Can you offer some advice on how to negotiate with this contractor ?
Hi Folks,
We have recently purchased a rental property and are eager to get a contractor in there to renovate and make the house rent ready.
It's a lower end 1960s home that will generate under $1,000 monthly rent . I have just had a contractor bid at $6,500- 7,000. He's a young fellow and he has very good quality of work. I would like to contract him , however I think he has quoted me a price that may be too high. We are just starting out and money is very tight . How should I go about this ?
I've included below what he sent us in explaining his bid .
Painting:
Sand rough trim to smooth acceptable condition , caulk any areas needing it.
-Walls 2 coats of sheen of your choice
-Trim 2 coats of Oil Base Enamel SemiGloss
$1,750 labor only
$2,300 material provided (Sherwin Williams) and touch up paint left for your property
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Repairs:
Material cost estimate $60-100
(Labor Only)
Plumbing repairs and tie in - $400
Minor Carpentry - $100
Wire bathroom switch - $50
Repair broken window - $50
-
Floor Repair/Level/Floor Installation:
Labor for subfloor, caulking cracks in foundation, laying moisture barrier, and installing underlayment and laminate
$2,400
Remove existing flooring and subfloor and rafters.
Lay moisture barrier and seal house of leaking cracks
Install and level new rafters 2x10 pressure treated, and install 3/4" subfloor.
Lay laminate underlayment and install laminate to match surround floor height.
Install Baseboards, quarter round moulding, and floor to floor transition moulding.
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Floor materials estimate
$1,200-1,400
Concrete sealer 100
Underlayment. 60
Laminate. 270
Shoe moulding. 50
Caulk. 60
Nails. 50
Screws. 60
Rafter 2x10x16 PT. 350
OSB subfloor 3/4" 200
Moisture Barrier. 55
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Total project estimate $6500-7000
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welcome to the site.
How many other contractors have you quote the same work? I would have at least three come in and then go back to the one you want to work with if the other contractors were lower and ask him to match the lower rate because you'd prefer to work with him.
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Real Estate Agent NJ (#0897533)
- 862-208-2287
- http://www.ReiMeetupTampa.com
- Podcast Guest on Show #48
Well, it worries me that he appears not to know the difference between a rafter and a joist...
But other than that, I'd get multiple quotes. But I would also tell you that in my (coastal but rural) market, I'd jump on that price. Maybe a tiny bit high on the painting (hard to know, you don't tell us the size of the house) but even assuming the floor leveling/repair is for a single room...
I agree you need to get at least 3 bids. This helps keep everyone honest. I usually tell my clients budget $5000 for a rental make ready. This usually includes carpet, new paint and any other small random repairs, such as patching holes, light fixtures ect.
What is the size of the house / room ect. Is paint interior only?
I can at least get you book pricing for your area and you can go from there....
Adam
I appreciate all the insightful responses . Please keep them coming !
@James Wise Thank you !
@Darren Sager I am working on getting other quotes now. If he is still the lowest after all the bids what do I do at that point ?
He comes recommended from an investor . He does 'seem' to know what he is talking about. I appreciate you pointing that joists vs rafter mistake.
@Adam Dahlberg The house is only 1100 square feet and 3 beds / 1 bath . Yes the paint is interior only.
Thanks again everyone !
Without seeing interior pics, i think he's out of line on the paint price. $2,300 in materials? Thats a butt load of paint. SW is higher than most, but the quality is worth it and I use it. I use the 200 series for my rentals.
If the house has carpet that you are keeping then he will have to protect that, but if not then this makes his job easier and his price should reflect that. $1,750 for labor is kinda ok. Not too high if the walls and trim are different colors.
Im not sure about the green treated floor joist being needed. This might be common in Houston since you guys have salt water so close and I'm sure its humid there. We only use green treated when the lumber contacts the concrete, But there should be a 2x4 plate between your joist and foundation.
He doesn't state how many joist he's replacing, or the square footage of flooring repairs. Get this in writing so both of you know the details. If he opens this up and its worse than you think then this could be important.
He's done a decent job of breaking down his estimate compared to most contractor bids Ive seen.
When it comes down to it. I would tell him your at "X" and my budget is at "Y". How much wiggle room do you have to get me to my goal.
Be sure to get copies of his insurance, his agent should email this to you no questions asked. Always get references and at least a couple different bids.
Also Try and get some type of Schedule worked out ahead of time from your contractor of choice, this helps to visualize everything being done and help keep the project moving forward.
Originally posted by @Chris Adams:
Without seeing interior pics, i think he's out of line on the paint price. $2,300 in materials? Thats a butt load of paint. SW is higher than most, but the quality is worth it and I use it. I use the 200 series for my rentals.
I read that as offering 2 possibilities. The $1750 for labor only, or the $2300 if he also supplied the paint. Not an additional $2300. Which is pretty reasonable for material from SW. $550 represents maybe 8-9 gallons of wall paint, 2 of ceiling and 1 of trim?
Totally agree about the quality of SW paint. SuperPaint is basically a miracle.
@Richard C. I don't read it that way, and since you and I read it differently thats one more thing @Cynthia B. should get clarified.
@Cynthia B. if you get other quotes and he's the lowest than his quote is fair and reasonable for the work you want him to do. That's just what it will cost to get it done.
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Real Estate Agent NJ (#0897533)
- 862-208-2287
- http://www.ReiMeetupTampa.com
- Podcast Guest on Show #48
Yes, she should be sure. But one line starting "Labor only" and the next starting "Material provided" looks like two options to me. He cannot really expect anyone would accept a bid for an additional $2300 for paint when they could accept the labor only bid and buy the paint themselves for $600.
Originally posted by @Darren Sager:
@Cynthia B. if you get other quotes and he's the lowest than his quote is fair and reasonable for the work you want him to do. That's just what it will cost to get it done.
Yep. Also, if this is a one time thing for you, it may be worth it to scrape every penny you can off the guy. If you will be doing really high volume, people will come to accept you nickle and diming them because you give them a lot of work.
If you are like me and add and rehab a house a year, maintaining a good relationship and having the guy happy to see your number appear on his caller ID is worth not being to aggressive in getting to absolute rock-bottom.
@Chris Adams
Sorry for any confusion above .Richard is right . The $2300 includes the paint . He is quoting $600 for paint. The house has no carpet. It is all laminate and tile. What should be my "Y"value when negotiating ? If it is too low he will feel I am low balling and if it is high I will be leaving money on the table.
Greatly appreciate your advice Chris . We will be sure to follow it.
Excellent idea I will ask him for a time frame and get this done on paper
@Richard C.
I will shoot for one house a year if possible. My thought process is buy and hold. Completely agree on keeping good relations with the contractor and not nickle and diming him.
Should we be writing up a contract , perhaps use an online template ? Some contractors ask for money before the work is even started. What should I do about that ? Would you pay before the work is 100% done ?
If there is something I haven't considered please don't hesitate to point that out.
Thank you !!!
Yes, you should use a contract. There are probably some in the files section here. Simpler is better.
Almost all contractors ask for money before work starts, it is absolutely standard practice. Maybe for either very small jobs or if they have done work for you before they will just bill at the end, but I would expect to pay at least a third of this up-front, and probably half. The rest on completion.
Get at least one other bid. If they are higher (or even if they are in the same area, since you have a reference for this guy and a good feeling about him) go with this quote. I honestly wouldn't negotiate much if at all. $1750 in labor for 1100sf of painting is actually a better price than I can get, so I retract my earlier statement about the painting being a touch high. I was picturing a smaller place.
But get used to the idea of paying money up front, before work starts or sometimes even before they will commit to a schedule. The only way I could see a young contractor who is already bidding low not insisting on money up front is if you hired him just for labor, and provided all materials yourself. In which case, those materials are your money up front, anyway.
I don't recommend buying the materials for your first rehab yourself, by the way. He likely can get discounts, and he has odds and end and things like spackle and sandpaper and stuff from other jobs where he can just charge you for what he uses, where you would have to buy whole packages. The only reason I would do it is if you were trying to put part of the cost on a credit card or something, and he doesn't take cards.
Yes, I agree. Without seeing the space and just looking at pricing, I would say the price is reasonable as well. Maybe a little high on paint by a few hundred bucks but that's just from the price in my area. Others say that is low.
Still not sure of the room he is refinishing the flooring in, but from the price of the laminate he is charging I'm guessing it's small.
I would just tell him your budget and ask where he can shave some money off. My paint guys are paid $12-15 an hour and 2 of them can rock out that house is 2 days easy...so my labor including overhead, insurance, etc is about 400 a day for both guys. Then I add my profit margin and markup on paint. So to me $2300 is high, but I have clients who wouldn't bat an eye at it. I guess it depends how much prep work is needed as well.If he has $60 in caulk estimated it might be a lot. So he might have some wiggle room there.
Adam
And just in case you want to shop the paint yourself which I recommend if you want to save the money you are looking at about:
10 gallons for walls, if all one color (satin or eggshell) double rolled
5 gallons for ceilings, closets (flat) spray
2-3 gallon for trim, baseboard, shelving doors, etc. ( semi - gloss) but better off just getting the 5 gallon ...also sprayed.
At least this is the formula/ amounts for flip and rental homes that size we use all the time.
Hope this helps.