Posted by Tom – IN on July 18, 2001 at 10:52:27:
Well, you could just be upfront with the guy and offer to pay him $100 or so for his time each time he comes out and helps you on such a deal. Or you could offer him a commission on each deal.
Contractors… - Posted by Steve - DC
Posted by Steve - DC on July 18, 2001 at 09:07:02:
Hi folks,
I recently invited a contractor to meet me at a house with the owner of a property that I’d like to flip. I needed an estimate of what the repairs would be.
While looking the home over, the contractor started asking questions such as, “When do you think you’ll need me to start working…?” etc., which of course, I had no answer for, because I have no intention of having him start working.
Well, I understand sales and closing, which is a large part of his job, “selling” his service, but my question is how do you handle or what do you offer to contractors when you have no intention of using them for anything other than the estimate? Are these just relationships you built that you utilize from time to time? I imagine I would possibly need him at some point in time…
But let’s say the deal works out exactly like I’d like it too…I get the property under contract, and then assign it. What do I tell the contractor? My first instinct would be to just tell him that I don’t do the same thing with every house, sometimes I may need him, this time I flipped it. I don’t think, however, that this approach is going to last very long…2 or 3 times and he’s not going to return my phone calls!
Thanks in advance,
Steve
Re: Contractors… - Posted by Bob B.(PA,DE,MD)
Posted by Bob B.(PA,DE,MD) on July 18, 2001 at 21:13:03:
Dear Steve,
The scenario that you described is very typical. You want an expert’s opinion, but you don’t want to commit yourself to anyone. You were right when you say that the contractor will expect to be used, and will not be there for you in the future if you waste his time. I am a hard money lender who gets asked often by newcomers how they can get advice on repairs and corresponding prices for these repairs. My advice to you is to tell the contractor in advance that you are trying to decide on the merit of different investment properties, and that if they help you determine the repairs and costs needed, you will give them the first chance do the repairs (subject to an acceptable estimate). If you don’t use him, you will pay him by the hour for his time. This way he knows you’re serious and his time is paid for.
Good Luck!
Bob Beckman
Rehab Funding