Verifying contractor work when brrrr’ing

[Ivan Aldana]

Who do you guys use to verify the contractor work when rehabbing a project out of state? The contractor himself? Agent? Property manager? Any insight would be much appreciated.

[Andrew Postell]

@Ivan Aldana hmmm, lots to this question.  Just in case others are researching this topic, the general recommended method when investing out of state is investing in a city where you know people.  As an out of state investor (and I have been one for 15+ years) you may NEVER see your asset!  That's an enormous amount of trust to put into a complete stranger.  So even if another city shows better "numbers" you should still invest in a city where you have trusted people.  That will trump any small % difference between cities.  

Now, the other method here is that we lean on other investors to tell us who is good people to use for...well, for whatever.  Plumber, contractor, property manager, insurance agent, etc.   If an investor that is local to your property makes a recommendation, it still may not be foolproof, but it reduces our risk.  For me, my contractor actually has an onboarding system where they load the work, upload videos and pictures, and I can do that even if I weren't out of state.  

In most cases it's my property manager that is checking the contractors work.  My PM will be taking pictures, listing the property, and if there's any issues when the new tenant moves in...well, that tenant will report it to the PM anyway.  So I have them check it.  If on the off chance I am purchasing a home, and in part of my negotiations the seller has committed to me to repair something, then it falls on the agent to verify that work before we close.  After closing, their job is done.

And if I do have someone who is in the area I might ask them to make one visit to my property - just to make sure everything is good.  Just in case.

Hope all of that makes sense.