Finding a general contractor

[Daniel Ramirez]

Hey BP community,

So I'm really interested in moving forward with my first rehab/flip. I've done some prelim analysis and spoken with a couple of contractors, but have not pulled the trigger on a deal yet. My biggest fear is working with a lousy general contractor (takes money and runs, shoddy work, slow, cost overrun, etc.)

Would anyone be kind enough to share how they approach this? How do you arrange payments (partial upfront, with balance at completion)? Do you buy materials separately yourself or pay contractor for both labor and materials? Finally, does anyone use sites like Angie's L- for sourcing contractors or is it strictly word of mouth. 

These are only a couple of many questions that come to mind. Any insights are very welcome!

[Aaron McGinnis]

Check license, check references, check insurance (From the insurance company directly), don't hire the lowest bidder, don't hire the contractor recommended by the wholesaler. Be careful of the guy who says he self-performs everything.

Preference to a contractor with a physical office. Failing that, make sure you get some kind of physical address. USPS/UPS box may not NECESSARILY be a deal-killer, but it warrants further investigation.

Visit the person's current job sites, maybe buy them lunch. Don't ask them to go walk a house with you unless you want to pay them for the privilege. 

As a brand new investor, perform this process at least 5-6 times before you have a job in hand that you're desperate to start. At that point you should start to have a decent idea of what the contractors look like.