15 Contractor Interview Questions for Real Estate Investors

March 6, 2022|InvestingTE.com|All Posts, Newbies & Finding Deals, Real Estate Investing, Strategies, Planning & Operations, Team Building

What is your screening process for hiring contractors?

Each role you fill, whether permanent or temporary, should have screening questions.

Maybe you’ll have multiple layers in your hiring process or maybe it will be one layer.

Regardless of how you determine final cuts, you need a starting point.

Today we will review questions for your contractors.

Let’s get started.

Intro

Interviews are best conducted in person.

Body language is known to be 70% or more of human communication.

When the body language doesn’t match what the mouth is saying, we have a concern.

It is up to you to address any concern you feel the concern is worthy of clarification.

Use this a basis when conducting your interview. Ask for clarification if or when necessary.

Contractor Interview Questions

1. Are you licensed?

First and foremost, you need to make sure anyone conducting work is licensed. If you are hiring a handyman, that does side jobs and isn’t advertising their business to the public, they may not have a license. If they are a handyman service, soliciting to the public, they should have a license.

Check your local state laws, but usually any business advertising a product or service to the public, must be licensed.

2. Do you have insurance?

Liability is a important factor. Be sure not only that your contractor has insurance, but there is also ample coverage.

Also, each individual the contractor is subbing work out to, or bringing as a helper, will need confirmation that they are individually insured or insured under the contractor’s insurance.

3. How long have you been running your own crew?

A contractor’s ability to lead, know his crew’s ability and knows his team’s ability to work well together is important. Just because the crew is new doesn’t mean the contractor is not a good leader.

Good people are hard to find. So, a good leader will also assess when to remove people from the team. Just keep in mind to inquire on performance levels and each crew members ability to work independently.

4. How many guys do you have on your crew?

It only takes a few men to build a house. So, a small team does not indicate high or low value.

Neither does a large team does not indicate high value. However, the size of the crew will provide visibility into who does what.

The team created be the owner usually has a “why.” Ask about the “why” when this question is asked.

5. Do you have a list of references?

References are very important. Try to get exact references for the last three jobs.

These are the best people to talk to if those customers are open to it. Be advised of references that could be family and friends of the contractor. These references would never say anything that isn’t positive about their family or friend. If this is observed, ask for more references.

6. Will you be using subcontractors on this project?

It is important to understand the dynamic of what will be happening on your site. Anyone that isn’t a part of the contractors team is important to know.

From a cost, compensation and communication perspective, all these aspects must be understood. Subs will cost you more, because the general contractor will charge you for managing the sub.

Communication and compensation from the contractor to the subs should also be confirmed so possible issues don’t arise. At times, it could be better that the investor pays the subs directly so there aren’t any issues.

7. Are you okay with working with a contract and giving written warranties?

There are many unspoken expectations beyond a normal scope of work. A contract should address all expectations, incentives and pay schedules based upon the scope of work.

To keep both parties honest, a contract is the best action plan for any job.

In regards to warranties, a contractor standing by their work is important. Outside of the manufacturer warranties, a one year warranty should be granted from the contractor. This insures that if anything is encountered that was human error, the contractor will manage it as necessary.

8. Where is your office?

Having an office could be an important factor. Many contractors want 25%, 33% or 50% down before starting a project, but don’t have a location.

Maybe for small jobs, this is okay once trust is established. But for large scale jobs, I would not recommend hiring a contractor who doesn’t have a location. There is too much at stake to not have an ability to have a face-to-face conversation if/when needed.

9. Have you ever had disciplinary action filed against you?

Legal action is a sign of faulty communication, unfair practices or the lack of good business decisions.

No matter what the dispute is (or was), it is important to know the contents of the situation. This doesn’t mean the contractor was at fault, but details matter.

Usually, if there is a contract involved and not just a scope of work, communication at the forefront is much better and reduces the possibility of misunderstandings.

10. Have you ever declared bankruptcy?

Bad money management is a sign you’d want to be aware of prior to hiring.

Knowing the current and past situation is vital in choosing who you hire. Look for honesty and understanding in these scenarios. Be wise in your final decisions.

11. What is the most complicated job you have done?

Experience and attention to details matter. A contractor knows what the most difficult job they’ve ever done is. If they don’t have one, their jobs have all been simple.

It doesn’t mean they aren’t capable of a large job, but you need to determine if they’re experience level is ideal for you.

12. What does communication normally look like with you and your customers?

Getting feedback to how and when the contractor communicates is important.

Seeing how they answer this question will provide a gage on if communication is above, just right or below the level needed for you.

Express your expectations and ask if they can commit if necessary.

13. How do you maintain organization on your job site?

An organized work space is an efficient work space.

On larger jobs, organization is very important. On smaller jobs, cleanliness may not affect productivity as much. A contractor not knowing where he left a tool on a 10,000 SF site, versus a 1,000 SF site, makes a world of difference.

Usually, cleanliness allows better organization and higher efficiency.

14. How many projects do you have going on right now?

Knowing what time the contractor has available matters. If they aren’t busy, it doesn’t mean they aren’t good.

However, it depends on if they are a new business or a old business. Old and not busy isn’t a good sign. New and not busy is totally different.

Assess timing together and if you all’s schedules will accommodate each other.

15. How do you manage through change orders on your projects?

Bids can very manipulative. Some contractors will bid low to get their foot in the door only to change the cost once the job is secured.

Some contractors will bid high, knowing it will be much less, to present the idea of them saving you money in the end. Some will bid exactly to their best estimation, being direct and honest. The only way to confirm legitimacy in any quote is to get time and material costs.

Use the time and material costs as a basis to determine if your bid was fair or if it was manipulative.

Change orders aren’t good or bad depending on how they are used and communicated. Many change orders come from the customer. So, being fair about change orders is a conversation that should be addressed prior to starting a job.