Hiring a contractor to work on your house flip renovation project can be stressful. You want to build a long-term, trusting relationship to streamline your projects, so ensuring you align on communication, workmanship, and goal-setting (among other things) is paramount.
Lacking that alignment is a major reason why flips fail. But how do you find that out as quickly and efficiently as possible? In this business, you don’t have time to court potential contractors for months.
Just like it’s important to have a renovations checklist on hand, having a standard list of questions to ask potential contractors for fix-and-flips will save you from future headaches and unpleasant surprises. And while there are specific considerations for each city, state, and region, you can use the list below as a starting point to build one tailored to your needs.
Red Flags When Hiring a Contractor
As you make your way through the list of questions, be on the lookout for these red flags:
- They aren’t licensed for the trade(s) you’re hiring them for.
- They promise a date and time to meet you for a walk-through and won’t follow up with you.
- They won’t give a firm timeline of when they’ll give you an estimate.
- They don’t communicate in a timely manner.
- They won’t commit to when they will finish the project or the budget it will take to finish it.
Questions to Ask When Hiring a Contractor
1. Are you licensed, bonded, and insured in this state?
An important follow-up is: “If so, what trades are you licensed for?” Find out if they are a general contractor or a subcontractor. If they’re a subcontractor, find out their trade. This is important because their liability insurance typically only covers them for the things they’re licensed for.
If they are working outside the bounds of their license, that leaves you with additional liability. Double-check this information on your relevant state websites (for example, in Arizona you would check with the Arizona Registrar of Contractors).
2. What kind of liability insurance do you have?
This is important to know in case there’s an onsite accident. Some of the liability could fall on you.
3. Do you offer a warranty?
If the answer is yes, follow up by asking when the warranty expires and if it is transferable. It could be that you have a lifetime warranty, but that it is voided as soon as you sell it to your end buyer.
4. Can you provide the names and contact information of two to three of your past clients?
Make sure you actually contact these past clients and ask them about the contractor’s quality of work, timeliness, and communication skills. And, while not necessary, you may also want to ask the contractor to provide the name and contact information of a client they had some challenges with.
5. What’s your experience doing projects that are similar to ours?
For obvious reasons, you’ll want to know if the contractor has worked on similar renovation projects. While the work doesn’t have to be exactly the same, this is another chance for you to learn more about the contractor’s work history.
6. Can I see some pictures of your biggest projects?
While technically this could be a follow-up question to #5, if the contractor doesn’t have experience with projects like the one you’re doing, photos of their biggest projects to date can at least let you see the quality of their work.
7. What permits do you think would be required for the project?
After a walkthrough, a good contractor should be able to at least provide an estimate of what permits would be required for the renovation, if any.
8. What work would you and your team be doing directly, and what would you subcontract out?
Many general contractors will likely want to manage all parts of the project directly. If you have a strong relationship with a trade subcontractor or plan on managing any part of the project yourself, establish this upfront. Also, if the GC plans to do a lot of work themselves, confirm they have both the manpower, expertise, and quality of work to be successful on the project.
9. What’s your relationship with your subcontractors?
Depending on the business relationship, you could benefit from volume discounts.
10. Do you have relationships with architects and engineers?
While this is not a make-or-break aspect, it’s nice to have these established relationships if you end up needing to have plans drawn up. Additionally, you could again benefit from volume discounts and/or more responsive service.
11. When can I expect to see your written estimate?
It’s understandable if the contractor provides you with an initial back-of-the-envelope estimate, because in the business of renovating and flipping, you’re trying to get as much done as quickly as possible. The deal-breaker here is if the contractor doesn’t stick to the promised delivery date.
That’s probably how they are going to treat you the entire project. Unless you want to hunt someone down constantly, you’ll have to decide if that person is worth the headache or if the project would benefit from hiring someone else.
12. How firm is your estimate?
Make sure your contractor has factored in a safety margin to deal with any surprises that may arise during the renovation. Just like with estimating what permits may be required, a good contractor should be able to not only get you a fairly accurate estimate after a walkthrough, but they should also know what safety margin they’ll need, as well as have contingency plans for issues that may take your project beyond those overages.
13. Are there particular material costs that you use?
This will help you better understand the estimate. You will want to know if the contractor is able to get discounts for certain materials and what those discounts might be. You will also want to cross-check each bidding contractor’s material cost ranges.