Got my first BRRRR, wahoo! Now to find contractors....?

Question

Hi everyone! I wanted to know how you would go about finding a contractor.

I thought I found a good contracting team, only to have that side swipe me. So, back to the drawing board and I close in a week and a half. Help! Where do YOU go for a contractor?

Thanks!

Chris

Matthew Paul · Answer

Every morning , I am a Contractor .

Contracting has allowed me to be a buy and hold investor . My experience has allowed me to look thru a property and know what it needs and what my costs will be . My connections over the years is how I have found my properties , from customers , and thru my subs . I have never had to have an agent involved in any of my purchases .

Matthew Paul · Answer

Go to your local lumber  ( not Home Depot )  Talk to the salesmen and ask them for some names of good contractors .  Look in their parking lot for clean well lettered late model trucks , write down their names and give them a call .

Dont expect them to get  on your job right away , good contractors usually have a backlog of work .

Caleb Brown · Answer

I have found good success with referrals and local groups(online like FB or in person).

Nicholas L. · Answer

@Christopher Ramirez Babinski

-go on google and call 50 or so.  i had to call 35 one time to get 2 quotes.

-go to a real estate meetup and ask for recommendations.

-find flips on Zillow and try to figure out who did them.

Christopher Ramirez Babinski · Answer

@matthew When do you usually start contacting contractors for your job?

Chris

Mike Klarman · Answer

This is one of the hardest pieces to find.  The investors who are from a contracting background have an edge here.

I can offer you dozens of cautionary tales about GCs. I can also tell you that the people who do this to scale don't necessarily use a GC.  Finding a good GC is like drafting a good QB out of college.  They all look nice on tape, and in drills but only one out of 100 pan put.

A GC can easily do more harm than good to you.  One, they have a heft fee on top of every trade.  Electrical may be 5k, and you get a bill for 6k.  Painting costs him 4500 and he bills you 6500.  Plus, unless you are a good, honest, organized, efficient GC then they are operating in the black hole.  That means there's always old projects starving for money so when new money comes in, some of it has to go to the old projects which means your project already starts short but you'll never know.  I've been a victim of two black hole scenarios.  One I had a group of investors involved in 30 deals over 18 months.  There were 13 projects going at once.  That was my first taste of the blackhole.  When a contractor is holding 20k in draw money that the project needs and the 4k mortgage on his house is due, believe me he's gonna pay his mortgage, or he will throw money at a laborer or sub he owes.  They are not responsible with the money, for the most part.  I'm sure some are but they are probably so busy and so above a small BRRRR that you can't work with them.  These knock around GCs online are a blood suck on profit.

You have a better chance building your own sub list.  Your demo guys, your mechanicals (there's all in one licensed mechanical vendors), your sheetrock/Framing - this is a tough team, cause this work needs to be impeccable or it won't look right, painting, flooring, roof, kitchens/baths, your tile guys when needed.

Build your own and run them yourself.  It's your money and you'll have a much bigger interest than anyone else plus your talking right with the vendor doing the work.

Andrew Postell · Answer

@Christopher Ramirez Babinski this is a super important question and it doesn't just apply to contractors.  How do you know that a lender is any good?  An electrician?  A title company?  Anything?  Even if they do have 20 years experience...how do you know really?  And while nothing is foolproof the most consistent method of finding good vendors is relying on OTHER real estate investors that have worked with those vendors.  This is why we network with other real estate investors - kind of like what you are doing here!  We just need it more local for you.

So, let's try some local real estate meetup groups. Meetup.com is a good resource for those but some of the groups will also post here on Bigger Pockets Marketplace too. Even facebook might have some good local groups for you. Some of those facebook groups have thousands of members. The priority is consistent recommendations from active investors.  Oh, eventbrite too. But post locally for this. That’s the best bet.

Got my first BRRRR, wahoo! Now to find contractors....?

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