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How to Choose the Best Possible Contractor For Your Project

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Most real estate enthusiasts and professionals look forward to flipping through real estate as a way to earn great and fast income. And why shouldn’t they? After all, flipping is buying an undervalued property that requires a significant amount of repair and selling it at market prices once the refurbishment is complete. So when you sell, you make that sweet profit.But that’s pretty misleading because you don’t So far Make money when you sell, but when you buy. Buying cheap has plenty of room for errors that may occur later. Of course, you need a sufficient margin to operate. To do that, we need a good team to make these numbers work.

One of the most important team members that helps to successfully flip a property is a contractor. He won’t go for sale, but your main expense will be him. Often, the house you think of turning over needs refurbishment far beyond what you initially thought. And believe me, finding a good contractor is not easy. Want to feel how bad things are?check out My previous post How I got burned in a dubious deal.

Nowadays, low market standards and controls allow almost everyone to engage in the real estate flipping business. You need to distinguish between professionals and beginners. So I’m here to help you make that distinction. To get started, some good contractors need to be on the candidate list. There are many fish in the sea, so a survey would be a great candidate. After referrals, recommendations, online surveys, and finally intuitive selection of contractors, you need to make a decision. Where are you going?

Credentials

Consider your contractor’s qualifications before thinking about any issues or tasks you need to do to your contractor. It’s much more detailed than what people are saying online. Can they do quality work within a specified period of time? Do they have the necessary licenses and insurance from state and local governments to become qualified contractors? The contractor must have current homeowner guarantee insurance. This compensates the homeowner for defective results and incomplete work in case the contractor escapes. Similarly, to work as a contractor, they need a license.

Related: The ultimate guide to finding incredible contractors

In addition to these, make sure your contractor has a clean health bill from the Better Business Bureau and the consumer protection agency in your state. These credentials speak a thousand words about the credibility of the contractor. After confirming these things, ask the contractor for reference. If he is good at his profession, he should be fine in providing at least 20 recent relevant references. It makes sense to partner with a solid and reputable contractor. We encourage you to read this paragraph again. If you just followed the above words, not in a hurry. As the saying goes, “measure twice and cut once.” I didn’t even measure – just cut / adopted. I was sitting in a house that needed a home remodeling, and I didn’t spend time doing extra due diligence to the contractor I hired. Don’t make the same mistakes I made.

Price points

At this point, we’re all looking for the cheapest option when it comes to repair work, but keep in mind that at least to some extent, we need to discourage price. Pricing is an important factor in turning a home over, but you can be prepared for failure simply by considering the cheapest contractor. “CheapCheapCheap” is definitely not the way to go. It’s always worth spending a few dollars extra on rehab as long as you can completely withdraw from your daily or regular phone payments. Don’t compromise your time working with a broken contractor just to make your rehab bids cheaper.

There are three types of contractors: low-end, average, and high-end. Low-end people are people who use few tools and are usually not licensed or insured. If they do something wrong, you can’t do much about it. It’s best to stay away from these contractors, and if they’re involved, limit them to basic tasks such as signing or piercing walls to place decorative fixtures. is needed.

The average contractor is usually licensed, insured and working in a small business. Their rates are reasonable. Choose the person who worked on the flipping project. These are great for this kind of project. You may not have all the tools you need, but you can work with most project types. This is where “bread and butter” type contractors come into play. For over 16 months, we have two great crew members on board and do most of the work. We also use “low-end” people for quick fixes, maintenance, and other small tasks.

High-end contractors are people who work for large companies with multi-million dollar projects. They are sophisticated and charge a tremendous amount of money for even small jobs. It’s best to hire them for very high quality work on a tight timeline. I recommend using these guys for A-class retail flips or rehab over $ 30,000.

Professional attitude and other nonverbal clues

This is a big thing that is often forgotten. Credentials are important, but they aren’t the only things to look out for when choosing a contractor. Nonverbal cues of professionalism are just as important, and those clues should not be overlooked. You will spend a lot of time with your contractor. So think about whether you are happy with his method, his communication skills and his attitude. Some important things to note:

  • Punctuality: First, when asking a contractor to submit a proposal or bid after the first meeting or phone call, check how aggressive the contractor is to submit those details. Is he punctual to send the document within two days, for example, or is he waiting for the second and third reminder calls? In case of problems, quick communication is the key. believe me. They always do.
  • Listening ability: This is one of the most undervalued qualities required of contractors. Not all clients are clear about what they want, so contractors are expected to listen patiently to them and clarify their requirements for an efficient workflow. Make sure the communication between you and your contractor is clear and he is willing to spend time understanding your requirements. If the contractor hurries up and offers a proposal that lacks some important details, you must think twice before hiring him. Also, be sure to include all the details on the paper. Otherwise, you may later be involved in a “he said, she said” war with the contractor. Take out the MontBlanc pen and point the bloody object down.
  • Flexibility: Make sure your contractor has some flexibility in case something unexpected happens. Even with the timeline agreed upon in the contract, I don’t want him to paint your gate when it’s raining outside. Take flexibility into account when they’re talking to you and look for a contractor to extend it to their written contract. If you can find someone who doesn’t use nickel and dime for every small excess that occurs, I think you might be the winner.
  • Project management skills: Contractors often need to do a lot of work at the same time, from installing tiles to painting and plumbing. He has a team of workers who work according to his instructions. Make sure he is good at handling multiple tasks at once. The best way to find out is to ask him many questions about his previous projects, the problems he faced, his most challenging projects, and more. Contractors generally like to talk a lot, and once you get started, what kind of work they do, what kind of clients they deal with, and how long it takes to turn a house like you upside down. Understand. Show him the property to be repaired and get a quote from him about budget and time requirements. You can compare these with other future contractors.

If you can’t tell you about the multiple experiences he’s had, it simply means he’s not working on many projects. It’s the red flag right there. Also, if possible, ask the contractor to take you to one of the ongoing projects. This will give you a good idea of ​​the quality of his work.

Related: 3 types of general contractors (& how to choose one for your project)

Detailed contract

One of the most important things a contractor offers before you agree to the terms of the contract is a detailed contract. A contract is a document that outlines the details of the project. If you and your contractor agree to the terms, it becomes a legal document. All projects require a contract. Make sure the legal document contains the following:

  • Details of you and your contractor
  • Clear start and end dates for the project
  • Final price and allowance
  • Work scope details
  • Payment schedule
  • Change order clause that leaves room for flexibility
  • Dispute resolution clause

Considering all the concerns so far, if the contractor creates a detailed contract that includes all of these, sign the dotted line and further delay seeing your home refurbished to your satisfaction. I do not have a reason.

Conclusion

Flipping a property often requires a lot of repair work before you can sell it for profit. The two most important considerations when flipping are quality and speed. Get a contractor who understands these two values ​​and has a professional attitude. Doing this will reduce your surprises and increase your profits.

Investor: What are your best tips for finding a top-notch contractor?

Let us know in the comments!

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