By startingpoint August 12, 2014

Once you have identified a few potential contractors I would suggest that you call them on the phone and interview them. If you like them then set up an appointment to meet at the property for a walk through. I always find it beneficial to walk through and around the property with them to get their opinion and ideas. They are the professional so it is always helpful to get a second eye on things as they may discover repairs that you overlooked. Although this may take up more of your time, it will ensure that everyone is on the same page with how much work needs to be done.

 

Here are some questions to ask while interviewing a contractor over the phone and in person:

  • What experience do they have in rehabbing?
  • Availability and turnaround time for project completion?
  • Do they have familiarity in your area?
  • Do they have insurance? Insurance is a must and should be verified (your insurance company will need proof of contractor insurance, usually in the amount of $1 million).
  • References- Ask if they have references from previous work. Always follow through and call the references. It’s easy to assume they wouldn’t give them to you if they weren’t good referrals, but you will find that’s not always the case.

Remember that you are likely not the only project that the contractor has, but you need to emphasize your timeline that they need to abide by, since you have monthly carrying costs associated with the property. Some rehabbers put financial penalties in their contracts for work that is grossly overdue. You don’t want to set unreasonable expectations, but you also don’t want to be at the bottom of the contractor’s priority list either.

Make sure that before hiring any company that you get copies of their current insurance and workman’s compensation, as you are putting yourself and your business on the line by having a liability on the project if they cannot furnish these two items. If you hire them and they don’t have these things and one of their guys fall off the roof you are liable for damages, which they can sue you for. This can cost your company hundreds of thousands of dollars, so spend a little bit of time to confirm that they do in fact have up-to-date insurance coverage; it is worth it in the end (trust me).

 So let’s review…

  • Spend 2 hours writing a scope of work or use the repair estimate worksheet
  • Ask for contractor referrals from other rehabbers and research options on Angie’s List and Craigslist
  • Interview on the phone
  • Interview in person (at the property if possible)
  • Call and verify references
  • Verify insurance and workers comp 
  • Hire!

     Have tips for finding the right contractor, or know a great one in the St. Louis area? Share it with us on Facebook, Pinterest, Twitter, and Google+. Stay tuned for more information and helpful tips for your next real estate investment.