Getting Detailed Estimates from General Contractors

[John Moon]

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.

What is going on?

Thanks<3
John

[Jeffrey Stasz]

All good points above. 

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.