Ensuring your success when working with Contractors!
Buy it, fix it, flip it! Buy, fix and sell! These are slogans that many investors live by. They describe the concept of finding a house that needs repair, fixing it up and then selling to an end buyer, usually a homeowner. However the key to buying, fixing and selling is the Fixing.
There are many courses and gurus that will tell you to rehab a property and you will make so much money you wont be able to stand it. But the key is to find the right contractor. If you are to be successful in real estate investing or any endeavor at all, you must find the right people to do business with. You must find the right contractor to work with you to fix up your properties. The contractor that you work with must meet the following criteria:
The contractor that you choose to work with must be
1) reputable
2) dependable and
3) economical.
Their reputation - when you decide to work with a contractor it is critical that you get references. When you get these references, make sure they are for people who the contractor has already done worked for. While a reference from a pastor or business associate is good, you need to know that they performed quality work and that the client was happy. It is also important that you call the reference. Too many people request references and are satisfied when they receive a list of them. But, you must call these people. See what they have to say. Make sure that the phone numbers work!
Their dependability - simply put, your contractor should do what he says he's going to do, when he says that he is going to do it. This is very important, because you do not want your rehab project to drag on needlessly or endlessly. A good contractor will have his workers on the site when he says that they will be there. The work will be done quickly and professionally. If your contractor is working more than one job at a time, your job should receive equal attention.
Their economics - for as many properties as there are in the market, there are just as many contractors and their pricing runs the gamut! You will be surprised to see the wide range of pricing that you could be quoted on one specific job. Typically, contractors who advertise in the Yellow Pages have a higher overhead, and charge more money. Someone who is your friend's cousin's brother may have lower prices, but they also might be just starting out and not have the experience you desire.
There are other things to be considered besides price. Here are some other items to consider:
1. You want to know if they need "up front" money to get started, or if they can bankroll themselves. Typically, the lower the price, the more money that will be needed up front.
2. Do they have a bank account? If you are dealing with someone without a bank account, you are in for a lot of headaches. Someone who hasn't taken the time to open an account for their business is not someone that you want to deal with.
3. How many people are in their crew?
4. Do they have their own equipment?
5. Do they have a business license?
6. Are they insured?
You can decide which of these items are most important to you. You do not have to compromise your value system. It is possible to find a good, reliable, dependable and economical contractor that you can work with. When you do, hold onto him!
A good contractor can make you a lot of money. Find a good one and grow your relationship with them and you will be well on your way to building your real estate empire!
We wish you much success!
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