Hoping to BRRRR. Thoughts on these GC Bids?

[Anish Patel]

Hi everyone,

I'm in contract for this property with a couple business partners. Inspection came fairly clean, but as you can see there is plenty of work to be done. I'm in the process of collecting bids from GCs, but the estimates are coming in far higher than what we were originally told (we were targeting ~$100K). Here is a comparison of initial bids (I'll keep adding as others come in). Our goal is to BRRRR this property and based on an initial comp analysis, we're expecting an ARV of ~$280K+.

This is our first BRRRR (but not our first Ohio investment), so we'd love to gather input from more seasoned BRRRRers (is that a word?). How would you approach negotiating down these initial bids? Are there any line items that seem way off base?

As an aside, I'd be happy to connect with any other investors in Ohio, particularly Columbus. Would love to trade notes!

Best,

Anish

[Tony Gunter]

@Anish Patel

There’s things missing from this. I don’t see mention nor price for any demo work. I see nothing mentioned for permits cost, or any other project overhead like portable toilets, dumpster, dumping fees, site security, and more. I hope this isn’t the SOW you intend to use to base a contract on. Who is supplying the build contract? If the contractor doesn’t have a contract ready for you to sign tell the good bye. They are probably equally prepared to do your job. Sorry, not intending to sound too harsh btw.

Aside from the SOW being weak, the cost of +/-$82/Sqft is within the realm of reality. There’s simply not enough information provided to say more than that. Your planned budget is also irrelevant. The property dictates what has to be done. It’s the most common pitfall for all this stuff, missing (underestimating) your rehab estimate.