Palpark, NJ · Member since 2016 · 69 posts · 11 votes
Hello friends,
I need your help by critiquing on my process of reaching out to general contractors
Right now, the most difficult thing I'm going through is getting an itemized bid from contractors. They always say, "yah i'll have an itemized by the end of week." But I never... ever.. hear from them again.
Here's how most of my conversation starts. I reach out to people i find through the listing services. I tell them I need an itemized estimate on my scope of work. They agree, and then I bring them out.
We meet at the house, and I walk through the house with them telling them what I want. They always measure each room and write notes, and we go through the BA, BR, Kitchen, etc.
I'm trying to do the least amount of work because these are rental units, and I want to make it livable but not a palace.
The contractors sometimes comes back with a estimate, but no itemized list. It's really frustrating to not get what I asked for initially and what they agreed to.
Let me add a POV as a contractor (granted I am not for hire, I just run point on my developments). It's important to note that an investor's detailed SOW and a contractors detailed SOW are radically different things. To a contractor your SOW is like the Table of Contents for a book, while their bid is the contents of a book. Both are called SOW's but they are not the same thing in practice. Even JScott's excellent SOW examples from his book are not enough for a contractor to accurately cost out a moderately complex job.
Doing estimates the way you're asking is very very time consuming. It makes sense to do it on a job that is going to run north of 80-100K but it is a time suck if you're looking to spend 5-10K. And to be honest it takes almost the same amount of time to do an estimate for a small job as it does for a big job.
So. Here are a couple of solutions that can get you closer to what you want done:
Drawings: Use an app like MagicPlan or RoomScan to get a PDF floor plan of your place. The measurements won't be 100% but that's okay. The contractors that can bust out a detailed estimate fast are almost always using some software that depends on a floor plan in PDF. On Screen Take Off and PlanSwift are two popular programs among residential contractors/light commercial contractors. Craftsman Book also has a program but it's clunky. Revit is the go to among the big boys but likely too expensive and complex for your needs.
Make the floor plan before you meet with the contractor and send it to them prior to the meeting. Bring paper copies to your meeting so you can mark it up together.
If you want to take this to the next level you can do the floor plan and takeoff yourself. Then hand the contractor the SOW, The Materials Schedule and just have them price the install. The advantage of doing it this way is you're going to learn A LOT about construction. The downsides are it takes time to learn that much about construction, the take-off programs are kinda pricy (a few grand a year) and there is a learning curve to these products.
But, if you're serious about the business and improving multifamily product to get stronger cash flow this is probably the right path just not an easy one.
One final note: I agree working directly with subs is often cheaper. However, you should check with your local laws. Some states require a GC on jobs over a certain value. Even if you're the owner and even if the sub is licensed and insured you could potentially be legally required to have a GC. Also, don't underestimate the value of GC's. Yeah they are going to ping you 25% in overhead. But the good ones will be done 30% faster with a lot less headache. And if you're lucky you might find a mentor that can teach you a lot about dealing with subs, what to look for in a build, where to find good deals on materials etc. And, if you're really lucky you might find a GC that is also an investor, expanding your network and providing a good person to bounce ideas off of.
Hope this helps and feel free to PM me if you have any questions.
It depends on how 'itemized' you're talking here. To get a cost breakdown by large items like painting, flooring, roofing, etc is normal and you should expect that. But if you are asking for the cost of the paint, the cost of materials to paint, the labor to paint, etc. then no contractor will give you that kind of detail.
I would just ask them specifically for a 'turnkey' quote which will include the 'out the door cost' for their product/service. If you prefer to supply any product yourself (for instance, you're supplying tile but want them to provide the labor plus setting/install material such as wonderboard/thinset, etc) then simply ask them for their labor and materials cost but that you will handle getting the other materials there. Usually, it's best to just get that quote from them right there on the spot, that way you have your numbers but then, if you're planning to award them the job, send them the price they gave you and ask them to put it in a formal quote so you can see everything they are including in the price.
On the whole, contractors are great at doing the work but not so great (normally) on paperwork or anything computer related for follow up. If you would prefer to still get itemized lists, go for the larger contracting companies instead of the smaller guys that do the work themselves. The larger companies will have a formal quotes department that will be able to get you all the info needed within a day or two.
@Adam Abdel-Hafez I haven't thought about asking for larger item breakdowns. This could be a good segue into asking for a more detailed breakdown on the larger item breakdowns if I want to get to the nitty gritty.
@J Scott Those are really great points. I do tell my contractors i'm looking for a mid level finish and I tell them this is a rental property upfront so they know that it'll be mid-end finishes.
However, most of them seem new to working with investors. Their reviews were generally from home owners. I'll make it a point to talk to other investors about their contractors and see what I can do.
@Rory Cummins Are you saying I should ask them for a quote for (e.g bathroom) renovation on the spot as we walk through the house and I plug in my number? I tried asking, "so how much do you think it'll cost to renovate this (e.g) bathroom" and they always say I don't know on top of my head, i'll need to get back to you. Thats been pretty tough. Maybe it's the way I'm wording the question when I ask them. I'll have to try new things.
Thank you all for your suggestions. I'm going to tweak my process and see what I come up with.
@John Moon Yes, I'd try to get an estimate on the spot if you can. Based on your response just now, looks like you are trying to find a general contractor/remodelor instead of individual sub-contractors that can handle each stage of construction (demo, tile, plumbing, electrical, etc). If you don't mind managing the work yourself, you'll usually save more money by having individual trades handle the work and give quotes for each stage. Most good remodelors/GCs should be able to give you a quick ballpark quote right on the spot if the bathroom isn't involving a full demo/remodel. They should be able to then break down the quote and give specifics within a couple of days. If not, I'd just move onto the next contractor that wants the work
1) provide a scope of work on what needs to be done. Never let the contractor decide the scope of work UNLESS they are referred by an investor and do that kind of thing often. If you don't know what needs to be done, then I would suggest finding somebody that you trust that could help. If you don't know anybody, then hire a property management company and they will be able to tell you what does and does not need to be done to get the place rented.
2) once you have the scope of work, get a few referrals for investor friendly contractors and walk the house with them with the scope of work you created. Any good contractor should be able to give you a ballpark price on the spot. There's will always be unknowns, but you should roughly be close especially on a rental rehab. Depending on what needs to happen will depend on if you can just get a sub or handyman to do it all or if you need a gc.
Let me add a POV as a contractor (granted I am not for hire, I just run point on my developments). It's important to note that an investor's detailed SOW and a contractors detailed SOW are radically different things. To a contractor your SOW is like the Table of Contents for a book, while their bid is the contents of a book. Both are called SOW's but they are not the same thing in practice. Even JScott's excellent SOW examples from his book are not enough for a contractor to accurately cost out a moderately complex job.
Doing estimates the way you're asking is very very time consuming. It makes sense to do it on a job that is going to run north of 80-100K but it is a time suck if you're looking to spend 5-10K. And to be honest it takes almost the same amount of time to do an estimate for a small job as it does for a big job.
So. Here are a couple of solutions that can get you closer to what you want done:
Drawings: Use an app like MagicPlan or RoomScan to get a PDF floor plan of your place. The measurements won't be 100% but that's okay. The contractors that can bust out a detailed estimate fast are almost always using some software that depends on a floor plan in PDF. On Screen Take Off and PlanSwift are two popular programs among residential contractors/light commercial contractors. Craftsman Book also has a program but it's clunky. Revit is the go to among the big boys but likely too expensive and complex for your needs.
Make the floor plan before you meet with the contractor and send it to them prior to the meeting. Bring paper copies to your meeting so you can mark it up together.
If you want to take this to the next level you can do the floor plan and takeoff yourself. Then hand the contractor the SOW, The Materials Schedule and just have them price the install. The advantage of doing it this way is you're going to learn A LOT about construction. The downsides are it takes time to learn that much about construction, the take-off programs are kinda pricy (a few grand a year) and there is a learning curve to these products.
But, if you're serious about the business and improving multifamily product to get stronger cash flow this is probably the right path just not an easy one.
One final note: I agree working directly with subs is often cheaper. However, you should check with your local laws. Some states require a GC on jobs over a certain value. Even if you're the owner and even if the sub is licensed and insured you could potentially be legally required to have a GC. Also, don't underestimate the value of GC's. Yeah they are going to ping you 25% in overhead. But the good ones will be done 30% faster with a lot less headache. And if you're lucky you might find a mentor that can teach you a lot about dealing with subs, what to look for in a build, where to find good deals on materials etc. And, if you're really lucky you might find a GC that is also an investor, expanding your network and providing a good person to bounce ideas off of.
Hope this helps and feel free to PM me if you have any questions.
@John Moon Why don't you provide the contractor spreadsheet of what you need done both Scope of Work and Specifications/Finish List. If you don't know how to do that, then you might not be ready for what you are looking for. I usually bid per line items so I could easily add/delete them, separate labor and materials per item too. As a contractor, investors are the least paying clients, home owners to be second, commercial to be third and government will be best. In short, some contractors want it on a silver platter, hand it to them and you might have a better chance on getting what you want.