How to Find Contractors
When doing rehab projects, you are going to need to find a contractor that is familiar with working with investors. There are millions of contractors out there but only a hand full of good ones. Finding a good contractor to meet your expectations can be very difficult. Contractors are hard to find, can be very expensive, late to the job or even quit on you. Finding a great contractor will make your life and your investment business much easier.
Why Buy Properties that need to be fixed up
Wouldnt we all just love to be able to buy properties that need no work done to them and be able to sell them for a profit. Well there actually is a way to do that- called quick flips or wholesaling. We will touch on these topics in another blog post but for now I want to explain why you will purchase properties that need rehab done to them. First off usually the more repairs a property needs the more of discount you will get for that property. This is why you need a contractor who can handle this type of work, for a fair price and can complete in a timely manner. If you arent buying properties at a discounted price of atleast 50% of market value you will have trouble making money in this business. Unless your business model revolves around you making the necessary repairs to sell your investment propeties at market value, do your homework and find a good contractor in your area.
The Best way to Find a Good Contractor
I can tell you first hand that the best way to find a good contractor is not by trial and error. Eventually you will probably find a good contractor this way but who has the time to hire bad contractors and lose money in the process- NOT ME. So here are some ways that you can find a good contractor.
Get referrals from other investors in your area: If you can find a profitable investor in your area who is willing to get you a name or two of good contractors in your area, you may be able to cut down on the learning curve of finding a good contractor
Ask family, friends or co workers for references: Its possible that somebody you are close to has had a lot of work done on there house and they have found a contractor that does good work, is trustwory and performs in a timely manner.
Real estate agents: Ask your real estate agent if they have come across any good contractors in there time working with properties.
A Recommendation Doesnt Mean He's The One
Just because you recieved a good recommendation from a relative, agent or investor does not mean that that should be the contractor that you use for your rehabs. You can choose to work with this recommendation for a project and see how he performs. This will be your trial and error process but off of a recommendation.
Managing your Contractors
Which you do decide on the contractor for this specific property, you are still going to have to be in control of your projects and and manage the contractors you have on site. The best way to do this up front is to have a detailed scope of work, schedule and budget laid out as guidelines for the project. Throughout this whole process you want to have good communication with your contractors to keep them on schedule and ensure they are on schedule. Make sure that you visit the property frequently to see for yourself that the work is being completed. Always get bids from your contractors you are planning on working with before work starts! You have to have every aspect of the job laid out so you know exactly what the job is going to entail and what the costs will be. Assist your contractors throughout the process. When I say this you are going to have to make decisions. You will have to pick out the flooring, paint colors, cabinents, and other items. That is why having a material list prepared for your contractor is a good idea.
Conclusion: While going through this process of finding contractors, if you find a good one, be sure to treat him good. No matter how long you have worked with a contractor be sure to always get numerous bids just to hold him accountable to his prices. You do not want your contractor to get to comfortable with you, where he begins to raise his rates without you knowing. Always be on top of your game. Continue to check in on your properties and evaluate your contractors performance!!