When should I use a CONTRACTOR?

Question

I'm a buy & hold investor & I'm currently analyzing Single Family properties in B/C class areas in Raleigh & Durham NC under $180k.

If I find a property from the MLS/Zillow that needs some work and I want to look at it, when should I bring along a contractor? I've heard contractors like to know the scope of work before looking at the property since it saves them time.

What's your experience in this matter? Any answer helps!

Adam Schneider · Answer

@Vic Oyedeji If you are just asking contractors to come along with you to look at listed properties...you won't get any who want a ticket to ride that bus. If you are under contract, that's a different story.

Jaron Walling · Answer

If you're looking for distressed property it's vital to understand BIG ticket items. You can't waste contractors time. When I walk a property I'm focused on HVAC, kitchen, bath, electrical box, roof condition, and level floors. You don't need an expert to understand these items. After it's under contract I will call some contractors. I'll make adjustments to the rehab budget that I started on day 1.

Ben Halabi · Answer

Hey Vic, my number one advice is to be sure you know the contractor or maybe you have seen his work before. It also depends on the kind of work you are getting done. As a property manager, we get a lot of out of state investors that would like to go with their own contractors and most of the time it turns to be a bad idea. Based on the contractor the unit should be rent ready and when we go out to do our inspection half of the job is not done and the unit is not rent ready which means our investor just lost time and money. On the other hand, if you are looking to get someone to work at your property make sure they are insured, licensed ( if the job requires them to be) and bonded. Good luck!!

Hai Loc · Answer

You should try and bring them in during due diligence period. They may ask for payment for their time and reimbursement when you use them. Or some contractors are hungry for work and will do it for free. But I would ask for referrals and not try and search on your own

Jaron Walling · Answer

@Vic Oyedeji Nothing wrong with over budgeting! I'm working on a house right now and decided to paint the exterior myself. I'm going to save big on labor but my original budget was $3500.

Scott M. · Answer

Hey Vic, unless you know them personally or have built up a relationship it is hard to get someone "good" to join you for free.  As we have a team of contractors in every trade that we use, some daily, some weekly or monthly, they will all provide estimates and give us opinions for free.  That wasn't always the case.

Be prepared to pay and don't be afraid too.  They can save you thousands. Like a few have said get folks to focus on things you may or may not be able to see or tell yourself.  Get an HVAC guy to check out the furance/ac/hot water.  We always have a plumber snake out the floor, main drains and stacks to see what is hiding under the ground.  Home inspectors while they can't price things generally they can at least poing you in the right direction.

You might also get a property management company to help you access it if you agree to use their services.  We have done that in the past as well.

Don't be shy, pick up the phone and call people and tell them what you are doing and explain you are not looking for a freebe, but you need help and most people will be glad to help.

Vic Oyedeji · Answer

I'm assuming understanding big-ticket items helps you get an approximate rehab budget. Correct?

My worry is that I'll under / over estimate the rehab budget before putting the property under contract since I won't have a contractor walking the property with me in the beginning.

Vic Oyedeji · Answer

I'm a 1st-time investor. Meaning I'm looking for my first property.

JD Martin · Answer

How many properties do you have now, or how many have you bought, rehabbed and sold?

When should I use a CONTRACTOR?

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