Finding contractors for flips & rehabs
If you are into property flips and rehabs, you know the importance of having a great contractor by your side. The profitability of your investment is directly related to the contractor you hire. But you may know that finding an outstanding one is difficult.
Contractors who know how to do what you want within your desired budget are difficult to find. These folks are the kind who provide you with clear and detailed bids, have a great work ethic, and make any rehab job look simpler. Work is completed within the allotted timeframe. Moreover, they don’t rip you off.
How can you find such contractors for your property flips? Finding contractors often involves a lot of trial and error. But to make it easy for you, here are some ways you can use to find the best contractors for your flipping needs.
- Ask for referrals
This one probably occurred to you, but it bears repeating. Ask your friends, family, and colleagues for referrals. Anyone who has had a remodeling done would suggest trusted contractors.
Yet a recommendation doesn’t mean that these contractors are indeed the best. It confirms that they’ve worked for someone you know, whose project specs may have differed greatly from yours. But there are others in your circle who you can ask for referrals. These trusted folks include your real estate agents, property managers, and builders.
- Go search for contractors
This one involves some reconnaissance. (Yes, just like the spy movies!) Drive around the neighborhood and see if you can find homes that are under construction. If you find one, check out any onsite signage that denotes the contractor or firm. You might even be able to meet them and size up their skills firsthand. What better way to find a contractor than this?
- Check out real estate investment clubs
No time to scout for referrals? No sweat! You can always visit your local real estate investment clubs. They will have official directories of contractors or unofficial lists of preferred vendors.
Look for contractors with a proven track record of finished projects, including the budget they worked within and the time they took to finish. The directories could also have the list of finished projects by the contractors. Drop by in person and analyze the contractor’s work.
- Visit the local building office
When in doubt, go the government agency route. Your local building office or city planning department is another great place to search for good contractors, since it will have records of contractors who have applied and received construction permits and projects that passed inspection. All these are public records, and you can access them to find a suitable contractor.
- Search online
With ratings and referrals that you can view, websites such as Craigslist, Angie’s List, Thumbtack, Bigger Pockets and others are great tools to help you find the best contractors for property flips. And, of course, you can search on social media as well—Facebook will have local business pages and Pinterest may contain images of finished flipped homes nearby.
Now that you have identified contractors, how should you choose the right ones for you? Follow these steps.
- Request a resume – Getting a resume is the first point of communication with a contractor. Ensure that they’re licensed to do the work in your state by checking for their license number. Ask basic questions and eliminate those who didn’t answer them thoroughly.
- Discuss rates – Talk to the contractor in person or via phone and ask about their rates. Keep in mind that contractors’ rates for real estate investors tend to be lower than what they would charge homeowners, owing to investors generally having more flexibility since this isn’t their main residence.
- Meet onsite – Pay a visit to the contractor’s current job site to get a sense of their process, quality of work and the skill/productivity level of the crew.
- Ask for bids – Once you’ve visited job sites, ask each contractor to send their bid. The responses will show the contractor’s sincerity and consideration towards your project. Always secure multiple bids (we recommend at least three) to find the most suitable provider for your needs.
Remember: your oversight is a must!
What’s next? Not resting on your laurels. Many real estate investors tend to get comfortable after hiring a contractor. They show up less often at the worksite, which can cause contractors to become a little complacent. The result of this can be disastrous, though: cost overruns, time delays, and a lower return on your investment. To avoid this, you must remain in touch with your contractor and maintain oversight of their work, whether in person or remotely.