Hiring a General Contractor 101

[Lucas Vanroboys]

I am about to go into my first solo BRRRR property and am seeking tips, advice and recommendations that would be important or valuable for a first timer like myself. How do you find them? How do you make sure you don't get ripped off? How do you negotiate with them? How do you keep them properly motivated and on scheudle? All these question and more lol

I've heard horror stories about bad GC's so trying to avoid those, but I've also heard about great experiences and long term business relationships so would love to find/develop something like this.

I am in the Boston area so any referrals or connections would be greatly appreciated!

[Doug Smith]

Hey Lucas, Your post is older, but I'm just now seeing it. I've flipped or built scores of properties and we're financed thousands of other ones. One of the most important things that a lender looks at is the experience of the operator, which brings me to your question. Most investors make most of their mistakes in the first handful of deals they do. I certainly did. Contractors are certainy one of the toughest areas. I can't tell you the number of contractors we've had issues with. Here's a few words of advice: 1) Start Small: A couple of days ago a borrower came to us wanting to do their first rental property. It was a 20-unit building for nearly $1 million. They had $20K to their name. If you're planning on doing a massive rehab, that's where you can get into trouble with a contractor if you don't have experience. Instead, consider doing a property with a lighter rehab that might not require permits. That will make it much easier to change horses mid-stream if the contractor doesn't work out. 2) Scope of Work: Make sure you get a very detailed Scope of Work that details everything that will be done including the exact work and finishes you can expect. Instead of "Flooring: $5000", insist on "Flooring: 1000 sf of Mohawk XYZ123 Luxury Vinyl Flooring with Deluxe 123 underlayment installed". Otherwise, you might think you're getting a Calcutta Marble countertop and you get 1980s Formica they pulled out of a previous job. One client just brought us a scope where the contractor intentionally left off the cabinetry quote. You gotta watch 'em. 3) Consider getting an experienced partner for the first couple of deals. That's what I did. You might not hit home runs by splitting profit, but consider it tuition. Mistakes due to inexperience can be even more costly. I know I could go on and on, but hopefully that gave you some food for thought. Good luck to you.