916: Crucial Contractor Tips to Avoid Renovation Disaster w/‘Rico to the Rescue’

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Investing, Business

4.8 • 16.6K Ratings

🗓️ 18 March 2024

⏱️ 47 minutes

🔗️ Recording | iTunes | RSS

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Summary

A bad contractor could not only ruin your home renovation but cost you tens if not hundreds of thousands of dollars. Don’t believe us? Just ask Rico to the Rescue’s Rico León. Rico has spent years cleaning up contractor mistakes, making homeowners feel whole again after getting ripped off, lied to, and scammed by who they thought were reputable contractors. As a contractor himself, Rico knows the red flags to spot right away to tell if a contractor will take your money and run, and he’s sharing them with us today! This episode is crucial for ANYONE who owns a home, is looking to renovate one, or is just getting started in real estate investing. Home renovations can make or break your career as a real estate investor, so knowing who can get the job done is a skill that can’t be overlooked. Rico breaks down the common problems inexperienced contractors run into, the Ponzi scheme of payments to look out for, how to create a contractor contract so you protect yourself, and the mistakes you can prevent BEFORE you hire a contractor. Plus, we’ll get into the not-so-obvious red flags that only an experienced contractor will notice, what you need to check before you hire a contractor, the milestones to set up so you don’t get ripped off, and the conversation you must have with ANY contractor before work begins. Finally, Rico leaves us with four tips to help even the most inexperienced homeowner hire the right contractor. In This Episode We Cover: Red flags that point to a shady contractor who has their eyes on your wallet Writing your contractor contract so you stay legally protected during a renovation Why you never (EVER!) pay upfront for a home renovation What you MUST check before you hire a contractor to ensure they’re legit The common contractor Ponzi scheme that is slowly being targeted by local governments Expert-tested tips to hire the right contractor for your first home renovation And So Much More! Links from the Show Find an Agent Find a Lender BiggerPockets Youtube Channel BiggerPockets Forums BiggerPockets Pro Membership BiggerPockets Bookstore BiggerPockets Bootcamps BiggerPockets Podcast BiggerPockets Merch Join BiggerPockets for FREE Learn About Real Estate, The Housing Market, and Money Management with The BiggerPockets Podcasts Get More Deals Done with The BiggerPockets Investing Tools Find a BiggerPockets Real Estate Meetup in Your Area Expand Your Investing Knowledge With the BiggerPockets Books Be a Guest on the BiggerPockets Podcast Hear Henry and James On the “On the Market” Podcast Henry's BiggerPockets Profile Henry's Instagram James' BiggerPockets Profile James' Instagram Watch "Rico to the Rescue" On HGTV Catch Rico On the Other HGTV Shows: Battle on the Mountain House Hunters: All Stars Check out more resources from this show on https://www.biggerpockets.com/blog/real-estate-916 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email advertise@biggerpockets.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	What's going on everybody? Welcome to the BiggerPockets Real Estate Podcast. I am your host Henry Washington
0:06.5	and I am joined today by my good friend Mr. James Dainerd for a show about one of the most relatable universal problems that investors face,
0:16.6	and that is contractors.
0:18.8	James, have you ever had a nightmare contractor?
0:21.7	Never once.
0:22.8	Every job site has not 100% smooth, always.
0:26.8	Batten a thousand.
0:27.8	Batten a thousand.
0:29.0	You know, I feel like me and you were talking about construction
0:30.6	a lot the last couple weeks.
0:32.1	Definitely one of my favorite topics, because, you know, I'm a value added investor, so the
0:36.0	construction is so important to implement correctly and have the right people on your team.
0:40.6	We're going to cover a lot of things that will help spare our listeners some pain to where they don't make same mistakes. They can vet their contractors and avoid costly problems.
0:50.0	And to do that, we have brought in Mr. RICO Leon.
0:54.0	RICO is a contractor who specializes in cleaning up other contractors' messes.
0:58.8	In fact, he's so good at it.
1:00.1	They gave him a show on HD TV called Rico to the rescue where he does just that.
1:04.4	So today he's going to talk to us about what red flags to look out for when hiring contractors,
1:10.7	how to protect yourself with a strong contractor agreement and what property
1:16.1	owners can do even if a contractor project goes way way out of bounds.
1:21.6	And I do want to say that not all contractors are bad. We
1:24.5	referenced that a lot throughout our show. There's thousands of great ones out
	...

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