Which do you think is better for finding good quality contractors for doing total rehab jobs?
I’d suggest talking to other SUCCESSFUL rehabbers at your local REIA. They will know who the good contractors are.
Between the yellow pages and classified ads, I’d choose someone from the yellow pages. Placing an ad is the yellow pages is a minimum 1 year committment, whereas placing a classified ad requires no committment and therefore has more fly-by-night contractors.
I’ve been a Yellow Page advertiser myself, and spoke to contractors about merits of advertising in the Yellow pages.
I’ve got two good one thru the years from the Yellow pages, and advertised “in business since”, the 1930’s in both cases. The AC contractors tip was to keep your Yellow pages over the years, and see if your guy was in the one 3 to 4 years ago. This way, you know he was able to afford paying advertising all these years, and still in business.
Other than that, I found a few through word or mouth from Church and the my mom in laws Senior citizens center. This later one was rather proud of his work, and showed me the few jobs he was working on. Not only that, he’s cheap as he’s doing it more like a hobby.
I also found some visiting my local hardware store, and paint supply shop. Both have a list of contractors, and the hardware store can tell me which guys do small job, and whcih does larger one.
I also tried some from the pennysavers for small jobs. I never got one this way for a major rehab.
Hi KJB 1891,
Our companies (property management & maintenance) use TheBlueBook.com for bigger jobs outside the scope of our licensing. They are a nationwide service with contractors for all the trades. We’ve used them a couple of times and the contractors who responded to our postings appear to be reputable and have provided good bids.
But like everything else, you have to use your experience and pay attention to your gut. And I think Mike gives the best answer: talk to other successful rehabbers. They know the good contractors but are also probably keeping them busy. And just like you looking for a contractor who won’t stiff you, the good contractors are looking for a good client who won’t stiff them. A good contractor, once found, is a gem.
There are a number of different ways to find contractors and several have been listed. Some of the best don’t advertise at all, just by word of mouth. No matter how you find your contractors, there are a couple of rules you should consider when working with them.
First is to never give any money up-front to a new contractor. Even if they gave you 100 good references, they could all be part of the scam. The first or second project has to be worked like any other 9-5 job, you do the work, then get paid.
Always withhold atleast 10% of the money until you are totally satisfied that the job is complete.
At every phase of construction, have them sign a mechanics lien waiver, acknowledging you paid them something. This is mandatory! No waiver, no check.
Don’t readily pay for their mistakes! If they walk through the property to give you a quote based on a scope of work and half way through the job they realized they forgot to charge for something, they will want a change order. Obvious mistakes on their part, they pay for. Honest or unforseen mistakes you can work something out to share the burden.
Stick to the original plan as much as possible. It’s easy to get carried away in the renovations thus going over budget and over schedule. Contractors line up as many jobs as they can get and by changing your mind mid-way through, you screw up their schedule and encourage them to do a sketchy job.
Keep a database of every contractor you talk to. I have a “Yes- Maybe- Hell NO!” database from every contractor who gives me a quote. If their prices are ridiculously high, their references don’t check out, they look sloppy, write that down so you know never to call them again. If they do a wonderful job for a good price at a good pace, write that down especially as someone to hire again.
Check their licenses and good standing with the state. It normally takes a license to get a permit (except if it’s your own property and your only doing minor work). Code inspectors will also want the work done by licensed contractors and sometimes they are the only ones able to schedule the inspections.
Some rehabbers go as far as doing a criminal background check and credit check. I just run their name through the sex offender registry, if it comes up clean, that’s enough for me. A lot of people with criminal histories are in the construction trades, I give them a chance (except sex offenders). I don’t care if their drunks and potheads, just as long as it doesn’t effect their work.
What is a mechanics lein waiver? And what is meant by every phase of construction - is this predertimined based on the scope of work? Can you give me an example?
I am getting ready to rehab my first property & you seem very knowledgable.
A mechanics lien is a lien (go figure) that a contractor can put on your property for non-payment. If they can prove they did work on your property, and you can’t prove they’ve been paid, they can put a lien on your property for the non-payment that will be paid at the time of the next sale. Since you’ll be selling the property in the immediate future, this is a problem. They have the right to put a mechanics lien on your property for nonpayment, so when you pay, have them waive their right to do that. Otherwise, you run the risk of having them cash your check, then put the mechanics lien on your property anyway. That could all be hashed out in court from cancelled checks but not before you deal with months of lawyer garbage.
A “phase” of construction is just a landmark in the progress. Your contractors will want to be paid in phases to recuperable their outlay thus far from the materials and labor they’ve had to pay for (this is why they can put a lien on your property for nonpayment). Lenders will also pay out a construction loan in phases called “draws”. You’ll want a waiver signed by the contractors after every phase to identify exactly what’s been paid which reduces the amount of their claim. What I consider a phase:
It’s easier to talk about with new construction, some of these would be done simultaneously or started in different order depending on the project.
- Structure and sheathing
- Plumbing and Electric rough-in
- Windows, exterior doors, roof, siding
- Insulation and duct work
- Drywall, paint and floors
- HVAC unit installation and light fixtures
- Bath fixtures, cabinets, appliances
Have a nice day.