Getting quotes from contractors on "potentials"

16 Replies

Hi BP community,

I am looking into getting into my first deal, looking to do the BRRRR method on a smaller single family in a developing neighborhood.

As I'm looking at properties and analyzing their potential, renovation costs is obviously a huge factor.  I am not a contractor, so what is the etiquette around taking a contractor out to potential properties to get an idea of renovation cost?  I don't want to waste their time because I know that typically there is a small percentage chance on the deal actually working out, but I don't know how else to accurately estimate renovation costs.

I have looked at the rehab estimator tool on BP and try to ballpark it but ultimately I know that I will not know everything, and wouldn't want to botch my first deal off of not accurately planning for reno costs.

Would appreciate any input - thanks!

I am not a contractor, but its my personal opinion that you should not expect a contractor to give you an estimate on a property that you do not own yet for free. If that's the route you wanna go, you should expect to pay the contractor a flat fee for his time and effort.

@Andrew B. right I totally agree, I don't want to disrespect anyone's time.  What would you offer to pay for their time/effort? Or how do you go about estimating your rehab costs without taking a contractor out to a potential property?

Originally posted by @Tim Henderson :

@Andrew B. right I totally agree, I don't want to disrespect anyone's time.  What would you offer to pay for their time/effort? Or how do you go about estimating your rehab costs without taking a contractor out to a potential property?

 There is a book that many around this forum recommend. The name escapes me, but if you search for other posts on this topic you should find it recommended many times.

My stepdad is a contractor in North Jersey. Last time someone asked him to do this, he told me he billed them $600. You might be able to negotiate a lower fee or an hourly fee if you can get him to do a couple at once.

@Andrew B. I'll look around for that book but I haven't seen it in posts I've read so far.  Most of what I'm seeing in the forums is around getting contractor bids once you have something under contract (with inspection contingency) and negotiating and that whole process.  I am looking for thoughts/tips/tricks on estimating rehab costs in order to inform an offer. 


@Tim Henderson a small percentage chance of them working out? How many contractors are you asking? If your asking 3-5 I would say that’s a fair percentage and you are giving them an opportunity to bid/compete for the job. Now if your calling three to five contractors to get price quotes on a toilet change, yeah your wasting their time but if it’s for 1000 square feet of floor, then your giving them an opportunity to earn the job.

I agree with not trying to waste their time and I’m against doing so myself. I’ve seen others get quotes regardless of the persons time and just price checking so the best thing to do would be get that ball park figure on the phone so you know they should t even come out in the first

place. There is nothing wrong with “interviewing” or getting quotes from contractors, just don’t do it when you know they have a slim to nun chance of getting the job. People definitely do and it is effective because you never know what the next contractor will say.

@Jonathan W.

I assume he’s bringing these contractors out before actually obtaining the property and there is a good chance that he won’t actually end up with the property at all, in which case the work would never get done by anyone. I could be wrong but that’s how I interpreted it.

Original question.... call them. Explain your situation and ask what the fee will be for them to come and bid a potential job. Some will be free. Some will be more than you are willing to pay.... most will be somewhere in between. Good luck.

What you want is called a a "ballpark quote" not a full blown estimate or bid. Any Contractor worth his salt can give you a ballpark and not take too much time. Ask to get a quote to the nearest five thousand dollars if it's a big job, thousand for medium, and hundred for small jobs. 

If that number sounds feasible, then get an full blown bid. I had 24 hours of bid time on my current job. But I had a ballpark in 15 minutes.

@Tim Henderson leverage existing relationships your network already has with various contractors. If your buddies are already using their services their likely to give you some free quotes just to get you in the game. However, don’t be opposed to paying either. You don’t just want a quote you want an accurate quote!

@Tim Henderson

The best way for you to do it is find a contractor that also does flips. I’m more than happy to go out with other investors because for me I have first dibs on the renovation bid with my gross profit margin of 30%-50% or if the renovation cost is to high for you I might be able to make the numbers work for me or we both benefit in it as a jv deal.

get the property under contract then get a contractor bid. 

Getting bids for a property not under contract is wasting everyone's time. You need an interest in the asset first, it doesn't matter what the bid is if you don't even get a chance to buy the building.

Catch 22 right? You don't know how much to bid without an estimate, and nobody wants to give you a bid (for free) on something you don't own. Solution? You must be able to estimate costs on your own. And guess what, once you learn how to do that, you'll be more savvy when it comes to dealing with contractors!!!

Are you sure you don't want to just invest in the stock market? Just saying, you signed up for this ride my friend, now you need to learn how to drive!!!

You can always call the contractor and get a feel for his pricing over the phone. Send him pictures of the comps, get rough estimations on what he charges per square foot for paint, what he charges per square foot for different types of flooring, how much per box for cabinets, how much per square foot for countertops, etc.

If a contractor can't give you a ballpark estimate over the phone for different line items, I wouldn't waste the time to get a bid from them.

Any contractor that does this for you not under contract isn't a contractor I'd want to work with....because the good ones will be too busy with current projects.

with that said assuming you don't already have a relationship with said contractor and have some kind of buy in/working relationship. Other wise why not just collect the fee from you give you a super high bid and then....also go after the same property or get finder's fee ...