Two weeks ago I called six different contractors to come take a look at a small repair job on my personal house.
Every single one went to an answering machine or voicemail. Okay, understandable.They are busy working. I’ll leave a message.
In total, four of them called me back, and I scheduled four different appointments with each of them to get me an estimate. Of the four appointments, two of them never showed up.
Of the two remaining, one said he didn’t know how to do the job. The other said he would call me back with an estimate in 24 hours. It’s been a week — and now his phone is disconnected.
And I still need the repair job done.
For anyone who’s ever tried to hire a contractor or handyman for their home or business, this story probably sounds a bit familiar. It’s difficult! Of the 100+ guests we’ve had on the BiggerPockets Podcast, I would rate “finding a contractor” as the number one difficulty mentioned by investors.
Why is it so tough?
Well, there are two primary reasons I see:
- Contractors are not generally not good business owners. This problem is part of the “E-myth” mentality — that just because someone can bake doesn’t mean they can run a bakery. Just because someone can swing a hammer doesn’t mean they can answer phone calls or show up on time!
- Real estate investors are always looking for a good deal now, which means we don’t typically call the “big guys” (those who ARE good at running their business) because we know they’ll be too expensive, will be too big for small maintenance jobs, and will be booked out three months.
So what should an investor do? How can we add a contractor to our “team?”
Let me give you a few pointers on how you can hire a good contractor or handyman.
How to Find an Incredible Contractor or Handyman
1.) Be Proactive, Not Reactive
Have you ever heard the old phrase “the the best time to look for a job is when you don’t need one?”
The same principle applies to contractors. If you are “reactive” in your search for a contractor, only waiting until something happens and you need to “react,” you are setting yourself up for problems to begin with. Instead, be proactive. Finding good contractors is a lifestyle, not a one-time event. Have a continually evolving list of people you could call for various problems, and continue to add people to the list even when you don’t need someone at the moment.
I ask nearly every person I meet in public if they have a good contractor because I know that the success of my business hinges upon the people I hire to take care of problems. The same will likely be true for your business, so be proactive and start looking for great contractors today.
2.) Understand Price vs. Cost
When you buy something, are you buying based on price or cost?
Confused? I was too, but several days ago I read something from the late Zig Ziglar in which he discusses the difference between price and cost, and suddenly I realized a huge error I’ve been making in my investing business for the past decade. I’ve been hiring contractors based on price, not cost! Let me explain.
Price is the monetary amount paid when you purchase something, but cost is the long term monetary amount paid over the life of a product or service. For example, the price of dishwasher A might be $400, and the price of dishwasher B might be $500 — but if dishwasher A costs an extra $20 per month in energy to run, it would have been smarter to buy dishwasher B!
You see, buying for cost rather than price is a subtle difference, but it can have a tremendous effect on your business. This principle also applies to hiring a contractor. Are you hiring on price or cost? If you are like me, price is probably the largest concern. But if you hire someone because their price is cheap, you might be setting yourself up for a lifetime of high cost on that repair.
So when hiring a contractor, don’t necessarily choose the cheapest option. You might think you are getting a great deal, but in the long run you’ll end up spending MUCH more. For two years of my investing business, I hired a local handyman to do most of my work because he was the lowest price. It’s been two years since he stopped working for us, and not a week goes by that I don’t find something that was done wrong that I now have to pay to fix. If only I had hired based on cost instead of price!
As Mike F, an investor from Colorado, recently stated in the BiggerPockets Forums, “We learned long ago, the old adage for construction has always ringed true: Pick any two: Price, Quality, Service. You can’t have all three.”
3.) Ask for Referrals
This is an obvious one, but so important I can’t skip it! One of the best ways to find good contractors is by simply asking others who they have used for similar work!
When people ask me who my best contractors are, I have no problem telling them because I know it will help out my contractor AND look good on me. I want my contractor to love working for me and to always put me at the top of his list, and giving him more work via referrals is a great way to do that.
So don’t be shy in asking other investors who they use!
You can always ask other real estate investors, but also ask family, friends, and agent Jon Deavers points out, “Good Realtors work by referral to generate their own business, and part of that is by making good referrals to other professionals. You can bet if you have an experienced Realtor, he/she is going to refer someone that has completed work and made their previous clients happy.”
4.) Check References
Always check references.
This is especially true when dealing with contractors. Despite what you might think, even references supplied by the contractor will generally be honest with you, and you’ll learn a lot. Ask to see examples of the kind of work you plan on getting done.
Megan C., an investor from Decatur, Texas recently told me she always asks for three referrals from the most recent jobs they’ve completed — and then calls those references to ask “if they showed up on time or when they said they would, did they complete the work, did they try to change the $$ amount mid-work or after it was done, and would you use them again.”
5.) The 6:00 a.m. Home Depot Trick
One of the most clever ideas I’ve ever heard for finding contractors came from house flipper J Scott (author of the best house flipping book ever written, called The Book on Flipping Houses) on the 10th episode of the BiggerPockets Podcast.
J’s suggestion: Go to Home Depot at 6:00 a.m. and meet the contractors what are there. These are the contractors who get up early and get their supplies before heading over to the job site. This is a strong indication that they know what they are doing and are not going to take advantage of you.
Although this is no silver bullet, it can weed out the ambitious contractors from those who sleep till noon to fight off the hangover from last night’s party.
6.) Ask Store Employees
Darren Sager, a real estate investor from New Jersey, suggests visiting supply stores (for example, a plumbing supply store if you need plumbing or a lumber yard if you need something built) and ask the employees who work there who they would have work on their houses. These employees have a unique insight into the quality of materials that the contractors use, as well as the experience level and management style of those who buy from them.
7.) Place Craigslist Ads
Have you checked Craigslist for contractor ads? Or even better, have you placed an ad yourself? One of the best handymen I have came after we placed a free ad on Craigslist asking for local handymen who can do occasional tasks for our real estate investment company. We received several responses, hired each to do a small task, and quickly found a great guy who we use often for small tasks.
8.) Make Them Compete
Sometimes the best answer is not finding one contractor, but several who can compete for your business, says Royce Jarrendt, a home builder from Virginia. Jarrendt says, “the best solution to finding a good contractor is find three good contractors. It’s way too easy to get cozy with what you think is a good situation with a contractor. Competition is what drives price and quality. All of my contractors know that I know other contractors and because I am honest, respectful and fair, they are willing to give me their best… price, quality, attention.”
I know some investors call three to five contractors to do a bid and tell them all the same time, both to minimize the hassle of meeting multiple contractors and encouraging lean bids.
9.) Who Do They Like to Follow?
Another suggestion that came from the BiggerPockets Podcast was to ask good subcontractors who they like to follow. In other words, what drywall person does the painter like to follow after? What framer does the plumber like to follow after?
If you ask for referrals from other subcontractors, you can gain valuable insight from those who have to work where the last guy left off!
10.) Be Clear On Your Expectations
With all this talk about finding a good contractor, there is also something to say about your responsibility in the relationship. Oftentimes a “bad” contractor only appears bad because they did not have clear enough expectations given to them at the start of a job. Martin Scherer, in investor from Santa Rosa, California, says to give them clear detailed instructions of your needs. “Contractors are not mind readers. If you give contractors a clear list of expectations you will find your task much easier.”
Wrapping it Up: Finding Contractors
A great contractor or handyman can make your real estate investing life smooth sailing, but a difficult contractor can make you wish you never bought a piece of real estate (and keep you from buying any more).
Sure, finding good, reliable contractors can be difficult, but if there is only one thing you remember after reading this post: finding contractors is a verb! In other words, it’s something that you physically have to do in your business, and something that never really ends. You cannot sit by and wait for the ideal contractor to walk into your life.
You must get out there and find them.
Article Credit: https://www.biggerpockets.com/renewsblog/2015/03/14/how-to-find-a-contractor/