First Fix and Flip Deal

[Joe Kulbacki]

Greetings. I'm in the process of investing in my first fix and flip and I'd appreciate some experienced minds' advice. I'd be doing the project with a contractor who has said he's done this before, but has no work going on right now and won't give me any references of people he's done this with before to speak with. He seems like a stand up guy and I've seen some of his work and he checks out with agents in the area.

The deal would be that I pay him for the man hours and project costs for the rehab to be accomplished. Once the house sells, he gets 20% on top of the man hours for the project and 10% of profit for being the property manager until it sells.

Does this sound like typical deal as far as the %s go and would you move forward without speaking with any references? Any other pieces of advice would be greatly appreciated.
Thanks in advance!

[John Moore]

Get bids from other contractors. Why should anyone share in your profits. The whole idea is to recruit qualified contractors who have earned a good reputation, who take pride in their work and want to work for you again, because you pay on time and don't ask for any extras that were not negotiated in the origianl price. You run the job, don't let the subs run you. Make sure you review all insurance coverge and all quotes are in writing in as much detail as possible.
If you can't get references then they should not be considered. Have the supply houses recommend or as has been recommended before go to home depot early in the morning and start recruiting. Good luck