Stay Safe With Contractors When Flipping Houses For Profit

Stay Safe With Contractors When Flipping Houses For Profit



Stay Safe With Contractors When Flipping Houses For Profit
Investors interested in​ refurbishing and reselling distressed properties often want inexpensive repair work, but it​ is​ important to​ avoid a​ contractor scam .​
Any contractor who offers significant discounts, makes large promises, asks for a​ lot of​ money up front, or​ wants to​ work without a​ contract should be avoided .​
If you wish to​ start flipping houses for profit, you will need to​ work with contractors in​ order to​ rescue distressed property so that they're ready for resale .​
However, some scam artists prey on new investors, especially, by posing as​ contractors .​
Since a​ scam contractor can cost you thousands and can severely reduce any profits you might expect from house flipping, you'll want to​ watch out for:
1) Contractors soliciting door-to-door .​
Very few professional contractors need to​ do this .​
While some legitimate contractors may use this marketing technique, you have no way of​ tracing the legitimacy of​ a​ contractor who solicits this way.
2) Special prices or​ discounts that seem suspiciously low .​
Be especially wary if​ you are told that you must sign up right away in​ order to​ get special pricing .​
Be extra suspicious if​ you're asked to​ give money up front in​ order to​ qualify for the special pricing .​
Professional contractors may occasionally offer a​ discount, but they do not do so with a​ hard sell and they cannot afford to​ offer hugely slashed prices while also offering quality work .​
If someone is​ offering to​ do the work for a​ fraction of​ its actual price, you need to​ wonder where the corners will be cut .​
You also need to​ consider that some contractors who are scam artists will slowly increase the price of​ the work as​ they go along .​
Therefore, that surprisingly low figure will end up being a​ much overcharged amount by the time the job is​ done.
3) Contractors who want to​ work with no contract .​
Some contractors will try to​ make it​ sound as​ though they work on just a​ handshake .​
You should never have any contract work done without a​ legal contract in​ place .​
a​ contract protects both you and the contractor, so any professional contractor will naturally want to​ have a​ contract in​ place .​
The contractor who does not have a​ contract in​ place knows that he or​ she can walk away at​ any time, since no official agreement was made .​
4) Large down payments .​
About a​ third of​ the total cost of​ materials is​ generally the maximum down payment required .​
Be very suspicious of​ anything that requires a​ larger down payment.
5) Long-term warranties and lifetime guarantees .​
Coming from a​ contractor who has not been in​ business very long, these may simply not mean much because there is​ no guarantee that the contractor will be in​ business for very much longer .​
Also, many of​ the very long-term warranties only apply to​ parts, rather than labor .​
Therefore, you or​ your future house owners will still be responsible for large share of​ the costs of​ any repairs .​
If you are flipping houses for profit, you'll want to​ make sure that any warranties can be transferred over to​ the new owners as​ well.
6) No business address .​
Look out for contractors who only have a​ PO address, a​ single private phone number, or​ no good way of​ getting in​ touch .​
These people can easily disappear overnight .​
Look for contractors with an​ established retail business or​ an​ address that has been around for at​ least a​ year or​ more .​
Make sure that you can track down the contractors if​ anything does go wrong .​
When flipping houses for profit, the last thing you want to​ have to​ deal with is​ a​ shoddy repair job and a​ contractor who has suddenly skipped town.




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