Risk Management - Flips

[Steven Walter]

I'm preparing for a meeting with a prospective investor/partner to discuss flipping houses. I want to cover in detail the risk and the downside to avoid any unpleasant surprises. Of course there are the obvious considerations, i.e. buying right, cost control, unexpected setbacks, etc.

But what about using licensed contractors vs. non-licensed labor, worker's comp, and the EPA's Renovation, Repair, and Painting program?

We are both risk averse and play-by-the rules but also want to be practical and realistic. Any thoughts are appreciated.

[Brandon Turner]

Hey Steven Walter - I'd definitely stick with the licensed contractors and as long as you are hiring contractors (not employees) you shouldn't have to worry about workmans comp or anything like that. If you run across lead, then yeah - you'll have to deal with it, but it's getting cheaper since more and more contractors are getting certified. If that concerns you - just be sure to do a lead test before buying any property.

Hope that helps some! Thoughts?