Selecting Your Contractor

Selecting the right contractor is one of the most important steps when beginning any fix and flip project. Unless your project requires only minor cosmetic work, you’ll need a contractor to help you complete the job – and hiring the wrong contractor can turn a great project into a financial disaster.

Here are some helpful tips to consider when selecting a contractor for your next fix and flip:

Ask About Recent Projects

A good contractor should be able to provide you with a list of recently completed projects. If possible, go look at these projects to see the quality of work. Also, ask about the specific work the contractor performed on each – if your project requires a complete renovation but the contractor normally performs only kitchen renovations, you may have an issue. A skilled, competent contractor should have no problem telling you about his work – if your contractor is unable or unwilling to provide you with information about past projects, you may want to find someone else.

Verify your Contractor’s License

This is an easy, but sometimes overlooked, step – go to the state’s contractor licensing website and verify that the contractor holds an active and un-expired contractor’s license. If you can’t verify the license online, ask the contractor for an explanation. Also, attempt to verify how long the contractor has held this license (not all states make this publicly available). If the contractor has been licensed for less than three years, more due diligence may be required.

Ask About Timing and Availability

In any fix and flip or rehab project, time is money – so you need a contractor who can begin the project quickly and finish on time. For this reason, the contractor with the best price may not be the right choice if he or she can’t start work until two months after your purchase date, or if he or she has too many projects underway and can’t devote time to your project. Be sure to ask questions like how many crews the contractor has, how many subcontractors he or she uses for the various trades, and how quickly a project can be started upon purchase. Find a contractor that will treat your project as a priority and understands the importance of finishing projects on time.

Get a Written Proposal or Contract

There are lots of contractors out there who struggle to put together a written proposal or contract. In our experience, these contractors are usually not the best of the bunch. If your contractor is unable to provide a written proposal or contract, be sure to talk to other candidates.

Negotiate Deposits and Payment Schedules

Beware of contractors who ask for large up-front deposits. We’ve heard too many stories of contractors taking large deposits then failing to complete the work. Simply put, if the contractor gets paid before completing the work, he or she has little incentive to finish the project quickly, or at all. A good contractor will have credit available from suppliers and vendors and will expect to be paid when work is complete. Having said this, it is still common in many markets for contractors to require some level of up-front deposit, so be sure to interview several contractors to understand what is customary – and don’t overpay. Just remember that your construction lender will not likely fund a up-front deposits, so you’ll need to have cash available after closing to cover any required deposits.

Search Online Review

This may go without saying in today’s world, but be sure to do an online search to see if you can discover any additional information about the contractor. Many potential issues can be discovered in just a few minutes with a simple Google search, so doing so is worth the time. A more in-depth search may include calling the state licensing bureau or the county permitting offices to inquire if any complaints have been filed against the contractor. In many markets, Angi is a great resource for contractor reviews, and you may even get coupon codes or discounts by being a member.

The steps above are important when selecting a contractor; however, even if every one of these steps are taken, you must still actively oversee your contractor once a project has begun.

Our Lending Experts are Here to Help

Thinking about a new project? Ready to get an approval? We want to make your life easier with our flexible process and knowledgeable staff. Get started with our online pre-approval and you’ll be one step closer to a fast closing.

Get in Touch

Want more information? Have a deal you'd like to discuss? Let us know!

Give us a ring

407-476-2500
Mon – Fri, 9:00am – 6:00pm ET

E-mail us

[email protected]

Contact Us