When should you start looking for a contractor

[Louis Van Der Westhuizen]

Hello BP and Happy 2019.

This may seem obvious, but as a new REI interested in flipping (have no deals at present and no team yet) when should I start looking for a good contractor? I assume I wait until I have a property under contract and then get bids based on the specifics of the property, but that would seem to be a potential delay and could result in longer hold time. So do you start looking earlier even when you have no deals yet?

[Nicole Pettis]

@Louis Van Der Westhuizen you should always be looking for contractors. Network, referrals, whatever information you can get the better. Talk to them, find out how they work, how many years they've been in business, see if they have a portfolio of work or a few references. 

Few things that I have learned over the years.

• Use contractors that have been in business at least 3 years - usually by this time they should have their business in order, meaning finances and crews. 

• Make sure they are licensed(if need be) and at least insured. Always get a W9 from whomever you hire

• Make sure you have them sign lien waivers before you give final payment

• Check your city's court documents(public info and usually online) to ensure they don't have any judgements against them

• Do not pay 50% up front. Start out with small jobs where you spread out the payment. Be fair, but balanced.

• See if they follow through on what they say they are going to do

• When you do get a rehab, have a complete scope of work ready for them. Do not walk and point. Have it written down and as specific as you can get(ie paint colors, flooring choices, kitchen updates). Do not leave anything open for interpretation and be as clear as you can be about all finishes, payment and deadlines

• Have contracts in place outlining the scope, payment process and deadlines

Doing these things will help with your project and you will have less headaches during the rehab process. 

Finding good solid contractors can be tricky, but it can be done. However you constantly need to keep finding more and more, so you have backups just in case. So keep networking as much as you can.