By Mike Baird
For as long as I’ve been investing in real estate, I’ve seen new investors make the same mistake over and over and over again. They choose a contractor who just isn’t right for the job, and as a result they lose a lot of time and money. Some new house flippers will go with the first contractor they find. Others always pick the lowest bidder. Still others blindly trust their friends and family to recommend a contractor, even though none of their friends and family have ever employed a contractor to work on an investment property. If you want to make the most profit on your fix and flip houses, you need to do a little bit of homework before you commit to a contractor. Use these tips to help you do your due diligence.
They Have the Right Credentials
First, before you even think about your project, get the details on your contractor’s credentials. Are they licensed, and do they have experience working with fast-paced projects of this scale? Call on their references and former clients to find out what your contractor did when faced with challenges like overrunning a budget, running into unexpected obstacles while on a deadline, etc. Then check them out with the Better Business Bureau to ensure that their business is legitimate and that they don’t have any pending or ongoing actions against them by former clients.
When you call on their references, ask about your contractor’s punctuality and professionalism. A few good questions to ask might be:
- When a job needs to be done early in the morning, are they there on time and ready to work?
- Did you feel like they really listened to your needs when you described the work you wanted done?
- Are they good about staying within budget, and can they work well under a strict deadline?
- How are their project management skills? Can they effectively handle multiple large tasks on a single job?
- Do they work some flexibility into their contract to avoid nickel and diming their clients to death?
- What kind of project did you hire them for, and would you work with them again?
By asking these questions and researching your contractors’ customer reviews online, you can get a clear picture of how they conduct business and whether or not they will be a good match for your next fix and flip project.
You Can Communicate Well with Them
After you’ve narrowed your search down to a couple of good prospects, you should meet with them each in person to determine whether or not you’ll be able to work well together. Some people really just can’t communicate and can’t see eye-to-eye enough to work well together on a project, and that’s okay. You just want to make sure that you don’t accidentally sign a contract that will make both your life and your contractor’s life miserable until the project is done.
Of all of the contractors you meet who have good credentials and meet your requirements for professionalism and quality, you may want to go ahead and choose the one you like the best. There’s still one more thing to consider, though: price.
How’s the Price?
As you narrow your search down, you’ll know that the last standing contractors on your list have all the qualities you need, and you’ll know that you can get along with them all, too. Now you can look at price and pick the contractor who’ll give you the best deal. Remember to maintain as much professionalism in this process as possible because you never know when you’ll be investing in real estate projects all over town, and you’ll need more than one contractor on duty to get all of your fix and flip houses done so you can sell them.