You know the saying—it takes a village? Well, nowhere is this advice more apt than in the real estate investment market.
Flipping a house is a complicated endeavor with lots of moving parts and potential pitfalls. It pays to get all of your ducks in a row before the first hammer is lifted. And that means lining up experienced, well-vetted professionals to help get the job done.
No job is more important in a real estate renovation than the general contractor. A good GC can be worth his or her weight in gold. When it comes to managing the subcontracting process and keeping the project on schedule, the GC can be an invaluable asset to the team, adding dollars to the bottom line.
But how to find a top-notch general contractor? We have some advice:
Tap Into Your Network
Just like everything else in this world, it’s often not WHAT you know but WHO you know that makes the difference. So start asking around. Your friends and family may have some personal experience with home improvement contractors that could prove helpful. Check with your business associates as well including your realtor or broker and, of course, your lender. These folks have been around the proverbial block a few times and know what it takes to successfully flip a house. Here at NavCap, we have worked with many reputable GCs and subcontractors and are happy to make referrals to our investors.
Visit Your Home Improvement Store
It may feel a bit like stalking but visiting your neighborhood Lowes and Home Depot in the early morning can be a winning strategy. Busy contractors loading up for the day are a good resource—they may be looking for their next project or know someone who is. It certainly doesn’t hurt to ask.
Use Your REIA To Your Advantage
Your local Real Estate Investment Association or REIA is a great place to get both advice from and referrals for home flipping professionals. Fellow flippers with direct experience in the industry can offer solid recommendations because they’ve been there, done that. Don’t know how to find a REIA in your area? Visit the National Real Estate Investment Association's website to locate a club in your state.
Ask For References
Once you’ve found a good contractor (or contractors, hopefully), ask for information about their past projects, either completed or, better yet, still in progress. Reach out to the homeowners to gauge their satisfaction level and, if possible, stop by to assess the level of workmanship. We suggest getting multiple references to get a good sense of the type and quality of work completed.
Compare Apples to Apples
When it comes to home renovation, there is no shortage of choices involving materials and supplies. Make it easy to compare multiple bids by specifying the Scope of Work up front. Download our free SOW template to itemize all repairs all in one place. That way contractors know exactly what is expected, and you know exactly what it will cost.
Work Out Financing
Most rehab lenders, including NavCap, use draws to distribute funding for a project over time. As a practical matter, draws done in arrears allow the lender to reimburse the investor for the cost of work as it is completed rather than fronting the cost of renovations or construction. Your contractor should be amenable to this arrangement as it helps keep the project moving forward and on budget. It’s a good thing to discuss right up front.
Finding and hiring a good general contractor for your next rehab project is a critical piece of the fix and flip puzzle. Put simply, it can mean the difference between success and failure. Feel free to reach out to us here at NavCap to discuss your next project or find out more about our flexible lending program. We are here to help.