Need advice for finding wholesalers and good contractors

[Joey Tamusaitis]

Hello Bigger Pockets Community,

I am a new college graduate investor that lives in California. Just like many other California investors, I'm looking to invest out of state. I'm currently looking to get into single-family homes and have narrowed my choice cities to 4: Huntsville Alabama, Indianapolis Indiana, Kansas City Missouri, and Oklahoma City. My main strategy at this point is to do the BRRR method and mainly use wholesalers for deals. I'm of course going to travel to the locations and get a sense of the land before making any investments.

I have two main questions.

First: What would be the best method for me to find wholesalers in these areas? Should I just search forums on this website until I stumble upon one or travel to the city and try to attend a meetup?

Second: For contractors would people recommend looking on various job sites or try to find other investors in the area and ask for recommendations?

I am open to all suggestions and comments and look forward to learning more!

[Ross Denman]

For wholesalers... most of the biggest players in any market are putting their deals on the BP marketplace. That's always a good place to start networking. Also, contact PM's in your target cities and see if they have any recommendations for sourcing inventory. I subscribe to about 5 different large wholesaling lists in Indianapolis and about 4 more small ones. I also unsubscribe from anyone who is remarketing someone else's deal at another mark-up (daisy chainers.) I only want to deal with the contract owner who is direct to seller.

Another option is to search google with "we buy houses for cash (name of city)." That's likely going to take you to the seller's side of the wholesalers business, but you should be able to call and get on their list. Check the "google ads" first as these wholesalers are probably sourcing the most leads and have enough income to pay for advertising. This probably means larger deal flow.

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Most active investors and providers that I know are very selective about who they share their contractors with. I only share my preferred GC's with clients who have offers on homes. I do not give them out as blank referrals. To many tire kickers waste their time and the GC's don't want to waste their time with unproven investors anyway. The best contractors are usually somewhat proprietary especially if they have plenty of business year round. I give my 2 top GC's about 10-15 jobs each year ranging from $10k-$100k in work.

Here is some insight in to how you might find some licensed and active contractors in Indianapolis.

1. Go the the Marion County Permit database here https://accela9ca.indy.gov/citizenaccess/ and click "Search Cases" under the Permits area

2. Change the start date of the search to something more recent. Just choose something in the last 3-6 months.

3. Change the License Type drop down to "General Contractor."

This should pull every General Contractor that has pulled a permit in the last several weeks or months. You will probably bypass the ones like sewer excavation or connection permits, electrical permits, or heating and cooling permits. Just click on the record to see what the permit was for and who filled it. It should have name, company name, license number, phone number, and email on most records.

The more that you work with the database, you will find ways to filter your search more effectively, but I use this database a lot... I use it to find homes with potentially motivated owners, to find sub-contractors, evaluate due diligence in a neighborhood (does other homes on the street have tons of code compliance issues?,) find out how many rehabs are going on in the area, are their any outstanding fines to the city against the home, etc.

You can also look at rehabbed homes for sale in your area and check to see who pulled permits on that property. Most interior work in Indianapolis doesn't need permits, but if there's extensive work done, there's likely several permits that were pulled.

Licensed contractors who pull permits are usually going to be pretty reliable... especially if they work with other investors. Pricing may vary... but I will pay more for a reliable, honest, and quality contractor who completes jobs in budget and on time than take a cheaper route with a contractor. Many of us have lost money on poor quality of work, poor communications, delayed rehabs, or contractors who disappear with your money entirely. I also prefer to use licensed, bonded, and insured GC's for my OOS investors. You can also check to see if there are any lawsuits against a GC here as well. https://public.courts.in.gov/mycase/#/vw/Search Bad contractors tend to get sued or have a checkered legal past.