Finding Qualified Contractors

Investor networks and REIAs: Other investors are the best source of contractor referrals. Ask who they use, why they use them, and what they have experienced.

Local lumberyard and supply house relationships: Sales reps at building supply companies work with contractors daily and often have informed opinions on who does quality work.

Pull permits at your county building department: Search for contractors who have pulled permits in your target area. Contractors who routinely pull permits operate above board and tend to be professionals.

Multiple bids: Always get at least three competitive bids for any significant scope of work. This provides market pricing data and helps you assess each contractor's professionalism and attention to the scope.

Vetting Contractors

Before hiring any contractor for an investment project:

Verify license status: Check your state contractor licensing board online. Confirm the license is current and in good standing.

Verify insurance: Request certificates of general liability insurance and workers' compensation. Confirm they are current and adequate.

Check references: Call prior clients. Ask specifically about timeline adherence, cost control, communication, and quality.

Review prior work: Visit a recently completed project if possible.

Managing the Renovation

• Never pay large upfront deposits: The industry standard is no more than 10%–15% upfront. Tie payments to completed milestones.

• Put everything in writing: A detailed written contract specifying scope, materials, timeline, payment schedule, and change order procedures is non-negotiable.

• Visit the site regularly: Daily or every-other-day site visits keep the project moving, catch problems early, and signal to your contractor that you are engaged.

• Document everything: Photograph the property before, during, and after renovation. This protects you legally and financially.

• Manage change orders strictly: Scope creep is one of the primary causes of budget overruns. Any change from the original scope must be documented with a written change order and approved before work begins.