For the investor focusing on fixing and flipping or holding properties for the long term, general contractors and trades people that have specialized skills are indispensable.
Perhaps some investors will have all the talents, experience and skills to rehab a property, or perform necessary maintenance – but even these investors will quickly run into a shortage of their own time if they have any ambition to scale up the number of properties they flip or own and maintain.
Talented, experienced, investor-friendly, reliable and trustworthy plumbers, electricians, framers, carpenters, HVAC technicians, roofers and other trades people can make or break the profitability of an investment.
Building relationships with these experts, fairly compensating them and thinking long term with the relationship are key to investor success. Like many other professionals listed here, these specialists often have excellent insights into local markets, investment opportunities and can advise on where your best returns for your rehab and repair dollars should be spent.
Selecting Contractors and Trades People to Work With
As an investor how is either rehabbing or managing and maintaining properties, you’ll need to make some judgment calls around how much and when specialists should be contracted for work and where the draw the line with using generalists.
Many investors early on with take on the role of managing and overseeing various individual tradespeople – acting as the “GC” or general contractor.
As with other activities, this can become a limitation on the ability scale and at some point hiring a general contractor to manage projects, particular large ones with many subcontractors. Some activities will require licensed and certified specialists to comply with local laws and ordinances.
Key Activities and Skills the Investor Needs
Some key activities and skills for the investor to consider include interviewing and selecting competent general contractors and specialists. The investor will be getting bids and estimates for work from specialists, and then must know how to evaluate and understand those estimate and make critical decisions about which to hire, and how to oversee them.
The investor must be a financial strategist and money manager to develop approaches for paying contractors over extended periods of time, managing against the risk of paying before work is completed. A general understanding of local ordinances is needed to ensure those that are hired are performing work legally. The investor needs communication and relationship building skills to develop rapport and trust with contractors and tradespeople and to ensure there is appropriate coordination across other members of the investor’s team.