Help Selecting Contractors

14 Replies

Hello BP,

I have worked with contractors in the past and it did not turn out well. Both times the work was poor quality and I had to pay to get properties re done. Also, they had lack of knowledge on permit requirements. I am not well versed in contracting but find myself needing them for upcoming project.

How do you spot scam contractors? How do you identify good contractors that are not ripping you off?

Does anyone recommend contractors in Atlanta, GA?

Thanks in advance

read a post I made earlier today.

http://www.biggerpockets.com/forums/51/topics/162792-how-hiring-cheap-labor-can-be-bad

@Account Closed  

hello,

I would suggest going to a busy lumber yard - not like Home Depot - but a lumber yard and ask a manager there who is consistently busy and they know has a good reputation in that area. They see these contractors all the time and usually have a decent sense of the good ones. 

You could also call up the different wholesale supply shops - like Platt Electric for electricians and so on - for the different trades and ask them, they have long term relationships with the contractors who have proven themselves over time.

Another thing I would do myself if I were new in a town is call a decent sized church and ask a secretary if they know a good contractor in their church. You would have a better than average chance of finding someone of good quality there ethically at least. 

Hope that helps.

This is by far the most difficult task you are faced with, particularly in Atlanta where the availability of competent contractors is a tough proposition. The best thing to do is to turn this situation to your advantage and that means a commitment of time from you.

Draft a comprehensive scope of work (SoW) for the project and then use whatever resources you can to get in touch with contractors. Ask these people to meet you at the job, give them a copy of the SoW and see what this throws up. At the very least it will be an education for you and give you a perspective. Meet them one at a time for best results.

The two most common issues you will face will be "contractors" with no paperwork and people looking for front money which you should never give.

If you are not good at assessing quality of work, there's two ways of dealing with that. Look at as many rehabs in progress as you can and look at flip projects for sale off the MLS. If you throw enough mud, some will stick and if you look at enough of these properties, you will eventually develop an eye for it.

Alternatively, you can hire an inspector to assess each milestone on your SoW. You also need to read the rehabbers bible, J. Scott's "the book on flipping houses" which will give you everything you need to know to get it done. 

Good luck with your project.

If you need to get a good contract you can go to Home Depot or Lowes and get there at 6AM.  See who's picking up stuff for their job and approach them.   If you go later then that it'll be indicative of their work ethic. 

Atlanta has different "zones" as well.  For example, if you're doing a low end home in west Atlanta, don't call the quality "church" referral contractor from Alpharetta... and vice versa.

Originally posted by @Greg Palmer:

...

Another thing I would do myself if I were new in a town is call a decent sized church and ask a secretary if they know a good contractor in their church. You would have a better than average chance of finding someone of good quality there ethically at least. 

...

Unfortunately, there are many people out there who "hide" by having a "religious" appearance. I still remember the one contractor who claimed to be "born again" and attempted to convert me - and literally every other word out of his mouth would be the F word at times, even in front of females ...

Seems to be an ongoing challenge. Some contractors will start off great wanting to win your future business and then become less reliable as time goes on.

Try to get references from people you trust to give them.

Always have a scope of work and I like to agree on an hourly wage for "add on" items that I forgot to put down.

Always agree on a time frame for completion. At the very least if the contractor doesn't finish when he promised, you may be able to negotiate additional items thrown in for free. I try not to nitpick here, as a good working relationship with your contractors is imperative to success in this business.

Never, ever get ahead on your payments to them. Suddenly another job in their pipeline will become more important if you do. I always outline in the scope of work when payments will be made. Some contractors will take a small or no deposit and asked to be paid in full upon job completion. This is obviously preferrable but there are many outstanding trades that live paycheck to paycheck and will want/need to be paid at various stages of the project. Just do NOT get ahead on your payments to them no matter the sob story.

So many post about finding a good contractor. This inst rocket science, think like a contractor here. You all say they come and go. You go to work do a great job, they tell you you did great, and you come in tomorrow and they give you a pay cut. Either you move on or your quality of work becomes less, while you look to move on. When you continue to beat your contractor up on price that's what happens. Everyone has to make money including the investor but when guys are making 20-30 an hr and you try to beat them up (and read even less with people complaining) on pricing it will hurt you in the long run because you will end up with companies that have n reserve to cover anything that goes wrong. Anything less than 30-40 an hour doesnt leave them making enough to have a decent wage and to cover insurance and stuff. Say a journeyman has 4 years of training, would you with a BS degree work for 20k a year, I think not. Need to treat your contractor as a friend and not an enemy, it is with there work or lack of that you succeed or fail.   Make sure your contractor is insured. 

see this post 

http://www.biggerpockets.com/forums/51/topics/1627...

Ardie, 

Hello I'm right outside St. Louis proper. Having been in this business a while I would suggest talking with your realtor, title person, loan co if you are not paying cash. Even if you are using transactional funding these people sometimes have people in their pocket they use. If you have a good relation ship or can build one with them they do help. At least the transactional funder I'm working with does.  He even has a contractor who is able to determine repair costs and only visit homes if necessary. 

A couple of months back I had one I had hoped to do. I will probably look it up to see who purchased it. As before I knew my transactional funder did such I had someone I thought who could do a proper repair cost estimate and they didn't follow thru and cost me time I obviously didn't have. 

I am going to give you a crash course. I was taken for thousands of dollars by the contractors in my early years. 

Thank I make a deal to myself, I will not be taken no more than a days wages by anyone. 

I hired an older gentlemen with a lot of experience and two others to help and myself we got to work. 

I would buy the houses, than change my clothes and get dirty with this guys to learn what it takes to fix a houses. this went on for 2 or 3 years. than I was able to just keep them on daily wages and have a good idea of what is going on. 

The problem with this is workman's comps or insurance or liability....but you are smart and I think with what I told you, I saved you from a lot of money going to the wrong pockets for the wrong reasons. 

May the LORD bless you and protect you.

I do the majority of my own carpentry, painting, etc. however I've found a plumber and electrician who work for larger commercial contractors that do side jobs on nights and weekends.  

Here's how I found them: I talked to guys on good sized construction projects around town and asked them if they knew anyone who was a small scale electrician/plumber with insurance and a license.  It took a few tries but eventually I got the referrals to great tradesmen. 

Thank you all for your comments and suggestions

Finding contractors I was not too much worried about but their work and compliance was more of the concern.

@Eric Danielson  I like that idea of looking on big work sites because usually they know the rules and have access to different type of tradesman. Only thin is I don't have time to work on my own projects :(

@Greg Palmer Thanks, that helps to find contractors for big and small projects

@David T.  Great advice, inspecting at each milestone seems it would get a little costly...

What I want to do is develop an eye for good work and what it looks like as  @David T. and @Morry Eghbal  mentioned and kind of do my own inspections . I guess I will have to get deeply involved with the rehab process, unlike before.

My plan is to use you all suggestions develop my SoW, present to at least 4 contractors and get their estimates than select one from their

Helpful blog @Jeremy Tillotson  

@Ardie Stephens,

In California, the Contractors State License Board provides consumers the opportunity of checking the license of contractors before entering into an agreement as well as filing a complaint as needed. There are publications available to help with selecting a contractor. Does Georgia have a similar Agency?

I built up a stable of contractors using the Home Advisers website. It's kind of like Angie's List but there's no charge to you. I've actually had pretty good success with it. You get the local small business owner instead of the big guys. But they're licensed and insured. I've never had a bad experience with anyone I've found on there. 

Hi @David T.  

Thank you for connecting the dots between the Scope of Work and the home inspection. The BP Podcasts and other resources are being used to provide a better understanding of calculating rehab costs. Your statement confirmed the benefit of possibly hiring a contractor to ensure executing a better agreement with the contractor. Thanks again.