Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
This is what a contractor told me today. Do they need a diet or am I out of line?
I'm closing on a house next week and I'm trying to line up someone to get it rent ready. A contractor my PM company recommended came out and gave me a quote for about $17k. He said it would take about a week to complete everything.
Here are examples of SOW & pricing
P/I (4) gutter extensions - $65
P/I (2) vacuum breakers on hose bibs - $39
Build 2 steps to back door - $475
P/I GFI - $65
Paint interior of house - around 2000sf total - $2000 materials $2400 labor
Clean carpets (3) 12x12 bedrooms (1) 20x12 rec room (1) set of stairs - $600
Tear off/replace roof 14 sq, $5300 (got a quote from someone else for $3700)
Obviously there are other things, but wanted to provide examples.
Franklin, TN · Member since 2013 · 39 posts · 15 votes
13y
Don't hire a general contractor. You are right that is crazy for you, and he is right, he can't feed his family for providing you with a 15 dollar an hour guy. Hire a handyman, a roofer, and a painter and you just answered your own question.
If he is a G.C. and pays a guy 15 dollars an hour, it costs him closer to 22 dollars an hour to provide that.....(workers comp, other ins, tools, advertising, etc. and many other things). You are not wrong in this is expensive for you, but don't talk like he is way off for what you want in a weeks time.
Investor / Chief Acquisitions Officer · Billings, MT · Member since 2011 · 91 posts · 24 votes
13y
It could very well cost that much to do the rehab. Our rehab costs in Montana are dramatically higher than other states we invest in. Best way to verify the costs is to get multiple bids and compare. Don't share the quotes from the other contractors with them.
Rental Property Investor · Upstate, NY · Member since 2012 · 3k+ posts · 3k+ votes
13y
I agree the pricing is definitely high even for us here in NY.
A young naive investor we met here gave his recommended contractor/handyman $750 to start. A week later the contractor had not started but wanted more money.
When our investor asked what happened to the $750 he had the gall to tell him he had bills to pay.
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Tell him to get on a healthy diet. He must spend most of his time eating cause that's not a big job, sounds like he wants to play general and make a few calls, you should do the same. Sounds like he called a roofing co, called a carpet cleaner, called a painter, added to their bill, he might build the steps and do the little stuff in an afternoon.
If you can supervise, you might go down to some day labor office or soup kitchen, painting is not to dangerous but I doubt I'd put those guys on a roof, but I have met some good ones while sober (not saying they all are drunks but there are some)and they worked out well, met roofers with experience too at day labor places as they were just out of work, but many can't really work on their own, they need to be supervised.
BTW, I've made roofers wear a belt and hooked them up, they might bounce off a wall but they won't fall far! :)
Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
13y
@Bill Gulley It's not a big job, most of it is handy man type work. I knew the roof would be expensive and painting would be too. I told him for the rest of the stuff, give me two $15/hr guys for a couple days and they can bang it out. That's what prompted him to say 'he can't feed his family for that'
Problem is, if I can't find someone to do it, I'll end up moving in for a week and doing it myself. Going to check out Angies List too. Seems much less expensive than I imagined, it's only $10 for a year. Seems hit or miss, but it's better than Homeadvisor.com I'm sure.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
13y
I'm guessing NC pricing (assuming not a tourist/beach town) is probably not too far off from Atlanta. I imagine you should be able to find:
- Carpet cleaning for $250 (call Stanley Steamer or ChemDry and ask about their specials...then tell them what you'll pay and they'll probably do it for that)
- Roof should be no more than $200 per square, or about $2800. That includes tear-off and haul away of an existing layer. Add more if the sheathing (plywood) is in bad shape or if there are steep peaks or lots of valleys.
- Painting shouldn't be more than $1.25-1.50 per square foot of living space, including labor and materials. So, you're looking at between $2500-3000.
The other stuff, $15-20/hour for a *good* handyman seems about right...
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
I agree J. Scott, prices here are similar, a hair lower but certainly in line here as well.
Yes, I see why the guy said that, they don't like letting people just use their workers at a lower rate cutting them out.
You'll save more doing the work yourself, depends on your time and losing income from what your other work might be.
If I see a good worker I have approached them before after work and asked if they ever do stuff on the side......shame on me! I've asked around at other building sites too, ask enough and you'll find them. At that point most think they are then big time contracts and ask for about the same thing.
Then I negotiate, happy to pay that, now, where is your insurance, what, well if you don't have it I need to knock that off, next is WC, you got that? Well why are you charging me for contractor's expenses that you don't have? Okay, where is your guarantee, your bond? Gosh, let's just do this on a labor basis since that's really all you got here! What's he pay you? $20 an hour, tell ya what, you just sign a receipt I'll pay you $15 in cash. I'll also pay you most of it everyday, you can get the rest when the job is completed. Usually works. If it meets the 1099 requirement get the SSN on the receipt.
But, cheap labor can be expensive too, sometimes it's better to bite the bullet and get a pro known for good work. :)
Contractor · Minneapolis, MN · Member since 2013 · 112 posts · 67 votes
13y
If you know exactly how to do things and you just need a laborer to help you or follow your direction, use your tools and supplies and you're not looking for quality work then $15/hour is certainly acceptable. If you don't know how to do the work, you're not paying for the workman's comp, insurance, unemployment etc, then your $15/hour guy is probably going to be finishing off a bottle of vodka on his way to your job and I hope you don't want paint free trim or straight rows of shingles cause you aint going to get it. As for $200/square for roofing...not in my world.
Most of the time you get what you pay for. If you want quality work, it's going to cost more. If you don't care about quality then ask Bill where he gets his "day laborers". If you don't know how to do this work and you need to hire someone who does...quit thinking in terms of labor since you now need to pay someone for their knowledge and expertise as well as their investment in tools, insurance, licensing, continuing education and alas, some profit.
Alternative, learn how and do it yourself to save the money...or is "your" time worth more then $15/hour?
Investor · Willow Spring, NC · Member since 2013 · 788 posts · 285 votes
13y
@Chris Christianson my time is worth way more than $15/hour. But this guy wants $17,000 for a weeks worth of work. Besides the roof & painting, it's generally handyman work that will take 2 guys, at most, 3 days to finish.
So subtract his roof price, $5300 and $2700 for painting and we are about $9,000 for 3 days of labor ~ $185/hr. I'd LOVE to make that much.
He quoted $2000 for paint materials for a 2000 sf paint job, walls only, one color. A gallon of paint covers 300 sf? With 2 coats, I'd need 14 gallons. Lets say we buy (3) 5-gallon buckets of most expensive paint at HD = $500. $1500 for extra misc materials? Come on now.
I see you are a carpenter, so you are sensitive to investors looking for economical labor. What do you think the cost should be? Approximately?
Paint interior of house - around 2000sf total - $2000 materials $2400 labor
Clean carpets (3) 12x12 bedrooms (1) 20x12 rec room (1) set of stairs - $600
Tear off/replace roof 14 sq, $5300 (got a quote from someone else for $3700)
He's crazy. The interior house painting should be closer to $2000 total, not $4400. I just got the carpet cleaned in my own house by a company that's not known for being cheap. 4 bedrooms, hall, large living room, family room, 2 sets of stairs, finished basement = $300. The roof, if in Michigan, should come in at between $200 and $250 / square without much negotiating. Your original quote was something like $380/sq. You said it, crazy.
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
13y
I agree it is high. Here I would never pay that much. I have very good luck using craigslist. I just post what I'm looking for, then what I'm offering to pay.
My most recent was $9 a hour for simple manual labor, demo and cleanup. I had a few call me a few names; however, I've had just as many JUMP at the chance to make a few buck. Most are happy because they won't get a 1099 if they make under $600 from me.
Franklin, TN · Member since 2013 · 39 posts · 15 votes
13y
Don't hire a general contractor. You are right that is crazy for you, and he is right, he can't feed his family for providing you with a 15 dollar an hour guy. Hire a handyman, a roofer, and a painter and you just answered your own question.
If he is a G.C. and pays a guy 15 dollars an hour, it costs him closer to 22 dollars an hour to provide that.....(workers comp, other ins, tools, advertising, etc. and many other things). You are not wrong in this is expensive for you, but don't talk like he is way off for what you want in a weeks time.
Contractor · Minneapolis, MN · Member since 2013 · 112 posts · 67 votes
13y
I'm a carpenter, and a contractor, and an investor. I am sensitive to two things, my need to make money and my guys need to make a living as well.
That said, I just painted a 1400 sf home, inside and out using quality $65/gallon paint you won't find at HD. I haven't done my tally for the job yet but I spent well under $1000 in consumables and that was inside and out, 5 colors. His supply price must be cost x 2 and that's a bit out of line. As for his labor price I really can't speak to that since I have no idea how much scraping, taping, cutting etc there is. Good painters are not easy to find and aren't cheap but again, I'm not sure how good a job your looking for.
Taking another look at the numbers you initially posted, I'd say you certainly have a contractor that's on the higher side for handyman grade stuff but I can't call it out of line. At least, it isn't for Minneapolis. If he does great work, does it on time and you want great work done, I'd tell him you'll provide the paint (don't use anything they sell at HD, go to a real paint store) and pay him for the labor.
By the way, when I was filling my day's with handyman gigs, I was $60/hour and up with a 2 hour minimum. I take pride in my work and people called me back. I learned quickly that investors and most realtors don't want to pay for quality so I didn't do many jobs for them.
Sorry for being so long winded. Everyone knows that when you buy a car you can spend a little or a lot. The more you spend, the more car you get. Same thing with construction services. Take the lowest bid and you'll probably get the lowest quality. If that's all you're looking for then save the money but don't expect much in return.
Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
13y
$200 a sq for roofing? Considering materials alone are going to cost close to $100 a sq, thats without sheeting, and dump costs are through the roof now, not sure how these guys are getting "rich" let alone making any money.
Cheap but quality job of tear off, sheet, ice shield / paper, arch shingles is in the $425 a sq by subs I know, but thats a roof I would be willing to put my name on and live under even.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
13y
@Bryan H. Have you considered hiring a full time handyman? If you have enough work it might be worth it. I did it once and it worked out very well for about 9 months then he formed his own business and now gets $35 an hour. Just a thought.
Investor · West Bloomfield, MI · Member since 2009 · 358 posts · 306 votes
13y
Better quality usually comes at a higher cost than low quality but that doesn't necessarily translate into "high cost = high quality".
I had an exterior paint job quoted recently in a fairly upscale college town. I spec'ed the paint so the real difference was for labor. The two in-town guys had a very professional presentation, excellent references, nice work vehicles and uniforms, and employed only non-smoking, no-radio-playing professional painters that even the most uptight person would not mind having in their beautiful house. They bid $5800 and $6300.
Another quote was from a guy about 15 miles down the road. Pretty much the opposite of the first two with respect to appearance, presentation and crew. He came in at $2100. I checked out his previous work, he got the gig, and did a very good job.
In this case the first two contractors' business strategy was to cater to the upscale customer who cared about not just the quality of the job but the quality appearance of the company and crew. The customers had money and found value in the deluxe approach. In fact, I had an in depth conversation with one of them regarding his business because I wondered how they were doing at 3X the price of the lower bid. Turns out they were doing great and had a backlog of work from their target customer segment.
What this illustrates to me is that there are different customer segments and value received is a perception based on customer wants and needs. As investors we don't see value in some things that "retail" customers will pay extra for. Not every contractor is a good fit for the real estate investor. Not every customer is a good fit for a contractor.
@Bryan H. Have you considered hiring a full time handyman? If you have enough work it might be worth it. I did it once and it worked out very well for about 9 months then he formed his own business and now gets $35 an hour. Just a thought.
I'd love to be able to do that, maybe some day. As of right now, 3 rentals won't keep anyone busy. If they did, I'd have 3 properties to sell.
What this illustrates to me is that there are different customer segments and value received is a perception based on customer wants and needs. As investors we don't see value in some things that "retail" customers will pay extra for. Not every contractor is a good fit for the real estate investor. Not every customer is a good fit for a contractor.
I totally agree. What gets me, is this is a guy that my PM company referred. He is obviously working with investors. We spent an hour at the house, going over my expectations and I thought we were on the same page. Guess not.
Real Estate Investor · Dallas, TX · Member since 2010 · 449 posts · 173 votes
13y
Hey Bryan,
The interior painting quote jumped out at me in particular. $4400 for a 2000 sf house seems really high. We finished a small rehab not long ago on a 1731 sf house, and the prices for interior painting were as follows:
walls - 900
ceilings - 350
fireplace - 75
doors - 40 each.
This was inclusive of materials and labor, and they came down to 30 for the doors after our dickering session. It was a fairly easy job in that the ceilings were pretty low (8'), and there were no hard to get at spaces, but that's still a pretty big difference.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
13y
I agree that you should dump this guy and find someone else. A few things that really stood out are:
Vacuum breakers on hose bibs. These cost $4-5 each and take literally 30 seconds to install.
Carpet cleaning. You can get a whole house professionally cleaned for $100-130.
Painting. I pay $60-100 per room for labor only. Even if you paid $120 per room, it shouldn't cost what you were quoted, unless we're talking aout a mansion.
Roofing. I pay $200-225 per square. Labor prices vary by region, but the materilas shouldn't be a whole lot different.
Investor · Macomb, MI · Member since 2013 · 654 posts · 115 votes
13y
@Bryan H. , Don't advertise that you are a rehabber on Angie's list. My membership was cancelled this year and money refunded (only after many emails demanding my money back) because I am a 'Company' requesting work from other 'Companies'
I read all the rules and there was only one statement in regards to this and it really is left open for interpretation. So do it as if you were looking for your personal residence.
So in short, I can't give other people work because I'm running a company not an individual hiring for my personal property. I don't know if I kept the emails now but I almost posted them everywhere so people could see what they told me. People lost work basically because they don't allow 'Companies' to hire other companies using Angie's List.