Is a detailed contractor bid asking too much?!?

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Hi Everyone -

I recently joined the BP community and I am looking forward to networking with like minded people.

My partners and I have recently purchased 3 properties in the Philadelphia area. As part of the purchasing process, we gave ourselves 10 days to perform due diligence on the purchases; namely to get a few contractors to come out and give us bids on what it would cost to rehab these properties.

In an effort to get a quick turnaround response and decide on continuing with the purchase, we allowed the contractors to give us verbal bids, followed by a summary written bid (which essentially listed out everything they are going to do, but only gives us a single total cost at the bottom of the quote). We informed them that once we decided which contractor we were going with on each property, we would request a detailed bid (i.e. itemizing and costing the major components of the rehab).

We are now getting push back from our contractors on them providing a detailed bid, with their rationale primarily being (a) the cost of the rehab would be greater if they had to itemize the cost (instead of giving 1 overall $ cost, where they have flexibility in changing material and labor costs) and (b) it will take time to pull that information together

By way of more background, we have only done 1 house flip inception to date. On that project, the contractor also didn't provide us a detailed bid but instead a total project cost bid (note that our 1st flip was successful though).

It seems we can't find contractors that are willing to give us this kind of information, and my partners seem to be giving in to it and not making it a priority. I have continued to advocate that we shouldn't work with contractors that aren't willing to give us what we want, especially since we are paying them to do this work. This information will only help in keeping the contractor accountable as well as make us better as estimating costs on the next project.

My questions for the community are:

1. Is it unreasonable to think that a contractor can provide a quote/bid that itemizes the costs?

2. Any tips or best practices on getting this information or finding the right kind of contractors for investors?

3. What is a reasonable time frame to allow a contractor to pull together a detailed bid?

All responses/thoughts are welcomed and appreciated.

Thank you,

George Sarianos

[J Scott]

Originally posted by George Sarianos:

We are now getting push back from our contractors on them providing a detailed bid, with their rationale primarily being (a) the cost of the rehab would be greater if they had to itemize the cost (instead of giving 1 overall $ cost, where they have flexibility in changing material and labor costs) and (b) it will take time to pull that information together

This rationale makes no sense. This implies that the contractors aren't preparing detailed bids behind the scenes that they are using to generate your quote. In other words, instead of coming up with a detailed bid that helps them determine how much it will cost THEM, they are just throwing a number out there.

That begs the question -- if they aren't generating detailed bids behind the scenes to determine what their actual costs will be, how are they confident that the number they throw out there is realistic. And more importantly, if the number they throw out isn't realistic, who is going to eat the cost if the number is low?

The next time a contractor tells you that preparing a detailed bid will take too much time, ask them how exactly they come up with their bid price without doing this...