It's very true- too many people just accept the word of someone that they have never dealt with before and then get burned. Granted, running a business is a risk, and you have to assume some risk to deal with people, but you really need to do your due diligence and be risk only what you are comfortable with.
VERY wise to limit their credit with you.
In other thoughts, here are a few in general for whomever is bored enough to read...
The same caution should go into reading EVERY LINE of a contract that you could potentially sign. Most people that sign these things never know half of what they are giving up. I mean- who in their right mind would sign a contract saying that your company would accept liability for any damages caused by the neglect of the company they are subcontracted to? Really? It's your fault, and I have to pay for it? Who signs that? Impatient preservation vendors. You've got to read these things. If they won't remedy the issues, DON'T SIGN IT!!
I know since I've been doing this on the side, I've turned down countless people. Most of them have almost the same identical contract, and similar crap rates, and if they can't even answer some intermediate questions about P&P, they will have no idea what they're doing once they are handling work orders. "We'll figure it out" isn't an answer from a professional, it's an answer for some dude on Craigslist who borrowed $500 from Mom to start his Preservation company- not someone needs to work for.
There is a simple idea to this, for me at least- The easier the work is to find, the worse it is. Everyone asks "how do I get work from investors, etc..." and really don't seem to understand that in almost every case- it's not as easy as signing on to Craigslist. It takes work. It takes time. It takes investment in yourself and your image. BUT, it is worth it. You go from $35 winterizations to $350 winterizations. You go from $30 grass cuts to $300+ grass cuts. Is every job like that? No. But the majority are.
Why isn't the "secret" of how to do it out yet? 2 reasons- First, it takes a LOT of freaking work. Why is anyone going to spend all that time themselves putting in the effort, then sign on here, and post up "well hey- just do this, talk to this guy, call these companies." Second, it's not really even a secret- it's just a crapload of hard work. Phone calls, donuts, drop-ins, freebies, favors, f**k-its, and frustrations. Not all of the work pays off, but it's a lot better than signing up with FlybynightCo Property Preservation on Craigslist, say "wow, that was easy, look at all of these orders!" Then complain about how they're only paying $30 for a lawn job. The time you put into finding good work is directly proportionate to the quality of the work you will be rewarded with.
Granted, not everyone has the time or money on reserve to put that required effort in, but you need to do what you can to differentiate yourself and make your company the "place to call" for at least one good investor. Once that happens, word will travel, work will grow, and you'll be able to tell FlybynightCo to piss off entirely.