5 Quick Tips: Hiring a Foreclosure Rehab Contractor (edit/delete)

5 Quick Tips: Hiring a Foreclosure Rehab Contractor

I have been in the residential construction business in Lee County, Florida for most of my life. Now, I am also in the business of investment real estate and it has become clear that a key component of successful real estate investments is having the right contractor on your team.  My intention is to share what I have learned for the benefit of investors and potential investors.  Some of this information will be under the heading of, "I never thought of that."

I have decided that we should do a series of five entries to cover this topic. I do not consider any one of the five more or less important than the rest. THEY ARE ALL IMPORTANT. All of the items mentioned here, and many more should be considered when finding the right rehab contractor for your needs. Typically the needs of the investor are quite different than that of the average homeowner. For the investor there is a certain amount of   "sounds great! How much"? AND investors have budgets, and the numbers DO matter. That said let's get started!

Hello again, I thought that to describe this concept of value properly, we should first make sure that we are all working from the same definition. Here is the most commonly accepted definition.

Accountability:

: The quality or state of being accountable; especially: an obligation or willingness to accept responsibility or to account for one's actions (Webster's Dictionary)

So as we see there is a difference between accounting and being accountable. That means anyone can tell your group of investors that they are losing money. (Accounting)

Creating a plan for success, and then taking proactive steps to insure that the end result is achieved through regularly setting & achieving  smaller goals throughout the project. (Accountability)

Here is how that goes. Your contractor should be open to setting goals for your project. A draw schedule is usually the best way to achieve this. This gives the contractor incentive to have things done on time. Communication is very important in the accountability phase of organizing any project. These goals should be lined out in the beginning stages of any project, no matter how small. All expectations for all parties involved should be included in the contract. (We will discuss contracts in my next entry.) In addition to the draw schedule, contractors should also offer weekly progress reports, pictures, expense reports, and e-mails that give the client a good understanding of the condition and stage of completion of the project. This task done properly also is very helpful in keeping the project on budget.

*Note about deposits and draw schedules:  If your contractor asks you for a deposit or draw schedule to be formatted, this does not automatically make them a predator or unscrupulous. Contractors should not be expected to finance your project. The best solution for both parties is to build an accountability plan and draw schedule for every project, then put it in writing.  This process will aide in identifying problems so they can be corrected before any major damage to the project or finances has occurred.   

If you would like more information about what to expect, and how to find the best fit for a contractor and your properties in Lee county Florida. Please contact us at concepts of value, www.conceptsofvalue.net  we will do our best to help answer some of the questions you have.

Thanks for your time, and your comments are welcome.