Should I hire a contractor off of Craigslist?

14 Replies

Would you hire a contractor off of Craigslist? What if you did not know many contractors in the area and were just getting started? If you would, what would your process look like? What would you be looking for during the interview?

I'm in need of a good quality, licensed and insured GC in the Philadelphia area who can handle a rehab of a small SFR, and am considering posting a request on CL. I plan to schedule a number of interviews with contractors who respond, and would set up the interview on site in order to walk the property with them, generate a sense of competition around price and enable them to provide me with a quote and SOW.

Has anybody used this approach? What are the pros and cons? Are there better ways, other than standing outside Home Depot at 6am, to find a good GC?

i am no expert and i only have one rental property but i looked for contactor on Craigslist to install windows and replace a roof. Most don't show up. The ones who do show up look over the job but did not quote the job. I joined an orgination called DIG Diversified investment group. They have an "answer line" Which you can get answer to questions. I asked the group about contractors for windows and roof and found a good one. They are some seasoned investor and are very helpful with questions and are very willing to help out. Also your local REIA and DIG meetings are good as well. Ask investor their who they use. DIG has an anual fee of around 100 bucks.

I've had mostly terrible luck with CL contractors.  As @Joe Mulcahy  pointed out, a lot won't show up or won't show up when they say they will.  I'd strongly recommend shelling out $30 (or whatever it is now) for Angie's List.  Contractors tend to be a bit pricier, but you can read reviews and pay to have something done RIGHT the first time.  If you go the CL route, expect to spend more money and for the job to take longer (not saying that will for sure happen, just that you shouldn't have high expectations).

You can definitely find good folks on CL, but you just have to be very selective. Ask for references and photos of previous work. Make sure you actually check up on all their references. Make sure they have the appropriate licenses to pull necessary permits and that they are insured. When a contractor asks a homeowner to pull their own permits, this is a big red flag. It almost guarantees they are not licensed, and probably for a good reason. 

I don't know about your market, but here in KC, Angie's List, BBB, and NARI (National Association of the Remodeling Industry) are all great sources for quality GCs.

@Alex M.  Absolutely, yes.  But it isn't easy.  Speak to any rehabber and you'll find that finding good, reliable, reasonably priced contractors is not easy.

Here is what I recommend.  First, your best option is to get recommendations from other investors.  Craiglist and Angieslist is second.  Second get customer referrals.  If you've gotten recommendations from investors, you already have your referrals--or at least some of them.  Ask if they did what was expected, if it was done on time, if it was done on time, if there were any problems or anything the contractor could have done better, how responsive and communicative they were, and if they would use them again.  Ask if the are insured, etc.  Third, you need to provide the SOW, not your GC.

Put a lockbox on the house.  Email the SOW to the contractors.  Ask for a bid.  Go with whom you are comfortable enough but even then you may decide not to use that contractor again after that job.  Find good contractors takes time.  Don't go with the cheapest guy.  Pay them reasonably well.  Pay them on time.   And tell them there will be more work.

Originally posted by @Joe Mulcahy :

 I joined an orgination called DIG Diversified investment group. 

Joe - thanks for the comments, and for the reminder to get involved with DIG. I've had a very limited amount of exposure to them so far, as I am really still a complete newbie to REI. It's a great recommendation, though. I hope to get more involved with them and some of the other active REIAs in the Philly area.

Originally posted by @Michael Seeker :

I've had mostly terrible luck with CL contractors.  As @Joe Mulcahy  pointed out, a lot won't show up or won't show up when they say they will.  I'd strongly recommend shelling out $30 (or whatever it is now) for Angie's List.  Contractors tend to be a bit pricier, but you can read reviews and pay to have something done RIGHT the first time.  If you go the CL route, expect to spend more money and for the job to take longer (not saying that will for sure happen, just that you shouldn't have high expectations).

 Michael - appreciate your comments. I do have access to Angie's List, but have been under the impression that contractors on this list are the "Cadillac" price versions. i.e. they are used to working with homeowners who will pay top dollar plus some to get a job done. Have you had any experience where it would make sense as an investor to work with a contractor on Angie's List?

@Larry T. and @Jake Matthew

Thanks guys. These are all good recommendations. As a newbie, it seems like it is going to be critical to get that balance right between paying for quality, but not paying too much. I'm starting to dig around on BP to see what others have written on the topic. 

Quick update on the property: On Friday morning, it seemed like my offer was likely to go through. I was getting good signs from the listing agent. I had offered $48 on Thur afternoon, asking price was $65k. Deadline for acceptance was Friday EOD. Agent never got back to us, though, until a couple of hours ago. It appears that she held off on responding to the contract deadline to let a couple of other offers come in. The seller is now countering with holding firm at $65k with three offers on the table. I've run the numbers and it looks like a reasonable buy still at this point, but I was much happier with the idea of $48k. Probably moving on to keep finding a good deal.

I have found and used about 75% of my contractors from CL. The rest are referrals from fellow investors. I have found that those on AL who have high ratings are either too expensive or too busy to help me. Look for the contractors that have posted their ad many times so they get noticed. In my experience these guys are hungry for work. I can’t think of any bad experiences I have had with the carpenters, plumbers, or gutter hangers I have hired from CL.

@Alex M.

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need. Get referrals here for investor friendly people.

Good luck

Paul

Yup, i do. But the issue is how do you determine who is real and who is not??? Answer....no money upfront (no money no risk other than wasted time), learn correct procedures fir something someone skilled needs to do in your house, test them out by asking how to do it. Licensing helps too..

Alex, i know where you are coming from. I had put in a bid on several properties and was getting shot down everytime. Offer too low.  Then i was getting PO'ed that i was not getting any properties. One more came up and got into a bidding war with myself. Long story short i overpayed about 10 k for the properties.  And i went in with no inspeciton.  House looked nice but was a lipstick pig.  Had new carpets and paint and that was about it.  Needs a new roof, windows, boiler didn't work, stove and a lot of little things. Anyway my make rent readyt rehab went from 5k to 12-15 k.  It will still cash flow just not as good as i thought it would. i have learned a lot though and i am glad i got into the game.  Good luck and as one guru quote i remeber is "The deal of the century happens once a week" 

I would not hire anyone without getting at least 2 or 3 referrals and even that can be a risky cause it could be a "friend" of theirs who isn't being 100% honest.  So many things that can go wrong and things they can mess up if they don't know what they are doing. Also if they're doing plumbing or electrical it can be dangerous if they don't follow code or do things properly.  I would hunt down other investors on BP in your area and ask them for recommendations. If you get 2 or 3 that recommend the same person or company then that's your winner. Unless it's something simple like painting, cleaning or yard work in which case Craig's List could be ok. 

Craigslist proved to be a disaster for me - it was everything bad discussed here and more (the people who did show up were mostly lazy and slow workers - and were paid per hour.) What worked was going to the local Lowes and Home Depot, developing good relations with some of the check-out staff who had worked there a while, and asking them for recommendations. Found an amazing GC through Home Depot and had him complete most of the project. Highly recommend the approach.