Posted over 5 years ago

How to Vet Contractors When You’re Using Loans to Flip Houses in Arizo

The criteria used to assess whether contractors and subcontractors are a good fit for your project change a bit when you’re working on an investment property versus your own. If you’re using , make sure your team is up to the task.

1. Make sure they have experience with fix-and-flips. When a traditional homeowner hires a contractor to perform repairs or remodel, it’s usually just an annoyance if it takes longer than initially planned. If you’re in the rehab business, a sluggish contractor or delays can derail a whole project, particularly if numerous tradesmen are involved and their work hinges upon someone else’s work being complete. Even a delay of a day can send the tradesman onto his next project, leaving your project undone until he has time to come back. When you’re using , you’ve got an exit plan and need to stick to your timeline. You need someone who has a proven track record of doing so in order to ensure your project moves forward without costly delays.

2. Get recommendations from other rehabbers and investment property pros. While you can check out general review sites, most are geared toward the consumer market. There’s a big difference in the types of requests a homeowner has and what a rehabber expects, and that ranges from the types of projects completed through the materials used. Your average homeowner may fixate on which shade of beige to paint the walls, which is fine because they’re the ones staring at it for years to come. A good contractor will roll with these types of things and be at least somewhat patient. That’s what’ll get him a good review with a consumer. A rehabber wants a contractor who can make a quick assessment and move on. The mindset is different. In other words, you don’t necessarily want to go with review sites, but rather get recommendations from other rehabbers and people in the industry.

3. Verify they’re insured. Uninsured contractors may do the work for less, but what happens if one puts his foot through the ceiling while working in the attic? What happens if one doesn’t seal a pipe joint properly and it leaks? The list goes on. Uninsured contractors can wind up being a costly proposition that will eat through your budget and then some with a single error or misstep. A true professional has insurance.

Get Multiple Bids to Make Evaluating Contractors Easier

Getting multiple bids lets you see the full range, so it’s easier to see if someone is gouging you or is likely to take shortcuts. It also means several highly-trained eyes will be checking out your property, so you’re more-likely to catch all the issues and hear multiple ways to address each. Getting multiple bids will also help you maximize your return on investment—an absolute must when using .

If you’ve got cash in hand, you may be able to negotiate better too.

It’s generally unwise to prepay for services, as this can actually make the team work slower. However, letting your contractor know you’re using may make him more willing to cut you a better deal. It provides reassurance that he’ll be paid swiftly and, if the project goes smoothly, that you’ll probably hire him next time too. Once you’ve found your ideal contractor, use your funding as leverage to negotiate better rates. By applying these tips, your projects will be smoother and you’ll see greater returns.

Dennis Dahlber Broker Ri CEO Level 4 Funding LLC Dennis Dahlberg
Broker/RI/CEO/MLO
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
[email protected]
Dennis Dahlberg Broker/RI/CEO

About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.