GC question

[Adam Betley]

Hi all,

I was hoping to get suggestions/recommendations on this question. First, here is a background.

I am looking to purchase a multi-unit (3-plex) home near where I live. The house is in rough shape. Not having a vast experience in repairs I want to estimate how much it would cost to fix up the home. Do GC's normally offer estimate services on homes that have not been purchased? Do they charge for these services? I found a few GC's online that say they give free quotes. However, I do not own the home yet and my offer on the house is going to be based on cost estimate of repairs.

So you see my dilemma. I do not want to put an offer in until I can get a good estimate on the cost of repairs, but I would like to do that the least expensive way possible...ideally free.

Thanks for your time and suggestions.

[Tom Meade]

Hi @Adam Betley

You're in a pretty typical Beginner's (I hate the term "newbie") dilemma. You hear a lot about going out and "build your team" first, before you have any deals. You can spend a ton of time doing that, and then never do a deal. Plus I don't realistically see how you build a team if you're brand new in the business...as Mark said, experienced contractors will sniff you out quick.

However now you find yourself in a spot where you have a live deal, but don't yet have the contacts to help you understand if you actually have a deal worth pursuing. There have been some good posts, and even books written on estimating the costs of rehabs, but I think that can be a little dangerous - these things can REALLY vary based on local conditions (labor prices and building codes to name the biggest variances).

Other great posts and blogs have been written about the importance of networking. Not sure if you've attended any local REIA meetings, but that's a great place to network with contractors who understand what it is we do. If you're there regularly, and can build a list of investor-friendly contractors. Its much easier to approach a guy like that and say - hey, this is my first deal, but I'm in this thing for the long haul so hopefully you can help me out on this first one and we'll do more and more deals together.

Bottom line, I would take that type of approach with anyone you contact for an estimate on the deal - be upfront, they'll probably sense you're not a seasoned pro anyways... As always, a referral would be ideal - better to pay a little more in the end for the guy who will do the job right, than to go with the cheapest guy out there and get yourself in trouble.

Best of Luck!