Hiring good contractors and handymen nowadays may seem like trying to find a needle in a haystack. In the grand scheme of things, the term “good” contractor might certainly be an oxymoron because of all the unethical rip-off artists, frauds, snake oil salesmen (the list goes on) that are involved in the profession. It’s amazing how such individuals gravitate to this line of work. But at the same time, it’s unfortunate because they can tarnish the reputations of the hardworking, honest and legitimate contractors that are in the business. The trick is to find and hire an ethical, customer-oriented contractor, and this can be quite a challenge, to say the least.

The process of hiring good contractors or handyman to work on your residential property is very similar to the process of finding a good mortgage lender – you must perform your “due diligence” and conduct a proper screening process.

Because your home is probably your most valuable financial asset, you’ll want to take the necessary precautions to find and hire a competent, ethical contractor or handyman to work on it. These precautions could make all the difference between having a good experience with the contractor or a nightmare.

The following are some general guidelines for finding and hiring good contractors and handyman to work on your rental property:

• Don’t fall for a slick TV, newspaper, Yellow Page or radio advertisement as an indication of a contractor’s work or reputation. Instead, first check with friends, family members, and neighbors who have hired contractors or handymen in the past. They’re your best source for good references.
• Beware of contractors who require large up-front payments and require you to take out the necessary permits. Legitimate contractors do not operate in this fashion.
• Obtain written estimates from several firms and don’t always choose the lowest bidder. They may be the lowest bidder for a reason! Ask for explanations regarding any price variations.
• Ask the contractor if they will be using “subcontractors” on your job. If they are, then request a lien release from all the subcontractors before you make final payment to the “general contractor”. This will protect you by ensuring that all subcontractors have been paid (by the general contractor) for work done on your property. This prevents them from placing “mechanics liens” on your property, which will force you to sell the property to satisfy their unpaid bills. Sounds crazy, but that’s reality!
• Don’t sign a contract that has “blank spaces” that can be filled in after you sign it.
• Make sure the contractor and all subcontractors are fully licensed, registered, and insured in your state and locality. Get copies of all current insurance certificates before work is started.
• Check the Better Business Bureau to see if the contractor or handyman is a member in good standing with no previous customer complaints.
• Beware of contractors who solicit door-to-door and/or only accept cash payments.
• Ask the contractor how long they’ve been in business, and ask to see a list of references for previous projects they have performed that were similar to yours.

Taking the above steps should go a long way in finding a good, reputable contractor or handyman to work on your property. And that will certainly make your experience as a landlord much more rewarding and satisfying at the same time.

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You found a home that you want to rehab and are excited to start the FHA 203K financing, but first you must find a contractor! This step might be the hardest step of all in the loan process. Unfortunately, there is not a list of contractors that are approved or suggested by HUD. There is no such thing as certification and there is no perfect way to tell which contractor is right for you. It takes some research on your end to find the one that will do the job that you need. These steps should help you get started.

• Figure out what work you need done. This needs to be done before you look for a contractor because you need a professional that can handle the scope of work that you need completed. Ask around for referrals if you know others that have had rehab work done to their home. You can even ask your lender for referrals, but remember, these contractors are not tied to the loan or the lender at all, so you are not obligated to use them.
• Read reviews online. You cannot believe everything you read, especially if the reviews are directly on the contractor’s website, but it should be easy enough to tell what is real and what is fake. Consult with third party websites and see what others have to say. If you find good reviews, ask the contractor for some personal referrals in the area, possibly referrals where you could go and see the work that was completed.
• Ask about insurance and licenses. You do not want to work with contractors that are not licensed and insured. You can find most of this information online, depending on the state you live in or you could ask the contractor directly. You want to make sure they are fully covered in the event that something were to go wrong on the job and something or someone were to get hurt. If damages occurred and insurance was not obtained, you could be liable for the damages.
• Get several bids. The bid process is time consuming, but it is worth it in the end. Once you have a contractor that provides, not just the lowest bid, but a quality bid, then you can pass him along to your lender. Don’t fall for the lowest bidder though as they do not always provide quality work – they have to make up for the low prices they are quoting you somewhere. That somewhere is typically in the quality of their work or the materials they use.
• Determine your budget. Be up front with contractors about your budget. They will let you know if they can work with you or not. This will help you to avoid wasting time on contractors that you could never afford or those that are just not reasonable with their estimates.

Finding the contractor for your 203K loan takes a lot of legwork. Oftentimes, the loan consultant can help you with this process. This can be especially beneficial because you are able to use his expertise in the area to find the contractor that will do the job right. If you have never rehabbed a home before, this step could be very overwhelming. Let your lender and loan consultant guide you along the way while you put in your input when it is necessary. This will help you have the greatest outcome from the process of creating the home of your dreams from a simple, fixer upper that no one else wanted to touch.

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