Pick Me, Pick Me! Hiring the Right Contractor for the Job.

A general contractor is someone who constructs buildings or makes improvements for an owner or developer. Contractors may have their own employees or use subcontractors. Typically, they will have a lot of contacts in the industry and will be able to negotiate better pricing on materials in order to complete your project from beginning to end. Contractors are different from handymen because they have to be licensed and insured. For this reason, they are often twice as expensive as a handyman, who operates without any of these official qualifications. Most contractors specialize in one type and size of construction project.

PMI Real Estate Coaching recommends that anyone hiring a contractor for a project follow these four steps:

1. Seek referrals: The best way to find a quality contractor is to get a referral from someone who had the company or person work for them. Real estate investment clubs are great places to get referrals. Friends, family, coworkers and neighbors can also provide great referrals. They might know a few people who are looking to start up their own handyman business or want to make money on the side. People working at hardware stores may know a few contractors or handymen that they see on a regular basis.

2. Check references: Getting a referral is a good way to find potential contractors or handymen, but you still need more information before you make a final decision. Ask them for the names of people that they have worked for. Be just as careful in this stage of the process as you would be if you were hiring the person as an employee for your business, because that is essentially what you are doing. You will be their boss, asking them to perform certain tasks for which you will pay them. Follow these steps in getting references:

• Get at least three references from projects they have completed.
• Call each reference and ask about their satisfaction on costs, materials used and time-frame for project completion.
• Ask other contractors or investors if they know them and can recommend them.
• With contractors, contact the Better Business Bureau to see if any complaints have been filed against them and the state licensing board to see if their licenses are current.

3. Conduct an interview: The next step is to actually sit down and interview your potential contractors or handymen. You will be able to obtain a lot of very helpful information as you talk face to face. You may even want to arrange for multiple opportunities to meet with these potential employees or visit their completed project sites. One of the most important questions to ask is who will perform the work. Will it be the contractor, a subcontractor or a hired crew?

4. Compare the bids: Get at least three job bids, so you can compare prices and materials. Just getting one bid doesn’t give you enough information about the possible range of prices and options. You want bids that itemize labor and material expenses. Contractors may have different kinds of pricing schedules and itemized bids make it possible for you to evaluate comparable costs.

It’s very important to get everything in writing so that you both are on the same page. It’s all too common to have miscommunications or even misrepresentations of the work that will be done. These mistakes can turn a potential profit into a loss. Another point to keep in mind is that the least expensive bid is not necessarily the best. It may not include high quality materials and the best construction practices, so be careful.