How do you screen a contractor and handyman?
Pompano Beach, FL · Member since 2016 · 39 posts · 20 votes
HI guys, I am in the process of buying a new condo to rent out and I know it needs some work done to get it ready. What are some of the questions you ask prospect contractors or handyman in order to determine whether they are not going to rip you off?
Last week I was interviewing for a new contractor. I was ready to hire a guy who seemed very knowledgeable, and professional. While vetting his info, I checked his ROC license number, but his name did not match. I googled his name, and up came a news release about him going to prison for unlicensed contracting and theft (stealing large upfront deposits, and never doing any work). He was just recently released. Be careful. Good luck.
The questions you ask can only go so far. The most telling thing is what their references say. Most people won't actually call the references contractors provide. But it's a must do, and call more than one.
@walther Arias @Jake Stenziano
Hi Walther
You need to get 3 bids for each job, and try to get referrals from people you know so you can trust the quality of work they do. Ask them how long the job will take, ask for their insurance and workman's comp. Ask to see a few jobs that they have done to see the quality of work they perform. One note: make sure not to pay them too much up front, and pay as the job gets completed in stages. If you pay too much up front, good luck getting them back to your job.
But once they are one, make sure to pay them.
Always bid out your jobs to keep your contractors honest.
We've all been ripped off by contractors. As you continue on in the business, you will learn how to avoid the unscrupulous individuals
Good Luck
Gino
Last week I was interviewing for a new contractor. I was ready to hire a guy who seemed very knowledgeable, and professional. While vetting his info, I checked his ROC license number, but his name did not match. I googled his name, and up came a news release about him going to prison for unlicensed contracting and theft (stealing large upfront deposits, and never doing any work). He was just recently released. Be careful. Good luck.
@walther Arias @Jake Stenziano
Hi Walther
Always bid out your jobs to keep your contractors honest.
We've all been ripped off by contractors. As you continue on in the business, you will learn how to avoid the unscrupulous individuals
Good Luck
Gino
Just know that most of the good contractors will not work for investors. We have been ripped off by investors/business people. We prefer to work for home owners because we do not need to fight for our money and the pay is better.
So it is true you really need to be vigilant. Your pool of contractors are mostly made up of new or shady.
Matt Shields: I actually hired a fellow who did the same thing. Lost $5700! And that was nothing compared to the tens of thousands that he stole from other folks. I am now skeptical about giving any contractor upfront money. Why would a reputable contractor need up front money when most reputable contractors maintain a line of credit at building supply stores? Deliver the goods and do the work; I'll pay in in increments of 1/3, the last third being when the job is complete.
HI guys, I am in the process of buying a new condo to rent out and I know it needs some work done to get it ready. What are some of the questions you ask prospect contractors or handyman in order to determine whether they are not going to rip you off?
The simple answer is - you screen them by knowing how much stuff costs, and how long stuff takes :)
Welcome to BP.
Don't put all of your eggs in one basket. If it's a bigger job, hire multiple people and after working 10 or more contractors (assuming same trade), you get to find the best ones.
You will lose some money trying to find the best contractors, there is no other way. Referrals are OK, but don't guarantee the quality of work.
Hope it helps.
Check online at the county site to be sure they are licensed and insured..tell them you will have a written contract... no handshake deals....do not deal in cash it messes up your accounting really fast...tell them you will match up every receipt you get with materials on the job...lastly I have had good contractors who all the sudden be it the drugs or alcohol or whatever kicked in and then they just stopped being good and ripped me off so references are ok but just be aware some of these guys change seemingly overnight
HI guys, I am in the process of buying a new condo to rent out and I know it needs some work done to get it ready. What are some of the questions you ask prospect contractors or handyman in order to determine whether they are not going to rip you off?
The simple answer is - you screen them by knowing how much stuff costs, and how long stuff takes :)
To learn how much stuff costs/how long stuff takes, would you rely on local investor stories and by getting multiple quotes from licensed contractors? Just a new investor who never hired contractors before.
Thanks!
HI guys, I am in the process of buying a new condo to rent out and I know it needs some work done to get it ready. What are some of the questions you ask prospect contractors or handyman in order to determine whether they are not going to rip you off?
The simple answer is - you screen them by knowing how much stuff costs, and how long stuff takes :)
To learn how much stuff costs/how long stuff takes, would you rely on local investor stories and by getting multiple quotes from licensed contractors? Just a new investor who never hired contractors before.
Thanks!
Well, bricks and mortar cost about the same everywhere. Yes, there are variances as to which material type is used to accommodate differing environmental conditions, but things don't vary too much.
What this means is that before you zero in on specifics, you should learn the fundamentals. You need to know what is a rafter, and what's a footer. You should know the difference between dimensional shingle and 3 tab. You should know the difference in 6/12 pitch vs 9/12, and what impact on quantity of material that's going to have - basic stuff.
Once you understand the basics behind materials, then it's time to talk to contractors and figure out pricing of 1 square of vinyl siding, vs. wood. What's it cost to put in a window/door.garage door. What do they typically charge to pour a basement. How about to run a linear foot of tile / vinyl, or a yard of carpet?
These are not necessarily project -specific things. These are "the market".
I provide a lot of info on this in CFFU, but for the best value and the most focus on these kind of things I'd advise you to invest in J Scott's books, which you will find in the BP Book Store
Good luck!
Wow, super awesome to know!! Thank you so much!! I really enjoy learning from you. I got some work to do haha! Basics here I come ; )
Take care!
Matt Shields: I actually hired a fellow who did the same thing. Lost $5700! And that was nothing compared to the tens of thousands that he stole from other folks. I am now skeptical about giving any contractor upfront money. Why would a reputable contractor need up front money when most reputable contractors maintain a line of credit at building supply stores? Deliver the goods and do the work; I'll pay in in increments of 1/3, the last third being when the job is complete.
A reputable contractor doesnt loan money to a customer , contracting is a for profit business with overhead . Money up front is the consideration to enter into a contract . I am a contractor , and I have accounts , but I get great pricing because my materials are paid for when I get them . Why should a contractor "trust" a customer to pay . If the customer has money problems the contrator still owes the supplier , help , insurance etc. I would worry if the contractor is willing to work without a deposit , that shows to me he isnt a good businessman . We NEVER do work without a signed contract spelling out the scope of work and payment schedule . The minute the money stops flowing so does the work .
Check online at the county site to be sure they are licensed and insured..tell them you will have a written contract... no handshake deals....do not deal in cash it messes up your accounting really fast...tell them you will match up every receipt you get with materials on the job...lastly I have had good contractors who all the sudden be it the drugs or alcohol or whatever kicked in and then they just stopped being good and ripped me off so references are ok but just be aware some of these guys change seemingly overnight
Professional contractors do not provide the customers with receipts for materials . they provide invoices for the job and separate invoices for change orders .They are hired to perform a job , materials are just 1 part of the job . The contractor uses the receipts on his tax returns . In addition ,what the contractor pays for materials is not what the customer pays , there is mark up on materials . The fact that I get good pricing due to my relationship with the supply house , that price is not passed down to the customer . that is part of the contractors profit . If you are dealing with "no show" contractors , drunks or drug addicts , you are not dealing with a professional contractor . You are dealing with people like this , expect to get ripped off . If you are paying a guy time and materials , you could be considered the employer and them an employee , requiring you to cover their taxes and workmans comp . A professional contractor wont be cheap , But the job will get done at the agreed price and in the agreed time frame . All extras will have been approved .
Real contractors dont advertise on craigs list , the majority drive late model trucks that are clean and neat ( expensive too ) . They wont be able to start your job next week , you may have to wait a month or two . And yes they will want a deposit to put you on the schedule . ( Here in Maryland , once you sign the contract you have 3 days to cancel after that if you change your mind you lose the deposit as per the contract )
What I tell my clients when they ask if I need money up front (most all are smaller jobs). I say I have 26 days on my credit card also... and if I don't have your job done and paid for in 26 days I probably don't deserve to get paid. I have only been doing this business for 11 years and I love my job. I don't mark up materials but I get paid to buy them for you. I tell my clients that " I tell you ... I don't sell you..." I will tell them every option I can think of even if it means that I don't do the job. I know in most cases that if people have the information they can make sensible decisions. So, you might just try asking "how would you suggest fixing this?" then "any other ideas?" One person might say for a loose toilet on a crawl space to rip out the floor and subfloor and then put it all back together. another idea might just be to go into the crawl space and see if you can't put a few blocks in and re bolt the toilet. I am sure you could see your way thru that one. :) I have never heard of a client losing their half up front deposit to a person who doesn't take money up front. Now, I have heard of clients losing their half up front deposits. Also, start a new worker on smaller jobs ... let them prove their work to you.. if they do nice work and the rate seems reasonable then slowly up the size of the jobs. Hope some of this helps. Best of luck.
Matt Shields: I actually hired a fellow who did the same thing. Lost $5700! And that was nothing compared to the tens of thousands that he stole from other folks. I am now skeptical about giving any contractor upfront money. Why would a reputable contractor need up front money when most reputable contractors maintain a line of credit at building supply stores? Deliver the goods and do the work; I'll pay in in increments of 1/3, the last third being when the job is complete.
A reputable contractor doesnt loan money to a customer , contracting is a for profit business with overhead . Money up front is the consideration to enter into a contract . I am a contractor , and I have accounts , but I get great pricing because my materials are paid for when I get them . Why should a contractor "trust" a customer to pay . If the customer has money problems the contrator still owes the supplier , help , insurance etc. I would worry if the contractor is willing to work without a deposit , that shows to me he isnt a good businessman . We NEVER do work without a signed contract spelling out the scope of work and payment schedule . The minute the money stops flowing so does the work .
I can only speak for doing business in Arizona. Here it isn't a matter of "trust", but the protections afforded to contractor's. If a contractor is not paid as agreed, the contractor can place a mechanic's lien on the property, preventing its sale until the lien has been satisfied. These liens even survive a foreclosure. This would be especially problematic for the flippers like myself, considering the carry and opportunity costs.
On the other hand, if a contractor fails to complete the work, and/or performs substandard work after being paid upfront, the investor must first request an ROC inspection. During this time the work cannot be repaired/finished, and the project is stuck. Then the investor must file a written claim with the surety company who issued the bond required by the ROC. Most will not pay without a judgement, so the investor will have to file a lawsuit against both the contractor and surety company, which will take months, and sometimes years.
For a GC with a large rehab, I can see having a draw schedule, but for smaller projects I never pay upfront. Of the four licensed painters I interviewed, none asked for a deposit.
Different States treat things differently Here in Maryland we have the Md Home Improvement Commission . They have strict rules as to how you can sell , the deposit , performance , what must be on the contract . The 3 day right of refusal . To pass the MHIC test it is all contract law , both contractor and salesman must take the test , contractor takes 1 added section. The contractor is required to provide the customer with a contract with all the information spelled out . Monies are as follows , 1/3 down , 1/3 when the job is started and the final payment when the job is done . So basically when I show up on the first day to start work , I have 2/3 s of my payment . Now passing the contractors test , there are no questions about construction , its all contract and sales law .Not one thing about building . So basically having the license doesnt mean you know a thing about building , all you did was pass the test . There are protections for the customer , but you have to go thru the State commission and they move like any agency .........slow .
If you hire a unlicensed contractor , the customer has no protection , the Commission will fine and sanction the individual , but any money damages the customer must sue the individual . And if it is proven the customer knowingly hired an unlicensed contractor , the customer generally loses .
@Account Closedhas a good idea with asking to see previous projects. Although it's often difficult to get into past projects, I've often toured prospective clients through my current projects that are nearing completion. You can get a feel for quality of work, general organization, job-site cleanliness, and so on. If the GC introduces you to workers on the job, ask them what they're doing - their answers will give you a feel for the scope. (Just don't expect construction guys to sound like corporate executives.)
But @Mark Holencikis right - really good contractors typically won't work for investors. Investors want rock-bottom prices, and most will say they want quality, but will choose price every time. So your pool will have a lot of the unsuccessful/shady types in it that you have to eliminate. Your best bets will be the newer GC who's worked for someone else and is now going out on his own, or maybe the Mexican crew whose English is too rough to allow them to score the best homeowner jobs, or the semi-retired guy who only wants to work occasionally. (Those are rare, but I actually found one in my only out-of-state reno.)
REI groups and talking to other investors can be a great help. Be careful, however - a lot of investors don't want to share their contractors, so they may give you the names of the guys they don't use anymore.
As @Matthew Paulnotes, no good GC will start work without money down. It's important to have a clear, written scope (not just "renovate bathroom", but details as to what that includes.) so that you do have protection if you run into the unscrupulous guy who doesn't start work after getting your money, or constantly delays. For a larger job (say over $20K), most contractors would be willing to do a 25/25/25/25 schedule, rather than 50/50.
I think a lot of the difference in people talking about not paying up front is whether you're talking about handyman work, or small jobs with low materials cost (like painting, although the concept of "licensed painter" that @Matt Shieldsmentions boggles my mind - the government regulates painting in your area????) may work without a deposit. The question you have to decide is if you are doing a larger reno is whether you want to manage each trade yourself, or have a GC involved who manages the whole project for you. I'd really recommend using a GC to start with - coordinating multiple subs on a larger project is really difficult when you're new at this.
Good luck. There's a lot of difficulty in this, but it can be really rewarding to see it all come together.
@Account Closedhas a good idea with asking to see previous projects. Although it's often difficult to get into past projects, I've often toured prospective clients through my current projects that are nearing completion. You can get a feel for quality of work, general organization, job-site cleanliness, and so on. If the GC introduces you to workers on the job, ask them what they're doing - their answers will give you a feel for the scope. (Just don't expect construction guys to sound like corporate executives.)
But @Mark Holencikis right - really good contractors typically won't work for investors. Investors want rock-bottom prices, and most will say they want quality, but will choose price every time. So your pool will have a lot of the unsuccessful/shady types in it that you have to eliminate. Your best bets will be the newer GC who's worked for someone else and is now going out on his own, or maybe the Mexican crew whose English is too rough to allow them to score the best homeowner jobs, or the semi-retired guy who only wants to work occasionally. (Those are rare, but I actually found one in my only out-of-state reno.)
REI groups and talking to other investors can be a great help. Be careful, however - a lot of investors don't want to share their contractors, so they may give you the names of the guys they don't use anymore.
As @Matthew Paulnotes, no good GC will start work without money down. It's important to have a clear, written scope (not just "renovate bathroom", but details as to what that includes.) so that you do have protection if you run into the unscrupulous guy who doesn't start work after getting your money, or constantly delays. For a larger job (say over $20K), most contractors would be willing to do a 25/25/25/25 schedule, rather than 50/50.
I think a lot of the difference in people talking about not paying up front is whether you're talking about handyman work, or small jobs with low materials cost (like painting, although the concept of "licensed painter" that @Matt Shieldsmentions boggles my mind - the government regulates painting in your area????) may work without a deposit. The question you have to decide is if you are doing a larger reno is whether you want to manage each trade yourself, or have a GC involved who manages the whole project for you. I'd really recommend using a GC to start with - coordinating multiple subs on a larger project is really difficult when you're new at this.
Good luck. There's a lot of difficulty in this, but it can be really rewarding to see it all come together.
In Arizona unlicensed contractors can perform work under the "Handyman Exemption ARS §32-1121.A.14" for work up to $1000, including materials and labor, and must be of a casual or minor nature. Over $1000 the contractor must be licensed with the Registrar of Contractors. An investor (anyone re-selling a home within a year) is also under this law, and must use licensed contractors for repairs exceeding $1000 per house.
Unlicensed contracting is no joke in AZ ROC Most Wanted
Good luck! I haven't completed a rehab in Md. however, in CA., there doesn't seem to be a problem to get a contractor who will work, getting paid usually on Fridays, once he hits the milestones that both you and the contractor have set up prior to work being performed.
I have a complete scope of work, so all he has to do is focus on his work, and not think about material selections. I give them the SKU nos., what it is, and where it is to be purchased. I know up front what it should cost with materials and labor before I ask for bids, that way I can see how "their" costs are compared to mine.
I have them sign my contract and several other forms prior to the start of work, along with asking for references, and seeing what they are working on currently and past projects they have done. How long in business, do they have a crew, how many projects have they worked on in the last 12 months, do they have their own equipment, do they work with sub-contractors, are they licensed, need to know that they have insurance, workmens comp, etc.
Investors are looking for the bottom line and best prices, of course, so there is money in the deal. But what we bring to the table is constant work for that contractor so he doesn't have lean months where Harry Homeowner doesn't have any jobs for that contractor and no income is coming in for him that month.
Go to the bldg. permit dept., they can't "recommend" a person, but you can tell them what you are looking to accomplish and find out who is doing a lot of work by the permits and they will be more open to you. Also at the supply houses, they know who is regularly picking up materials for projects.
Again, Good Luck, the contractor can make your deal go down the drain or not.
@Walther Arias, I think @Ben Leybovich's advice is a good start. Whether you are having a floor put in or a smoke detector installed, start by learning the basics of what materials are needed, what they cost, how much time it should take to complete and the basic steps in how it is carried out. You can get a lot of the information instantly on U-Tube, the library and right here in the DIY forums. Once you know these things, then it's time to shop for a contractor/handyman. Check that they are licensed and ask for references of RECENT JOBS that are similar to what you want to have done and be prepared to pay for GOOD WORK. The best people will always be busy and will not be the cheapest.
Be specific and firm in what you want to have done - even for the smallest jobs. For example, I scheduled a vendor to install the new 10 year lithium battery smoke and carbon monoxide detectors. A simple enough request, right? However, upon review, he had installed an older model of smoke detector that he happened to have on his shelf; a model that the stores no longer sold. I showed him a picture of the type of detector that was required and made him go back to the store and purchase and install what I had wanted.
Also, when you speak their language and they know you know what is expected and how a job should go, the ride will be a lot less bumpy.
I have to hand it to you all; some of these responses are Excellent! While interviewing my previous contractor I had no idea what questions to ask but now I do. Thanks #BP for all of this wealth of knowledge!
If you hire a unlicensed contractor , the customer has no protection , the Commission will fine and sanction the individual , but any money damages the customer must sue the individual . And if it is proven the customer knowingly hired an unlicensed contractor , the customer generally loses .
And in Maryland, if one owns more than three residences or dwelling places, they're not entitled to make a claim against the Guaranty Fund*. So sadly, many investor/customers have no protection via the GF, but penalties and the right to pursue legal action may remain (and as noted above, the chances of success in action may be improved if hiring a licensed contractor over an unlicensed one).
*Citation:
BUSINESS REGULATION
TITLE 8. HOME IMPROVEMENT
SUBTITLE 4. HOME IMPROVEMENT GUARANTY FUND
Md. BUSINESS REGULATION Code Ann. § 8-405 (2015)
§ 8-405. Claims against Fund
(f) Excluded claimants. --
(2) An owner may make a claim against the Fund only if the owner:
(ii) does not own more than three residences or dwelling places.