Freelance
The problem about freelance and indie anything now a days is that it's too free. In the world of literature, it is basically anarchy, there is no set governing body (that I know of) which controls the flow of words going from a private author to the published world and sometimes that's alright, but usually it's not.

With any freelance work, the proof is in the pudding and you go into it a bit weary and mostly blind. The lessons you'll eventually learn will take you far, but you'll get more than enough scrapes and bumps along your path.

Here are the cautionary points:
Everyone's a professional editor
Actually, they're not, actually they are, actually, you don't know. Not until you've tried that editor out, and then after that, it's just a matter of waiting to see how it goes. But everyone and their mother seems to think they can edit.

You get what you pay for If you have the time and patience to put up with a poor situation, then by all means, endure. There's no shame in that. Any form of editing is better than nothing at all. But for the most part, when it comes to editors, maybe this once you should dig into your pockets.

Time is money
Rarely do editors give a flat rate (not that I have encountered anyhow), they charge based on time either per hour or per word. They will ask for a down payment before starting. Upon which time, they will give you a deadline. If my payment was on time I expect my end product to be on time as well. Of course, in life, things happen, and more so with a freelance editor because life can get in the way, but even if an editor cannot follow through on the promised date, they can at least give you proper notification ahead of time. Since the editor ultimately sets the return date, it doesn't seem plausible that they can't meet it.... or change it.

Watch your emails You can learn a lot about a potential editor from the emails alone. If the emails are slow to get back to you, the editor could have a heavy work load. If an editor cannot answer your email in full sentences (everything you've asked), then do you really want that person editing your story? If you feel like you're being disregarded before the project starts, it's rarely going to get better later on. If you are treated sub-par even before they get your money, how will you be treated after? If you get an editor who is so busy from hurrying to meet deadlines, consider just how much time is set aside for your manuscript when the time comes.

Reference, schmereference
Unless the referral is from someone you know, then it really has no meaning. Any referral can be written by a friend. A sample edit might be the best way to go. I have seen my own errors, or been told about them, but left them in the sample edit to see if editors would catch them all. Editors are people too, but if they didn't catch it, it would concern me.

The more the Merrier
Editing is a long drawn-out process which has several stages. You might want to consider more than one editor for different stages.

Development edit which concentrates on the structure of the story. Checking the story's viability. This is more comprehensive but it varies from editor to editor, just what they will do. Usually, a manuscript assessment accompanies the edit.
Content edit which concentrates on the contents and plot, consistency, clarity.
line edit this is about the grammar and style
proofread the final step before publication.

What to look for
Look for an editor who is not afraid to tell you like it is.

Expect to get back a good amount of markups.

Look for an editor who doesn't boast about being a nazi. Yes, we want someone strict, but not irresponsible.

Don't chose an editor who acts like they're doing you a favor. You're paying for a service, and you should get just that.

Don't ask the editor for any favors. he/she is doing this for work, and you should respect that.

What to avoid
Don't look for an editor who flatters your work. I'm not saying that your work isn't good, but that's not what you need, you need honest feedback and a solid critique.

Don't put up with editors who have no tact, or don't know how to word a critique so that it is constructive. Though you do go to an editor to essentially let that person rip you apart, they don't have to do it so crassly. Your money didn't come with sh*t, your finished product shouldn't either.

Surely, an editor above all others, would be a expert enough wordsmith to deliver honest feedback in a fair way. If not, you need a new editor.

Lastly, the entire thing is a process, so be patient and take it slow.