What does "getting bids" on repair costs mean?

Question

And are estimates on repair costs for free? I was thinking about getting a handyman only to "pretend" I needed repairs for the sole purpose of finding out an estimate. Is it wrong for me to do this and then later tell him that I "wouldn't be needing the repairs anymore?"

Account Closed · Answer

Lots of contractors I know now charge new customers for estimates ($50-75) and will credit it to the job if you hire them.  I have no problem with that. It didn't use to be like this, but with so many players in the rehab business, it's hard for contractors to know who's going to be a good or repeat customer.  It's not like an auto body quote where you drive in.  A contractor has to meet you at the property, inspect, and then go back to the office and write up an estimate.  I always tell contractors if I'm shopping around before they come to the property.  That way they can decide if they want to compete or not.  Some of the really busy contractors who always get their asking price won't want to do a bid if it's just for comparison

A few weeks ago I agreed to pay an HVAC company's fee of $79 for a full inspection and quote.  Their guy was there over an hour and there was lots of problem solving.  I'll probably go with someone cheaper, but I needed one more quote to get a feel for the price range of the repairs versus replacement.

The other reason I'm OK with paying for the quotes from new contractors is that it's worth it to me to meet them and get to know their MO before they start working. I do projects for a couple of clients with special privacy needs where part of what I'm paid to do is shield them from the contractors and cause as little disruption as possible.  Some contractors, no matter how good or well priced, just aren't going to be a match.

Mary Elizabeth C. · Answer

I have had good luck with being up front about what I was doing (budgeting for a project next year for my residence) and offering to pay people for their time. That way they know this is not work about to come down the pike for them and  I am able to get information I need.

Kyle J. · Answer

I do think it's a good idea for you to have an understanding of approximately how much the rehab/repairs are going to cost.  Obviously, you won't know exactly how much it's going to cost because you likely have no idea what level of rehab/repair is going to be done by the end buyer.  However, it might make it harder to market your property if you're just telling potential flippers that you have a house available for X number of dollars but you have no idea how much it's going to cost in repairs.  I think flippers are going to want to have a rough idea of costs so they can quickly evaluate whether or not it's a potential deal for them.

Your ultimate goal should be to learn how to do estimates yourself.  However, in the beginning, you'll obviously need some help.  You might try calling around for some quotes on the stuff that's easy to quote over the phone.  Or you could attend a local REI club meeting and ask other investors what they are paying for certain work.  Or you could just compensate a GC to accompany you to houses to give you estimates.

There are a few other threads on here on this topic that may offer additional info.  Here's a couple I found by searching for "estimating repair costs":

http://www.biggerpockets.com/forums/93/topics/46870-estimating-repair-costs

http://www.biggerpockets.com/forums/93/topics/64732-repair-costs

J Scott · Answer

Find a good General Contractor and pay him a nominal fee ($50 or so) to come out an give you a full estimate for rehab.  The fee will cover his time and gas given that there's no chance you'll actually be hiring him to do the work.

Eugene Koh · Answer

Okay thank you. Well, I'm only wholesaling as of now, so I won't actually hire them for the repairs, so could you recommend me a better way to estimate repair costs? Or is that the rehabber's job?

Kyle J. · Answer

Every estimate I've ever gotten has been free.  However, that being said, every estimate I've ever gotten has at least come with the possibility that I would hire the person giving me the estimate.  Obviously, I didn't always hire everyone who gave me an estimate.  But they had the opportunity to get hired if they gave the lowest bid and/or I felt like they were the most qualified.

I would think you'd burn a lot of bridges fast if you just used people for estimates with no intention of ever hiring them.  I mean, that can only last so long before people get tired of taking time out of their day to help you estimate your project(s) for no compensation.