What kind of Form/Estimate Sheet do you give your contractor?

[Jeremy H.]

Wondering what kind of form/estimate sheet you all give your contractor?

I've completed various renos, usually on the smaller side <40k and always used an excel spreadsheet with what is to be done, kind of broken down into categories - flooring, roofing, painting etc. Never done a full house flip however. 

For each category I have a price/estimate - then essentially compile everything to get to my estimate. I've typically found the subs I want to do individually - however I this next one I'm using a contractor. He's a small company and does a lot of the work himself, so he doesn't charge the 20-30% on top like most of them do. Found him through my property management company (he's one of the guys they use). I have also generally used verbal estimates (I know there is a better way to do this) and I give an amount to NOT go over. If this is to be exceeded, then I need to know why and about every cost from here on out. 

The other thing is payment - I NEVER pay for jobs up front. I will pay for materials and ask for receipts. I typically will split the jobs up into 3rds or 4ths and pay in sections of work completed. I do get a 1099 from from them to so I can add whatever the amount is into my cost basis and depreciate it. 

I was just trying to figure out what the "standard" was, for what you all do for larger renos and flips. There's a lot to keep track of and a lot that can fall through the cracks. And there's always the estimate vs the real cost.

Any advice to standardize and systemize this?!

[Matthew Irish-Jones]

@Jeremy H. Your job as an investor is to create a scope of work of what you want done.

His job as a contractor is to quote the Job based on your scope of work. I would create a scope of work in order of operations

Exterior

Mechanicals

Framing

Drywall

Ect

Ect…

Let him bid per line item of work and you can decide to give him the full job or manage yourself by managing subs and give him some work.

As for payment schedule and receipts that’s up to you and the contractor.

If you were doing a job with our company we do not let clients but materials and we require 50% up front, 25%, 25%. We don’t negotiate because we don’t have to, we are booked out 4-16 weeks depending on job type and season.

If he’s a smaller contractor and isn’t doing a huge volume you can probably negotiate a payment schedule and you can pay for materials.

Just be careful because if you pay materials you are probably also on the hook for estimating materials.

If he tells you he can do the job for 5K in labor and gives you a rough estimate of 5K in materials and it ends up being 15k in materials and he has receipts for everything… who pays? You do!

That’s why we include all materials and labor in our quotes. Less surprises and easier for us and the client.

I can see why you would want to pay for materials on a smaller job while you build trust with a contractor, but it’s kind of a pain for you to verify every screw, and gallon of paint.