How to deal with contractors

[Anthereca E. Lane]

We are planning to purchase a building that needs to be renovated.  We have found a great contractor but his prices seem elevated.  Is it customary to be presented with a contract that does not have a separate line for labor vs materials?  I want to know where the money is going and where I can impact savings.

[Tom Savoca]

@Anthereca E. Lane I tend to agree with @Matthew Paul. It would take most contractors a cost-prohibitive amount of time to break down the material cost vs. labor cost on every single line item. 

When you get down to it, there are really two options: 

1. GC it yourself: you'll have total control over cash flow, and will directly collect any savings you are able to create for yourself, but also pay for any miscalculations.

2. Get the outsource GC: you'll likely overpay in some areas, but - if they're good - he/she will also likely net you lots of savings along the way that comes with their professional experience.

It's also important to know that it's definitely a vendor's market right now; a good GC can pretty much name their price. If normal GC markup is +/- 12%, current market rates are closer to 18%.

The most important thing here is to make sure the scope is called out correctly from the start. Hope that helps!