Friday, October 23, 2009


In our last article, Larry outlined some great questions that you should always ask your contractor.

His follow up article lays out really interesting points that you should consider asking yourself before hiring a contractor. It outlines some great lessons that will help you make decisions that could very well determine the success and profitability (or lack there of) of each rehab project you take on.

Take some time and read them through, and if you have thoughts to share with us on other pertinent contractor questions, we would love to read them.

Happy Investing!

Rehab Funding Staff


By: Larry Goins

Secret #1: You cannot always rely on the Better Business Bureau to determine whether a contractor is qualified or not

Many people feel that if the Better Business Bureau does not have any complaints against a company, they must be a reputable firm. Unfortunately this just is not true. You cannot rely on the Better Business Bureau to determine whether you are dealing with a competent contractor. Just because a contractor has not had any complaint logged with the Better Business Bureau does not mean he is competent or that he will do a good job! All that it means is that the Better Business Bureau does not have a file on him at this time. In fact, according to a recent issue of Money Magazine, the Better Business Bureau does not do a very good job of reporting offending companies at all. So, just because a contractor does not have any complaints with the BBB you are not assured your working with someone who is reputable.

Secret #2: The company that offers you the lowest price is not necessarily the company you should hire

Here are some important points to consider:

On a low estimate, you must ask yourself what is being left out or what short cut is being taken. Be careful of choosing your remodeler based solely upon the lowest price. The price you see offered may not be for the services you want performed.

One of the most common signs of trouble ahead in your project is someone offering to do the work for much less money than other contractors or a contractor asking for large sums of money up front. This could be a tip-off that the contractor is not financially stable and that could spell trouble ahead for you.

Though price is a consideration, you should be more concerned with value, that is, getting the best contractor you can find and the highest quality work for your money.

Secret #3: Doing it yourself does not always save money

Sometimes the “weekend warrior” can undertake small projects like painting, hanging wallpaper, routine repairs, etc. But beware of undertaking larger, more complicated projects. What starts out as an attempt to save money can turn into a money pit. All too often the job is botched and it costs more to have a professional come in and fix what is been done. According to an article in the Baltimore Sun, less than 20% of these do-it-yourself jobs work out. If you want to be assured your project will turn out the way you want it, call a qualified professional.

Secret #4: If a person claims to have many years of experience, it does not necessarily mean they do quality work.

I cannot tell you how many people receive bad workmanship from contractors who’ve claimed to be in business or the trade for twenty years or more. Take experience claims with a grain of salt. Do not believe just because a person has twenty years' experiences, he will do a good job. He could have done a poor job for twenty years. Investigate further to ensure you are dealing with a qualified professional.

Secret #5: Today only discounts

If a contractor ever tells you that the price is available for “today only," it’s time to show him the door. Quite often they’ll provide you a story that by signing today you’re entitled to a ‘model home” or ‘advertising discount." The story centers around the need to use your home as a model to advertise their services in the neighborhood. They mark their prices up just to give you this false discount. Don’t be fooled. This is an old trick used to pressure homeowners into making a quick decision. This is your money we are talking about! Quickly show these salesmen the door!

Secret #6: Avoid high-pressure salespeople

You should never feel pressured into making a decision about choosing your contractor. If you ever feel that a contractor or salesman is pressuring you, ask them to back off. If they persist, its time to look for another contractor. High pressure usually leads to a bad decision when remodeling. A qualified professional would never have to pressure anyone into a project.

Secret #7: Listening to the wrong people

It never ceases to amaze me how many people take advice on their construction and remodeling project from people who are totally unqualified to give this critical advice. Quite often, when I see construction messes, and I ask where they got the idea to do this or that, I inevitably hear things like:

My brother-in-law told me to do that. He used to do work like this on the side when he was a in college.

I asked the guy in the office next to mine. He did the same thing to his home when he lived in Wisconsin.

I read an article by so-and-so that said we should...

Everyone has an opinion on what you should do with your remodeling dollars. “Do it yourself” or “Hire the sub-contractors and run the project yourself," etc. Just because someone is your relative, friend, or thinks they know construction, doesn’t mean they know the answers to your remodeling questions or problems.

Secret #8: Appearance

Now that you have met the contractor, make sure he has a neat appearance.

This may sound silly but it’s not. A coat and tie are not necessary, but neatness does count in this business. During construction your home should be kept as neat and tidy as possible. So, make sure his truck is clean, he is clean and his shoes should not be caked with mud!

Secret #9: Communication

When discussing your project with a contractor make sure that you can communicate well. You are going to be involved in an important project together. You should feel that your contractor listens to your needs and ideas, answers your questions and he should be accessible. This avoids miscommunication and costly errors.

Secret #10: Completion

Will your contractor give you a reasonable estimate for how long the project will take to complete. A good contractor will do this. Remember, you want to hire a good contractor, not get a new roommate! Nothing is more frustrating and irritating than a remodel job that drags on and on.

Bonus Secret #11: Down Payment

If the contractor asks for a big chunk of money up front, this could be a tip-off that they are not in good financial shape and you could be in for a rocky experience. A fair down payment should not exceed one third, unless custom ordered items are needed in the beginning stage of construction. As the work progresses, you should expect to pay out additional funds to match the prescribed, completed stages.

By following these recommendations, you will gain all the information you need to make an informed, intelligent decision.

Tuesday, October 20, 2009

Manage your contractors for maximum profit.

Selecting the right contractor is essential to the ultimate success on your real estate investment projects. We’ve overseen thousands of real estate rehabs and we’ve had a lot of success and a lot of failure.

If you can learn to screen properly for the right contractor, your chances of success will improve dramatically. Too many real estate investors choose a company based on price alone. We all want to save money, but an inexpensive original estimate doesn’t guarantee anything because low ball estimates often lead to cost over runs or inferior work. However, if you’ve seen the work of the contractors and spoken to others who have used them, you can have a stronger basis for hiring them.

Here’s a well written article that will help you choose the right company. We hope that this helps to save you money and aggravation.


By: Larry Goins

  1. Are you licensed? Most states require contractors, even sub-contractors to be licensed. Make sure your contractor is properly licensed. Anyone can say they are licensed. Make the contractor prove it by either showing you the license or giving you a copy of it. Remember to check the expiration date. Being licensed is the law. If a contractor cannot produce a valid license, DO NOT HIRE HIM! You can check the contractor’s current licensing status with your states Secretary of State.
  2. Do you carry general liability insurance? Make sure your contractor carries general liability insurance. This type of insurance protects your property in case of damage caused by the contractor and/or his employees. The insurance company will pay for the cost of replacing, and/or repairing any damage that occurs. Anyone can say they are insured. Make the contractor prove it by having a certificate of insurance.
  3. Do you carry workers’ compensation insurance? Make sure your contractor carries workers’ compensation insurance. It protects you from liability if a worker is injured while on your property. Be aware that if the contractor does not carry workers’ compensation coverage, you may be liable for any injuries suffered by the contractor, or any of his employees on your property. If the contractor is a one-man operation, he can be exempt from having to carry workers’ compensation insurance. If he is doing so legally, he can provide you with a copy of his Construction Industry Certificate of Exemption from Workers’ Compensation. This is very risky for you though. If he shows up with a helper and the helper gets hurt, with no workers’ compensation insurance, you may have to pay the medical bills. If the uninsured contractor is sloppy about verifying his sub-contractor’s workers’ compensation insurance and the sub-contractor gets hurt, again you may have to pay the medical bills. In short, it is much safer to deal with a fully insured contractor.
  4. Do you offer Financing? Many Contractors are lender-approved contractors. They have been approved and investigated by lenders as being financially sound, maintaining satisfactory relationships with suppliers, satisfactory credit and no outstanding complaints at the Better Business Bureau.
  5. Are you a member of NARI or NAHB? NARI stands for the National Association of the Remodeling Industry and NAHB stands for the National Association of Home Builders. It’s always a good idea to consider hiring a NARI or NAHB contractor. In most cases, both organizations only attract conscientious contractors interested in bettering the industry and in weeding out unprofessional contractors. In order to become a member, the contractor’s background and references are thoroughly investigated.
  6. Will you pull all the required building permits? Make sure your contractor pulls all required permits. This is very important. When a contractor pulls the required building permits, you know things will be done to “code." Also, many homeowners insurance policies require pulling a permit on any major remodeling to keep your home properly covered. Not all contractors will do this. Many prefer not to pull permits because of the time involved and the “hassle” with the inspectors. Some contractors may ask you to get the permits. This could be a warning sign that they are not able to pull the permit because they are either unlicensed or the work is outside of their license. A reputable contractor will permit every job where a permit is required.
  7. Do you guarantee your work? Your contractor should guarantee his work for at least one year from date of completion. They should also include any warranties from the material used if applicable.
  8. Who will be in charge of the job? Make sure the contractor or his foreman is on the job whenever work is being performed-especially if sub-contractors will be used. The responsible party must be familiar with every aspect of your project. You cannot be worried about what is going on when you are not there.
  9. Will you provide me with written references? A good contractor will be happy to provide you with references. You should look for a well-established contractor who can give you several customer references from the last 6 months to one year. Ask for the name of the contractor’s accountant or banker. You want to ensure the contractor is financially sound and will not be declaring bankruptcy in the middle of your project.
  10. How do you handle “dirty work”? Construction is dusty and dirty! It gets everywhere, especially if any sanding is being done. Make sure the contractor will make an honest effort to keep the dust contained, or notify you when the heavy dust generating operations will take place so you can place sheets over furniture or move sensitive belongings. Make sure the contractor agrees to sweep up and place all construction debris in a predetermined place or refuse container at the end of every day.

If you follow these simple steps when selecting a contractor, you will be much better prepared to tackle your rehabs with confidence. Stay tuned as we bring you more great relevant articles and our thoughts on the state of Real Estate investing.

Rehab Funding Staff.

Friday, September 4, 2009

List your Properties for Free

Well its finally here. We have been hard at work to give our investors every advantage we can. To that end, we have added a section to our website where you can post as many of your properties for sale as you wish.

Go to:

to create your free account. Once you log in you can post as many properties for sale as you like.

Let us know what you think. We encourage your feedback.

Rehab Funding

P.S. We are busy creating a new software suite designed especially for real estate investors. It's been pretty hush hush, but it's almost done.

Think about it, real estate investor software that will automate your business. Not just the easy stuff either. We're talking front to back automation designed by veteran hard money lenders and real estate investors. You'll always know what needs to be done now, what is scheduled for completion, and all the steps forms and events that all happen throughout your busy day. Every step, automated.

We are looking for experienced real estate investors to help us fine tune the last details of the product. For you assistance we will give you free lifetime access to the software all future enhancements and add-ons. We want your feedback to make this the only system you will ever need.

Contact: David Cline at

Please include a brief discription of your background and specific area of expertise.

Please understand that we can only select a very small number of the people who apply to this. we will offer a substantially discounted price to everyone who applies, at the release of the final product.

Monday, July 27, 2009

New Services with Rehab Funding

We have been hard at work to give our investors access to the thousands of "Active" real estate investors everyday. Well it's almost here!

Everyone will now have the opportunity to list thier property for sale FOR FREE!

Are you looking for properties? Well sign up for auto-notifications and be the first to receive notifications the minute a property is added in your investing area.

Sign up to our blog to be the first to receive notification this week when we roll this out. Feel free to contact us if you have questions or are looking for a rehab loan or hard money for your next property rehab. Send your inquiries to We are eager to hear from you.

Subscribe to our blog to stay ahead of your competition and learn the latest and best techniques to constantly improve your investing career.

Happy Investing

David Cline
Rehab Funding

Thursday, May 14, 2009

Welcome to Rehab Funding's Blog!

Rehab Funding is a leading national lender helping real estate investors to acquire and rehab properties for investment purposes. Our specialty is allowing you, the real estate investor, to leverage your liquid capital to purchase more homes without any cash flow problems!

Successful real estate investors need the right tools to allow them to maximize their cash flow and to successfully negotiate the best and lowest price on investment properties.

Nothing could help your cash flow more than 100% funding and deferred payment plans!

To learn all about our terms and cost, please go to the "Rehab Programs" page and our Frequently Asked Questions page.

For full pre-qualification instructions, please go to the "Pre-Qualification Documents" page.