How do you vet a new contractor before hiring them?

Question

Hey everyone, curious how experienced investors decide whether to trust a new contractor.

Do you rely on referrals, reviews, licenses, a small test job, or something else? And what’s the biggest red flag that makes you walk away?

Would love to hear what’s worked for you. Thanks!

Ametria Chaney · Answer

Matteo, great question — contractors make or break more deals than the numbers do. My checklist: verify license and insurance yourself through the state board, don't take their word for it. Ask for references, but specifically from other investors or agents, not just homeowners — an investor will tell you how they handle draw schedules and delays. Get every bid line-itemed so you can compare apples to apples, and never pay a large deposit up front; draws should follow completed, inspected work. And start every new contractor with a small paid test job before handing them a full rehab. How they communicate and show up on the small job is exactly how they'll act on the big one. What kind of projects are you lining up in Westchester?

Bruce Woodruff · Answer

@Matthew Morrow has it right, pay close attention to how they conduct their business before they get the job. That is a huge clue! Of course, check their license/insurance/bond status, any black marks, suspensions, etc...?

And, as a Contractor and Investor, I can tell you that the referrals that the Contr gives you are pretty worthless. No Contr is going to give you a bad reference. Of course, if you get an unsolicited referral from a friend or fellow investor, then you're probably good-to-go.

And what @James Jones says is all good. I'll add this - if you get a Contr that asks for NO money up front, then you are golden. Any decent Contr should have enough money and enough confidence to take on ANY size job without seeing any money upfront. I used to insist on that just to make the customer fell comfortable...it always blew their minds when they'd ask 'how much up-front'? and I'd say 'nothing'....

James Jones · Answer

Matteo, referrals get a contractor a phone call from me, not a job. The vetting is a small paid test: one trade, one house, inside a real rehab — a bathroom rough-in, a panel swap, something I can inspect in a day. Three rules tell me most of what I need. His price comes back line-itemed, not one round number. He works on draws against completed, inspected work, never a big check up front. And he shows up on the day he said during the test, because the test week is the best behavior you will ever get. Biggest red flag: a guy who needs most of the money before he starts. That is not a contractor problem, that is a cash-flow problem, and it becomes yours.

Matthew Morrow · Answer

@Matteo Scali small test job. References and a license check are the baseline, but you learn the most watching how someone handles a little job before you hand them a big one. My biggest red flag is how they act before they have the job: slow to call back, no clear written scope and price, late to the walkthrough. If it's like that now, it won't get better once they have your deposit. Good luck building the list.

Andrew Postell · Answer

@Matteo Scali 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!

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.

How do you vet a new contractor before hiring them?

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