As a real estate investor, how do you make sure that the general contractors you are working with are qualified? What are the qualities you should look for in a contractor?
Van Sturgeon is an experienced entrepreneur of over 30-years who has successfully created several businesses in the real estate industry that cover land acquisition, development management, construction, and renovation.
Van personally owns over 1,000 properties across North America and is semi-retired from the day-to-day operations of his businesses.
He shares his passion for helping homeowners and real estate investors overcome their fears of house renovations/rehabbing, and he loves to be actively involved in helping people reach their goals.
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Jay Conner:
Speaking of these contractors, Van, what is it that real estate investors should do to make sure that the contractors they’re working with are qualified, and what are the qualities that you want to look for in a contractor?
Van Sturgeon:
Well, obviously, when you come across a contractor or a tradesperson, hopefully, you’ve got them from references that you’ve received from people that you trust. But even in those situations, you still need to go out there and you need to do your due diligence. You need to go visit the job sites, if they have a current job site that they’re working on, go and find out what their condition is. And also, hopefully, you can get a hold of that principal, or the person who they’re doing work for to find out how this tradesperson, contractor is. Are they showing up all the time? Are they happy with the service that they’re being provided? And that’s where you really need to start to figure out whether this is an individual that you want to do business with, or you don’t. It is a process where once you’ve been able to find those contractors and tradesperson that you want to do business with, then ultimately the process of trying to manage them is easy. Because if you have a scope of work in place and you know the details associated with what everybody’s supposed to do, then you can then create a flow chart and create when it is that they’re supposed to arrive and not arrive. And it flows beautifully. I don’t know if I’ve answered your question.
Jay Conner:
Sure. So do you recommend that real estate investors manage their own renovation? And if so, how do they go about doing that if they’ve got a general contractor hired?
Van Sturgeon:
Well, I’m going to suggest that people don’t hire a general contractor. And in fact, I suggest that they plan and manage their own renovation without a general contractor and think of saving between 30 to 50% on the whole total renovation rehab budget. Like, if you go follow the step-by-step process that I’ve just sort of touched on right now with you, you don’t need a general contractor, you can handle this all on your own. It’s just a matter of knowing how to plan and manage it. And there are tens of thousands of dollars that you can save. And with you starting off as a new real estate investor, I think you need to go down that road and do it yourself because not physically do the work, Jay, I’m not suggesting that at all, but hiring the right plumber, the electrician, the painter directly, you eliminate the general contractor acting as a middleman, and you’re dealing directly with these folks and you get the best bang for your buck. And listen, at the end of the day, Jay, you gotta have that skillset just as, as important, it is to find a great deal.
Van Sturgeon:
It’s also really great to be able to plan and manage your own renovation and minimize the rental budget as least amount as possible because that’s more money in your pocket. And if you don’t have that skillset, it’s a problem. Because guess what? Tomorrow you’re going to get a phone call and it says, “Hey, there’s a great deal on this property.” You get over there and you know these properties we’re looking at are ugly ducklings. And if you don’t have a semblance of an understanding of what it is, what kind of work you need to do in that property, how are you going to be in a position to be able to snap that deal up? You got to call up your contractor friend, you’re going to call up your property inspector to come over there? By the time they show up, that property is long gone. So you need to have the skillset. If you’re going to be a successful real estate investor, be able to walk in, determine what exactly what it is you need to do, what the value is, how long it’s going to take and bang that, and then make a decision whether you want to buy that property or not.
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