How to Find and Work With Real Estate Contractors

Finding Contractors

The best contractors are found through: referrals from other investors (ask at REIA meetings), driving by active renovation projects (note the company name), your real estate agent's network, and supply houses (Home Depot pro desk, lumber yards).

Never rely on a single contractor. Build a network of 2-3 generals and 3-5 specialty trades.

Vetting Contractors

Before hiring:

• Verify license (check your state licensing board)
• Verify insurance (general liability and workers comp)
• Check references (call 3 previous clients)
• View completed projects (drive by or visit)
• Get a detailed written bid (not verbal)

Getting Bids

Always get 3 bids based on the same written scope of work. Compare: total price, timeline, payment terms, and level of detail. The lowest bid isn't always the best — evaluate reliability and quality alongside price.

Managing the Project

• Never pay more than 30% upfront
• Pay in draws as work completes (demo, rough, finish)
• Visit the site 2-3 times per week
• All changes in writing (change orders with cost and timeline impact)
• Hold back 10% until punch list completion
• Document everything with photos

Common Contractor Problems

• Disappearing mid-project: mitigate with milestone-based payments
• Cost overruns: mitigate with detailed scope and change order process
• Quality issues: mitigate with site visits and punch list holdback
• Timeline delays: mitigate with per-diem penalties in your agreement

The Bottom Line

Good contractors are the most valuable relationship in your investing business. Find them through referrals, vet them thoroughly, manage with clear documentation and milestone payments, and maintain the relationship by paying on time and providing consistent work.