Hiring Contractors for Fix & Flip

[John Santiago]

Hi all,

What are some tips you have when it comes to choosing your current contractors ? I'm about to close on a fix and flip property and trying to get as many bids as possible but don't want to be bamboozled by contractors with high prices. Is it even possible to hire a general contractor to take care of it and come out green on the backside? Just looking for any advice you guys might have! Thanks a lot.

[James Hamling]

Quote from @John Santiago:

Hi all,

What are some tips you have when it comes to choosing your current contractors ? I'm about to close on a fix and flip property and trying to get as many bids as possible but don't want to be bamboozled by contractors with high prices. Is it even possible to hire a general contractor to take care of it and come out green on the backside? Just looking for any advice you guys might have! Thanks a lot.

Generally speaking the most frequent mistake new "investors" make is by searching out a bazillion bid's to start, and/or going with the "cheap" person. 

Before you get 1 bid, you should be FIRST vet'ing potential contractors based on the real #1 most important factor; QUALAFICATIONS. 

See, getting bid's is nothing but a # on paper, or verbal. It tells nothing of can they get it done, will it get done, how soon, how good or bad, if there will be a laundry list of "and then's" as you go, it only get's a # on paper. And, poor operators know this, they know flashing a low # will "buy the biz" and get all other items ignored. 

Start by fielding who is actually qualified for what you want to do. And that means not just ability to do that kind of work, not just a proven history of doing such, but doing such for investors. Because many, if not most, well qualified GC's in that space won't do investor flips, just not in there interest and they got all the work they ever could want so only way to get em is paying full retail because that's what they do. 

Than, after identifying the potentials is to find if them and you are a fit for working together. 

LASTLY comes bidding. Yes, LAST. Fact is, there just isn't all that much difference in prices. Sure, there is variations where ones carpet is a bit cheaper and windows a bit more, but the next is opposite, and in the end most wash out to being pretty dang close to par with each other. Why is this? Because any professional GC's, get most items from the same place. And labor rates are rather standardized, not to mention many are using the same sub's, for example roofing, I think in Twin Cities about 40% of GC's use the 1 same roofing crew, no joke. That's hundreds of GC's, competing, with the 1 same crew doing the actual roofing. 

If a GC mentions about getting things at HD, Lowes or Menards, walk away, there not your GC. Anyone who does flips via retail materials, it's not gonna be a fit. I could go into details of this, which is a post itself but every experienced professional GC/builder know's this, we don't pay retail for 80-90% of our materials, we get them higher up the feeding chain. 

Last advice, keep in mind what you know but more importantly what you DON'T know. The right GC is gonna know about 1,000X what you do, so don't get on with ego, understand your for most part just the $ guy, and they are for most part everything else. They have done more builds like this than homes you've seen, they have forgotten more on design than you know. A good GC is going to be a willing partner in this, getting your thought's but most importantly budget, and than telling you how it should be done, and how the priority list should go. If you let ego run the day, they will fire you as a client, because truth is you need them more than they need you, that's the reality of it. 

Best of luck.