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Updated over 10 years ago on . Most recent reply

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Harold Groetsema
  • Investor
  • Fairbanks, AK
9
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how does a contractor bid?

Harold Groetsema
  • Investor
  • Fairbanks, AK
Posted

I just got a property under contract, and I have 2 contractors coming tomorrow for bidding the rehab. My question is how are they bidding? Do they bid all the labor and materials? Do they include the appliances? Do I need to provide them a scope of work detailing everything I would like done? Any help would be appreciated.

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Bill Gulley#3 Guru, Book, & Course Reviews Contributor
  • Investor, Entrepreneur, Educator
  • Springfield, MO
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Bill Gulley#3 Guru, Book, & Course Reviews Contributor
  • Investor, Entrepreneur, Educator
  • Springfield, MO
Replied

You're in AK, not CA, I suggest you not schedule them all together, never even heard of, some will walk off as many don't play games, another point, they probably know each other, you want independent bids or bids that can be done in collusion? You do make it clear you're taking bids, but don't put it their face!!! Telling them is clear enough. If they don't know who they are bidding against you'll get their best bid, if they know Joe has higher overhead that can pad their bid, and Joe may walk off knowing Sam does lowball bids and comes in with overruns half way through, so you set up conflicting issues before they start.  Never have contractors show up together.

Yes, you need scope of work and quality of materials, appliances by price range or make model. Be as specific as you can. If you don't already have that, meeting tomorrow is a little soon unless you're good at it.  

Get referrals and check them. You can go to building regs and see permits, the address will be on it, drive by, knock on the door, ask the owner how their rehab went!

Takes time to find good contractors, take the time and check them out.

I ask for two bids from each, turn key and labor with profit, I can get materials and they charge to go get it, find it, haul it and carry it, much can be delivered too. If the turn key isn't much higher than my material costs, I go there with less brain damage, if they want too much, I just buy their labor and project management. You'll do better starting off with a turn key bid and just keep back. :)

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