What do you need before a flip?

[Rigo V.]

what forms do you have your contractor sign before starting a flip? 

What do you usually have in place before you commence the project? 

[David Robertson]

There are 5 forms you should have signed/received from your Contractor before you start the project:

1. Independent Contractor Agreement
2. Scope of Work Document
3. Payment Schedule
4. Form W-9
5. Proof of Insurance

Independent Contractor Agreement

The Independent Contract Agreement outlines the terms, obligations and responsibilities of both parties to the Contract.  A strong Independent Contract Agreement clearly defines the work that the Contractor needs to perform, when the work needs to be completed and how much the Contractor will be compensated.   The ICA also clearly spells out why the party being hired is not an employee for legal and tax purposes.

Scope of Work Document

The Scope of Work provides a detailed list of all of the repairs that need to be completed on the project. Your Scope of Work Document should include as much detail as possible including:

1. Detailed List of Repairs 
2. Plans/Drawings
3. List of Materials (SKU #s) & defines who's responsible for purchasing (you or Contractor)

Payment Schedule

The Payment Schedule defines the Payment Terms of how and when the Contractor will be paid on the project.  A Payment Schedule should outline Payment Milestones, Amounts & Terms which describe the work that needs to be completed in order for the Contractor to get paid, how much the Contractor gets paid, and when the Contractor gets paid.

Form W-9

You will need to get a W-9 from the Contractor so you have the Contractor's Name, Address & Taxpayer Identification number which will be used for preparing Vendor 1099s for your Contractors at tax time.

Proof of Insurance

Before hiring a Contractor you need to make sure that the Contractor is carrying the proper insurance to protect your property, investments & personal assets.

Your Contractor should carry both General Liability Insurance to protect your property against damages, and Worker's Compensation insurance to protect you in the event that a worker is badly injured on your jobsite.

Before you start construction ask your Contractor to provide a valid, up-to-date Certificate of Insurance that indicates the coverage that they are carrying for their business.