How To Find and Interview Contractors for Your Rehabs – Flipping Junkie – For Those Addicted to House Flipping (2023)

While trying to find a new ‘go-to’ contractor for the rehabs on the houses we are flipping, I decided to put together this post to outline some of the things I do when trying to find the perfect investor-friendly contractor. We recently have had some issues with our main contractor and it has been really overdue for me to get out there and find someone else to use. It’s tempting to stay with a contractor for longer than you should simply because you become comfortable and lazy. He knows what you want and how you work. You don’t have to get into huge negotiations because you have both found a mutually agreeable balance.

But this all becomes a huge problem when you start letting things slide that you shouldn’t be. Shoddy work might rear its ugly head or increasing bids for work that you don’t check because you trust them too much. You start showing up less and less to job sites and they start taking advantage. Very bad idea.

Here’s what I do when starting over and looking for a new contractor for our rehabs:

Where To Look For An Investor-Friendly Contractor

The first thing I do is contact other investors to see if they know of any good contractors that need work. Most investors, no matter how well you know them, will not give you their ‘go-to’ guys. They don’t want you keeping them busy or getting them used to higher pay or whatever other evil things you might do. 🙂 I don’t blame them. If I am keeping someone busy and we have a good thing going, I don’t want to share them either. Guess I’m selfish like that.

But, this works if they do know of someone that has done some work for them that they cannot keep busy or just use when they need an additional crew. Sometimes investors get stuck with too many properties on the market and hesitate to buy more, at which point their contractors will be looking for work. The investor will want to help them by referring them.

Another great way to find a good contractor that knows how investors work is to keep your eyes peeled while driving for dollars. Look for rehabs in progress. When you see a front door wide open and a pile, or construction debris in the front yard, it’s a good sign some serious rehabbing is taking place. Check out the job and see what work they are doing. Ask who the boss is and ask if the house belongs to an investor. Ask the questions that I bring up in the next section below. Try to really pay attention to how good of a job they are doing with the current rehab.

Is the job site clean and orderly? Is there trash strewn about everywhere and texture on switches and plugs (things that should have been covered first)? Is the line between baseboard paint and wall paint clean and straight? Are there beer cans everywhere? Is everybody on the job site working or are they standing around talking on cell phones or texting? You get the idea.

I don’t know how many times I’ve stopped at rehabs to meet contractors and because of some of the things I just mentioned, will throw the contractors card away on the way out the door.

(Video) Running Rehab Properties: Flipping Junkie Podcast (episode 76)

Another good source of contractors is your local Home Depot. Go to the contractor desk (pro desk) and ask them for referrals. Tell them you are looking for a handyman or contractor that can do everything. Contractors there regularly develop friendships with the people that work the pro desk. It’s a good way to find friendlier contractors. They might not be the cheapest though.

I tend to avoid the yellow pages because a lot of the contractors that advertise are bigger companies with a lot more overhead. These tend to be the guys that show up in the giant Hummer and expensive Italian leather shoes. Ok, maybe I’m exaggerating a little. You really want someone that is either doing the work or hiring subs directly beneath them to do the work with their direct supervision.

It’s best to also avoid craigslist. I don’t think I’ve ever found anybody worth a darn on craigslist. Seriously, one guy was trying to just quickly get $20 from me. Weird. And from the looks of him, I’m sure it was for drugs. That’s just my experience though. It’s not to say that you can’t find a good contractor there.

Questions To Ask

It is usually easier to find someone that has done work for another investor. This is mainly because they will likely understand that you are not looking for regular homeowner prices. You bring them the benefit or more jobs and more work. You help them by providing a way for them to avoid having to constantly find more work and compete for jobs.

Ask if they’ve done any work for anyone else that is flipping houses or is a real estate investor. If they have, ask how many jobs they’ve done for them. Get their name and number if you can. Ask what they liked about working with them and if they’d like to work for other house flippers.

Ask how long they’ve been doing this line of work.

Ask if they do the work themselves with helpers or whether they just sub everything out (more expensive but not necessarily something to avoid).

Ask how many people they have working for them. If they don’t or just have one or two guys, it may be difficult for them to handle big rehabs and definitely will be difficult if you have more than one rehab going at a time.

(Video) Rehab Addict Rescue's Nicole Curtis, Detroit involved in legal battle over home she rehabbed

Ask if there is anything they don’t do. Do they do foundation work? Do they do minor electrical or plumbing? Do they do roofing? What about framing? Some guys really only want to do minor things like drywall and painting. Ask if there is anything they don’t like to do. In this business, it is best to find someone that can do it all or hire people that can fill in the gaps.

Ask if they are currently busy with work. If so, ask when they think they might be free. You don’t really want to wait 3 months for someone to start your job. Trust me.

Ask whether or not they are licensed. This one is up to you. They don’t have to be to do general work and light rehabs. Some will not be licensed but will be able to have friends or associates pull permits for them when they are needed. You really should have licensed contractors for specialized work like electrical, plumbing, hvac, roofing etc.

Ask if they are insured. This one is very important.

Bad Signs To Watch Out For

If they seem like they need the work really bad and will give you a super low price that is far below any other bid, be careful. Sometimes, especially if they have been out of work for a while, they need your job so they can pay their past due bills, other people they owe, or finish previously started jobs. This happens a lot and you need to be careful. Many times, unscrupulous contractors will tell you that they don’t have enough money to finish your job and that they need another draw. The problem is that you had already paid the money for the job, but it did not go to your job. They will dig themselves a hole and ask you to help them dig it, WITH YOU IN IT! Ask me how I know.

Sometimes they will try to play to your soft side and give you a sob story and beg that you help them out by giving them the job. Feeling bad for them, you will be tempted to go ahead and do it even though your gut is likely screaming at you to run the other way. Trust your gut.

Be careful to avoid the guy that smells like alcohol. I don’t just mean the guy that has beer breath either. I’m talking about the guy that smells like alcohol is coming out of his pores. Some of these guys may do perfectly fine, but more than likely they have some serious issues. Don’t even think about hiring one that doesn’t have insurance.

Avoid the guy that says he has to have half of the cost of the job up front. Geez. I don’t know how many times I’ve heard of people paying a contractor half or more up front and then complain that they are not showing up and when they do it is only because they nagged them to death for several days. Sometimes they won’t ever show up. Have fun getting your money back. People should get paid for work AFTER THEY DO IT. Novel idea, I know.

(Video) HOW TO REHAB HOUSES - Rehabbing Houses 101 with Dennis Anderson

You might also want to avoid the guy that talks too much. This might sound a little strange, but I’ve found it to be true several times. The ones that are constantly and repeatedly telling you about how awesome they are and how professional they are, are usually just the opposite. If they need to work so hard to convince you, something is wrong. The ones that only speak when necessary are usually the better contractors. Sometimes all of that blabbering is just to butter you up for the outrageous bid they are planning to throw in your face. If you can’t get a word in edgewise, walk away.

Filter The Prospects

Once you’ve talked with several contractor prospects, you’ll want to filter them and only invite the ones you feel best about to bid on your job (or look at the flip house that you intend to make an offer on). You really don’t want to waste your time with the ones that you did not have a good feeling about. It takes time to walk through a house with someone going over a scope of work for a rehab.

You should be asking for AND CALLING the references. Sometimes this is hard to do. It can be hard to get ahold of people. It is well worth it though. References should be recent and should not be for people that are friends or are related to the contractor. Ask the reference what the extent of the work was that was done for them. How was the contractor’s professionalism? Were they there every day? Were they there working early and staying late? Did they ask for draws before they were due? Did they quickly and happily correct mistakes?

Ask for the address of a job they are currently working and show up there unexpectedly. This is a great way to see how they really work and how good of a job they do. Pay attention to detail and ask questions. Try to spend some time just focusing on the work. You can get hung up in talking and not really paying attention to the work they’ve done. Don’t let your time there be wasted. Ask how long they have been on the job and how much longer they expect it to take to finish it. Pay attention to everyone’s attitude. You don’t want people that are rude and unfriendly. This is not super important but can really make the difference in your wanting to visit your job site on a regular basis, which of course, you should do.

Let Them Know How You Work, Up Front

When you meet your selected contractors at a job (separately is preferable of course), it is important to talk to them about what you expect from them. It is best to get this out in the open so that they know what to expect. This is very important because it puts you in a position to control the situation. You are the one with the work and you want them to know that it will have to be on your terms.

This does not mean to dictate unfair and crazy terms. Don’t be a jerk.

The things that I want to make sure they understand are:

  • I expect wholesale prices, not single-job, homeowner prices.
  • They are to be independent contractors, not employees.
  • I pay draws based on job milestones, not just every Friday afternoon (I hate going to job sites on Friday afternoons!).
  • I want quality work and a constantly clean job site.
  • We will be using my contract.
  • When starting with a new contractor, there will be more draws for each job (smaller payments).
  • There is a penalty for exceeding the job completion date.
  • Any additional work or change orders will be approved for time and cost in writing before the additional work is started.
  • Their work must be warrantied for at least a year.
  • There will be no smoking in the house after painting has started.
  • It will be their responsibility to make sure the house is secured properly every day.

If they give you grief for any of these items (if you feel they are important to you as well), you might want to reconsider hiring them.

(Video) Figuring Out What You're Good & Bad At: Flipping Junkie Podcast (episode 22)

Get Bids

Wait for the bids to come in and try to avoid playing games. Some contractors will try to pry and find out what the other guys are bidding or just ask you to name your price. Try to avoid this and have each of them supply their bids. It’s important to have a scope of work drawn up that details exactly what you want to be done so that you are comparing apples to apples.

I usually throw out the ridiculous ones, on the high and the low side. Take the remaining ones and determine who you liked the most and felt the best about while weighing the cost of each. If you impressed on them that you will be giving them a lot of work, the bids shouldn’t be too far off from what they are willing to do the work for. Try to negotiate with each of them, even if you like the price and see how that goes. You should always negotiate, even if it just for a small amount. Don’t leave the other side feeling like they left money on the table.

Evaluate The Job

Once you’ve selected your new ‘go-to’ guy and have them do a job, be ever mindful of anything that doesn’t leave you with a good feeling. Sometimes people will do an amazing act to get the job and then almost immediately do the opposite of what they promised.

This is a very important point. Pay close attention.


If they are in default of your agreement, you have every right. Do not put up with problems just to avoid confrontation. Some contractors are pros at knowing how much they can get away with and will push and push and take and take all the while knowing that you are not going to do anything about it because you want to avoid the confrontation. You have to lay down the law when things are not going well. Do not wait and hope that things will improve. They rarely do. Stand up and set the job back on the right course by demanding that it be corrected. This can be hard and I’ve struggled with it in the past, but it something that must be done and done from the first sign of problems.


I hope this post on finding and interviewing contractors for your house flips helps you in your efforts to find a contractor that you can build a relationship with and work with for many years. That really is the nice thing about all of this. Once you work hard to find the right one, things will become a lot easier and you will find that flipping houses becomes a lot easier.

Don’t forget to subscribe to the blog above,Like us on Facebook,Follow on Insta,Follow via Twitter, and Subscribe to the Podcast (iTunesandStitcher).

(Video) Dr. Phil S18E157 ~ Feeding My Addiction

Next: Are You a Flip Pilot?


How much deposit do I need to flip a house? ›

If you are looking to flip a property by selling within 0-12 months, then the best option is usually a specific form of short term finance. For this you need a minimum 20-25% deposit and to be prepared to set aside extra cash for fees (approx 2% of loan amount) and higher rates of interest (approx 0.7-1.5% per month).

What is a flip business? ›

Flipping is a term describing purchasing an asset and holding it for only a short period of time before re-selling it. Most often related to transactions involving real estate and IPOs, flipping is intended to turn a quick profit.

What is the meaning of flipping houses? ›

House flipping typically refers to buyers who purchase distressed properties, fix them up, and then resell them for a profit. They'll typically find these properties via foreclosures, bank short sales or property auctions.

How do you flip a house in Texas? ›

The Basics Of Flipping Houses In Texas
  1. Find a property in Texas that is undervalued.
  2. Source funding from a reputable lender.
  3. Buy the property for a price that makes it possible to generate profit when it is resold.
  4. Complete renovations that will increase the after repair value.
15 Jun 2022

Do you have to pay taxes if you flip a house? ›

The standard tax consequences of flipping a house, where you own the property for less than 12 months, is that the profit you make is subject to your standard taxation rate. This is due to the fact that the IRS classes any investment you own for less than a year then sell for a profit as 'normal income'.

Is there a limit to how many houses you can flip? ›

There are no laws in the United States that limit the number of houses that you can sell each year. A quick internet search will result in a long list of people stating that they can sell 20 homes or more each year.

What is the most profitable thing to flip? ›

Best Items to Flip for Profit
  1. Wood Furniture. Solid wood furniture is one of the best items to flip for profit for a few reasons. ...
  2. Upholstered Furniture. Likewise, upholstered furniture can also be profitable to flip. ...
  3. Outdoor Furniture. ...
  4. Antiques. ...
  5. Collectibles. ...
  6. Motorized Items. ...
  7. Appliances. ...
  8. Records and Record Players.
22 Jun 2022

What is the most profitable flip? ›

Houses are the best items to flip for the most profit

But basically, you'll need to purchase a home for a low price that needs some work. Then you fix the house and get it in good enough shape to sell for more than you paid for it. There are a lot of rules for this, so take your time.

What is the 70 rule in house flipping? ›

The 70% rule helps home flippers determine the maximum price they should pay for an investment property. Basically, they should spend no more than 70% of the home's after-repair value minus the costs of renovating the property.

What is an illegal flip? ›

A con artist buys a property with the intent to re-sell it an artificially inflated price for a considerable profit, even though they only make minor improvements to it.

What skills are good for flipping houses? ›

The reason that so many house flippers are professional builders and other skilled professionals is because they have the right skills to be able to fix and flip houses. People who already know how to do things like woodworking, plumbing, painting, and so on, will know how to flip a house better than people who don't.

How do you flip a house without spending money? ›

Here are a few options to help you learn how to flip a house with no money:
  1. Private Lenders.
  2. Hard Money Lenders.
  3. Wholesaling.
  4. Partner With House Flipping Investors.
  5. Home Equity.
  6. Option To Buy.
  7. Seller Financing.
  8. Crowdfunding.

How long do you have to live in a house to flip it? ›

As a general rule, you should have the home for at least 90 days before you sell it. FHA, VA, USDA, and conventional loan buyers will have the easiest time getting approved if you hold the title for at least 90 days.

What is the 90 day flip rule in real estate? ›

What Are FHA Flipping Rules? If you plan to purchase a flipped home with an FHA loan, you must abide by the FHA 90-day flipping rule. This rule states that a person selling a flipped home must own the home for more than 90 days before home buyers can purchase the property.

Can I deduct my own labor when flipping a house? ›

In terms of the flip itself, expenses the investor has like the cost of materials needed for the actual renovation, and the cost of labor on the property can be deducted.

How much does the average house flipper make? ›

It is common for experienced house flippers to achieve a return on investment that ranges from 10-20%, after factoring in all the expenses involved when flipping a house. If you assume a 15% return, that would mean a net profit margin of: $100,000 House Flip = $15,000.

What is Micro flipping? ›

What Is Micro-Flipping? Micro-flipping is a type of short-term real estate investment that involves buying properties in need of renovations and reselling them quickly for a profit, usually without improvements.

What happens if you run out of money in house flipper? ›

What should I do if I run out of money and want to keep working on something? Is that specific save bricked? If you have a tiny bit of money left, you can go back into your old "messages" and redo handyman jobs for some extra cash.

Is it more profitable to rent or flip houses? ›

Rental Property is Passive Income

As previously mentioned, flipping can earn a lot of money in a relatively short amount of time. Whereas renting an investment property usually produces less upfront income, but generates income consistently over a long period of time.

Which products are in high demand? ›

Other items in high demand for online buyers are mobile phones, consumer electronics, footwear, convenience food, health supplements, beauty products, personal hygiene products, kitchenware, home décor, fashion accessories, jewellery, books, toys & games, fitness equipment and customised gifts.

What can I resell quickly? ›

The 15 Best Items to Flip
  • Apparel. Whether you're simply looking to clean out your closet or want to turn reselling into a part-time gig, apparel of all kinds is perfect for flipping. ...
  • Cameras. ...
  • Smartphones, Tablets and Tech Accessories. ...
  • Exercise Equipment. ...
  • Household Appliances. ...
  • Used Books. ...
  • Designer Bags. ...
  • Vintage Jewelry.
2 Dec 2021

What is the easiest thing to sell? ›

13 Easy Things To Make and Sell
  1. Sweet Treats. Cookies and candies and cakes, oh my! ...
  2. T-shirts. If you're not exceptionally creative, t-shirts may be the ideal things to make and sell. ...
  3. Bath Bombs. People love artisan bath bombs. ...
  4. Candles. ...
  5. Jewelry. ...
  6. Subscription Boxes. ...
  7. Enamel Pins. ...
  8. Lip Balm.
4 Jan 2022

Where can I find things to flip? ›

So where do you find these things you ask? Well, there are several places, but I have found that the best places to find items to flip are these places you likely see every weekend.
The Best Places to Find Items to Flip for Profit
  • Yard Sales. ...
  • Thrift Shops. ...
  • Barn/Shop sales. ...
  • Curbside. ...
  • Church Rummage Sales.

What can I flip for 1000? ›

How To Flip 1,000 Dollars
  • Buy And Resell Clothing. One popular option for flipping 1,000 dollars is to buy clothing to then resell online. ...
  • Buy & Sell Collectibles. ...
  • Start An Online Business. ...
  • Amazon FBA. ...
  • Invest In Real Estate. ...
  • Invest In Dividend-Paying Stocks. ...
  • Stake Crypto. ...
  • Rent Out Assets.
12 Jun 2022

How do I start flipping? ›

Here are 5 simple steps to get started flipping items for profit.
  1. 1 – Declutter your space. The BEST place to find your first items to flip is your own home. ...
  2. 2 – Take Pictures of the Items in Your “Sell” Box. ...
  3. 3 – List Your Items for Sale. ...
  4. 4 – Sell Items and Ship Them Out. ...
  5. 5 – Repeat.

Can you get rich flipping? ›

You could make $1 million a year flipping houses, but it is not as simple as it may seem. To run an operation large enough to flip low-margin houses, you will need a team and a lot of help. There are many costs involved that eat into that profit.

What is the flipping strategy? ›

Flipping (also called wholesale real estate investing) is a type of real estate investment strategy in which an investor purchases a property not to use, but with the intention of selling it for a profit.

How do I avoid paying taxes on a house flip? ›

There is another tax-saving method available to investors that flip houses. Investors have the option to file a 1031 Exchange, under which you can defer your capital gains tax bill on a property that is sold, as long as a similar property is purchased with the profits from the first property sale.

What is the 2% rule? ›

What Is the 2% Rule? The 2% rule is an investing strategy where an investor risks no more than 2% of their available capital on any single trade. To implement the 2% rule, the investor first must calculate what 2% of their available trading capital is: this is referred to as the capital at risk (CaR).

What is the most common indicator of illegal property flipping? ›

The appraisal may include red flags symptomatic of inflated value. Many of the same red flags that accompany a traditional flip also apply to cash-out purchase fraud – straw buyer, false source of funds and false occupancy.

Can someone call the cops on you for flipping them off? ›

Is Giving the Middle Finger to a Cop Free Speech? Indeed, it is. As long as you don't cross the line and cause a public disturbance. The U.S. Supreme Court has ruled that there are exceptions to what's protected speech and what isn't.

What is a red flag of an illegal flipping scheme? ›

Some of the following red flags may occur in flips: • Ownership changes two or more times in a brief period of time with the property value increasing significantly. • Two or more closings occur almost simultaneously.

What do I need to know before flipping? ›

Continue reading for 10 things you should consider before committing to flipping a house.
  • Determine your source(s) of funding and overall budget. ...
  • Study your neighborhood's market. ...
  • Find the best deals. ...
  • Don't buy unique properties. ...
  • Establish a timeline for your flip from purchase to sale.
20 Jul 2022

How do I start a career flipping houses? ›

Here are the steps you need to take to become an intelligent house flipper.
  1. Step 1: Get your real estate license. ...
  2. Step 2: Access the MLS. ...
  3. Step 3: Receive brokerage support. ...
  4. Step 4: Purchase a property. ...
  5. Step 5: Renovate the house. ...
  6. Step 6: Sell and earn a commission.

How do I become a successful house flipper? ›

Here are 35 house flipping tips from pros you should know:
  1. Buffer Your Budget. ...
  2. Never, Ever Overpay. ...
  3. Ditch Zillow. ...
  4. Market to Sellers to Find the Best Properties. ...
  5. Stay Objective. ...
  6. Choose the Right Neighborhood. ...
  7. Move Quickly and Always Measure. ...
  8. Price Down, Negotiate Up.

What is the danger in property flipping? ›

One of the risks of property flipping is the project costing you a lot more money (and taking a lot more time) than you originally planned for. Being as thorough as possible before taking the plunge can help reduce those risks.

How do you price a house flip? ›

Purchase Price

The 70 rule in house flipping means you calculate the after-repair value (ARV) and secure a home for 70% or less of that price minus repair costs. The after-repair value refers to the price a home should sell for if it's renovated to meet the market standards.

How can I buy a foreclosed home with no money down? ›

There are two main ways to buy a foreclosed home without a cash down payment: with a loan assumption or with financing that doesn't require a down payment, such as cash-out mortgage refinancing, home equity lines of credit, shared equity mortgages, or hard loans.

What is the best state to flip houses? ›

Utah and Tennessee establish themselves as the best places to flip houses in terms of low remodeling costs. New Hampshire meanwhile has the lowest rental vacancy rate. West Virginia boasts the highest homeownership rate in the US and the lowest housing costs.

What is the 70% rule in house flipping? ›

Many real estate investors use the 70 percent rule to determine if a house is worth the time and money it would take to flip. The basic principle is that a flipper should never buy a home for more than 70 percent of its after-repair value (ARV) while also factoring in the cost of renovations.

Can you flip a house with 10k? ›

It's entirely possible you could flip a house with at least $10,000 to start off depending on the geographic location of the property, whether you are willing to do all the work yourself, can buy all the upgrade parts for wholesale and the ultimate price you intend to sell the house for.

Can I start flipping houses with 20k? ›

You absolutely can. Research your market, come up with a flip strategy (what type of house you will want to purchase, how you plan on finding this property, what area you want to purchase, how you will come up with financing), find the property that fits this strategy, secure the financing, and close on the deal.

Is 100k enough to flip a house? ›

Ultimately, $100k is more than enough to successfully fund a fix and flip project, provided you are open to taking out a loan.

What is Micro flipping? ›

What Is Micro-Flipping? Micro-flipping is a type of short-term real estate investment that involves buying properties in need of renovations and reselling them quickly for a profit, usually without improvements.

What adds the most value when flipping a house? ›

7 Renovations to Add Value to Flipping Houses
  • Home improvements that add value for real estate investors. ...
  • Update or renovate the kitchen for best value. ...
  • Focus on bathroom fixtures, finishes, and efficiency. ...
  • Increase home value with new paint and flooring. ...
  • Add curb appeal through smart landscaping. ...
  • Be strategic with lighting.
28 Feb 2021

What's the best state to flip houses? ›

Utah and Tennessee establish themselves as the best places to flip houses in terms of low remodeling costs. New Hampshire meanwhile has the lowest rental vacancy rate. West Virginia boasts the highest homeownership rate in the US and the lowest housing costs.

What is a good profit on a flip? ›

How much profit should you make on a flip? On average, a rehabber shoots for a 10 to 20% profit of the After Repair Value, but it varies depending on the market and the specific project risks. A 10% profit would be on the lower end, and a 20% profit would be considered a 'home-run' by most rehabber's standards.

What is illegal house flipping? ›

A con artist buys a property with the intent to re-sell it an artificially inflated price for a considerable profit, even though they only make minor improvements to it.

Can you make money flipping houses in 2022? ›

323,465 homes were flipped in 2021, the most homes flipped in a single year since 2006 and a 26% increase from 2020.
House flipping gross profit and return on investment.
YearShare of house flips purchased with financingShare of house flips purchased with all cash
2022 (Q1)37%63%
5 more rows
20 Jul 2022

Where can I find fix and flip properties? ›

The key to finding them for your house flip is to work with a realtor who has the inside track on these real estate listings and new rehab homes on the market. You can find them by doing specific internet searches for REO real estate agents and brokers within a specific geographic area.

Can you get rich off flipping houses? ›

You could make $1 million a year flipping houses, but it is not as simple as it may seem. To run an operation large enough to flip low-margin houses, you will need a team and a lot of help. There are many costs involved that eat into that profit.


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