If you are new to flipping, you may want to start with a simple flip (new paint, carpet, fixtures, cabinet fronts, minor plumbing) with a quick turn around. As you build your skills and understanding of scheduling, permitting, and real estate markets, you might to temped to invest in more a upscale or complicated property that will provide greater profit but requires more risk. At this point, consider using a general contractor. But if you haven’t developed a relationship with a one, what do you do?
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- Decide what you can do and what your contractor will be doing.
- Create a detailed plan with material specifications.
- Get a least three bids. Use networking for recommendations – real estate forums, Linkedin, Facebook. Look at reviews on Yelp or Angie’s List. When you meet with the contractor(s) for the first time, treat it as a job interview. You will be spending time together and it’s important to communicate as equals. A good working relationship is essential to success.
- Provide same plan and specifications to each contractor so that each bid is roughly based on the same scope of work. If there are big discrepancies in the totals, talk through the bid with each contractor to understand the differences.
- Find out if the contractor is available for the job. Discuss timelines (when the work will be done and completed), and how change orders are handled.
- Ask how big his or her crew is and how much of the job will be subbed out.
- Ask for recommendations and before and after photos. A good contractor should have these.
- Is the contractor is licensed (if your state does not require it, the city may), bonded, and carries general liability and worker’s comp to cover problems that may arise on the job site? Ask the for copies of the licenses of the major subcontractors who will work on the job. Check Better Business Bureau and local court records for problems.
- Create a payment schedule you both agree on. For payment schedules outlines click here.
