What makes a contractor stand out?

25 Replies

As an investor, what are the most important aspects you look for in a contractor? What makes them stand out among the dozens of others doing the same trade?

When you have a contractor you use regularly, what would make you consider trying a different person for a job?

Do you respond more to/prefer one-on-one marketing and "elevator pitches" or by receiving professionally prepared, informative materials? Or both?



(I am asking this because my husband - who is a contractor - is looking to expand his investor accounts. We've decided to move more predominately into that niche versus homeowners as the "busy" season starts to slow down).

I greatly appreciate your input!

Hi Beth,

Good question. For me, references are gold. If I were you, I would get happy clients on video and put them on your website. Have your clients speak specifically to great customer service, on time and on budget. If there are any public sites in your are, ie, Homestars, Yelp etc, invite your clients to leave reviews there. Word of mouth is gold. As a real estate investor, having someone who cares about my business and their reputation, is gold.

Good luck!

Originally posted by @Penny I. :
Hi Beth,
Good question. For me, references are gold. If I were you, I would get happy clients on video and put them on your website. Have your clients speak specifically to great customer service, on time and on budget. If there are any public sites in your are, ie, Homestars, Yelp etc, invite your clients to leave reviews there. Word of mouth is gold. As a real estate investor, having someone who cares about my business and their reputation, is gold.

Good luck!

Thank you @Penny I. - I really appreciate your reply!

I love the video idea versus just "copy & pasted" typed reviews.
Have a great day!

I like to see previous work; even just pictures are great.

Be straightforward.

Show up on-time, etc.

Investors hate having to baby sit contractors and constantly look over their shoulder and have them back out to correct mistakes. If he does quality work and hes dependable, he'll get lots of business.

@Beth D.

It really isn't that hard to impress investors.

- Be a good communicator. Don't have to be on call 24/7 but should return calls promptly and it is always nice when you have one that is actually on email so you can just send a few questions at night they can answer when they have a chance (If non urgent).

- Offer good prices for quality work. Investors don't want to pay retail. A good investor DOES want the contractor to make money, just not a killing on any given job. The trade off is usually bigger jobs and lots of them. Also in turn if you get a couple of active investor clients you should be able to cut down if not eliminate marketing costs as you should have continuous work.

- Assuming he is a GC he should be a "One Stop Shop" if they need him to be. While some guys will want to have their own trusted Subs for stuff others will want to outsource that and not want to deal with anyone other than him.

- Similarly don't expect me to go to Home Depot of Lowes to pick out items with you. I will either give you SKUs or better yet when writing your proposal if you aren't given that initially give your own list of those with a "Or others of similar type and quality at costumers request" so if they like what you picked they sign off or know what you budgeted if they don't, so they either pick similar or know they will have to pay more if they want higher end.

After a couple of jobs with the same guy hopefully the investor will be "Use the same stuff we did at 123 Main for the fixtures but do the counters from 321 Center" so you cut down on time hashing that out.

I do agree with others that INITIALLY giving good references, letting me walk a current job site, and seeing a portfolio of work as well as being able to provide copies of the license insurance and other pertinent info will show professionalism. But as I said once you get a few good clients you will probably not have to worry about this stuff since you will have repeat business.

The one I NOW have was just by chance.

I always had a couple I could trust & did 'predictable' work for the money but they were getting to be unreliable & that's frustrating.

The latest was a 'client' who then proceeded to gut/rehab the home we helped him buy. I noticed the work he did was impressive & detailed no short cuts.

The workmanship would be the clincher for me.

While in RI, a huge storm dumped 4ft of water in the basement of one of our properties (with a great tenant). Desperate @ 2am I text him & the next day he went in & replaced the HW tank, electrical sub-panel etc. He has since been immediately avail via text etc, is punctual & always gets back to me immediately.

We have since used him exclusively on a number of our properties & are in the process of helping him with a rehab/flip as a winter project.

Then again I have another 'friend' who is a contractor/investor but I would never use him on any of our properties.

My rehab general contractor stands out by (almost) never surprising me.

We'll walk a house and he'll say, "I'll do it for $12K and it WILL BE $12K.". He's got so much experience, he doesn't miss HUGE problems like the guys on Flip this House ("I didn't realize it needed a new roof! Oh my! That's another $6,000! ... whimper, sob..." - tight camera shot, fade to black.

For us investors, SURPRISES SUCK. Consistency and predictability ROCKS!

Originally posted by Dev Horn:
My rehab general contractor stands out by (almost) never surprising me.
We'll walk a house and he'll say, "I'll do it for $12K and it WILL BE $12K.". He's got so much experience, he doesn't miss HUGE problems like the guys on Flip this House ("I didn't realize it needed a new roof! Oh my! That's another $6,000! ... whimper, sob..." - tight camera shot, fade to black.

For us investors, SURPRISES SUCK. Consistency and predictability ROCKS!

LOL. I hope that roof example never happened. Dev are you willing to "share" your GC, I am looking to do my first flip here soon.

Originally posted by @Dev Horn :
My rehab general contractor stands out by (almost) never surprising me.
We'll walk a house and he'll say, "I'll do it for $12K and it WILL BE $12K.". He's got so much experience, he doesn't miss HUGE problems like the guys on Flip this House ("I didn't realize it needed a new roof! Oh my! That's another $6,000! ... whimper, sob..." - tight camera shot, fade to black.

For us investors, SURPRISES SUCK. Consistency and predictability ROCKS!

Great point @Dev Horn

I should have had this in my list. My best guy is the exact same. We walk the house and he can give me a number on the spot and he sticks to it most of the time. He even eats additional costs on things he feels could have been picked up and he missed. I'd say over 75% of change orders I have gotten from him were things that inspectors said they were going to require us to do that were not in the scope, and really shouldn't have been required, but they have you at their mercy so we have to do it.

A good GC should be able to estimate the costs that they will pay to the plumbers, electricians, flooring guys, HVAC guys etc. close enough that they should be able to give a solid number without having to bring back a half dozen guys to look at things and take measurements.

If it is iffy give a best and worst case contingent on getting the specialist in there.

@Beth D.

one GC we reviewed had most of his projects on-line & it was basically a slideshow presentation of the project (set to music). It was impressive to watch the transition.

We did visit several of his projects & if his costs were more reasonable we may have used him. He also had several of these slide show presentations for homes he rehabbed & had for sale.

Originally posted by Pat L.:
@Beth D.

one GC we reviewed had most of his projects on-line & it was basically a slideshow presentation of the project (set to music). It was impressive to watch the transition.

We did visit several of his projects & if his costs were more reasonable we may have used him. He also had several of these slide show presentations for homes he rehabbed & had for sale.

Hahaha...

My first thought reading this first paragraph was "Wow it sounds like that guy would be expensive", which was what you said in the 2nd one. :)

Most investors want the GC to give them his price that he is getting at Home Depot which I think is crazy because it took time and gas to go and get those things. A excellent GC will be busy all the time, and I would not expect a GC that worked 10 hours at my place go home and answer some silly question by email after a hard days work. The bottom line when you find a excellent GC treat, him right and pay him well because when you sell you will be asking top dollar and without the GC, you would not be getting top dollars.

Joe Gore

References and pics are nice but true customer service goes a long way. As testimonials can be faked, especially video ones as to me they always feel like this person did this for a discount. Where if you get handwritten or email ones while they can be faked there is less likely a kickback.

You don't have to be the cheapest but don't be the most expensive.

Listen to investors needs as this time they may need quick an next time might need higher quality and attention to detail.

BE On time or early!
Finish on time or early!
Don't be a nickel and dimer, be detailed on your quote so that should something come up that needs to be an add. You can point back to your quote if its very detailed.
Provide support even after the job is needed. On even the little things. I'm not saying do it for free but I am tired of contractors that finish a job then never respond on questions unless I have another job for them.

Originally posted by Joe Gore:
Most investors want the GC to give them his price that he is getting at Home Depot which I think is crazy because it took time and gas to go and get those things. A excellent GC will be busy all the time, and I would not expect a GC that worked 10 hours at my place go home and answer some silly question by email after a hard days work. The bottom line when you find a excellent GC treat, him right and pay him well because when you sell you will be asking top dollar and without the GC, you would not be getting top dollars.


Joe Gore

Not a fan of having them mark up materials specifically.

Add a factor for time and travel in the rest of your quote. If the investor wants to source their own materials or even put the stuff on a Home Depot card to put off the expenses until they sell the house in a flip or get rent coming in if it is a rental then you guys will have to bump heads on it since they still will need to get the stuff and had planned on just marking that up.

As far as the comment on answering a question on email after a long day, would they prefer you call them while they are at work and bother them while trying to work to deal with you right then?

I personally would much rather deal with non urgent matters on my own schedule and would be annoyed as hell to have someone calling me about stupid crap while I am trying to work.

@Beth D.

Visiting several local REIA's to meet the investors is a great start.

You might consider working with them on a deal. On a flip there is a quicker return. He can put the materials on an interest free Home Depot or Lowes card. He is making the minimum payment and carrying the labor till the place sells.

Offering to price out repairs for newbies might lead to more jobs.

Good luck

Paul

Originally posted by Beth D.:
As an investor, what are the most important aspects you look for in a contractor? What makes them stand out among the dozens of others doing the same trade?

  • Cost - low but not necessarily the lowest if other factors compensate
  • Quality - suited for the project, which will be different between high-end flips, mid-grade flips, rentals or my own house.
  • Reliability - shows up on time. Calls if he might be running a little late. Doesn't vanish for a day or two in the middle of a project.
  • Communication - easy to reach, is proactive in communicating issues or statuses to me
  • Technology - can handle emails, texts, sending photos via smartphone, capable of even taking a short video and uploading to a Youtube account for my viewing (this can be a big time saver for both parties)
  • Professional - nothing fancy or expensive, just honest, competent, business-like, with a decent attitude. Some one who can handle a well-defined project without much additional input.
  • Financially solvent - No "I need gas money" calls. A real business has enough working capital that the customer doesn't have to fund things in advance. We might work out an arrangement where I buy the materials, or pay something up front, but hopefully not because the business has only $17 in their checking account and their credit cards are over the limit. I got a call once from my HW floor guy. He was standing at the supplier counter and they had put him on COD, so he needed my AMEX number to buy the wood and supplies. Not a great impression.


When you have a contractor you use regularly, what would make you consider trying a different person for a job?

There's a pretty low barrier to entry as a contractor. Some you find just aren't up to the minimum standards. Some get comfy with the repeat business and jack pricing up too high, or start to slack off on the quality or reliability, taking the customer for granted.

Strangely, some who are great for a period of time seem to flake out for no obvious reason. I had a plumber who did a number of whole house replumb jobs for me. On one house there was a leak from a 1" copper elbow that he did in the crawl. He came out, resweated it, but it still leaked. Every attempt to contact him after that was ignored. I guess that was his breaking point for some reason. He lost out on a lot of work and referrals. I don't know why, but my guess is that he had enough work lined up that he figured he could burn my bridge. Obviously pretty short-term thinking, but some contractors aren't really business people.


Do you respond more to/prefer one-on-one marketing and "elevator pitches" or by receiving professionally prepared, informative materials? Or both?

Nothing fancy. Give me a verbal elevator pitch with a one or two pager on what you do and why I should use you. It doens't need to be professionally prepared, just proofread it for grammar and spelling.

Try to make the investor's life easy. If you can be a reliable go-to type contractor who need minimal babysitting and occasionally anticipates the investor's needs ("hey the subfloor is all rotted out in the bathroom, do you want me to refloor over it or I can replace it real quick") or goes above the call ("I'll stick around a 1/2 hour to let the cabinet delivery guys in so you don't have to drive cross town in rush hour just to unlock the door"), you don't need to be rock bottom on price.


My #1 tip would be to Be a partner to the investor. I want someone I feel is working with me, looking out for my interests and we are making money together. Someone that understands my goals and helps me to achive them

Bryan,

I think the GC should vet the home owner same the home owner vet the GC to make sure the person hired them is the owner of the property, and they have funds to pay when the job is done.


Joe Gore

This might sound hokey and new-age, but I really, really like positivity. The only cranky or whiny person allowed on any of my jobs is me. I reduce my own negative tendencies or worries by hiring people with attitudes I admire. I like people who say "That's a new one, let me see what I can come up with" or "Let me make a few calls" as opposed to the worried tone and the frowning and the "This could really cost you". Investors often need GCs to solve problems as opposed to quote a new roof or HVAC. GCs need to have skills and ideas and interest in "making it work" or "making it go".

Lots of investor needs for flips and rentals will not involve high-end materials, and are often not that interesting. Replace the HVAC for $5K? Or hire the sub that figures out it only needs a new king valve and freon and fabricates a custom replacement condensation pan in his shop for $1K? So IMO, the contractors really better love what they are doing in order to keep it interesting. Unfortunately, a lot of the GCs where am are really just quote machines with a nice white truck and good communication skills and can't problem solve their way out of paper bag. Many are looking to get as close to new construction or a gut rehab as they can with their quotes, because that's the work they really want. They might really know framing and are masterful with the county permitting. But on an average rehab, they are only as good as what they are willing to learn from their subs.

In my brief experience in dealing with contractors, I must say I have been disappointed so many times. The profession must be doing very well because the majority of people I have come across have no hunger or sense of urgency. They must have too many jobs available.

A few things I hate (I know, hate is a strong word):

- Take to long to provide a quote (more than 2-3 days)

- Does not want to provide a detailed breakdown of quote by each task (labor, materials, overheads, etc.)

- Tries to charge for a quote or need guarantee they get the job (this one blows my mind)

- Not responsive or hard to get in contact with

- Mark-up of materials or an excessive material handling fee (a small handling fee is okay)

- Excuses to justify failure

- Blatant overpricing because they think you might not understand

A few things I like:

- Responsive and easy to reach

- Offers recommendations/alternatives without being asked

- Do what they say when they say with quality and efficiency

- Free, detailed quotes in a timely manner

- Views the job as an opportunity to build a long term relationship

- Competitive pricing (doesn't have to be the lowest but work must justify the price)

- Manages their subs to reflect quality and professionalism

I just want to thank everyone AGAIN for all of these great responses!!!

I am thankful all of the "character qualities" are definitely already taken care of.
I think we have narrowed to 5 things main things to emphasize in our marketing.

Thank you thank you thank you!

Daren,

Most GC does get a discount on materials and why should they pass that on to you. If a GC gives you a quote by the job, there is no need to break down on each thing cost to do by the hour yes break it down.


Joe Gore

@Joe Gore, if all else is equal between two GCs I have never worked with before and one has a significant price difference because of his material cost he wouldn't be the guy/gal I picked. I would think it would be more beneficial in the long run for a GC to use some of his/her material discounts to offer more attractive pricing to customers which should attract more jobs (assuming the work quality, efficiency, etc. are worth it). I do see your point though.