When you're working on an investment property you'll want to do everything you can to make sure things go as they should -and- within your budget. When investors run into problems it is usually because they don’t understand what a project entails and they are not as prepared as they should be. Here are some steps you can follow to avoid these issues right off the bat.
• Get References – Aside from getting references from contractors (which you should always do) network with others on your investment team for personal references.
Not only are you better off getting more reliable contractors, there are a lot times you can get a discount as a “referral”. When you get references, check to see that the quality of work matches what you want done.
• Get Several Bids – Bids for a project can differ dramatically from one contractor to another. Though higher bids help for negotiating purchase price, we all know paying more for work does not necessarily mean its higher quality work.
Along with checking references, make sure they are specific with how they came up with their numbers and what they will do to complete the project. If the numbers don't add up, that would be a big red flag.
• Maintain Clear Communication– Make sure you communicate what you want done and make sure they have the same understanding. If you have a difficult time with a prospective contractor in the beginning; you should look elsewhere for help.
Additionally, while the work is being completed, it is important to meet regularly to follow up on progress, payments, and to tackle any issues before they arise.
• Get License Information – Make sure they are registered, licensed and bonded with the state and provide you with copies of such. You can also check with the state Bureau of Consumer Protection or Consumer Affairs to see if any complaints, lawsuits, or judgments have been filed against them.
• Get Everything in Writing– Even if you hit it off with someone and they seem like a person you can trust, don’t depend on a verbal agreement. Unfortunately, what one person sees as “moral and ethical” may be very different to someone else and contracts with a “handshake” don’t mean what they used to. For more extensive projects it is also good to have an attorney look over anything you plan to sign to make sure your rights and assets are protected.
• Use Payment Phases –Some may require you put down 10% or 20% depending on the amount of work involved, however, any more than this can mean work may get delayed or not done at all. You can avoid this by arranging payment phases and including them in the agreement terms.
Following these steps you will help you avoid a lot of the nightmares you hear and read about, especially when rehabbing properties. Another good way to avoid some of these issues in the first place is to use strategies that don't require extensive work like flipping houses and other quick cash investment strategies. Hopefully these guidelines will give you some added protection to help this aspect of your business, as needed, to run more smoothly!
• Get References – Aside from getting references from contractors (which you should always do) network with others on your investment team for personal references.
Not only are you better off getting more reliable contractors, there are a lot times you can get a discount as a “referral”. When you get references, check to see that the quality of work matches what you want done.
• Get Several Bids – Bids for a project can differ dramatically from one contractor to another. Though higher bids help for negotiating purchase price, we all know paying more for work does not necessarily mean its higher quality work.
Along with checking references, make sure they are specific with how they came up with their numbers and what they will do to complete the project. If the numbers don't add up, that would be a big red flag.
• Maintain Clear Communication– Make sure you communicate what you want done and make sure they have the same understanding. If you have a difficult time with a prospective contractor in the beginning; you should look elsewhere for help.
Additionally, while the work is being completed, it is important to meet regularly to follow up on progress, payments, and to tackle any issues before they arise.
• Get License Information – Make sure they are registered, licensed and bonded with the state and provide you with copies of such. You can also check with the state Bureau of Consumer Protection or Consumer Affairs to see if any complaints, lawsuits, or judgments have been filed against them.
• Get Everything in Writing– Even if you hit it off with someone and they seem like a person you can trust, don’t depend on a verbal agreement. Unfortunately, what one person sees as “moral and ethical” may be very different to someone else and contracts with a “handshake” don’t mean what they used to. For more extensive projects it is also good to have an attorney look over anything you plan to sign to make sure your rights and assets are protected.
• Use Payment Phases –Some may require you put down 10% or 20% depending on the amount of work involved, however, any more than this can mean work may get delayed or not done at all. You can avoid this by arranging payment phases and including them in the agreement terms.
Following these steps you will help you avoid a lot of the nightmares you hear and read about, especially when rehabbing properties. Another good way to avoid some of these issues in the first place is to use strategies that don't require extensive work like flipping houses and other quick cash investment strategies. Hopefully these guidelines will give you some added protection to help this aspect of your business, as needed, to run more smoothly!
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