There are approximately 250 disasters in the US each year. Last year there were 15 that were over $1 billion each with a total of $46 billion. When big disasters strike insurance co’s expect demand surge that puts contractors, labor, and materials in short supply. How does an individual property owner, armed only with their insurance check, compete to get rebuilt?
First it’s important to define your objective. Do you need to rebuild as soon as possible? Maybe you want to also add your own funding and rebuild better? Maybe you plan to sell? Are there other unique challenges to consider in your area?
Some of the problems in Gatlinburg are unique. There was already a shortage of builders and a high demand for their services. Then there is the problem accessing properties on steep winding, mountain roads and now there’s $1.1 billion of new work added. What about the normal problems that follow every disaster? Are you aware of those, and how they impact you?
I’ve been studying disasters since Hurricane Andrew in 1992...
...and many of the same problems repeat over and over.Following most large disasters credit for contractors at local material providers will get cut back or eliminated entirely. Many local contractors will avoid insurance work due to the unknown risks and hassles; and associations warn subcontractors that they will not get paid their final invoice 30% of the time. Material providers will have no way of forecasting the materials needed and they too have credit constraints with wholesalers and manufacturers.
Competing for contractors and materials causes another set of problems for property owners desperate to recover. Bad deals are made, bad actors are hired and fraud all-too-often happens. The greater the disaster demand the higher the incident of property owners making abnormally risky decisions that otherwise would not be made. Rebuilding becomes the perfect storm all over again.
So how can you attract the good contractors and avoid the risks?
Let’s face it, contractors are in business to make money. The good ones do want to help you but they are accepting your project by price and/or payment assurance factors. They’ll walk away if they think they’re won’t be paid enough or if there’s a perceivable risk getting paid. After almost 25 years, 3 pilot experiments and countless interviews the number one attractor for contractors, subcontractors and suppliers is payment; assured, fast payment. Thousands of good contractors have told me, “I just want to get paid”.
Payment is the one and only construction process that every single player on every single project has in common. It is also the single point of convergence for all project data exchanges. Receipts, invoices, lien releases and more is all exchanged with payment requests
Payment is why I built BuildPay. BuildPay is the first, the only end to end construction funds control solution for the entire project payment chain. It mimics the payment control hierarchy of construction today without the payment risks and delays. It assures rapid payment release for approved work and materials while it reveals who was paid and what was bought. Our team in Gatlinburg will work hard to accelerate recovery and combine your purchasing presence with 2,459 others to improve pricing and attract more good resources. #rebuildgatlinburg #mountaintough