Real Estate

How to Start a Real Estate Business

Whether you just got hired as a property manager in Manhattan, or you are a home owner looking to remodel, you are now in the same situation that any property manager is... getting the right contractor.

Before looking through the yellow pages, start with asking your family, friends and neighbors. People who have already gone through the whole process that are giving a recommendation put you way ahead of the game.

Even if the project was totally different, if the company claims to do the type of work you're looking for, it's worth meeting them. Just make sure you have references from the company of similar work that was done.

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A friend of mine who is a property manager in N.Y. gets ideas of who to hire by speaking to people in the inspection department. They know who is reliable, and more importantly, they know the guys who are guilty of shoddy work.

If you know anyone with a property management company, ask them. Property managers (like me) are always hiring contractors, and we don't want to have to do the job twice, and we certainly don't want to overpay.

Don't forget to check with the better business bureau (BBB) for complaints about the contractor. You should be interviewing at least two different contractors. The prices and quality of work from one contractor to another can have a far range, and you will have to weigh both of these factors carefully before making your decision.

Getting the company that puts in the lowest bid might not work to your advantage if you wind up with inferior materials. On the other hand, you really don't need gold edging on your Jacuzzi.

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Finally, you want to make sure that the contractors are licensed and insured. If they don't have a license, you will have a problem when inspection time comes, especially in New York. Even if there is no inspection, a rule of the thumb is if someone is really serious about their work, they will take out the time to get a license.

More important is the insurance. Without insurance, you are the one who liable if anything unfortunate happens. Here is the most important part of the hiring a contracting company, the contract. When things are not spelled out clearly, they have a habbit of winding up in court. A clear, concise contract can save you allot of heartache.

You should have the project written up in detail. What type of moldings, what grade of paint, etc. What are the start and completion dates. It's prudent to think ahead when defining contractor responsibilities. Besides the quality of paint, how are they applying it to the surface? Are they stripping with chemicals (and then you have to move out for three days), or using sanding equipment with a hepa vacuum filter?

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Another issue is getting a lien release. You want your contractor to furnish you with one so that hi suppliers can't take you to court if he doesn't pay his bills. And make sure both parties have an agreement regarding who has to take care of the permit costs. New York City permit fees can run high.

When you finally have agreed on terms, you will have to give a down payment. You shouldn't have to pay more than half, and depending on the job, one third is sometimes sufficient. One more thing, no matter what type of promises you get, don't release that final payment until all work is completed.