ADVICE when seeking a contractor

16 Replies

Hello BP!! 

I am a new investor and of course I'm looking for contractors to work with. I need to know what are the right questions to ask and other things i need to look for? What are the"red flags" i need to avoid? Thanks so much! 

@L'Oreal Smith Unfortunately I do not have any experience with finding contractors but through what I have learned it tends to be one of the hardest things to do.  I would suggest start with your current network and see if anyone has any recommendations.  I would then vet them by checking references and asking for proof of prior work.

I would even indirectly test the contractor, learn enough about fixing a home to ask a question that you know the answer to and ask them the question and see how they respond.

If you have absolutely zero resources, someone on a podcast mentioned to go to your local home depot or lowes when they open and talk to some people there.  Generally, the contractors that are out there early tend to be the go getters. 

Good Luck,

Angel

I avoid contractors that want money in advance unless it is a reputable company.  I avoid reputable companies because they typically charge way too much.  I avoid contractors that want to get paid by the job because then they will typically make it so that they earn in excess of 100 an hour; for larger jobs they might underestimate the amount of work.  I prefer contractors with years of experience with most types of residential repairs who are honest and will work for a daily rate.

Look for someone who can present you per line item basis, and separate labor and materials, then buy materials. Anyone who charges in excess of 50/hr is a red flag, or someone who wants cash in advance when they are hired labor only.

Originally posted by @Manolo D. :

Look for someone who can present you per line item basis, and separate labor and materials, then buy materials. Anyone who charges in excess of 50/hr is a red flag, or someone who wants cash in advance when they are hired labor only.

 $50/hr too much in Los Angeles wow what do you hire illegals with no tools? I can barely afford to run a legitimate business in the midwest at $50/hr I don't know how any one that does it right could work in LA for $50/hr.  I see why I need to stop working for landlords and become one.

Daily workers I work for a landlord(when his cheap contractors can't fix it) that has one of those he does great fast work for $175/day.  Has no workmans comp or insurance and drinks jack daniels all day, some days he doesn't just drink it he chugs it.  Seen him stumble right into a dumpster off a deck one day.  Crazy SOB was lucky the dumpster was there to break his fall.  That landlord is going to hate life when that guy falls off a roof or sets a house on fire.

So OP find us however you can but get references and make sure the contractors insured and has workmans comp.  A contractors tools is probably the best way to judge him though.  If he has a whole bunch of brand name mostly worn out tools thats your guy.  He goes for quality and has been at it awhile.  The next would be a guy with all new nice tools he could be hit or miss he might be new in business and really good or hes bad and won't last long.  Third guy not many tools the ones hes got are knock offs, thats the one you avoid at all costs, probably a drunk or a junkie trying to hack it for his next hit.

I wish I could tell you how to find us I have the opposite problem finding more good customers.  I'm not cheap but I'm affordable so I can't afford real advertising just yet.  Oh and home depot works but early is my coffee, computer time but I'll get to work and get it done here in a bit.

Research, research, research. Take the time to vet whatever contractors you chose to work with.

Also, I know price can be a sticking point, but you would rather pay a little more for a great job that doesn't need to be messed with again, then a lower price for one that needs more maintenance because it wasn't done right to begin with.

Don't be cheap.

@John Whittle

 Haha, I only charge $80/hr on government jobs, just because they make me pay $45-60/hr on prevailing wage. My guys are cheap because of the informal "security of tenure" I give them, they work for me more than 1000 hours/year, if they are not working for me, I pass them on to one of my friends when I am idle, I always find them work, sometimes on a daily based house repair. The tool thing is also important, I only hire guys with tools, and if they don't have the necessary tool for the job, I let them buy it with my funds and deduct them at payroll time. I have a no drinking and no smoking policy on my job site, you will be off with a warning the first time, but termination on second if within a year. Maintaining guys is not easy, but for small volumes, I could understand why you are paying that much, I have been there, the days that I pay $250/day workers are long gone, and you don't even get the whole 8 hours because these guys think that their day is only 6 hours, lol. I pay by the hour, in 30 minute blocks. They want to go home at 3pm? Fine, they get 6 hours. They show up 8:30 and stop 3:00? 5.5 hours. Easy. They want to work 10 hour days for 4 days, so they could work for somebody else on Friday/Saturday for extra money? I have an approved modified work-week flex time too.

But, the original poster didn't seem to care to our post, so I'll stop here. Lol

Originally posted by @Manolo D. :

@John Whittle

 Haha, I only charge $80/hr on government jobs, just because they make me pay $45-60/hr on prevailing wage. My guys are cheap because of the informal "security of tenure" I give them, they work for me more than 1000 hours/year, if they are not working for me, I pass them on to one of my friends when I am idle, I always find them work, sometimes on a daily based house repair. The tool thing is also important, I only hire guys with tools, and if they don't have the necessary tool for the job, I let them buy it with my funds and deduct them at payroll time. I have a no drinking and no smoking policy on my job site, you will be off with a warning the first time, but termination on second if within a year. Maintaining guys is not easy, but for small volumes, I could understand why you are paying that much, I have been there, the days that I pay $250/day workers are long gone, and you don't even get the whole 8 hours because these guys think that their day is only 6 hours, lol. I pay by the hour, in 30 minute blocks. They want to go home at 3pm? Fine, they get 6 hours. They show up 8:30 and stop 3:00? 5.5 hours. Easy. They want to work 10 hour days for 4 days, so they could work for somebody else on Friday/Saturday for extra money? I have an approved modified work-week flex time too.

But, the original poster didn't seem to care to our post, so I'll stop here. Lol

 Ahh I see you mean employees or 1099 employees not real independent contractors.  Well save that topic for another thread

Originally posted by @John Whittle:
Originally posted by @Manolo D.:

@John Whittle

 Ahh I see you mean employees or 1099 employees not real independent contractors.  Well save that topic for another thread

1099 is only for bar tenders and waitresses. I don't have 1099s. There is no such thing as 1099 employees, either they are independent contractors or employees. Unless they are LLC or Sole Props that have their own license.

Originally posted by @Manolo D. :
Originally posted by @John Whittle:
Originally posted by @Manolo D.:

@John Whittle

 Ahh I see you mean employees or 1099 employees not real independent contractors.  Well save that topic for another thread

1099 is only for bar tenders and waitresses. I don't have 1099s. There is no such thing as 1099 employees, either they are independent contractors or employees. Unless they are LLC or Sole Props that have their own license.

 You should probably have a read here

http://www.irs.gov/Businesses/Small-Businesses-&-S...

If your not issuing w2s to employees then you need to issue 1099s to anyone you pay over $600/year. The 1099 employee things a joke guys like you have guys they call contractors they treat like employees.  It's very common in the construction industry. 1099s are for way more than waitresses. I didn't even know they got 1099s for the tips I guess? Sounds like you need to talk with a lawyer or accountant.

Originally posted by @John Whittle:
Originally posted by @Manolo D.:
Originally posted by @John Whittle:
Originally posted by @Manolo D.:

@John Whittle

 Ahh I see you mean employees or 1099 employees not real independent contractors.  Well save that topic for another thread

1099 is only for bar tenders and waitresses. I don't have 1099s. There is no such thing as 1099 employees, either they are independent contractors or employees. Unless they are LLC or Sole Props that have their own license.

 You should probably have a read here

http://www.irs.gov/Businesses/Small-Businesses-&-S...

If your not issuing w2s to employees then you need to issue 1099s to anyone you pay over $600/year. The 1099 employee things a joke guys like you have guys they call contractors they treat like employees.  It's very common in the construction industry. 1099s are for way more than waitresses. I didn't even know they got 1099s for the tips I guess? Sounds like you need to talk with a lawyer or accountant.

 My God man, you totally missed my point, I do not have 1099s, all my employees are w2, I do not hire 1099s. Why do I need an accountant or lawyer for my business? 

For someone who wants my business, get issued a 1099, or a subcontractor agreement, they need to have a valid contractors license, and at least 1 Million Single Occurrence in workers comp, 1M general commercial liability, and 1M Auto Liability Insurance, I won't accept anything below that. Plus, I need to be additional insured before starting a job.

I know my trade, my clients are 80% city/county/school districts, so I ain't scared of legal issues, nor do I need to talk to a lawyer/accountant. I have them retained for services, not for problems on my daily operations.

Originally posted by @Manolo D. :
Originally posted by @John Whittle:
Originally posted by @Manolo D.:
Originally posted by @John Whittle:
Originally posted by @Manolo D.:

@John Whittle

 Ahh I see you mean employees or 1099 employees not real independent contractors.  Well save that topic for another thread

1099 is only for bar tenders and waitresses. I don't have 1099s. There is no such thing as 1099 employees, either they are independent contractors or employees. Unless they are LLC or Sole Props that have their own license.

 You should probably have a read here

http://www.irs.gov/Businesses/Small-Businesses-&-S...

If your not issuing w2s to employees then you need to issue 1099s to anyone you pay over $600/year. The 1099 employee things a joke guys like you have guys they call contractors they treat like employees.  It's very common in the construction industry. 1099s are for way more than waitresses. I didn't even know they got 1099s for the tips I guess? Sounds like you need to talk with a lawyer or accountant.

 My God man, you totally missed my point, I do not have 1099s, all my employees are w2, I do not hire 1099s. Why do I need an accountant or lawyer for my business? 

For someone who wants my business, get issued a 1099, or a subcontractor agreement, they need to have a valid contractors license, and at least 1 Million Single Occurrence in workers comp, 1M general commercial liability, and 1M Auto Liability Insurance, I won't accept anything below that. Plus, I need to be additional insured before starting a job.

I know my trade, my clients are 80% city/county/school districts, so I ain't scared of legal issues, nor do I need to talk to a lawyer/accountant. I have them retained for services, not for problems on my daily operations.

 Why are you talking about how much you pay employees in a thread about contractors?

Like with anything else I recommend getting offers from multiple contractors. At least five or more, so you can compare their offers and terms. Also this will give you leverage when negotiating the price.

If you get one to five you'll be at the mercy of the contractor. Being a shopper lets you look around for better deals and puts you in the driving seat.

Recommendations are where its at. With that being said not everyone is going to tell you who their guy is for a variety of reasons. Talk to managers of contractor supply stores and ask them. If you tell them you had a bad experience they might be more forthcoming. When talking to the contractor mention that so and so recommended them because they were x because you had a bad experience with another contractor who dropped the ball.