All Forum Posts by: Account Closed

Emilio R - What is "lump sum by trade"? Also, what is a reasonable payment for a detailed bid? Great suggestion on taking notes and included it in the contract.

Joe Gore - Good suggestion; what would be a reasonable payment? Also, it would be sufficient if the contractor took the job and broke it up into major components for the bid (i.e. kitchen - $10,000; bathroom - $5,000 etc.) which would include material and labor and then if there was something used for the entire project (i.e. paint in the entire house), just included that as a line item (i.e. paint entire house - $5,000).

Thanks everyone for you input.

Chris Adams - That is quite an accomplishment and something all new real estate investors aspire to. It sounds like you've been successful in finding contractors that give you this level of detail?

Hi Everyone -

I recently joined the BP community and I am looking forward to networking with like minded people.

My partners and I have recently purchased 3 properties in the Philadelphia area. As part of the purchasing process, we gave ourselves 10 days to perform due diligence on the purchases; namely to get a few contractors to come out and give us bids on what it would cost to rehab these properties.

In an effort to get a quick turnaround response and decide on continuing with the purchase, we allowed the contractors to give us verbal bids, followed by a summary written bid (which essentially listed out everything they are going to do, but only gives us a single total cost at the bottom of the quote). We informed them that once we decided which contractor we were going with on each property, we would request a detailed bid (i.e. itemizing and costing the major components of the rehab).

We are now getting push back from our contractors on them providing a detailed bid, with their rationale primarily being (a) the cost of the rehab would be greater if they had to itemize the cost (instead of giving 1 overall $ cost, where they have flexibility in changing material and labor costs) and (b) it will take time to pull that information together

By way of more background, we have only done 1 house flip inception to date. On that project, the contractor also didn't provide us a detailed bid but instead a total project cost bid (note that our 1st flip was successful though).

It seems we can't find contractors that are willing to give us this kind of information, and my partners seem to be giving in to it and not making it a priority. I have continued to advocate that we shouldn't work with contractors that aren't willing to give us what we want, especially since we are paying them to do this work. This information will only help in keeping the contractor accountable as well as make us better as estimating costs on the next project.

My questions for the community are:

1. Is it unreasonable to think that a contractor can provide a quote/bid that itemizes the costs?

2. Any tips or best practices on getting this information or finding the right kind of contractors for investors?

3. What is a reasonable time frame to allow a contractor to pull together a detailed bid?

All responses/thoughts are welcomed and appreciated.

Thank you,

George Sarianos