To be blunt, most contractors are terrible. As a landlord, I deal with it all the time.
They don’t answer their phone. They don’t show up when they said they would. They don’t do what they said they are going to do.
But there ARE gems to be found in the rubble. The problem is most people have no idea how to identify that great contractor from all the bad ones out there—until long AFTER they’ve already hired one.
I want to share with you my seven-step process to identify a great contractor before hiring them. Whether you’re remodeling your own home, a rental property, flipping houses, or need a contractor for something else, here’s how to land a great one.
How to Find a Great Contractor
Build your contractor list
What I mean by this is you need to get the names and phone numbers of a lot of different contractors in your area. I mean, if we’re searching for a needle in a haystack, we have to first get a haystack.
You can find potential contractors in a number of ways, but my three favorite are:
- Referrals, meaning ask people you know who they have used
- Referrals, so yeah, asking people you know who they have used
- You guessed it! Referrals.
Human nature is to generally do what you’ve always done. It doesn’t guarantee success, but when you know a contractor has done great work in the past, it’s likely they’ll do it again.
So get in the habit of asking your friends and family often—even when you’re not looking for a contractor. “Who did this work for you?” Then, keep track of those referrals.
There are a few other ways to find contractors, as well. I like to talk to other contractors and ask who they like working with.
Rockstars tend to party with other rockstars, and good tradesmen tend to work with other good tradesmen.
For example, I have a great finish carpenter, so I can ask him, “Hey, do you know any great plumbers?”
You can also build your list by snapping a photo every time you see a contractor sign on the side of a work truck, or by searching Yelp, or by asking the employees in the pro department of your local home store who they like.
Pre-screening on the phone and in person
Just as with tenants, our opinion of the contractor begins the moment we start talking with them, whether over email, phone, or in person.
Do they carry themselves professionally? Do they respond well to questions?
Ask them some general questions, such as:
- How long have you been in this line of work?
- What skill would you say you are the best at?
- What job tasks do you hate doing?
- In what cities do you typically work?
- How many employees work for you? (Or “work in your company” if you are not talking to the boss.)
- How busy are you?
- Do you pull permits, or would I need to?
- If I were to hire you, when could you start knocking out tasks?
Then, set up a time to meet and show them the project, if you have one. Set an appointment and be sure to show up a few minutes early, just to see exactly what time they arrive.
Are they on time? Late? Early? Do they look professional? How do they act?
If everything feels OK after this first meeting, move on to the next step.
The first thing we do now when looking for information on a certain contractor is to simply search Google for their name and their company name. This can often unearth any big red flags about the person.
You’ll also want to add your city name and some other keywords to the search, such as “scam” or “rip off” or “court.”
For example, if we wanted to find out more about First Rate Construction Company in Metropolis, we would search things like:
- First Rate Construction Metropolis
- First Rate Construction scam
- First Rate Construction sue
- First Rate Construction court
- First Rate Construction evil
These terms can help you discover major complaints about a contractor. But keep in mind, not all complaints are valid. Some people are just crazy.
What this will do, however, is give you direction about what steps to take next.
Ask for references
Next, ask the contractor for references from previous people for whom they have worked. Photos are nice, but names and addresses are better.
Then, do what 90 percent of the population will never do and actually call those references!
You may want to ask the reference several questions, like:
- What work did they do?
- How fast did they do it?
- Did they keep a clean job site?
- You are related to [contractor’s name], right? (If they are, they will think you were already privy to that information and will have no problem answering honestly!)
- Any problems working with them?
- Would you hire them again?
- Can I take a look at the finished product? (This could be in person or via pictures.)
These questions will help you understand more about the abilities and history of the contractor. Then, if possible, actually check out the work the contractor did and make sure it looks good.
Another tip recently given to us by J Scott was to ask the contractor to tell you about a recent big job they’ve done. Contractors love to brag about their big jobs, so he or she will likely regale you with the story of how much work they needed to do and how great it looked at the end.
Find out the address, and then go to the city and verify that a permit was pulled for that project. If not, the contractor did all the work without a permit, which is a good indication they are not a contractor you want on your team.
It’s okay to be trusting, but make sure the contractor is worthy of your trust first! To do this, first verify that they truly do have a license to do whatever work you intend for them to do.
If they are an electrician, make sure they have an electrical license. If they are a plumber, make sure they have a plumbing license. If they are a general contractor, make sure they have a general contractor’s license.
Next, make sure they do actually have the proper insurance and bond. As we mentioned earlier, you could ask them to bring proof, but you can also simply ask the name of their insurance agent and verify it with that agent. Either way, just make sure they have it.
Remember: this protects you.
Hire them for one small task
Before hiring the contractor to do a large project, hire them to do just one small task, preferably under $500 in cost. This will give you a good idea of what kind of work ethic they have and the quality of work that they do.
If the work is done on time and on budget, and if it meets your quality standards, consider hiring them for more tasks.
Even if the contractor has passed through the first several steps of this screening process, 75 percent of them will still likely fail at this step, so don’t settle with just one contractor. Hire multiple contractors for multiple small jobs and see who works out the best.
Manage them correctly
Ninety percent of the time, when I have a disastrous situation with a contractor, the blame lies on no one but myself. If I had managed the job correctly, I wouldn’t be caught in the positions I’ve been in.
Here’s an example. I hired a contractor to paint a bedroom. He says $500. I say, “Great.”
He calls me, tells me he’s done, and I send him the $500.
Now, I go check out the property and what do I see? He didn’t paint the ceiling, despite the obvious need for it. And there are a couple paint splatters on the floor that are easy to clean—but now I have to do it.
I call the contractor and he says, “Well, you didn’t say I needed to do the ceiling,” and “No, the floor was perfectly clean when I left. Someone else must have made the drips on the floor.”
Now, you might be saying, “But that’s ridiculous! It’s clearly his fault.”
But it’s my responsibility to manage him correctly. Therefore, when you work with a contractor, always get a detailed scope of work that clearly lays out 100 percent of what is going to be worked on, what’s included, and what isn’t.
Then, never pay anything until you’ve inspected the work. On larger jobs, be sure to spread out payments over the course of the job, so they don’t get too much money up front. You always want them hungry for the next paycheck.
To help with this, I put together a really simple “Contractor Bid Form” over in the BiggerPockets FilePlace—100% free—so you can fill this out every time you work with a contractor. Just go to BiggerPockets.com/bigform.
The Bottom Line
Whether you’re a real estate investor like myself or not, you’re going to need to deal with contractors in the future. By following this seven-step process, you’ll save yourself time, stress, and a lot of money.