Contractor charges/estimate accuracy

[Eric DeVito]

As a newbie who is doing research for his first flip. How do you know if a contractors estimate is to high or to low? For example say the contractor tells me all the work needed to be done will cost 40,000, but in reality 20,000 is more then enough and the house can still look good and be sold. How do I know what is right/wrong basically? I don't want to get ripped off.

[Brandon M.]

Eric- my favorite plan of action is to have contractors bid me what they would charge to do the labor only. That leaves me the ability to go out and price the materials myself. I prefer that method to just handing a contractor $20k and hoping that was the right amount. If it really costs $25k he will be coming back to you for $5k more, but if it only costs him $15k for materials and labor don't think you will be getting a check back for the extra $5k......

This does require a little bit more legwork on your end, trips to stores, etc, and most contractors will actually have some connections where they can buy certain materials at a better cost than you or I would get at retail prices.