How hiring a contractor for a flip works?

Question

I'm really itching to start a flip. I have come across so many "potential" homes in my east Tennessee area but I don't know because I'm no contractor. I want to start talking to contractors about walk throughs but don't know how to start. Any suggestions? Should I be prepared to pay a fee?

Roger Poulin · Answer

Worry about the waivers or insurance when it is time to sign the repair contract.  There are a couple of good books on rehabbing by J. Scott, and I suggest you read those before you jump in.

Good luck with Zillow, I haven't been able to find good deals there but every area is different. Driving and knocking is more likely to find a winner.

Benjamin Barredo · Answer

I need all those waivers for a walkthrough or if I hire?

Right now a lot of the deals I have come across is on Zillow. I'm planning to drive for dollars this weekend but I have no real planned approach for that method.

Sounds like I might need a realtor or lawyer to help me with this waiver paperwork?

Roger Poulin · Answer

I agree with @Shawn Roberson on this one. Estimates should be free and any good contractor will consider that part of doing business.  You need to be respectful of their time and the home sellers time also.

I recommend finding out if the deal is even a possibility before you schedule an in person visit.  On the phone ask the seller, "What is the lowest you will take for your house?" compare that to the retail value and see if it is worth further investigation.  If it is, have your favorite contractor meet you for the walk through. Get the 1 estimate, and base your offer on that. You can get additional bids later, before you sign to start work. Most sellers will not want a parade of contractors coming through the home if they still live in it. Also if you find a deal, act fast. Coordinating 3 visits will allow to much time for someone else to swoop in.

Shawn Roberson · Answer

@Benjamin Barredo all estimates should be free. You want 3 bids on each project. At first it will seem like a lot of work. I sub out and I am the GC. Make sure they have a bank account, know what a scope of work is, have some kind of insurance or have them sign a liability waiver, lien waivers, and please have them give you recent references (very important). There is more in detail but this is a start.

Matthew Paul · Answer

yes , you should be prepared to pay the contractor  , you are taking up his time and using his expertise .

You make your money when you buy the property ,   Pay too much and you will lose your backside . Underestimate the rehab , and you lose .