7 Tips for Finding (& Keeping) the Best Contractors For Your Team

17

Contractors and subcontractors can be the bane of a real estate investor’s existence. Yes, there are plenty of good ones out there, but there are also a good number of incompetent, unscrupulous or simply unqualified ones as well.

Real estate investors need to find the best balance of quality and price. You can go to the big firms, and they will almost certainly do good work. But it will cost you an arm and a leg.

You can also find some Joe on the street corner to do it for next to nothing. Of course, you’ll have to redo the entire project after Joe butchers it. Details, right?

Download Your FREE guide to evicting a tenant!

We hope you never have to evict a tenant, but know it’s always wise to prepare for the worst. Navigating the legal and financial considerations of an eviction can be tricky, even for the most experienced landlords. Lucky for you, the experts at BiggerPockets have put together a FREE Guide to Evicting Tenants so you can protect your property and investments.

Click Here For Your Guide to Evicting Tenants

7 Tips for Finding (& Keeping) the Best Contractors For Your Team

1. Ask for Referrals

The best way to know a contractor is good is if that contractor has been good for another investor. I cannot stress this enough; the best way to find quality contractors is through referrals.

There are two great ways to go about this. The first is right here on BiggerPockets. Go to the Forums and ask for a recommendation or message an active investor in your market. Don’t be shy. We’re all one big, happy family here.

Related: How To Find & Manage a Top-Notch Contractor for Your Projects

The other is to go to your local real estate club and ask around there. I’ve found quite a few quality contractors this way.

contractor

2. Don’t Settle for One Bid

If you have found a quality contractor, he can become your go-to guy, and you don’t need to shop around every time. But when you’re still looking, don’t get just one bid. Get a couple and compare them against each other. This way you can learn costs better and don’t needlessly delay a project if the bid doesn’t come in right. It also allows you to meet and at least partially evaluate other contractors who could become backups. And it’s definitely important to have backups (see #7).

On another note, the cheapest bid is not always the best. If a contractor comes off as unprofessional and doesn’t have good references (see #3), don’t go with him just because his bid is lower than the other guy. Sometimes, you get what you pay for.

3. Ask for References

A while back, I was looking for a new general contractor. He came as a referral (of course), but I asked for some references from him anyway. I called them, and they were all great. The next day, I talked to the contractor and he mentioned that some of his references called him to tell him I had talked to them. He said this was the first time that had happened in over a decade.

“You have got to be kidding me!” I replied.

“Nope.”

It’s amazing how often this step gets skipped. I guess some people think that the references will just tell you what you want to hear. This has not been my experience. Usually, if they weren’t great, you can pick up signs of this. Something like, “Well, if you don’t mind X, then he’s fine.” That kind of phrase is a big warning sign. Sometimes, references will just out and tell you the contractor wasn’t any good. If they were good, you’ll usually get a glowing description and examples. If they were mediocre, you’ll get vague, empty verbs and the like. You have to read between the lines a bit, but it’s not that hard. So don’t skip this step!

4. Get the Documents Up Front

You always want to get a copy of the contractor’s liability insurance up front. If they have any employees, they will need workman’s comp too (or the workman’s comp insurer will charge you for their work). In some states, contractors will need a license and bond too, or you’ll need to get proof of a specialized license (say, with an electrician). Get these documents up front because if you don’t and the contractor wasn’t be straight with you, you’re out of luck.

I would also write out a scope of work and give it to the contractor to write their bid on for any larger project. Then you can compare their bid directly with other contractors (as some won’t bid certain items or may add things). And you should sign a contract with them at the beginning to make sure there are no debates afterward about what was and was not agreed upon.

find-contractor

5. Never Pay All Up Front

A guy walked into our office once asking if we managed properties. “We only manage for ourselves, sorry,” I replied. He looked utterly dejected. He lived out-of-state and had two houses with a property management company here. He paid them to rehab both, and then the company went dark on him. So he flew out and realized that neither house had even been touched.

Never pay all up front. With any smaller job, you shouldn’t really pay anything up front. Sometimes with larger projects, contractors may need a partial payment to get started. But try to avoid paying up front at all and never pay everything up front!

6. Don’t Cut the Last Check Until the Job is Completely Done

Good luck trying to get a contractor to come back out and finish something after you’ve paid him the last check. More often than not, it won’t happen. And if it does, it will take a while.

Related: 8 Simple Tips for Managing Contractors Without Losing Your Mind

Go through the property with the contractor once he says it is complete and check off every item to make sure every last thing he agreed to do has been done. Then, and only then, can you cut the check.

7. Don’t Get Complacent

It’s amazing to me, but many contractors start feeling entitled once they’ve worked with a particular client for a while. Their prices start creeping up, and their quality goes down.

Unfortunately, just because you found a good contractor doesn’t mean that contractor will stay good. And even if they are good, a watchful eye keeps honest people honest.

So, 1) Keep an eye on each project. Make sure it is progressing at a good rate (and consider putting a time incentive into the contract). Evaluate any change order closely and while projects usually have change orders, don’t just rubber stamp them. And 2) Keep an eye out for backups for each type of contractor. Every once in a while, have them bid against each other and even use your backup from time to time.

After all, there’s nothing like a little good old competition to keep a contractor in line.

What tips would you add for finding (and keeping) great contractors?

Let’s talk in the comments section below!

About Author

Andrew Syrios

Andrew Syrios is a real estate investor in Kansas City and a partner in Stewardship Properties along with his brother and father. Their company owns just over 500 units in four states.

17 Comments

  1. Mindy Jensen

    I will second “Check References”. I called a reference, and they said “I’m shocked that he gave you our name and number as a reference. We are currently suing him for the work he did and all the mistakes he made. I absolutely recommend you find someone else.” I was really happy he gave me that guy’s name…

    Another tip for vetting a contractor is to check out his car. I hired one guy, and his car was a disaster. Turns out, he was a disaster, too. Another guy came over, and I was so impressed with how clean and neat his car was. The body style and color were dated, but it looked like he just drove it off the lot, so I asked how old it was. 20 years old, and pristine condition. He was an amazing worker, too. Your car says a lot about you.

  2. I agree that you should ask for referrals. Great contractors do great work, and their clients aren\’t afraid to show off their work. My father is going to be doing a project here in the near future. He should probably start asking for referrals now.

  3. Austin Davis

    Great post and comments!

    I currently lucked out and found a great contractor that is very upfront, honest, fair price, etc. However, he is the only contractor that I know and use. He has also been upfront that he is starting another business that could take up more of his time in the near future.

    How do I approach him that I need to look for a backup in case he is not available? Should I follow the same advice and just ask him for references that he would use if he wasn’t going to do the work?

  4. These are some great tips, and I appreciate your advice to ask for referrals. If you have any friends or family who also invest, it’s a good idea to ask them. They know you personally, and would be better able to determine if the contractor they used in the past would work well for your needs. Thanks for the great post!

  5. In the past, my projects have gone very smoothly due to qualified contractors. However, all of my past experiences were before I moved, and I came to realize that I have no connections in my current area. For this reason I greatly appreciate your detailed instructions about the hiring process and how to know that you’ve found the best professional for the job. I will keep this in mind as I try to find a contractor as incredible as the ones I had in the past, thank you!

  6. I agree that referrals can be incredibly helpful in this type of situation. There is only so much information that you can gather from the businesses themselves. People who have actually been through this process from your side will be able to give you the best advice and a clearer idea of what you should be looking for. Thank you for the applicable advice on finding a qualified professional of this kind!

  7. I appreciate your suggestion to ask real estate investors who they go to. Since I\’m not in the real estate business I never would have thought of that, but hopefully someone will be willing to share their experiences with someone just looking to increase the value (and safety) of their home. We have knob and tube wiring that desperately needs to be replaced, and considering that we just moved here I don\’t have that many local contacts to ask for references for electricians from.

  8. I appreciate your tip on asking for references when looking for a building contractor. I would imagine that contacting these references would be a great way to figure out how a contractor works and help you decide who to hire. My wife and I are looking for some builders to help us construct our home so when were looking for a company we’ll be sure to ask for references.

  9. I appreciate your tip on getting a contractor’s liability insurance information up front. I would imagine that having documentation about a company’s insurance before you hire them to build your home would be very important. My husband and I bought a piece of property last month to construct a home on so we should remember to check with a contractor’s insurance before we hire them.

  10. I like what this article mentions about keeping an eye on the work being done to make sure the contracting company is always doing their best. It definitely makes sense that the initial stages of a project might be the best due to a companies effort to impress but a time goes on I can see how the quality of work could decrease. It\’s something I\’ll have to remember when looking at different companies as reviews could be a good way to tell if they are known for getting complacent.

  11. I liked the story you shared about how you found a some good options for a contractor. So many people skip that step, but it really can help you find any hidden gem companies that are out there and not well known. It’s important that you still do your research on any referrals you get, but getting a referral is still a great way to start. We are going to start looking for a contractor in a month or so to help us build our house. We’ll have to try out the things you said here!

Leave A Reply

Pair a profile with your post!

Create a Free Account

Or,


Log In Here

css.php