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The 6 Commandments of Working With Contractors on Rehab Jobs

The 6 Commandments of Working With Contractors on Rehab Jobs

3 min read
Brett Snodgrass

Brett Snodgrass is CEO of Simple Wholesaling and has been a full-time real estate investor for 10+ years. He specializes in wholesaling, wholetailing, creative financing, and scaling a business from a one-man band to an amazing full team running 100s of deals per year.

Brett has extensive knowledge and firsthand experience in several facets of real estate investing. He is an investor in Indianapolis (who loves being a hoosier) and works with investors all over the country who want to invest in one of the top-rated cash-flowing markets in the nation—that being Indy.

Experience
Brett’s amazing team buys and sells 300+ properties per year and builds passive streams of income by creating 50+ creative financing deals per year. In a five-year timespan, Brett has gone from a one-person team to a full-time staff of 10+ team members and has tripled his deal flow.

As a man of faith and a real estate investor, Brett combines both to bring opportunities to everyone he encounters while spreading the kingdom of God. This is his mission and the purpose behind his company Simple Wholesaling. He has a passion for helping others in business and personal growth.

Brett also enjoys spending time with his wife Karen and his four young children, in addition to taking mission trips and serving others through his faith.

Press
Brett has been featured on several podcast interviews, including two BiggerPockets shows—BiggerPockets Real Estate Podcast #231: A Simple Strategy for Doing 25 Deals a Month and the Best Deal Ever Show #10 With Ken Corsini: Substitute Teacher Makes $80K on First Land Deal. He has also been a guest on dozens of other podcasts, including Wholesaling Inc. and FlipNerd.

For the past several years, Brett has also hosted his own show called Simple Wholesaling Podcast with Brett Snodgrass, as well as a local meetup in Indianapolis, the Wholesaling Made Simple Meetup. He is a sought-after speaker who has given key presentations on topics ranging from scaling a real estate investing business to developing a purpose behind the business. He loves to give back all the blessings that God has given him.

Accreditations
Brett is an Indiana real estate broker and a member of two prestigious real estate mastermind groups, Collective Genius and Multipliers.

Follow
Instagram @simple_wholesaling
Brett’s Facebook
Simple Wholesaling Facebook
SimpleWholesaling.com
Brett’s LinkedIn

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For those of you who know me, I’m a full-time wholesaler right now, but for three years, I used to be a full-time rehabber.

There were a lot of reasons why I reverted back to wholesaling, but a major reason was the headache of dealing with contractors.

Through my experience, I’ve learned how to spot a great one, and how to spot one that will most likely steal from you. Everyone in real estate at some point will have to deal with these guys, so I thought it’d be helpful if I shared that knowledge with you.

Today, I am going to share with you the 6 commandments of working with contractors, and if you live by them, I promise that your experience will be far more pleasant than mine was.

Ready? Let’s do it!

The 6 Commandments of Working With Contractors on Rehab Jobs

1. Thou Shalt Not Always Hire the Cheapest Contractor

When I first started in real estate, my logic was that whoever gives the best price wins. However (through a lot of pain, I might add), I have learned that typically the contractor with the lowest bid has underestimated the job, which translates to him putting your job second to other jobs and the work being sub-par.

Then, usually you’ll end up having to hire a new contractor to fix his sloppy work, which will end up costing you far more in the end.

Don’t do this!

find-best-contractor

2. Thou Shalt Not Always Use the Same Contractor

The truth is, your relationship with your contractor can be looked at as a marriage. In the dating phase, you always put your best foot forward. You’re pretty much Johnny-on-the-spot at all times — until you get married. And then things start to get loose. You’ll get comfortable and start leaving clothes on the floor, using the bathroom with the door open, things that you would have never dreamed of doing during the dating phase.

Well, it’s the same with contractors! When you first hire them, they’re amazing — until they get comfortable! Then things start getting slightly more expensive, your jobs start taking a back seat, and the work begins to become less quality.

So, the key is to have a handful of contractors that you use regularly, so that they strive to continue earning their keep.

3. Thou Shalt Not Use Contractors That Are Not Licensed and Insured

Through my experience, licensed and insured contractors will be a little bit more expensive, but they typically do a better job and are safer at work.

Related: The Simple Step-by-Step Guide For Rehabbing Your First Rental

At some point an accident will happen on the job, and you don’t want to foot the bill of an injury that should have been handled on the contractor’s end.

The truth is, when a contractor is licensed and insured, it’s a filter that signifies them as a better professional and helps you separate the gold from the dirt.

You don’t want to deal with anything else, trust me!

4. Thou Shalt Not Pay Contractors Too Early

Contractors will typically push you to pay as much for a job as possible before the work is done.

You don’t want to ever do that because paying too much on the front end will demotivate them.

If someone asks you to paint a fence and they say, “Hey, I’ll pay you $900 right now, and then $50 when you’re done,” instantly you now want to finish the job as soon as possible — usually at the expense of the quality of work.

But if I pay you $500 now and $2,000 at the end, then it keeps you motivated to continue the job and do it with excellence.

Make sense? Great!

Is the Answer to my Contractor Problem Starting my own Company?

5. Thou Shalt Not Do a Job Without a Detailed Budget

When I was a rehabber, I used to typically have some idea of what work I wanted to do on a house, but if I was to be honest with myself, the majority of the time I was just winging it!

You need to have an entire breakdown of the project, a 100 percent layout with general ball-park figures attached to the things needing to be done before you ever get bids from contractors.

You need to have the end in mind, from the beginning. Otherwise, it will cost you more time and money.

6. Thou Shalt Always Put a Timeline on the Project

If you simply hire someone and you don’t give them the parameters around the timeliness of the work, you’ll find yourself in a never-ending headache.

Related: How To Find & Manage a Top-Notch Contractor for Your Projects

What I do is work out a completion date with the contractor, and then if they don’t make it, I begin deducting money off the original agreed price.

For example, if we agreed that the work would be done November 10th, every day after November 10th, I’d deduct $75 off the original price until the work is done.

I tell them upfront about this before I hire them, and it has drastically improved my experience with contractors finishing when they said they would.

So, there you have it, guys! These are the 6 commandments of working with contractors, and if you keep them in mind, I promise your life and work will be significantly more manageable.

In the comments section today, is there anything else you’d add to the list?

Leave a comment and let me know!