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Investing Strategies

Contractors: How to Not Get Screwed by Them

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(Note: Want the best system for fixing and flipping houses in the world? Get our 17-Step Systemized Renovation Process, guaranteed To make rehabbing houses fast, fun, & easy.)

screwHave you ever been surprised to find yourself ensnared in a maddening wrestling match with “the contractor from Hell”?  If so, when did you first realize that the situation had spiraled woefully out of control?

Was it the time he stood you up for an important meeting, failing to keep yet another appointment with you?

Was it the time he called you at midnight to seek advance payment for the following day’s work, mentioning something about “labor costs” and “fuel expenses”?

Or was it, perhaps, the time he forgot to set his alarm while napping in his truck, shocking your sensibilities (and offending every respectable bone in your body) upon your first unannounced visit to the property?

Tragically, such frustrating scenarios are far too common in the world of home renovations and rehabbing.  And although many contractors are happy to provide an honest day’s work in exchange for reasonable subsequent payments, it can sometimes seem as though there are ten bad apples for every good apple on the contracting tree.

Fortunately, real estate investors are not powerless in their efforts to procure the best possible assistance for their home renovation projects.  In fact, a savvy investor learns how to proactively identify important red flags very early in the planning process – sometimes within thirty seconds of first meeting a troublesome contractor – thereby saving his business from a ton of unnecessary hassles and haggling in the future. 

megaphoneThe best defense is a good offense.

As the hiring manager for a home renovation project, it is not only acceptable but also necessary for the real estate investor to be bluntly upfront with contractors regarding (i) exactly what he is trying to accomplish as a businessman and (ii) exactly what type of employee he wishes to partner with in pursuit of his personal financial goals.

This thoughtful and assertive dialogue functions as a helpful shield against most “bad apple” contractors, defending the integrity of your real estate business by filtering out prospective employees whose interests might not align with your own. 

And although we may each have a few personal idiosyncrasies, the best real estate investors always communicate the same basic set of goals and priorities in their dealings with contractors.

You can control your relationship with contractors from Day 1!

chalkboardLet's continue our series of lessons with "red-headed rehabber" Bob McIntosh.  Bob is a full time rehabber who proudly runs a thriving and highly-profitable rehabbing business in multiple markets.  He knows a thing or two about dealing with contractors, and today this “red-headed rehabber” has agreed to share his wealth of highly practical knowledge with Real Estate Mogul.

Our previous conversation with Bob focused on New Market Rehabbing: What's Changed, What's Not and How We Crush It, and there will certainly be more to come as this series of lessons continues to evolve.

Today's tactical advice is for any real estate investor who wishes to (i) maximize his effective collaborations with like-minded renovation partners while (ii) minimizing any additional exposure to “the contractor from Hell”.

Specifically, you'll learn:

  • The difference between an owner and an investor – and why it matters
  • Your role as a hiring manager for renovation contractors
  • The most important ingredients for partnering with a contractor
  • How to select and manage a contractor
  • How to fire a bad contractor
  • And more!

So tune in to Bob's video as he shares from the richness of his very successful "Red Headed" rehabbing business.

Bob McIntosh explains how to take control of contractors…

{Mogul Elite: Download a transcript and MP3 of this video in the Power Pack tools for this lesson.}


Do It To It! Immediate Action Steps
  • Memorize – Memorize a 30- to 60-second “elevator speech” that you can give to every contractor who might potentially work for you, including (i) who you are, (ii) how you work and (iii) the contractor’s ability to enjoy long-term success from playing by your rules.
  • Create – Create a “scope of work” template (or find one online) to standardize and simplify your renovation strategies, thereby helping you and your contractor(s) stay on the same page.
  • Memorize – Memorize a 30- 60-second “firing speech” that you can give to every contractor who fails to meet your needs, including (i) the reasons you are letting him go, (ii) your unrelenting prioritization of your own business needs.

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