How to Hire a Contractor for a Flip: The 10-Invite Rule

The old rule for how to hire a contractor for a flip was simple: get three bids, take the one in the middle. That rule is broken, because getting three bids now takes so long that the first contractor has forgotten who you are by the time the third one calls back. Aaron Keating, a general contractor in Seattle running roughly 16 active projects, tells investors to send requests to about 10 contractors instead and work only with the ones who reply.

The second half of the answer is less comfortable: a lot of investors shouldn’t be hiring a GC at all. Keating’s own pricing sits in a 20–30% margin range, which prices out most small single-family flips where the investor is swinging a hammer themselves.

Below: the invitation process, which investor profiles a general contractor actually fits, what to screen on once bids come in, the rehab sequence that eliminates surprises, and where owner-contractor relationships blow up.

From the Real Estate Pros Show

This article draws on an interview with Aaron Keating of ARK Washington on the Real Estate Pros Show, hosted by Quentin Edmonds.

Why the Three-Bid Rule Stopped Working

Three bids assumes contractors are competing for your work. Most good ones aren’t. “People are too busy,” Keating says. “It’ll take you forever to get three bids. Those people won’t even remember you by the time you get to the third bid.”

His replacement: send invitations, requests, or emails to about 10 contractors you’d actually want on the job. Then work with whoever replies — and expect that to be about three.

The key shift is how you read silence. Non-response isn’t a problem to solve with follow-up calls. It’s a contractor telling you they have enough work, and a contractor you have to chase into a bid is a contractor you’ll chase through the whole build. “The ones that don’t reply back, they’re too busy. Don’t spin your wheels tracing them down, looking for all these things, forcing people to work for you.”

Practically, that means the sourcing step moves earlier and goes wider. Build your list of 10 before you close, not after. For an investor, every week of unanswered bid requests is holding cost — interest, taxes, utilities, insurance — paid for nothing. Keating is blunt that time is the investor’s real cost, and a bid process that takes six weeks has already eaten part of the margin before demo starts.

Ten invitations also gives you a sample size worth comparing. Three responses from a wide net are three motivated bidders. Three responses pulled out of three invitations are often three contractors who had nothing else going on.

Should You Hire a General Contractor at All?

For a large share of flippers, the honest answer is no. Keating sorts investors into four tiers, and a GC only fits two of them.

• The full DIY investor. Buys the house, fixes it himself, figures out what he doesn’t know as he goes. “If you’re that kind of investor, you do not want to hire a general contractor. I’m too expensive. It’s not going to fit.” He also notes this is the hardest version of flipping — in his observation, these are the operators having the most trouble.
• The semi-skilled investor. Knows enough construction to do some of the work, brings in friends for the trades he can’t cover. Same verdict: a GC doesn’t fit the budget.
• The investor who becomes the GC. This one works, but only as a full-time job. You run the process, the financing, the schedule, and the crews. Keating thinks this path is genuinely successful because you can standardize and get repetition.
• The larger operator. Buying apartments or doing volume. Here a general contractor earns his keep, “because he’s going to be able to get your time and organization in place.”

The deciding variable isn’t the rehab budget in isolation — it’s what your time is worth against holding cost. “For the investor, it’s about time. That’s your cost. That’s your holding cost.” A GC who shortens a 20-week rehab to 12 may cost more and net more. A GC layered on top of a small flip you could have managed yourself just subtracts margin.

Send requests out to about 10 contractors. The ones that reply back, start working with them. The ones that don’t reply back, they’re too busy — don’t spin your wheels tracking them down, forcing people to work for you.

— Aaron Keating, ARK Contractor (Seattle)

What to Screen For Once They Reply

Price is the last thing to compare, not the first. Once you have your handful of responders, Keating says to judge three behaviors: how they communicate, how they do their billing, and how they handle change orders.

Those three predict almost everything that goes wrong later. A contractor who answers your email the same day during the bid will answer it during framing. A contractor whose invoices are itemized and tied to scope will produce change orders you can actually audit. A contractor who is vague about how changes get priced and approved before you’ve signed anything will be vaguer once he’s three draws in.

His selection rule is deliberately uncomfortable for investors trained to squeeze every line: “Trust your gut. Go with the guy — even if he’s more expensive — if you really like the way he communicates. Go with the guy that has the best communication.”

The reason is that a rehab isn’t a transaction, it’s a relationship that runs months. You will be in it through discovery, permit delays, and at least one thing behind a wall nobody priced. The cheapest bid buys you a worse partner for that whole stretch.

He adds one caution worth repeating during bid review: “Shiny things are not always what we want to go after.” Slick presentation, a polished portfolio, and a low number can all mask weak process. Ask how a change order gets written and approved, and ask for a sample invoice. The answers are more diagnostic than the bid total.

The Repeatable Rehab Sequence That Kills Surprises

The sequence never changes. Keating builds every project the same way — ground up, outside in. Land, foundation, walls, then the rest. On a flip, the version he recommends is tighter: demo everything out, fix what needs to be fixed, then paint and install finishes.

The part most investors get backwards is which thing adapts. “If you’re going to be a real estate investor, especially one that wants to do flips, get your system down and find properties that can fit into that system.” The system is fixed; the acquisition criteria flex to match it. Investors who instead redesign the process for every house inherit a new learning curve on every deal and never build speed.

What that looks like in practice:

• Demo is complete before any repair starts, so you discover the problems all at once instead of in three separate surprises.
• The dumpster gets dropped at the same point in the schedule every time.
• The same crews run the same scopes, so nobody is being onboarded mid-project.

Crew continuity is doing most of the work here. Keating’s main crew relationship dates back to COVID — about six years. “You have to have a real relationship with this guy. It can’t be monetary. You don’t want to be treated monetary, and the contractor doesn’t want to either.”

The goal of all of it is stated plainly: “Get the system so there’s no surprises.” Surprises on a flip are schedule, and schedule is holding cost.

Where Owner-Contractor Relationships Actually Break Down

The single biggest failure Keating sees isn’t a contractor problem. It’s owners who don’t read what they’re sent and then dispute the number at the end.

“People come to me and they’re like, okay, Aaron, come remodel my kitchen. And then they come back: how come our budget’s out of whack? Why are you asking me this question? I’ve sent you the change orders. I’ve sent you this communication. We’ve talked about it. Are you reading my emails?” One client told him outright that he doesn’t read his bills — he assumed they’d just be right.

If you’re the owner, you carry real responsibility in the transaction. Read the change orders when they arrive, not at closeout. Approve or reject in writing. Reconcile each invoice against the approved scope before you release the draw. A change order you ignored for six weeks is a change order you’ve effectively accepted.

Prevention happens before the contract. Keating’s framing of relationship-building ends with a hard conversation: “Look, if this goes bad, this is what we’re going to do. If this goes bad, this is what we’re going to do.” Run that conversation through the realistic failure modes — rot behind the siding, a failed inspection, a subcontractor who walks — and agree how each gets priced and decided.

Then take the feelings out of it. “No emotion in contracting.” That applies to the buy, too. He regularly walks houses where an investor has talked himself into a structure that’s falling down. “Doing a house is nothing but math.”

Pricing, Margins, and Tooling on the Contractor Side

Useful calibration from the other side of the table. Keating’s project mix runs from small bathroom refreshes in the $15,000–$20,000 range — gut it, bring it back — up to a two-story garage addition at around $300,000. He’ll break a million in revenue this year across roughly 16 active projects, with a full house build scheduled for next year.

His margin sits in the 20–30% range. That number is the one to hold in your head when a GC bid lands. It’s not padding to negotiate away; it’s the overhead, the warranty exposure, the subcontractor management, and the profit that keeps the business able to show up next quarter. If your flip math only works by assuming the GC runs at 10%, you either need a different deal or you need to be your own GC.

ADUs are a growing product line for him in Seattle — he’s built several, with more coming. That’s a signal for investors in markets where accessory dwelling rules have loosened: the contractors who have already done a few have the permit path figured out, and that’s worth paying for.

On tooling, he runs JobTread for project management and client invoicing. Change orders, communication, and bills all live in one place where the client can see them and respond. He calls it “a force multiplier all the way — best thing I ever did for my company.” When you’re screening bidders, ask what system they use. A contractor running change orders through text messages is a contractor whose budget you won’t be able to reconstruct.

Frequently asked questions

How many contractors should I contact before starting a rehab?

Send invitations to about 10. Expect roughly three to respond, and work with those three. The traditional three-bid approach fails now because busy contractors don’t reply, and by the time you’ve chased down a third bid the first one has moved on.

Build the list before you close so the bid process runs parallel to your due diligence rather than after it, when holding cost has already started.

Is it worth hiring a general contractor on a small flip?

Usually not, if you’re doing any of the work yourself. A GC carries a 20–30% margin, and on a single-family flip where the investor has trade skills or brings in friends for the specialties, that cost doesn’t fit the budget.

A GC earns his fee when organization and speed matter more than line-item price — larger operators, multifamily, or investors whose time is worth more deployed on acquisitions than on job sites.

What should I look at besides price when comparing contractors?

Three things: how they communicate, how they bill, and how they handle change orders. Those behaviors during the bid stage predict how the whole project will run.

Aaron Keating’s rule is to choose the better communicator even at a higher price, because a rehab is a months-long relationship, not a one-time transaction. Ask for a sample invoice and ask exactly how a change order gets priced and approved.

What margin does a general contractor typically build into a rehab bid?

Keating’s own projects run in a 20–30% margin range, spanning $15,000–$20,000 bathroom refreshes up to a $300,000 two-story garage addition. Markets and scopes vary, but that range is a reasonable reference point for a licensed GC managing subcontractors.

If your deal only pencils when the GC works at a much thinner margin, the problem is the deal, not the bid.

How do I avoid budget blowups from change orders?

Read them when they arrive and respond in writing. Keating’s biggest pain point is clients who skip change orders, emails, and invoices and then question the budget at the end — including one who admitted he doesn’t read his bills at all.

Have the what-if-this-goes-wrong conversation before signing: agree in advance how a failed inspection, hidden rot, or a walked subcontractor gets priced and decided. Then reconcile every invoice against approved scope before releasing a draw.

The bottom line

Before your next acquisition closes, build a list of 10 contractors and send the invitation out — then treat the three who reply as your real candidate pool and pick on communication and billing behavior rather than the lowest number.