Honesty & Rehab Costs

[Joey Hamaoui]

Hey everyone,

My partner and I are looking at getting into flipping houses. We've done minor rehab projects for rental properties but now we're looking to get into flipping homes and I wanted to ask two questions to the BP community. 

First how can I keep costs down while still paying the contractor an honest wage? We're not looking to cut corners or get a rehab done for free but we are also aware that many contractors overcharge a lot. What advice to you guys have on getting contractors to do good work at an honest price when just starting out?

Second is do you recommend we bring GCs out to estimate the whole project and compare or should we bring out subs for each part of the project (e.g. flooring, roofing, kitchen, painting)? 

Thanks,

Joseph

[John Thedford]

Get more than one bid. Find someone that gives you an honest bid the first time. If you are going to be doing this on an ongoing basis, stress that this will not be a "one off" deal and that you want someone to take good care of you and that you will be using them on a regular basis. Checking with a GC can't hurt either. This just happened to me: I was offered the name of a handyman. I got him to look at the work and he quoted $600. When I asked if he could do any better he instantly dropped it to $500. I said go ahead. Thinking about this overnight I kept considering how fast he dropped the price. So I called another friend and got a different guy to give a bid. It came in at $300. So I said do it. When I texted the other handyman stating I didn't need his services (with no mention of price) his reply was: "I can do it for $400 if that helps". So the moral of that story is: check around. That being said, don't forget that if you get a reference, make sure you get the quality desired. If you get ulta cheap work but the quality stinks you won't be happy either!