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INVESTORS’ CORNER: Hiring a contractor, Part 1

I am a great believer in “do it yourself” approaches to fixing up properties, but I also feel it is important to hire out what you can’t or don’t want to do. If you find yourself having to hire a contractor, keep in mind the following guidelines as you make your choice.

You should always get at least three estimates on your project. Statistics show that if you get three estimates, on average there is about a 20% difference between the highest bid and the lowest bid. It also allows you to talk with contractors so you can get a feel for how well you get along with them.

When I have met with the contractors, I usually feel better about one of the candidates than the other two, and then I will take the lowest estimate of the three to the contractor I felt best about working with and ask if they will meet or beat the estimate. Most contractors advertise that they will meet any professional estimate. This is how I manage to get discounts on hiring out work. Keep in mind that getting free estimates takes up a contractor’s time, so if you are not ready to start a project yet, wait until you are serious about the job before asking them to show up. If you just want to get an idea of how much something would cost for future reference, call the material suppliers for what you want done and ask what the average going rates are. Example, if you are thinking of getting some siding replaced, look in the yellow pages for companies that sell siding and ask them what the average going rate per linear foot is for siding replacement. This will give you a ballpark price.

I always ask for five references from each of the contractors that are giving me a price. Obviously three are for people that they have done work for, but number four should be from their material supplier. I want to ask them about the contractor. I ask them how long the contractor has been a customer. Also ask if they would recommend the contractor and has anyone ever complained to them about the contractor. The fifth reference is a customer that needed them to come back to the job to fix something. If they say, “We have never had to go back for a problem,” that’s probably untrue. There are many reasons to have to return to a job and admitting that they did is a good thing. We want to know from the customer that the contractor stood by his work and came back in a reasonable amount of time and with no attitude about making the job right.

Pete Youngs is a national speaker better known as “Mr. Rehab” and a longtime friend of the Metrolina Real Estate Investors Association, which provides education, mentoring, and networking for real estate investing in the Charlotte region. He can be contacted at PeteYoungs.com. For more information, visit www.MetrolinaREIA.org.

 

 

 

 

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