Stay Safe With Contractors When Flipping Houses For Profit

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Stay Safe With Contractors When Flipping Houses For Profit
Traders intrigued in refurbishing and reselling distressed properties often want inexpensive repair work, but it is important to avoid a contractor rip-off. Any contractor who offers significant discounts, makes large guarantees, asks for a lot of money up front, or wants to work without a agreement should be averted.

If you wish to start flipping houses for profit, you will need to work with contractors in order to rescue distressed property so that they're ready for resale. However, some rip-off artists prey on new traders, especially, by posing as contractors. Since a rip-off contractor can cost you thousands and can severely reduce any profits you might expect from house flipping, you'll want to watch out for:

1) Contractors soliciting door-to-door. Very few professional contractors need to do this. While some legitimate contractors may use this marketing technique, you have no way of tracing the legitimacy of a contractor who solicits this way.

2) Special prices or discounts that seem suspiciously low. Be especially wary if you are told that you must sign up right away in order to get special pricing. Be extra suspicious if you're requested to give money up front in order to qualify for the special pricing. Professional contractors may occasionally offer a discount, but they do not do so with a hard sell and they cannot afford to offer massively slashed prices while also offering quality work. If someone is offering to do the work for a fraction of its actual price, you need to wonder where the corners will be cut. You also need to consider that some contractors who are rip-off artists will slowly increase the price of the work as they go alongside. Therefore, that surprisingly low figure will end up being a much overcharged amount by the time the job is done.

3) Contractors who want to work with no agreement. Some contractors will try to make it audio as though they work on just a handshake. You should never have any agreement work done without a authorized agreement in place. A agreement protects both you and the contractor, so any professional contractor will naturally want to have a agreement in place. The contractor who does not have a agreement in place knows that he or she can stroll away at any time, since no official arrangement was made.

4) Large down payments. About a third of the total cost of materials is generally the maximum down payment required. Be very suspicious of anything that requires a larger down payment.

5) Long-term warranties and life time ensures. Coming from a contractor who has not been in business very long, these may simply not mean much because there is no guarantee that the contractor will be in business for very much longer. Also, many of the very long-term warranties only apply to parts, rather than labor. Therefore, you or your future house owners will still be responsible for large share of the costs of any repairs. If you are flipping houses for profit, you'll want to make sure that any warranties can be transferred over to the new owners as well.

6) No business address. Look out for contractors who only have a PO address, a solitary personal phone number, or no good way of getting in touch. These people can easily disappear overnight. Look for contractors with an established retail business or an address that has been around for at minimum a year or more. Make sure that you can track down the contractors if anything does go wrong. When flipping houses for profit, the last thing you want to have to deal with is a shoddy repair job and a contractor who has suddenly skipped town.