EP 11: How to Hire a Contractor

Hiring a contractor is probably the third most important aspect of flipping an investment property:

  1. Buying price: the price you pay for a property
  2. Estimating costs of rehab: making sure that your rehab budget is accurate
  3. Hiring a contractor: making sure that you hire a qualified, skilled contractor

Hiring a contractor can be one of the more intimidating aspects of real estate investing.

  • If you’re not skilled in rehab, it is easy to be misled
  • It’s similar to having your car fixed if you’re not a mechanic. You just don’t know what questions to ask.
  • You can ask someone to help you, but ultimately you need to know what’s going on during the hiring process. You need to know what agreements are being made and what the budget and timeline is.
  • It is critical to establish a good relationship with a contractor. Changing contractors for every job is probably not going to give you the best results.

The best source for finding good contractors is getting a reference from someone you trust.

  • You still need to check references.
  • Get references from other real estate investors who have had success with those contractors.
  • craigslist – still a good place to find contractors

Do not hire friends or family to be your contractor.

Make sure that additional costs are minimized by setting limits on additional work being done without approval.

Make sure have a written agreement (contract) with your contractor for all rehabs.

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