If you’ve been in real estate investing for any length of time you have a contractor story. Probably more than one. I’ve had great contractors and I’ve had contractors who disappeared halfway through a job with my money. Here’s what I’ve learned about navigating these relationships the right way.
Take Your Time Finding the Right One
The biggest mistake investors make is hiring the first contractor who gives them a reasonable quote because they’re in a hurry. Slow down. Ask other investors in your market who they use and trust. A referral from someone who has actually worked with a contractor on an investment property is worth more than any online review.
Get Multiple Bids
Always get at least three bids on any significant job. This isn’t just about price — it’s about understanding the scope of work. When you have three bids you can compare not just numbers but what each contractor is actually proposing to do. Significant differences in bids often reveal that someone is missing something.
Never Pay More Than 10-20% Upfront
Materials for a job might require some upfront payment — that’s reasonable. But paying a large percentage of the total job cost before work begins is how investors get burned. A draw schedule tied to completed milestones protects you. Pay for completed work, not promised work.
Get Everything in Writing
A detailed written contract is non-negotiable. It should specify the exact scope of work, materials being used, start date, completion date, payment schedule, and what happens if the work isn’t completed on time or to standard. Verbal agreements are worth nothing when a dispute arises.
Visit the Job Site Regularly
Don’t assume work is progressing because your contractor says it is. Show up regularly and unannounced. Document everything with photos throughout the project. This keeps contractors accountable and gives you a paper trail if problems arise.
Build a Bench
The best thing you can do as an active investor is develop relationships with multiple contractors across different trades — a general contractor, a plumber, an electrician, an HVAC tech. Having a reliable bench means you’re never desperate, and desperation is when you make bad hiring decisions.
The Bottom Line
Good contractors exist and they’re worth their weight in gold when you find them. Treat them fairly, pay on time, and communicate clearly — and the good ones will prioritize your jobs. Build those relationships carefully and protect them.