How to find good contractors

Question

Hello everyone,

Im considering getting into the flipping side of RE investing but in order to do this i would need to find a good contractor who would be able to provide accurate estimates for the fix-up cost.

Was wondering what would be a good strategy to achieve this goal.

Thanks!

Jonathan Greene · Answer

There is a misconception contained in your post which is indicative of what a lot of new investors think. No good contractor is going to square away time to help you bid jobs before you own the property. A lot of new investors think it's not a big deal to just get someone to give an estimate based on the fact that "you are going to do a lot of future deals together", but that almost never pans out. You are thinking correctly though in terms of building relationships and you got some great advice here. Meet investors and contractors through local groups, ask smart questions, and do not ask for too much. Try to learn how to estimate from asking questions. My project manager and I bid our jobs before we buy on our own, but we have a lot of experience. Good contractors are very hard to find and when we find them, we don't share them so your best recommendations come through relationships and evidence of work done.

Karl B. · Answer

I find my people on Angie's List and Yelp. I also look at Google reviews but they're easy to fake - the companies who fake the reviews/hire someone to write the reviews typically have them written by accounts with 1-3 total Google reviews total and so when I look at the Google reviews I take them with a grain of salt unless most reviews come from strong accounts (accounts with a good amount of reviews).

Yelp and Angieslist I trust more as . they actually use algorithms to filter fake reviews. And I can honestly say I've had much better results doing it this way than by hiring someone through word of mouth.

Jody Sperling · Answer

There's so much subtlety to this question that it seems the best place to start is with the early episodes of BiggerPockets Real Estate Podcast. Listen through any interviews with J Scott. He has great advice on contractors.

Make sure you're part of your local Facebook Real Estate Investor groups. Contractors have a major presence in those groups and you can find great help through interacting there. And the best advice I ever got, was to avoid brand name companies and general contractors in favor of independent contractors so you don't get charged for the middle man.

Best of luck! Flipping is a tough business to be good at, and a lucrative one if you are.

Bruce Woodruff · Answer

Yep. This^^^

I can't tell you how many times I would go to a Fixer Open House - the kind where everyone gets an hour to visit the property and then make an offer - I would be crawling under the house and taking apart the electrical panel while all these couple complained about the paint color and the old carpet.... Headsmack.... I would offer $325k, only to find that the winning bid was $225k. Boy were they in for a lesson......

Jonathan Greene · Answer

@Bruce Woodruff yes! Baby flippers think contractors are desperate for jobs and treat them like handymen (not that I think handymen are low value, they are also so important) and always say I am going to do so many jobs with you, can you just give me an estimate only to find out the baby flipper has a 10k reno budget and this is a 75k reno and then they think the contractor is trying to juice them because they only think cosmetic and don't understand plumbing, electric, foundation, etc.

Bruce Woodruff · Answer

Exactly! I would modify that to say that 'no good contractor is going to square away time to help you bid jobs even after you own the property.'

It takes a LOT of time to put together a tight, accurate bid. Like weeks. Pricing materials, calling/meeting subs, multiple site visits, Etc....

I used to drive by and throw out a rough price, but that was only within 10-20% of reality. IF you want an EXACT price, you'll have to develop an awesome relationship with your Contr, so they know there is a 90% likelyhood that they are actually going to get the job. But a good Contr is NOT going to get the jobs because Flippers are always looking for a low-ball price.

I used to hate getting calls from people like the OP. I was polite, but nothing more.

Alora Glaze · Answer

Good advice above to join your local investor groups on social media. Even getting in touch with local realtors for referrals can be beneficial as well. Just always make sure to vet properly, that mean getting references, viewing pictures of recently completed pictures that pertain to your strategy. Being able to send boundaries of clear communication and expectations for updates and timelines. Furthermore, and this is a no brainer - make sure that they're licensed and insured properly. You can do this by acquiring their license number and asking for a certificate of insurance (COI). If you can get that far in your vetting process, most likely you have a serious contractor that can do business with an investor well.Something to also consider is that there are significant delays in certain materials for rehabs right now (i.e. windows, lumber packages, etc.) ask these contractors where they anticipate certain manufacturing or shipping delays and what their plan is to keep your timeline on-track for completion

Best of luck to you!!

Jason Nguyen · Answer

@Lutfi Kadd

You have to find them though. Most people don't want to share their contractor because they don't want the contractor to work on too many projects and slow their project down. Don't ask investors for contractor, instead ask the wholesaler or realtor who sold a property to you. Usually wholesalers and realtors don't need a contractor if they're not doing a project for themselves but know a good guy to refer to you.

Wale Lawal · Answer

I would join meetups and Facebook groups. You'll get to network with people that are having success with their contractors. Always ask for a quick interview and to see their portfolio.

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