A successful fix-and-flip depends on more than finding the right property and financing. The contractor you choose will directly impact your timeline, budget, and final resale value. Investors need professionals who are reliable, experienced, and transparent. Knowing how to evaluate contractors before signing an agreement can protect your profits and prevent costly delays.
Review Past Work and Reputation
Look for Real Project Examples
Start by researching a contractor’s previous projects. Reputable professionals should be able to show before-and-after photos, references, and details about similar renovations they have completed. Online platforms such as Houzz provide portfolios and customer feedback that help investors compare quality:
Read Independent Reviews
Search for reviews on multiple sites rather than relying only on testimonials provided by the contractor. Google Business profiles and Yelp listings often reveal patterns about communication, scheduling, and workmanship.
Check for Complaints
The Better Business Bureau is a useful resource for identifying unresolved disputes or legal issues:
One negative review may not be a deal breaker, but repeated complaints about missed deadlines or poor quality should be taken seriously.
Verify Licensing and Insurance
Confirm State Requirements
Most states require general contractors to hold an active license. Requirements vary, so investors should confirm local rules through state licensing boards.
The National Association of State Contractors Licensing Agencies also provides guidance.
Require Proof of Insurance
A qualified contractor should carry workers’ compensation, general liability, and property damage coverage. Without proper insurance, an investor could be held responsible for on-site injuries or damage. Always request current certificates before work begins.
Compare Multiple Bids the Right Way
Evaluate More Than Price
Obtain at least three written estimates that break down labor, materials, and timelines. Extremely high bids may signal price gouging, while unusually low bids often indicate inexperience or the use of cheap materials.
Watch for Unrealistic Timelines
In fix-and-flip projects, delays reduce profit. Contractors who promise completion dates that seem too good to be true may not understand the scope of work or may be juggling too many jobs.
Understand the Contract Before You Sign
Put Every Detail in Writing
A clear contract should outline scope of work, payment schedule, materials, permit responsibilities, and completion dates. The Federal Trade Commission provides consumer guidance on home improvement contracts:
Document Any Changes
Renovations often uncover hidden issues. If plans change, require written change orders with updated pricing and timelines to avoid disputes later.
Never Pay Everything Up Front
Use a Milestone Payment Schedule
Professional contractors typically request a reasonable deposit followed by progress payments tied to completed work. Demands for full payment before starting are a major warning sign. Paying by check or credit card creates a record that protects investors.
Protect Your Rehab Budget
Reliable financing also helps manage contractor payments and material costs. Center Street Lending offers fix-and-flip loans with draw schedules designed for renovation projects:
Build the Right Team for Your Flip
Hiring the right contractor is one of the most important decisions a real estate investor makes. Careful research, verified credentials, and clear contracts reduce risk and keep projects on schedule. Pairing a trustworthy contractor with fast, flexible financing gives investors the best chance for a profitable flip.
Center Street communications are not intended to provide business, legal, tax, investment, or insurance advice. No Center Street communication should be construed as a recommendation for any business or investment strategy by Center Street or any third party. You are solely responsible for determining whether any investment, investment strategy, business strategy, or related transaction is appropriate for you based on your personal investment objectives, financial circumstances, and risk tolerance. You should consult your legal or tax professional regarding your specific situation.
