Hiring a General Contractor for My $180,000 Project Was The Worst Mistake

What I learn from building a $180,000 ADU project

Backyard that was about to build ADU

I wanted to build an ADU in the backyard - something I'd been excited about for a long time. Thus, I hunted for a general contractor to give me an estimation.

One guy was a perfect fit: low cost, fast turnaround.

All the things that I wanted to hear.

I decided to hire him. 

The initial drawing phase started, and the architect told me it needed a larger sqft. That's when the first red flag came: he changed the contract and asked for extra money beyond what we'd agreed to in the contract.

However, I ignored it, thinking, "Okay—let's be flexible. "It might be normal in the construction world to iterate on these things.

Then, it took a surprisingly long time to finalize the blueprints and drawings. A year later, I'm still in the process of submitting drawings to the city.

At this point, he told me that the city requires topography, which costs $5000 to accomplish. I asked him, "Can you give me the name" of the company and also the receipt regarding the costs of this?"

He wouldn't tell me. "

This wouldn't be the red flag number that slapped me in the face—he wasn't upfront about the project's cost. Every step was shrouded in mystery, and I was left guessing and giving him whatever money he demanded.

Being too Ambitious by starting multiple projects at the same time

Ambition is great, but sometimes it gets tangled up with excitement. You see the potential return on investment, and suddenly, you're all in, chasing your hesitation.

That's exactly what happened to me.

The second issue? I was spreading myself too thin. I initiated both construction projects simultaneously, and when you're stretched too far, a small disruption can knock you off balance.

The result? I became restless, juggling too many things simultaneously- constantly multitasking between projects.

The real problem behind my ambition was the emotional attachment I built with this project. I obsessively checked in with the contractor every day, asking for updates. Well, I must because things will exacerbate until it is too late. So better safe than sorry.

I was hyped about the result, picturing the extra income I'd bring in. Was it great? Maybe. But let's be real—we are trying to make a better living, right?

In the end, my impatience kicked in. I wanted everything done and fast. And that's when I learned the truth: when you let emotions drive your work or investments, they can come back to bite you. As Warren Buffet says, "You don't want to be a no-emotion person in life, but you definitely want to be a no-emotion person when making investment or business decisions."

Not Having an End Date On The Contract

Edward, this is contracting 101.

I know, I know. I blamed that on inexperience. 

It was my fault for being inexperienced when we first set up the contract.

They did a tricky thing.

Initially, the contract had a clear deadline. But with all the back-and-forth between the architect and my growing impatience to finish the project, I agreed to a new contract that was "open until the city per "it is due. "

This is a lesson for "myself and anyone else negotiating a contract - whether you are contracting on a software project or a construction project: always have a firm deadline. It's the only way to hold the other party accountable and keep things on track.

Finding Contractors through the Internet instead of Referrals

The world of construction is pretty backward. It's a reminder that not everything you see online is real. 

Reviews can be faked, bad comments can be erased, and even their office addresses can be made to look more "professional" than they "really are.

I did my due diligence, though. I went to their offices to ensure that they weren't scammers. What wasn't off was that their initial address mentioned that their office was in Beverly Hills, but when I verified, it ended up in the valley.

This reflects the current noises of internet marketing. We're bombarded by people selling a perfect lifestyle, acting like they've made it big. Expensive cars, beautiful women, private yachts—whatever you can think of is fantasy in your mind. This creates a trigger in human psychology to think that our lives are not enough and that we need to also buy into the program that they are selling.  

A referral would've been way more would've. You can fake reviews, comments, and polished sales pitches, but you can't fake real, hardworking.

If it is too good to be true, it's too good to be true

Gut instinct is our second brain.

As Warren Buffet said, "If your gut tells you to do something, trust your gut." Steve Jobs also said, "Intuition is the most underestimated form of decision-making process."

At first, I disagree with gut instinct. Coming from the tech industry, we are trained to rely on facts and data instead of our intuition. Data leads to the right answers; we have AB, so we can rely on data to make our next move.

But looking back, some of the best decisions I made came purely from my gut. No data, no facts - just intuition.

In 2021, when the prices skyrocketed, people were outbidding homes by $100,000 over asking; everyone told me I was crazy to follow the bidding process.  But my gut told me it was the right time to buy. To purchase this house, I sold most of my stock portfolio, which is at an all-time high. It sounded like a stupid decision because the stock market is booming. 

But here's the thing- when you look back, it all makes sense. Stealing the infamous speech by Steve Jobs, "Life makes sense when you connect, look back, and connect the dots." I wasn't some genius; it was simply luck and trusting my gut.

Sometimes, your intuition will seem outrageous. But if it feels right in the moment - go for it.

The best deal isn't always the cheapest. We've been taught that the best deals are usually the lowest price. So, I picked one that was the fastest and cheapest. 

It's about quality.

But here's the thing—prices are subjective—what you think is expensive, someone else might find cheap. In construction, quality beats price every time. And if I have to pay more for better quality work, I will do so.

Closing

If you asked me what I have been up to for the past year, I would tell you about all the exciting projects I worked on during my 9-5 and the shenanigans of the tech layoff.

In reality, I was juggling between caring for my family and managing this construction project. Add that to working 50 hours a week at my day job, and you can imagine how draining it was.

It was supposed to be a safe bet—something that would generate extra income. But, man, did it require a mountain of time, energy, and patience.

The whole process turned out to be grueling. I had to step into the role of project manager, constantly checking in on progress, and let's just say the contracts weren't exactly in a hurry that showed no urgency. Every week felt like babysitting. Since it was my first big construction project, I had no clue what things should cost. Was a topography survey worth $500 or $5000? Was hiring a general contractor even the right move? I didn't know what was considered slow or fast in this industry, and the learning curve was steep.

This brings me to think: What is the bar to getting into the construction business? Pretty low. I had a similar experience when I added a bathroom to my house. It's frustrating - disorganized, unreliable, and mentally exhausting. Honestly, I felt lucky that I was not in the field then. In tech, people are efficient and reliable, and you can count on things to run smoothly most of the time. It's a privilege, not just because of the money, but because of the professionalism you experience daily.

After a year's effort, I am still in the permit submission process. Only this time, the general contractor has illustrated that he wants to back out due to inflation. He has briefly illustrated that the workers are now 3-4x more than they were a year ago. 

Now I'm stuck wondering: Should I push forward because it's still cheaper, or should I renegotiate the terms to match reality?

Let me know what you think.