Are contractors to be trusted?

[Crystal Chang]

My main worry as an out of state investor is if I want to get a property at a discount, the property would needs to be in some form of distress. I would then need to rehab it so that I can rent it out as a buy-and-hold.

My main question is how can I prevent myself from getting "taken to the cleaners" by the contractors that I will need to hire to rehab the place? I know I need to get 3 bids, but even then, how do I know the contractors are using the materials they had promised to use and not just the cheapest materials to increase their profits?

Once again, any help from the investing community would be great!

Thank you,

Crystal

[James Wise]

If the price is 54k & the rehab is 65k that takes you to $119k for a home that's worth 120k.

You would be in a much better position if you just purchased a home in "turnkey" condition. Not saying it has to be from a "turnkey" provider just a home in really nice shape.

A 65k rehab is a huge job. You could go over budget and your also loosing lots of rental income due to the home being under renovation for a lengthy period of time.

Lastly, if you purchase a home that does not need all of this work you will be able to leverage much more of your money.