When I am completing up to 22 flips at once, having great contractors and a system to keep track of them is vital to my business. It has taken some time, mistakes, and multiple people, but I have things running relatively smoothly now. On this episode of The InvestFourMore Real Estate Podcast, I go over exactly how I have developed my contractor system, how I hire contractors, how I find them, how I pay them, and how I use subcontractors. How has my flipping business evolved with contractors? When I first started flipping houses, I was working with my father. We flipped 3 or 4 houses per year and had one contractor who did most of the work. He was fantastic, charged reasonable prices, was fast, and was dependable. I did not know how good I had it! We were able to use him for years with no issues since we were not flipping that many houses. Toward the end of my partnership with my father, we flipped more and more houses. We had to hire more contractors, and we started to run into problems. I learned you have to spend a lot of time hiring and keeping track of your contractors. I bought out my dad in 2013 and also ramped up the flipping business. I was doing 7 or more flips at a time and needed more contractors. I was not good at keeping track of things and ran into multiple problems that I talk about on the podcast. Eventually, I hired a project manager, who did not help at all. We butted heads as he did not do what I thought he should be doing, and houses did not get repaired any quicker than when I was doing everything on my own. I fired that project manager. I was doing all the work on my own again when I tried out a couple of people who were already on my team to help out with the flips. Nikki, my current project manager did an awesome job and is still my project manager today. Once I had the right person in place, everything got better. She helps hire contractors, works with subcontractors, keeps track of invoicing, designs houses, and helps me decide what to buy. How hiring and delegating will improve your business. How do we find contractors? We use a number of techniques to find contractors: Craigslist Angieslist Thumbtack Home Advisor Home Depot Friends and Family Other agents and investors In the past, we would waste a lot of time meeting contractors at houses and waiting for bids from them. Half the contractors never gave us a bid, and it was very frustrating. Now, we screen our contractors before we meet with them. We send them an email with some questions about their work, what they are looking for, and give them background on us. Most of the contractors do not reply to the email, and we eliminate them. If they respond to the email and we like what they say, we interview them in our office. If we like that interview, we meet them at a house and get a bid from them. We always give new contractors a small job to see how they perform before we give them a big job. We find that the more work one contractor does, the more problems that come up. It usually costs more money to have your contractor do everything as well. How to Find a Great contractor. How do we keep track of and pay our contractors? Some of my biggest problems have come from paying a contractor before they completed all the work. I have accidentally paid a contractor for work they did not do and paid subs before work was all the way done. The best way to get a contractor to stop doing work midway through a project is to pay them in full. I pay contractors 25% up front, 25% when the job is halfway done, and the rest when they complete the work. I want the job to be completed. I go through and blue-tape anything that needs touched up and do not pay them until that is done as well. Nothing is more frustrating than having a house 99% done, but it takes the contractor three weeks to come back and touch up things. We also have a managed Home Depo