Investors interested in refurbishing and marketing distressed homes typically want low-cost repair work, however it is necessary to avoid a specialist fraud. Any specialist who provides considerable discounts, makes big promises, requests for a great deal of cash in advance, or wishes to work without an agreement should be avoided.
If you want to start flipping houses for profit, you will need to deal with specialists in order to rescue distressed building so that they’re ready for resale. However, some scammer exploit brand-new investors, particularly, by posing as contractors. Considering that a scam specialist can cost you thousands and can severely decrease any revenues you might expect from house flipping, you’ll wish to look out for:
1) Specialists obtaining door-to-door.
Very few expert contractors need to do this. While some genuine professionals might utilize this marketing technique, you have no way of tracing the authenticity of a specialist who solicits this way.
2) Special prices or discounts that appear suspiciously low.
Be especially wary if you are told that you need to sign up immediately in order to get unique rates. Be extra suspicious if you’re asked to provide cash in advance in order to receive the unique prices. Expert contractors may occasionally offer a discount, but they do not do so with a hard sell and they can not manage to offer extremely slashed rates while also providing quality work. If someone is offering to do the work for a portion of its actual cost, you have to question where the corners will be cut. You also have to consider that some contractors who are scam artists will slowly increase the rate of the work as they go along. For that reason, that remarkably low figure will end up being a much overcharged amount by the time the job is done.
3) Professionals who want to work with no agreement.
Some professionals will try to make it sound as though they deal with just a handshake. You should never have any agreement work done without a legal contract in place. An agreement secures both you and the specialist, so any professional contractor will naturally want to have a contract in place. The contractor who does not have an agreement in place understands that he or she can walk away at any time, given that no main arrangement was made.
4) Big down payments.
About a 3rd of the overall expense of materials is typically the optimum deposit required. Be extremely suspicious of anything that needs a bigger deposit.
5) Long-lasting service warranties and lifetime assurances.
Originating from a contractor who has actually not been in business very long, these might merely not mean much because there is no warranty that the specialist will be in business for quite longer. Also, a lot of the really long-term warranties only apply to parts, instead of labor. For that reason, you or your future home owners will still be responsible for large share of the costs of any repair works. If you are turning houses for profit, you’ll wish to make certain that any guarantees can be transferred over to the new owners as well.
6) No business address.
Watch out for contractors who only have a PO address, a single personal phone number, or no good way of getting in touch. These people can easily vanish over night. Try to find specialists with a recognized retail company or an address that has been around for a minimum of a year or more. Ensure that you can find the contractors if anything does go wrong. When flipping homes for profit, the last thing you want to need to handle is a substandard repair work task and a specialist who has all of a sudden skipped town.