Finding that Contractor to perform your rehab estimates

Bernard

a great way to find contractors is to go to your local home depo or Lowe's or even manards (not sure if i am spelling it correctly) they should be there early in the morning or simply asking an associate who works there hey is there any business cards for contractors and where? Another great place is yelp...
Or yp (yellowpages .Com) finally if you choose to factor in actual break down of a rehab ask the contractor hey how much is installation (or labor being the technial word) and ( you should know possible problems from what the tenant told u is wrong) and then ask um of I want to repair a roof what items of that roof needs to be changed?

Or if you want to simplify it ask for a break down of the estimate specifying items plus labor costs.... remind the contractor you are a real estate investor and you will bring them alot of work

to find anything you need and network with other investors. Don't be afraid to go, as now-a-days their are many newbies at these meetings and seasoned investors will happily work with you. Make sure you find a REI club near you, and more than one is even better. meetup.com also may have rei clubs near you.

I have a couple of ways I have found contractors for myself.

1. Search Craigslist for for contractors in the services provided section.
2. Place ads on Craigslist advertising your looking for contractors for rehab flips.
3. Check the yellow pages in whatever town you need the contractor in and make some calls. Tell them your starting to invest in the area and would like some estimates for rehabs and if you purchase the property you will use them to do the rehab or refer them to whoever closes on the property.

I had also gotten many calls from contractors on my bandit signs looking for work.

You can also go to Lowes and spend some time there checking what materials cost, plus they usually have the labor cost to have the materials put in.

Thanks for everyone's input here. These are all great ideas for finding contractors. Bernard, with respect to your question as to how to place offers and/or when to get estimates, you can do it one of two ways:

On your first visit to the property you should do a visual inspection and if you're lucky enough to have a tenant already in place, as insidernotes suggested, ask the tenant what they would like to see fixed or updated. Often, they will over-embellish what is wrong with the property because they don't want anyone to buy it for fear that they will be asked to move. Once you get your laundry list of "problems" with the house, put their mind at ease by asking if they would like to stay and continue renting there. If you are still interested in the property after your first inspection, you can make a second appointment and bring your contractor. Once he gives you an estimate of what the repairs will cost, figure you offer and maximum price from there.

The second option which I saw all the time as a Realtor was to place an offer subject to inspection. Yes, you are essentially renegotiating a contract after it is executed, but it is done all of the time. This is usually more effective for more serious defects in the property that couldn't be seen our shouldn't have reasonably been expected to have been noticed by the "lay person" when viewing the property. Examples of this would be code violations, leaks in the plumbing inside the walls, evidence of previous water in the basement, structural issues etc.

Don't stress out and lose sleep over this. You have a ton of support here in the DG Family. Just tap in to it.

Is it "normal for a contractor to ask for a 50% deposit up front before starting the work. I am just starting to rehab and got 3 estimates from Electricians and the 2 best estimates asked for half of the estimate up front before starting any work. It's not that I don't trust them, but I don't know them and how do I know they might not just take my deposit and disappear on me? - btw the 3rd estimate was a far larger scope of work and about 8 times the cost of the other 2.

Anyone have experience with this?

Thanks,

Kevin in Massachusetts

I believe if all possible find one who knows what investors are trying to do and have worked with them, you can get that from word of mouth through REI Clubs, realtors
,attorneys, accountants or other investors or any one for that matter, the more we get the word out what we do the more others will try to help, sincerely, Jim

If your only going to wholesale and not rehab, that contractor better be your friend or partner because they don't want to waist time looking and pricing jobs they wont ever get..

What you wanna do is take some time and go to Lowes or Home Depot and price for yourself. For example a bathroom needs gutted, price bathtubs, sinks, tile, toilets, fixtures, drywall, paint, I think we get it. Now we know basic material cost, time to call 3-4 contractors and ask what they charge minus material cost, only labor cost, we don't want them picking our designs for us.

Do this for kitchen, living room, bedrooms, roof and don't forget landscaping. This will take more than one visit but well worth the time, think about it, after you get all the basic costs you have a cheat sheet to take with you every time you go through a house...

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Aaron

This is another aspect I am concerned about. Being based in New Zealand how can I go about finding a contractor willing to work with a out of the country wholesale investor.

aaron-n-suzy - This is helpful, Thank you - This seems to be some solid advice for getting an idea what things cost in your particular area. going to Lowes/Home Depot to get material prices is a good step.

You also ask is a contractor asking for 50% normal. Some do that so they get all the material cost paid and labor later after job is signed off. Its different with each contractor, I have paid mine some $ in advance.

As far as trusting them, get it on paper every item every term you agree on cover your A**
Hold them accountable for everything and keep them on time, as job moves on check quality and call them on it..fix it...Its your house.

On your crazy price dif, expect it. Make sure what your numbers are and design ideas don't go over budget, if it does rethink.

Just some thoughts

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Aaron

Aaron,
Thanks for the advice. I was a little nervous about paying a contractor/electrician 50% up front when I have never worked with him before.

thanks,
Kevin

Almost all the contractors that I have used have asked for some money up front. They are also worried because they don't know you and you might walk off without paying them after they do the job. This also happens and an experienced contractor might even put a lien on your house until final payment has been made. I've heard stories from both sides.

One third up front sounds about right to me, but sometimes it's more. There should be a written contract which will hold them accountable showing work to be done and how much the deposit is.

I have done a couple of Fix N Flips with a hard money lender and they will only pay 1/3 up front to get the job started. Then they do inspections of the work before more money is disbursed. You should have the same work ethic with them. Make sure the work is done to your satisfaction.