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How To Find Reputable Contractors (By Avoiding The Shady Ones)

Greetings, real estate investors! We’re back with an even more comprehensive guide to help you dodge the pitfalls of bad contractors. 

real estate investor frustrated looking at bill from bad home contractor

As we all know, a lousy contractor can be more than a headache; they can be a devastating blow to your investment. Today, we're going to delve deeper into this subject, armed with a dose of personal anecdotes and hard-earned wisdom.

So, ready to learn how to deal with bad contractors? Let's get started!


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1. "The Hard Sell: Not Falling for Fast Talk and Pressure Tactics"

One of the first red flags to look out for is the hard sell. We've seen this tactic employed everywhere, from shady used car lots to timeshare presentations.

A while back, I was hunting for a contractor for a major home renovation. I met one guy who appeared professional and promised to transform my property. However, he insisted that his "special price" was a one-time deal that would disappear if I didn't commit immediately.

Instinct told me that a project of this magnitude needed more consideration than an impulse buy at a boxing day sale. I declined his offer, and later on, I discovered from a colleague that the same contractor had a reputation for delivering subpar work and inflating prices with hidden costs.

Takeaway: A legitimate contractor will understand and respect the fact that you need time to think about their proposal, get other estimates, and check references. If they're pushing you into a snap decision, that's a warning bell you shouldn't ignore.


2. "Ghosting: The Disappearing Contractor Act"

real estate investor at desk looking at phone and frustrated by poor contractor communication

Ghosting is a term we usually associate with the murky world of dating, but it's a phenomenon that can also plague your relationship with a contractor. I've experienced this firsthand with a contractor who would often cancel meetings at the last minute, was frequently late, and took days to respond to messages. I made excuses for him, assuming he was just overwhelmed with work.

When the project started, the communication didn't improve. It led to misunderstandings, costly delays, and a lot of unnecessary stress. That ordeal taught me the value of consistent, clear communication from the get-go.

Takeaway: If a contractor can't maintain open lines of communication before you've even signed the contract, it's a sign that your project might not be a priority for them. An excellent contractor will be punctual, responsive, and proactive about keeping you in the loop.


3. "Lowball Offers: Beware of the Too-Good-to-Be-True Pitch"

In the quest for a good deal, it's easy to fall for the allure of a lowball offer. I recall a contractor who quoted a surprisingly low price for a comprehensive kitchen remodel. It was tempting, especially compared to the other bids I'd received. However, when I asked for a detailed cost breakdown, he couldn't provide one.

I decided to pass, and it turned out to be the right decision. I later heard from a neighbor who'd hired him that the final cost of their project had ballooned to twice the original estimate due to a litany of "unexpected" expenses.

Takeaway: When a bid is significantly lower than the competition, it's often a sign of potential trouble down the road. Make sure to get a ballpark of the estimate yourself using a an online estimator, and be skeptical of any quotes that seem too good to be true.


4. "No References? No Deal!"

Rushing to find a contractor can lead to overlooking important checks, like asking for references. I learned this lesson the hard way when I was in desperate need of a roof repair.

The contractor I found seemed knowledgeable and experienced but couldn't provide any recent references. I was in a hurry, so I decided to roll the dice and hire him anyway. It was a gamble that didn't pay off. His repair job didn't hold, and I ended up having to hire another contractor to fix the damage.

Takeaway: Just like any job interview, references are crucial. They provide an insight into the contractor's work ethics, reliability, and quality of work. Insist on seeing references from recent clients, and make sure to contact them. If a contractor can't or won't provide these references, consider it a red flag.


5. "Licenses and Insurance: Your Shield Against Potential Pitfalls"

Insurance agent blocking wooden blocks from falling on home

In the realm of construction and home improvements, licenses and insurance are non-negotiables. I learned this lesson from a friend's unfortunate experience. He hired an uninsured contractor for a renovation job. When the contractor was injured on site, my friend found himself financially liable for the medical expenses. It was a hard lesson about the importance of proper documentation.

Takeaway: Never compromise on the essentials. Make sure your contractor has the necessary licenses and insurance. If something goes wrong during the project, this could be the difference between a simple solution and a costly legal dispute. Always ask for proof of licensing and insurance before signing a contract.


6. "Vague Contracts: Navigating the Fine Print"

real estate investor scrutinizing fine print in contract

The importance of a detailed contract cannot be overstated. It's your blueprint for what to expect from the renovation and your legal protection if things go awry. I once hired a contractor for a basement renovation. His contract was vague, with many details left to "discretion." As the project progressed, I found this lack of clarity led to misunderstandings and disagreements about the work's scope and quality.

Takeaway: Your contract should be as detailed as possible, outlining the scope of work, materials, costs, timelines, and what happens if these parameters change. If a contractor resists providing a detailed contract, it's a strong signal to reconsider your options.


The Biggest Takeaway:

Real estate investment can feel like a battlefield, especially when it comes to navigating the world of contractors. I've been there, I've made mistakes, but I've also learned invaluable lessons. The key is to stay vigilant, do your due diligence, and never be afraid to ask questions or walk away if something doesn't feel right.