Anyone who is in the business of flipping houses knows the importance of having sound contractors on their team. Contractors are a pivotal part of the process and someone you can’t do without if you are going to make a profit flipping homes. If you are new to the business of house flipping, you might not have a contractor on your crew yet. You shouldn’t jump at the first contractor that comes along. You want to make sure you have a trusted professional who knows what they are doing.
If you are planning on making a business out of flipping homes, you need to make sure you have a strong team behind you. Otherwise, you could find yourself in over your head quickly. After all, the goal is to be able to make money, not lose it. To help you along the way, here are a few questions to ask contractors before you hire them as part of your crew.
Here are 10 questions to ask...
Are you licensed?
Any reputable contractor is going to be licensed. This is one of the most basic questions to ask any potential contractor. In fact, you should ask them to see a copy of their current license. They should also be registered with the state where you are doing the remodels. Double-check to make sure all of their licensing is current and up-to-date. You don’t want to hire someone who doesn’t have the proper licensing in place to get the job done right. When a contractor is licensed and current with their registration, that normally means they care about following the proper protocols and making sure that everything is done according to code.
Do you have the proper insurance in place?
One of the other basic questions you need to ask potential contractors is if they have the proper insurance in place. If they do have insurance, you also need to ask them what type it is to make sure it is the right coverage for your projects. You also need to find out what their coverage levels are. Insurance is only as good as the amount of coverage. If someone only has a couple thousand in coverage, that isn’t going to go very far if something were to happen on the jobsite. When you have a contractor who is insured working on your remodels, you can rest assured that you are protected. It also protects the worker in the event something was to happen onsite.
How long have you had your team?
When you ask a contractor this question, you will often find out whether you are dealing with one contractor or a team of 10 or 20 individuals. If they do have a large crew, you want to ask them what their turnover rates are. You don’t want to deal with a contractor who is constantly firing and hiring new people. That often means that there is an issue with the contractor that makes many people not want to work for them. This could lead to problems getting your renovation done, leaving you unable to flip the house as quickly as you like.
How many people are on your team?
If you are only doing a small renovation project, a one-man crew might be fine. However, most people who are in business to flip houses need a large crew to be able to come in and get the job done quickly and easily. This is especially important when dealing with a lot of projects at one time. The number of people you need to have on hand is directly proportional to the type of project you are working on and the amount of projects you have going on at one time. You have to consider your individual renovation needs to determine what your needs are.
Do you have any references you can provide?
In many cases, new investors don’t think about asking for references from the contractor. Even though it takes a little bit of time to go through their references, it is well worth the time in the end. Another thing to ask is if they have any current projects going on. If they do, visit those projects to see how things are going and get an idea of their work firsthand. Not only do you get to hear what they are doing, but you can see it for yourself. Show up at an unexpected time to see how the crew works together and what the site looks like. Anyone can say they are capable of doing certain things, but to see it in action is completely different.
Do you plan on using any subcontractors?
Most contractors use subcontractors in some form or another. It’s hard to find a crew that has a plumber, electrician, HVAC specialist and so on as part of their crew. Because of this, many contractors turn to subcontractors to come in and handle the parts of the project that they cannot do on their own. Generally speaking, contractors often have guys who handle the roofing, trim, windows and so on. They then turn to specialists to come in and do everything else that they need done. By knowing how the team works, you can better plan for what they are going to do and how the project will be handled.
Are there any written warranties?
You need to know if there are any types of warranties available, as well as the terms of the warranty. While you might not ever have to take advantage of the warranty, it is good to know whether there is a warranty available or not. Once you get to the point where you have a good relationship with your contractors, you won’t need to worry about asking them for a written warranty on their work. Ask them how they handle something that goes wrong on the project. This gives you a better idea of the type of contractors they are.
Has anyone ever filed any disciplinary action on you?
While this isn’t exactly a question you want to ask, it is one that needs to be asked. Ask in a way that isn’t offensive, such as “have you ever been in legal trouble?” This will end up opening the conversation without actually coming out and asking if they have had someone file disciplinary action against them. It’s a great way to get information without coming off sounding offensive or downgrading.
Have you ever filed for bankruptcy?
Filing for bankruptcy might be a little personal, but it is also extremely important. You might be surprised at how many contractors have filed for bankruptcy. Even though you might not feel comfortable asking this particular question, you should seriously consider doing so. You have every right to ask, so why not get as much information as you can all at the same time? While this shouldn’t be the first question of the interview, it should be brought up at some point along the way. You can also do a really quick background check on the individual to gain access to a world of information about them and their practices online. It’s always better to have them let you know right from the beginning than it is to be taken by surprise down the road.
Where is your office located?
If the contractor works out of their house, that isn’t a big deal. You don’t need to head over to their personal home for a visit. However, you might want to stop by their office if they do have one. This way you can see how it is that they run their office and operate. It gives you an idea of how their staff members are and how they interact with one another. If the staff is at odds with one another and on edge, that isn’t going to be good for your job site. You want people who are able to work together as a team to get the job done. The office should be neat and orderly, not a chaotic madhouse.
By going through the questions above and asking them right from the very beginning, you can get an idea of what you are dealing with and whether the individual is right for your needs. You don’t want to end up hiring someone who isn’t going to gel with your needs. Spending more time in the beginning will save you a lot of hassles down the line.
Source: Westpark Loans
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