In my last post, I introduced the 7-step process of rehabilitating a home for resale by discussing steps one and two. Step one: create a plan for how you wish to accomplish this rehabilitation by focusing on what repairs are necessary and what improvements should be made to better the chance of the house selling. Step two: create a scope of work so you know which repairs are affordable and what can be saved to be done by the next homeowners. Let’s talk about steps three and four.
Once you’ve prepared your plan for rehabilitating a home, the next step is to hire your contractor. This is not a decision you want to take lightly. Which contractor you decide to hire will either make your project difficult or a total breeze.
Use websites, local real estate associations, job boards, and your network of friends and colleagues to find the right contractor for your project. Ask any and all questions you can think of. It’s better to have a clear understanding of how each other plans to work from the start rather than find later on when it’s too late to switch your contractor, and you’ve already invested too much money. Some things to ask are what kind of relationship they expect to have while working with you, what their previous projects have looked like and were they able to stick to the projected timeline, and how they will be able to help you reach your goals. Through questions such as these, you’ll not only be able to find out about this contractor, but you’ll also establish your reputation as a responsible and trusted real estate rehabilitator.
Think of your rehabilitation process as a business, with you as the owner. You will want to have dependable employees to help you reach your goals. Just like most people before they get hired, they have to go through an interview process. While interviewing your potential contractors, be sure to ask the questions about the following: years of experience, equipment they own vs what they’ll have to rent, who their employees are and their work ethic, licenses, permits, and insurance. Once you’ve completed the pre-screening process, you can begin to collect bids from these contractors and evaluate who to pick.
Now that you have your plan and your contractor, it’s time to begin signing the paperwork. It’s important to remember that neither party should start any of the work before they contracts have all been signed.
The paperwork should include the agreement between you and your contractor with details about the project specifically as well as the final price. Insurance identifications forms are good to have in the event of any accidents that happen during the project.And finally, a W-9 tax form is required by law and reinforced by the IRS for independent contractors.
Steps five, six, and seven to come on my next blog!