The contractor you hire for your fix and flip deal can either help you maximize your profit or lose money. You will need to carefully evaluate each contractor if you’re looking to make one your right-hand man for all your deals. To find the right contractor for your renovation projects, use the tips below.
Gathering referrals from investors you trust is one of the best starting points for hiring a contractor for your deals. Once you have at least a handful of potential candidates from referrals, collect a few references from them. Make sure these are actually professional references and not ones from family members or friends. Ask their references general questions like what they were like to work with, how responsive they were, costs involved, and timeframe of specific jobs. Taking the time to ask questions and express any concerns is well worth it when it comes to finding a reputable contractor.
Be sure to verify their license and insurance
Verifying the contractor’s insurance is imperative because it protects you if the contractor has an injury on the job site. Having a license verifies that the contractor has met the minimum requirements to perform the work you need. Not using a licensed contractor can cost you time if there are holdups in the project due to the contractor not being able to obtain certain permits. Save yourself the trouble early on and verify that the contractor is licensed and insured.
Ask for samples of their work
Ask the contractor for before and after photos of their work. You can even ask to physically view the properties they’ve worked on and assess them in person. This may sound over the top, but you’ll be able to get a better handle on their level of expertise and experience once you see their previous work firsthand.
Watch out for red flags
A contractor who has no verifiable experience is a huge red flag. If they say they have all the experience they claim, it shouldn’t be hard to verify and track down their previous work through testimonials or even seeing it firsthand. If a contractor is giving you a price that sounds too good to be true, it probably is. Another red flag is if the contractor is giving you an estimated bid versus an exact amount. Make sure their bid for your project is an actual amount, not an estimate. Also, be sure to watch out for contractors who mark up material prices. Don’t take their word for it, do some digging yourself so you’ll know how much the materials should cost.
Interview a few different contractors
Go through the interview process with multiple general contractors and really dive deep into the logistics of the project. Ask them about specifics of past projects like the start and completion date, obstacles they ran into and how they overcame them. Ask them if they have worked with investors on other fix and flip deals. Also find out when they expect to get paid for the work. It is best to pay contractors after the work has been completed.
Get several bids
Do not just settle with one bid. The cheapest bid can cost you more in the long run. After you’ve selected your top three to five contractors, go with the one whose bid sounds most reasonable.
All the time and effort you are putting into the nitty-gritty details of your project will pay off in the end. If you take the time and steps necessary to hire the right contractor from the beginning, you won’t have to go on a massive search each time a great deal comes around or end up wasting precious time and losing money.