In my book on flipping houses, I talk about the top 4 ways I find great contractors. Those are certainly not the only four methods I use, and I’m constantly getting asked if I have any additional suggestions for finding reliable and reasonably price people to work on my project. Well, I do have some other “tricks of the trade” I use to find contractors, and thought I’d provide a few more ideas.
Here are my next favorite ways to find contractors:
Builder Supply Houses
If you’re looking for a skilled tradesman (electrician, plumber, HVAC, etc), one of the best places to find them is where they buy their materials. And the good ones don’t generally buy their stuff at the big box stores like Home Depot. Instead, they buy from local suppliers, as they know they’ll get better prices and better service. So, if you want to find these good contractors, start hanging out at the supply houses. Here’s the catch — many of the busy contractors will just call in their orders, so you may not actually catch them at the store. But, it’s the busy ones you want to find, as they are the ones who are in demand. So, my recommendation is to introduce yourself to one or two of the guys in the sales department and ask them who they recommend. Some places have a policy not to give recommendations, in which case, you can ask who some of their bigger clients are instead (you’ll likely get the same names even though you asked a different question :).
Angie’s List
I’ve mentioned before that my favorite way of finding contractors is through other investors and through great contractors I already have. But, one of the biggest questions I get from new investors is, “If I don’t yet have a network of other investors and contractors to rely on, where do I start?!?!” This is where contractor recommendation sites like Angie’s List are tremendously helpful — they allow you to kick-start the task of finding those first few contractors in each trade. I first used this site to find contractors when I moved to Maryland and was working on my first rehab (it was a tremendous shock having to start over finding contractors). The only thing I don’t like about Angie’s List is that there’s a small fee to join (less than $10 per year), but the good side was that it didn’t require me to actually go out, pound the pavement and solicit people for contractor recommendations.
New Home Subdivisions
Now that I’ve started doing new construction, I’ve come to the realization that builders tend to get the best contractor prices, especially when they’re doing volume work (building lots of houses at once). Not to mention, builders are likely using licensed/insured contractors as well. That’s why I’ll drive through subdivisions as they are being built out. In many cases, I’ll see the contractors they’re using just by looking at the trucks in the neighborhood; in other cases, I’ll walk into the houses, introduce myself to the contractors and ask if they’re looking for additional work. In some cases, they’ll tell me that they work exclusively for the builder, but more times than not, they’re either freelance contractors who will work for anyone or they work exclusively for the builder, but sneak side jobs on the weekends.
I still have a few more ways that I recommend finding great contractors…but I’ll save those for another follow-up…
very good tips. I have done the supply house route and have had mixed results. some are still very overpriced, some don’t even show up and some are good.
I am about to sign up for angies list. in fact, besides paying the fees, I am a member. I lost 3 contractors in the past 2 weeks (various reasons beyond my control), so I feel like I have to start from square 3.
i have done drive by a few times with terrible results. never done the new subdivision tip.
As far as sites like Angie’s List, I’ve lost some faith because you’re going off of customer reviews, that a lot of times, are useless. Telling me how polite and friendly the contractor is means nothing to me. Telling me how the crew cleaned up nicely means nothing to me.
I will take a rude guy who leaves a bit of a mess but does awesome, quality work any day. Also, most people don’t even know what to look for in quality work. Let’s say, for example, a ceiling fan is installed. If the fan turns on, then that’s all that matters, right? No. The customer probably wouldn’t know that that fan could be wired up poorly, loose box in the wall, not grounded, etc.
How about a customer with no eye for detail that just had new windows installed? Oh, they look great, right?! No. Take a closer look and see how the contractors didn’t caulk all the way around the window. Notice even further if you happen to take the trim back off that they didn’t bother to insulate around the window frame with expanding foam or something. But those guys got a great rating!
I’ve learned the hard way that it is EXTREMELY difficult to find contractors who actually do quality work.
Nicole,
No argument that finding contractors is TOUGH — there’s no silver bullet (I’ve used thousands of them at this point, and it doesn’t get much easier). While Angie’s List isn’t my first choice (it’s my 6th, actually :), if you have no network of contractors or investors for references, it’s the best online starting point I’ve found…so far…
Mr scott. I have a quick question, why do you flip houses.
Hey Kareem,
I do it for two reasons: 1.I like the income and 2. I like the challenges…
Kareem,
I also like the freedom it affords me…
and he has no boss. he has no set schedule. he creates the rules. so many positives, and yes, there are always negatives. the biggest one is “contractors”!!!
George – You hit the nail on the head…which is more than most of my contractors can do… 🙂
Lol. Good answer mr. Scott I just was curious.
I’d say extremely high taxes run a close race with contractors as the biggest negative!
j, i want to hear stories about contractors. i want to know that “we” are not the only ones that have trouble with contractors not showing up, doing crappy job, not meeting expectations. what do you do if the trim or the xxxxx is not right? do you make them redo it? what do you do when they say “i need a check on friday to pay my guys”?
George,
I set expectations up-front on the quality of work I expect, and I always verify that they have the ability to deliver that quality (I will check other projects they’ve worked on or talk to others they’ve worked for). So, quality is rarely an issue.
As for asking for a check, I’m always happy to pay for work completed. If a contractor asks for a check on Friday, and he’s 60% through the job, I’m happy to pay up to 60% of the total price of the job. I assume the contractor isn’t paying his guys for work they haven’t completed, so there’s no reason for me to pay them for work they haven’t completed.
Great ideas! Just curious if you have some favorite flooring and wood/plumbing/electrical and lighting supply houses around the Baltimore City or county area? Would be really appreciated to start implementing your idea!
J Scott: Just finished your book on flipping. Excellent…and discouraging when you embrace some of the realities. Especially when it comes to dealing with contractors. I’ve just gone a round with a new contractor. Licensed (I verified), presented himself well, agreed to SOW, etc. Then from day one the typical little things start happening: Doesn’t appear when he said he would. Doesn’t call. Doesn’t return phone calls. Just shows up whenever. Ordered the wrong sized trim (I know, I should order my own materials). Doesn’t have the right saw for trim (but took the job). Buys one, small part not working right. Excuses, delays. I fired him when he said he didn’t call back because he didn’t have my phone number!?! J, I’m beginning to question the health of our culture. I worked in IT for years as a consultant. If I treated my clients the way I’ve been treated by contractors, I would have been fired instantly. What gives? Why are there so many bad contractors?
Ted – You’ve figured out what a lot of people who want to jump into this business quickly figure out…contractors are the hardest part of this business. Unfortunately, the contracting field is very low-barrier-to-entry (with the exception of skilled and artisan labor), so it attracts a lot of people who lack the skills you’d like to see in a typical contractor. It definitely gets easier the more you do it, but I’m not going to lie, contractors are the biggest challenge in real estate investing.
J, What are your thoughts on using sites like Home advisor?
Hey Isaac,
I’m not against it, though consider that most of the contractors you’re likely to find (just like Angie’s List) are going to be more accustomed to working with retail customers. Make sure you clearly define your goals to the contractor and ensure they understand how you work as an investor.
Finding contractors is such a bloody nightmare at times!!
I have used rhe same plumber on 5 houses. The last house I had my huband go in and replace all rhe supply valves prior to the plumber replacing shower valves and the usual…because he was a little too leisurely on the prior house ( just to show him I have other options). He works for $85 hour and is pretty fast and pretty fair and pretty good…and not dumb. I hate getting bids…being a female I get talked down to when I do…and lied to. My plumber knows I am not dumb. Added bonus, he just rehabbed a house his wife inherited and now he knows first hand, I earn my profit.
J,
I really like your suggestion about hunting around job sites for contractors. That’s one that I will begin using. A source that I have had some great luck with is getting referrals from reliable contractors that I have used in the past. It seems like the good ones run together and they are very unlikely to recommend someone that does questionable work or has quality below their own standards.
Great article! I’m a Philadelphia Real Estate Agent and I constantly refer contractors to home owners in need and it can be a challenge. Out of ten contractors I meet for estimates, only 2 follow through. Virtually all get excited to get the initial call, most show up to the house and seem excited and thankful for the opportunity; but only 1-2 actually ever get to the point of submitting an estimate. Very frustrating, especially for those with house problems! This list helps!
I’ve definitely found that going for quality contractors from the start is a much more profitable business decision. Everyone tries to cut corners with “Craigslist” contractors and the project tends to drag on and nickel and dime you into a loss. You may pay more for a real professional up front, but really, you’ll probably save.
Great tip on the builder supply houses and how to get around the no referral policies!
What’s amazing Matthew Rockett, is that we all seem to have to learn the ‘craigslist shortcut’ is a bad idea, despite every experienced guy on the planet telling you different. LOL. I’m sure you run into a decent craigslist guy from time to time, but I have had no luck at all. My sample size isn’t that large yet, but i’m batting 0%.
This is a little old at this point I know but curious if you guys have found that the reviews the local review sites to be contrary to what the contractor is actually like? I say that because in our age it is actually quite easy to acquire a fake review. In some cases there are ‘verified’ reviews which would give more weight to that contractor because they are verified to have purchased or used the service but not sure how the different review sites execute that. In any case, as indicated by others Craigslist has a bad rep (and deservedly so in many cases) for being a good place to find shady contractors. Networking seems to be the way to go but for new guys that can be difficult. It almost feels like you just have to get lucky in some cases. Just do everything you can on the front side to vet your contractors and you will be less likely to get taken advantage of.
J, I am considering flipping houses in Montgomery County and wanted to know the extent to which you worked in Maryland and what you thought about the market here? Any advice for a new participant?
Hey Karl,
I do deals in Maryland, but mostly stick with Baltimore County and Howard County. Montgomery is great, but you’re going to find that houses tend to be expensive and you’ll have a good bit of competition. Parts of PG country are great, and I’m hoping to do more down there in the near future (I live in Howard County). I hear DC is good, though I don’t know that market at all.
Overall, this area is good for real estate, though there are a LOT of investors, so you need to stand out over the competition.
Great post.. Thanks for sharing.. I also recommend builder supply houses for finding contractors. Because they have the products. They know what is best. also they know who buys the best. This chain helps to find out the best in the business.
I follow your posts ardently. This is another well written and informative post on contractor hiring tips. Thanks for sharing. Expecting more such posts.
Thank you for sharing! This may come in handy in the future. Keep on writing such informative posts.