Difficulty securing contractors

[Jon Stephens]

Good morning all!

I am eager to get started with trying my hand at some house flips, and one of my concerns surrounds contractors.

How do you get contractors on board in a market where they are struggling to find enough help to complete the existing obligations, material prices are sky-high, and as a starting flipper, I don't have enough volume to be attractive to the contractor.  I've had trouble getting people to come out for personal jobs even knowing I have cash.  Likewise, when I speak to builders, they complain constantly that they are running into issues with their subcontractors, and these are people with long-term relationships that are able to bring higher volumes of work.  I don't know how to compete with that.

Am I jumping at shadows? If not, looking for strategies people currently use that have been helpful.  

Thanks in advance!

[George W.]

There is an extreme shortage of skilled workers, schools have done a great job at convincing people that college is the only way to make a living the last couple decades. You will not be able to help your contractor find skilled workers that is 100% out of your control.

As far as volume goes, my best suggestion is to not tell prospective contractors that you're even a investor at all on their 1st project with you. Less info is more. If they ask then don't lie but, Alot of contractors select their customers in the same way a landlord should select their tennats. Alot of contractors want little to do with investors for various reasons. Especially if you're price shopping or trying to justify that they should charge less because you'll have volume of work etc. 

in the sense of a business why would you trade volume for profit margins? Think if you had 100 rentals and cashflow $100 each. Sure you could make $10,000/mo but you could also have 33 units that cashflow $300/mo and make the same $10,000 with 67 less headaches to worry about every month. The same logic applies to owning a small contracting business. 

Now picture owning a quaility construction, electric, plumbing or hvac company etc. Would you rather be obligated to work littleraly non-stop to make money? Or would you rather only do profitable jobs and work less to make the same cash? Then you have time to pursue more profitable jobs and free time with your family.

alot of the problems people have with contractors is because they price shop so much that it becomes a race to the bottom for the contractors. The lowest price is the going out of business rate in the trades. If your jobs don't sound profitable to a prospective contractor then they probably will not want you as a customer unless they are desperate.