Research
Home Research Details Steps Asbestos

Research Index

The research preparation for a flip of a residential property should take longer to complete than the actual work on the property after you own it.  During this phase, issues may present themselves which make the project unworkable. Or issues may become clear that this as one great prospect for making money. Without spending time on research, entering a new project will be a guess at best.

Here is an index of some of the topics which may be appropriate to research for each property under consideration. Click on each as needed. Some projects will not have as many research topics as others. Base the investigation on the assumption that each research topic is important until it is ruled out as inappropriate for a specific property.

The suggested method to use this index is to start at the top left. Determine if this is an appropriate task to perform based on your specific situation. When complete, move to the next index item to the right. Then move across and down the table of topics until complete.

Some topics may need quite a bit of time to complete. Others are just a matter of a few minutes. Be sure to take notes, keep names and telephone numbers, and in general, be ready to research again and again each appropriate topic.

Each of these topics would make a good tab in a file folder or notebook for quick access of details as needed. 

Use your back button to return to this index.

 

Table Of Research Topics

Investigate Area
Document Trends
Locate Possibilities
Evaluate comparables
Identify Buyer Type
Develop Rough Budget
Consult Realtor
Shop Mortgage
Establish Cash Source
View Each Property
Independent Inspection
Building Department Visit
Improve Rough Budget
Contractor Inspection
Insurance Policy Plan
Evaluate Details Checklist
Develop Scope Of Work
Write Specifications
Request For Proposals
Materials List
Equipment Needs
Architect Meeting
Building Department 
Financial Plan Set
Tax Liability
Finalize Financial Plan
Accounting System Ready
Bank Account Ready
Verify Scope Of Work
Establish Timeline
Title Insurance Plan
Offer To Purchase
Tentative Material Orders
Tentative Contractor Plan
Tentative Insurance 
Tentative mortgage

 

     
 

The greatest amount of money is paid to contractors. Avoid problems by becoming educated in selecting qualified and reputable contractors. Here are some useful details about selecting contractors:

SOURCE

Home Sweet Home Improvement

Whether youíre planning an addition for a growing family or simply getting new storm windows, finding a competent and reliable contractor is the first step to a successful and satisfying home improvement project.

Your home may be your most valuable financial asset. Thatís why itís important to be cautious when you hire someone to work on it. Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV. However, donít consider an ad an indication of the quality of a contractorís work. Your best bet is a reality check from those in the know: friends, neighbors, or co-workers who have had improvement work done. Get written estimates from several firms. Ask for explanations for price variations. Donít automatically choose the lowest bidder.

Home Improvement Professionals

Depending on the size and complexity of your project, you may choose to work with a number of different professionals:

bulletGeneral Contractors manage all aspects of your project, including hiring and supervising subcontractors, getting building permits, and scheduling inspections. They also work with architects and designers.
bulletSpeciality Contractors install particular products, such as cabinets and bathroom fixtures.
bulletArchitects design homes, additions, and major renovations. If your project includes structural changes, you may want to hire an architect who specializes in home remodeling.
bulletDesigners have expertise in specific areas of the home, such as kitchens and baths.
bulletDesign/Build Contractors provide one-stop service. They see your project through from start to finish. Some firms have architects on staff; others use certified designers.

Donít Get Nailed

Not all contractors operate within the law. Here are some tip-offs to potential rip-offs. A less than reputable contractor:

bulletsolicits door-to-door;
bulletoffers you discounts for finding other customers;
bulletjust happens to have materials left over from a previous job;
bulletonly accepts cash payments;
bulletasks you to get the required building permits;
bulletdoes not list a business number in the local telephone directory;
bullettells you your job will be a "demonstration;"
bulletpressures you for an immediate decision;
bulletoffers exceptionally long guarantees;
bulletasks you to pay for the entire job up-front;
bulletsuggests that you borrow money from a lender the contractor knows. If youíre not careful, you could lose your home through a home improvement loan scam.

Hiring a Contractor

Interview each contractor youíre considering. Here are some questions to ask.

bulletHow long have you been in business? Look for a well-established company and check it out with consumer protection officials. They can tell you if there are unresolved consumer complaints on file. One caveat: No record of complaints against a particular contractor doesnít necessarily mean no previous consumer problems. It may be that problems exist, but have not yet been reported, or that the contractor is doing business under several different names.
bulletAre you licensed and registered with the state? While most states license electrical and plumbing contractors, only 36 states have some type of licensing and registration statutes affecting contractors, remodelers, and/or specialty contractors. The licensing can range from simple registration to a detailed qualification process. Also, the licensing requirements in one locality may be different from the requirements in the rest of the state. Check with your local building department or consumer protection agency to find out about licensing requirements in your area. If your state has licensing laws, ask to see the contractorís license. Make sure itís current.
bulletHow many projects like mine have you completed in the last year? Ask for a list. This will help you determine how familiar the contractor is with your type of project.
bulletWill my project require a permit? Most states and localities require permits for building projects, even for simple jobs like decks. A competent contractor will get all the necessary permits before starting work on your project. Be suspicious if the contractor asks you to get the permit(s). It could mean that the contractor is not licensed or registered, as required by your state or locality.
bulletMay I have a list of references? The contractor should be able to give you the names, addresses, and phone numbers of at least three clients who have projects similar to yours. Ask each how long ago the project was completed and if you can see it. Also, tell the contractor that youíd like to visit jobs in progress.
bulletWill you be using subcontractors on this project? If yes, ask to meet them, and make sure they have current insurance coverage and licenses, if required. Also ask them if they were paid on time by this contractor. A "mechanicís lien" could be placed on your home if your contractor fails to pay the subcontractors and suppliers on your project. That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project. Protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.
bulletWhat types of insurance do you carry? Contractors should have personal liability, workerís compensation, and property damage coverage. Ask for copies of insurance certificates, and make sure theyíre current. Avoid doing business with contractors who donít carry the appropriate insurance. Otherwise, youíll be held liable for any injuries and damages that occur during the project.

Checking References

Talk with some of the remodelerís former customers. They can help you decide if a particular contractor is right for you. You may want to ask:

bulletCan I visit your home to see the completed job?
bulletWere you satisfied with the project? Was it completed on time?
bulletDid the contractor keep you informed about the status of the project, and any problems along the way?
bulletWere there unexpected costs? If so, what were they?
bulletDid workers show up on time? Did they clean up after finishing the job?
bulletWould you recommend the contractor?
bulletWould you use the contractor again?

Understanding Your Payment Options

You have several payment options for most home improvement and maintenance and repair projects. For example, you can get your own loan or ask the contractor to arrange financing for larger projects. For smaller projects, you may want to pay by check or credit card. Avoid paying cash. Whatever option you choose, be sure you have a reasonable payment schedule and a fair interest rate. Here are some additional tips:

bulletTry to limit your down payment. Some state laws limit the amount of money a contractor can request as a down payment. Contact your state or local consumer agency to find out what the law is in your area.
bulletTry to make payments during the project contingent upon completion of a defined amount of work. This way, if the work is not proceeding according to schedule, the payments also are delayed.
bulletDonít make the final payment or sign an affidavit of final release until you are satisfied with the work and know that the subcontractors and suppliers have been paid. Lien laws in your state may allow subcontractors and/or suppliers to file a mechanicís lien against your home to satisfy their unpaid bills. Contact your local consumer agency for an explanation of lien laws where you live.
bulletSome state or local laws limit the amount by which the final bill can exceed the estimate, unless you have approved the increase. Check with your local consumer agency.
bulletIf you have a problem with merchandise or services that you charged to a credit card, and you have made a good faith effort to work out the problem with the seller, you have the right to withhold from the card issuer payment for the merchandise or services. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges.

The "Home Improvement" Loan Scam

A contractor calls or knocks on your door and offers to install a new roof or remodel your kitchen at a price that sounds reasonable. You tell him youíre interested, but canít afford it. He tells you itís no problem ó he can arrange financing through a lender he knows. You agree to the project, and the contractor begins work. At some point after the contractor begins, you are asked to sign a lot of papers. The papers may be blank or the lender may rush you to sign before you have time to read what youíve been given to sign. You sign the papers. Later, you realize that the papers you signed are a home equity loan. The interest rate, points and fees seem very high. To make matters worse, the work on your home isnít done right or hasnít been completed, and the contractor, who may have been paid by the lender, has little interest in completing the work to your satisfaction.

You can protect yourself from inappropriate lending practices. Hereís how.

Donít:

bulletAgree to a home equity loan if you donít have enough money to make the monthly payments.
bulletSign any document you havenít read or any document that has blank spaces to be filled in after you sign.
bulletLet anyone pressure you into signing any document.
bulletDeed your property to anyone. First consult an attorney, a knowledgeable family member, or someone else you trust.
bulletAgree to financing through your contractor without shopping around and comparing loan terms.

Getting a Written Contract

Contract requirements vary by state. Even if your state does not require a written agreement, ask for one. A contract spells out the who, what, where, when and cost of your project. The agreement should be clear, concise and complete. Before you sign a contract, make sure it contains:

bulletThe contractorís name, address, phone, and license number, if required.
bulletThe payment schedule for the contractor, subcontractors and suppliers.
bulletAn estimated start and completion date.
bulletThe contractorís obligation to obtain all necessary permits.
bulletHow change orders will be handled. A change order ó common on most remodeling jobs ó is a written authorization to the contractor to make a change or addition to the work described in the original contract. It could affect the projectís cost and schedule. Remodelers often require payment for change orders before work begins.
bulletA detailed list of all materials including color, model, size, brand name, and product.
bulletWarranties covering materials and workmanship. The names and addresses of the parties honoring the warranties ó contractor, distributor or manufacturer ó must be identified. The length of the warranty period and any limitations also should be spelled out.
bulletWhat the contractor will and will not do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause." It makes the contractor responsible for all clean-up work, including spills and stains.
bulletOral promises also should be added to the written contract.
bulletA written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the sellerís permanent place of business. During the sales transaction, the salesperson (contractor) must give you two copies of a cancellation form (one to keep and one to send back to the company) and a copy of your contract or receipt. The contract or receipt must be dated, show the name and address of the seller, and explain your right to cancel.

Keeping Records

Keep all paperwork related to your project in one place. This includes copies of the contract, change orders and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project ó during or after construction.

Completing the Job: A Checklist

Before you sign off and make the final payment, use this checklist to make sure the job is complete. Check that:

bulletAll work meets the standards spelled out in the contract.
bulletYou have written warranties for materials and workmanship.
bulletYou have proof that all subcontractors and suppliers have been paid.
bulletThe job site has been cleaned up and cleared of excess materials, tools and equipment.
bulletYou have inspected and approved the completed work.

Where to Complain

If you have a problem with your home improvement project, first try to resolve it with the contractor. Many disputes can be resolved at this level. Follow any phone conversations with a letter you send by certified mail. Request a return receipt. Thatís your proof that the company received your letter. Keep a copy for your files.

If you canít get satisfaction, consider contacting the following organizations for further information and help:

bulletState and local consumer protection offices.
bulletYour state or local Builders Association and/or Remodelors Council.
bulletYour local Better Business Bureau.
bulletAction line and consumer reporters. Check with your local newspaper, TV, and radio stations for contacts.
bulletLocal dispute resolution programs.

For More Information

ē Federal Trade Commission: www.ftc.gov

ē National Association of Home Builders Remodelorsô Council: www.nahb.com

To order a free copy of How to Find a Professional Remodeler, send a self-addressed stamped envelope to:

NAHB Remodelors Council
Dept. FT
1201 15th Street, NW
Washington, DC 20005

ē National Association of Consumer Agency Administrators: www.nacaanet.org

1010 Vermont Avenue, NW
Suite 514
Washington, DC 20005
E-mail: nacaa@erols.com

The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint or to get free information on consumer issues, visit www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.

 

Prepared 2006-2011 David Ullian Larson 
dularson@bellsouth.net

Other websites which may be of interest:
http://www.electricianeducation.com

http://www.electricianmath.com
http://www.technicianeducation.com
http://www.visiteuropeonline.com

http://www.swedenroots.com
http://www.stampdealerlots.com 
http://www.oldpostcardsforsale.com
http://www.greenfieldvillageonline.com
http://www.6901st.org