones, insisting on transparency in numbers, and watching actions more than words. Over time, you’ll find that the fog lifts. The contractors who deliver, the tenants who pay, and the partners who show up are the partners you build your business with.
Here’s the alchemy: once you stop chasing the illusion of easy answers and start embracing the messy reality of human behavior, you gain control. You stop being surprised by dishonesty and start rewarding integrity. You stop wasting energy on the noise and start compounding trust into wealth. That’s the real transformation, turning everyday interactions into gold, not because everyone is honest, but because you’ve learned how to uncover the ones who are.
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