What should be included in quote from contractors

Question

When I am compiling quotes from contractors for fix and flips, should I be including material (Kitchen cabinets, flooring, etc.)? I know from reading other topics on here, a lot of investors purchase the materials themselves with credit cards to get rewards and airline miles. Is the best way to go to just have contractors provide quote for install on them items? Thanks for any input you can provide.

Matt K. · Answer

If you know your stuff and you want to have some fun..... on a bid walk when they give you some crazy bid, have them walk you through it FACE TO FACE lol. It can be rather entertaining to see how they explain the extra hours. Caution, this can backfire and make you look like an idiot if you wrong.

Matt K. · Answer

No where did I say trust them, in fact that is why you get multiple bids or do due diligence to know a ballpark price. There is such thing as competitive range, which will include a low/high limit. There are cases (not your example) where contractors will bid low on purpose and then change orders come flying in.... again this where you need to do due diligence. But the bids that are too high/low usually stand out very clearly if you get enough bids. Then you start looking at why they are different and go from there. Sometimes it could be misunderstanding, poor scope of work, or just contractor trying to rip someone off.

Matt K. · Answer

Your bid should match your scope of work.... and if you're new to this you should break projects up into smaller ones. You could if you wanted get a bid that includes materials/labor for the project, but if it's a small job it might not be worth it.

If this was me doing a small job like say flooring, I'd just evaluate the total price. Now, you should do some basic research so you know the price of material to see if it's reasonable, but you're probably best letting the contractor order it. If the price comes in high ask them to "price match" the prices you found or maybe use your source, this way burden is still on them to get the "correct" material.

Kitchen would be similar idea, but bigger scale. You'd get costs for appliances or cabinets and then go from there.... but again make sure you have a clear scope of work so you can compare like bids.

Richard Rolle · Answer

One thing that's not clear in your question.  Are you bidding a portion of the job, one trade, or a whole renovation?

If you are using a GC to do the whole project, get a breakdown of time and materials for each trade.  eg, electrical and plumbing, rough AND finish cost.  Drywall and paint, finish work etc.  That way you can review your material cost and know exactly what your getting.  It can be frustrating to find out you paid $5k for electrician and then find out that didn't include light fixtures in the bathroom.  Can you buy tile for $2.50 sq ft but the contractor is charging $5?  Good to review and save costs using various materials.  Some contractors will put in an order and have you pay when they go to pick it up.  That is always a nice medium.  Its usually fair and customary to give them a small mark up as they are picking it up or getting you a contractor discount.

If a GC is doing the whole job, make sure you get releases from all his subs before you pay out.  If the GC  doesn't pay, say the electrician, its your house that will get the lien and you pay twice.

Make sure you are clear on change orders.  If it is something that should have been obvious to a pro, that's on you, not me!  There will always be the unexpected, but I'm not paying extra for something a pro should have foreseen in his initial bid.

If you can get timeline guarantees in your contract, you are a good man!  Do it!

Zachary Wilson · Answer

@Matt K.

Yeah you can get into a huge amount of issues paying hourly i think. If you bid per job, ask them how long it’s going to take, add a week to that and make a penalty for each day job isn’t completed the contractors tend to  sing a different tune lol. I’m sure paying hourly works for some just like paying per job works for some.

Yeah you hired this contractor because they are the “expert” so you just trust what they say? If your new figure out what other investors are paying to have things done in the area. Roof,hvac,electrical. i feel you need to be able to call these people out if they are padding in material cost or over charging based off what others are paying.

Little example of a house I’m flipping where i got an estimate from a contractor on some tile work at $5 sq/ft. Another person i know ( newbie)used an “expert”  and Paid $15 sq ft.  Know the business you are in if your new. Get out and meet people and get a few bids from people. You will quickly get an average of what things cost

Angie’s list is pretty legit and home advisor

Matt K. · Answer

If you don't know what you're doing (not you per say) then supplying your own material is likely to cost you a ton more. Simply put a contractor (good ones at least) know their trade, hence why you hired them. They will know what works/doesn't etc much more then the average joe. They'll also get pricing that isn't retail and "should" be able to make a profit and either match or beat retail. Now, this won't stop them from trying to get more, but if you do your research and know the prices you can at least attempt to get them to price match, or last resort supply your own.Labor is actually a lot easier to hide costs in, more so for the inexperienced person. If you don't have the historical data (previous contracts/jobs) or the technical know how... it can he hard for a person to know if a job should take 4 hrs or 10 hrs. This gets confusing when you have more then one person working too because then the hours really add up. More so if the contractor say's something like well yea we can get that done in "a day". Once you get your skills up, you can usually cut through that by having them explain what they are doing on that job by hour etc.

What should be included in quote from contractors

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