Top 3 Ways to Find Good Rehab and Repair Contractors – Part 2 of 3: Licensed Contractor List
In the previous article, Part 1 of 3, we talked about finding contractors through Referrals.
The second way that I want to give you to find repair contractors that you probably haven’t heard before is getting a list of licensed contractors from your city (or local government).
In the state of Ohio contractor licenses are issued on a city level. Of course there’s a possibility that it could be on a county or state level where you live, but the point is that the contractor licenses in your area are also likely issued at some local government level. For ease of discussion, we’ll just refer to them as being issued by the city.
✅ When and Why You Should Hire Licensed Contractors
When many investors hear the term “licensed contractors”, they’re thinking, “that sounds expensive”, or at least “more expensive” than a non-licensed contractor.
If it’s a small job, let’s say like something like painting, then maybe I hire a handyman to do that. I might even hire a handyman-type person to do a small cosmetic facelift for a kitchen or bathroom.
But if the job is bigger than that, where I’m having them do a total renovation of a kitchen or bathroom, or a total renovation of a house, then I’m definitely going to hire a licensed contractor… Period… No way around it.
And, yes, I’m definitely willing to pay more for that. But what am I paying extra for? I’m paying for quality. I’m paying for getting the project done (closer to) on time and (closer to) on budget.
And I’m paying for somebody who has a certain level of professionalism and accountability. I’m paying for fewer hassles and less babysitting.
So, if a contractor is going to expend the time, money, and effort to get a license from the city, especially from a large city, like Columbus, Ohio, then chances are they have some higher level of accountability than somebody who’s not willing to jump through those extra hoops.
I want somebody who has an active (not expired) contracting license if I’m doing any kind of large renovation project; plus, they’re typically going to be more responsible on the job, because they value their license, right?
Part of the problem with hiring contractors is getting them to show up for work. When I’m hiring a licensed contractor, I expect a higher degree of professionalism, and somebody that’s treating their contracting work like a real business, and not just a side hustle.
I’m running a million-dollar business, and I want them to treat their business like a very serious business as well.
So again, for a small job, maybe hire a handyman. But for a big job, I’m definitely going to hire a licensed contractor.
✅ Permits
Also, there’s the issue of permits. For many rehab jobs, small or large, the city may require permits to be pulled. These cost money and is basically a way for the city to generate extra revenue, but also make sure that renovations are being done up to local building codes.
If a job requires a permit, and the city discovers that permits haven’t been obtained, then they can fine you a lot of money, and/or require you to RIP OUT the work you did, obtain the permit, and REDO the work!
Ouch! Obviously no one wants to pay for the same job twice! So better to get the permits and avoid all that costly nonsense!
In our area, only the homeowner or a licensed contractor can pull (obtain) these permits. A non-licensed contractor or “handyman” cannot pull the permits.
I prefer to let the contractors pull the permits, and expect them to just add the licensing fees and/or their time involved in obtaining the permits to the total cost of the job. I don’t want to get involved with the city’s red tape in obtaining permits. I would much rather for the licensed contractor to deal with that.
✅ How Do You Know if They’re Really Licensed?
Now, one of the problems is that many contractors lie about being licensed, bonded and insured.
So first I’m going to ask them if they’re licensed. Also, there are differences between licenses in a large city versus licenses in a suburb or smaller municipality.
In the area where I live, Columbus, Ohio, is the main city. And we have a lot of smaller suburbs or municipalities like Dublin, Whitehall, Reynoldsburg, Pickerington, Westerville, etc. that make up the entire Columbus Metropolitan Area.
Sometimes these contractors might be licensed in the suburbs / municipalities, but not licensed in the city of Columbus. There are varying degrees of accountability in these outlying areas. Typically, a contractor that has their license with the big city is going to have more accountability than a contractor that is licensed with a smaller municipality or suburb. Be on the lookout for that.
For me, since I live in Columbus, in a larger city, I’m not impressed with a license from a smaller municipality. I’m especially not impressed if the contractor just tells me that he’s licensed but neglects to tell me that it’s NOT a Columbus license, but that his license is from the suburbs.
In that scenario, I will start to look at him as being a bit deceptive, because (by omission) he’s trying to give the impression that he’s licensed in a big city when he’s really got a small municipality license.
So after they tell me that they’re licensed, then I’m going to ask them, “Where are you licensed from? Is your license issued from the city of Columbus or from one of the suburbs?”
I’m also going to ask them their license number! This is very important! This is another way that I can crosscheck to verify their license!
I can easily verify whether they’re licensed with the city; by just calling the appropriate city department, or I can check them against my contractor list that I’ve obtained from the city of Columbus. Now, let’s talk about how to obtain lists.
✅ Obtaining Contractor License Lists
As I’ve alluded to previously, you just simply contact your city and they should be able to help you find their licensed contractor list online, or even email it to you directly.
You should be able to obtain a list of all the licensed contractors in your area, including general contractors, plumbers, electricians, concrete contractors, roofing contractors, etc.
You can specify to the city licensing department which lists you want, whether you want all the different types of contractors they have licenses for, or if you just want certain types of contractors based on the categories that they have available (i.e. just electricians, or just plumbers, etc.).
There may, or may not be, certain idiosyncrasies unique to your area.
For example, in Columbus, Ohio, we would expect a licensed “general contractor” that works on houses to be called a “general contractor”. For whatever reason, though, that licensing designation doesn’t exist in our city for residential work. Instead, a “general contractor” for residential work is issued a “Home Improvement Contractor (HIC)” license.
They may deliver you the list by hardcopy or PDF document, but I always try to get an Excel file if at all possible. If I have it in an Excel file, then I can sort the data the way I want to. My 2nd choice after an Excel file, would be to receive it in a CSV file or Text file, both of which I can easily import into Excel or Google Sheets.
It’s also important to ask them what exact name the license is in. The license may in their personal name, or it could be in the name of the business THEY run.
Worst-case scenario, is that the license is in the name of their buddy, or their buddy’s business, and they are merely USING their buddy’s license.
Depending on the job, it may or may not be acceptable to me if they are using their buddy’s license. I will feel more comfortable if they tell me up front that they are using their buddy’s license, rather than me finding out after asking them multiple questions, or by cross-checking the list.
Remember, asking them their license number is another way to cross-check the list!
The “I’m using my buddy’s license” thing usually comes up when the time to pull permits is discussed. Very often the guy will say, “I’m not licensed, but If you want permits pulled, then I can get them pulled under my buddy’s license.”
If I’m hiring someone to do a big renovation job, then I would feel a lot more comfortable dealing with the person who actually is the license holder. I want to be dealing with the person that has the most accountability because their name is on the line.
Click Here Now to check out Part 3 of 3 of this series on “Top 3 Ways to Find Good Contractors”
Ready to step up your game?
Check out my step-by-step real estate investing courses for both beginner and advanced investors.
Are you looking for a 1-On-1 real estate investing mentor?
Check out my Monthly Coaching and/or Hourly Consulting Programs.
In the previous article, Part 1 of 3, we talked about finding contractors through Referrals.
The second way that I want to give you to find repair contractors that you probably haven’t heard before is getting a list of licensed contractors from your city (or local government).
In the state of Ohio contractor licenses are issued on a city level. Of course there’s a possibility that it could be on a county or state level where you live, but the point is that the contractor licenses in your area are also likely issued at some local government level. For ease of discussion, we’ll just refer to them as being issued by the city.
✅ When and Why You Should Hire Licensed Contractors
When many investors hear the term “licensed contractors”, they’re thinking, “that sounds expensive”, or at least “more expensive” than a non-licensed contractor.
If it’s a small job, let’s say like something like painting, then maybe I hire a handyman to do that. I might even hire a handyman-type person to do a small cosmetic facelift for a kitchen or bathroom.
But if the job is bigger than that, where I’m having them do a total renovation of a kitchen or bathroom, or a total renovation of a house, then I’m definitely going to hire a licensed contractor… Period… No way around it.
And, yes, I’m definitely willing to pay more for that. But what am I paying extra for? I’m paying for quality. I’m paying for getting the project done (closer to) on time and (closer to) on budget.
And I’m paying for somebody who has a certain level of professionalism and accountability. I’m paying for fewer hassles and less babysitting.
So, if a contractor is going to expend the time, money, and effort to get a license from the city, especially from a large city, like Columbus, Ohio, then chances are they have some higher level of accountability than somebody who’s not willing to jump through those extra hoops.
I want somebody who has an active (not expired) contracting license if I’m doing any kind of large renovation project; plus, they’re typically going to be more responsible on the job, because they value their license, right?
Part of the problem with hiring contractors is getting them to show up for work. When I’m hiring a licensed contractor, I expect a higher degree of professionalism, and somebody that’s treating their contracting work like a real business, and not just a side hustle.
I’m running a million-dollar business, and I want them to treat their business like a very serious business as well.
So again, for a small job, maybe hire a handyman. But for a big job, I’m definitely going to hire a licensed contractor.
✅ Permits
Also, there’s the issue of permits. For many rehab jobs, small or large, the city may require permits to be pulled. These cost money and is basically a way for the city to generate extra revenue, but also make sure that renovations are being done up to local building codes.
If a job requires a permit, and the city discovers that permits haven’t been obtained, then they can fine you a lot of money, and/or require you to RIP OUT the work you did, obtain the permit, and REDO the work!
Ouch! Obviously no one wants to pay for the same job twice! So better to get the permits and avoid all that costly nonsense!
In our area, only the homeowner or a licensed contractor can pull (obtain) these permits. A non-licensed contractor or “handyman” cannot pull the permits.
I prefer to let the contractors pull the permits, and expect them to just add the licensing fees and/or their time involved in obtaining the permits to the total cost of the job. I don’t want to get involved with the city’s red tape in obtaining permits. I would much rather for the licensed contractor to deal with that.
✅ How Do You Know if They’re Really Licensed?
Now, one of the problems is that many contractors lie about being licensed, bonded and insured.
So first I’m going to ask them if they’re licensed. Also, there are differences between licenses in a large city versus licenses in a suburb or smaller municipality.
In the area where I live, Columbus, Ohio, is the main city. And we have a lot of smaller suburbs or municipalities like Dublin, Whitehall, Reynoldsburg, Pickerington, Westerville, etc. that make up the entire Columbus Metropolitan Area.
Sometimes these contractors might be licensed in the suburbs / municipalities, but not licensed in the city of Columbus. There are varying degrees of accountability in these outlying areas. Typically, a contractor that has their license with the big city is going to have more accountability than a contractor that is licensed with a smaller municipality or suburb. Be on the lookout for that.
For me, since I live in Columbus, in a larger city, I’m not impressed with a license from a smaller municipality. I’m especially not impressed if the contractor just tells me that he’s licensed but neglects to tell me that it’s NOT a Columbus license, but that his license is from the suburbs.
In that scenario, I will start to look at him as being a bit deceptive, because (by omission) he’s trying to give the impression that he’s licensed in a big city when he’s really got a small municipality license.
So after they tell me that they’re licensed, then I’m going to ask them, “Where are you licensed from? Is your license issued from the city of Columbus or from one of the suburbs?”
I’m also going to ask them their license number! This is very important! This is another way that I can crosscheck to verify their license!
I can easily verify whether they’re licensed with the city; by just calling the appropriate city department, or I can check them against my contractor list that I’ve obtained from the city of Columbus. Now, let’s talk about how to obtain lists.
✅ Obtaining Contractor License Lists
As I’ve alluded to previously, you just simply contact your city and they should be able to help you find their licensed contractor list online, or even email it to you directly.
You should be able to obtain a list of all the licensed contractors in your area, including general contractors, plumbers, electricians, concrete contractors, roofing contractors, etc.
You can specify to the city licensing department which lists you want, whether you want all the different types of contractors they have licenses for, or if you just want certain types of contractors based on the categories that they have available (i.e. just electricians, or just plumbers, etc.).
There may, or may not be, certain idiosyncrasies unique to your area.
For example, in Columbus, Ohio, we would expect a licensed “general contractor” that works on houses to be called a “general contractor”. For whatever reason, though, that licensing designation doesn’t exist in our city for residential work. Instead, a “general contractor” for residential work is issued a “Home Improvement Contractor (HIC)” license.
They may deliver you the list by hardcopy or PDF document, but I always try to get an Excel file if at all possible. If I have it in an Excel file, then I can sort the data the way I want to. My 2nd choice after an Excel file, would be to receive it in a CSV file or Text file, both of which I can easily import into Excel or Google Sheets.
It’s also important to ask them what exact name the license is in. The license may in their personal name, or it could be in the name of the business THEY run.
Worst-case scenario, is that the license is in the name of their buddy, or their buddy’s business, and they are merely USING their buddy’s license.
Depending on the job, it may or may not be acceptable to me if they are using their buddy’s license. I will feel more comfortable if they tell me up front that they are using their buddy’s license, rather than me finding out after asking them multiple questions, or by cross-checking the list.
Remember, asking them their license number is another way to cross-check the list!
The “I’m using my buddy’s license” thing usually comes up when the time to pull permits is discussed. Very often the guy will say, “I’m not licensed, but If you want permits pulled, then I can get them pulled under my buddy’s license.”
If I’m hiring someone to do a big renovation job, then I would feel a lot more comfortable dealing with the person who actually is the license holder. I want to be dealing with the person that has the most accountability because their name is on the line.
Click Here Now to check out Part 3 of 3 of this series on “Top 3 Ways to Find Good Contractors”
Ready to step up your game?
Check out my step-by-step real estate investing courses for both beginner and advanced investors.
Are you looking for a 1-On-1 real estate investing mentor?
Check out my Monthly Coaching and/or Hourly Consulting Programs.