Rental Property Investor · Boca Raton, FL · Member since 2014 · 1k+ posts · 713 votes
Hello all,
I am in the midst of needing to interview contractors, and I am debating if I should provide a list of things that need to get done, or if I should just give them the Home Inspection Report. My thought process is that they may inflate their quote if they have knowledge of EVERYTHING that needs to get done. And this home inspection was pretty thorough. There isn't anything major that needs to be done. Foundation and roof are fine, but it is a bunch of little cosmetic things here and there. I'd like to put it out there to see what everyone else has done in this situation.
San Francisco, CA · Member since 2014 · 345 posts · 281 votes
12y
Make a list of the things that you want the contractor to fix. It could be specific items on the inspection report. Get what you want fixed. The contractor just wants clear instructions for bidding. He understands that a home inspection report is often overstated.
If you leave an item off your list, don't expect the contractor to fix it.
Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
12y
An inspection report isn't going to enumerate everything you want completed. For example, it's not going to say to replace the carpet with hardwood and to replace the vinyl with tile. It's not going to say to put in granite countertops or to paint with a particular color scheme.
You need to create your own SOW. It can be based off the inspection report, but it's usually a superset of the inspection report.
Residential Real Estate Broker · Country Club Hills, IL · Member since 2014 · 37 posts · 14 votes
12y
Create your own list of exactly what you want done, but make sure that all the issues on the inspection report are addressed. If the property is going to be rented out, the municipal will not approve it for occupancy until you have completed all the required repairs.
Secondly, you should have some ideas of how much the repairs will cost you so that you will be able to tell if your contractor is within reasonable range.
@J Scott Sounds like a great idea. I'll need to draft something up. Are there samples of Statements of Work anywhere? I checked http://www.biggerpockets.com/files but couldn't find anything. I have used some of your other docs in there though. There is some good work in there.
Residential Real Estate Broker · Renton, WA · Member since 2014 · 87 posts · 33 votes
12y
Hello Jon,
SOW for an investor is similar to a request for bid or request for estimate. Not quite a purchase order. The best way is a basic letter format with bullet sentences to separate each item you wish to include in the GC bid. It could be numbered as word processors and even this editor can accomplish for you. Some items to check:
Look over the inspector notes. You will find something that is not in his suggested repair list but still hidden in print.
Try to find the items the inspector mentioned. I know, you were with the inspector. You will be surprised if you try without the guidance.
Your Sow could be as simple an appearance as my response here.
@J Scott Sounds like a great idea. I'll need to draft something up. Are there samples of Statements of Work anywhere? I checked http://www.biggerpockets.com/files but couldn't find anything. I have used some of your other docs in there though. There is some good work in there.
Doylestown, PA · Member since 2014 · 25 posts · 12 votes
12y
As a contractor it is common for me to receive a inspection report from buyers. Typically I supply a proposal with costs for all items specified. Then I am usually asked to supply a proposal for any rehabs planned.
Investor · west seneca, NY · Member since 2014 · 376 posts · 211 votes
12y
i agree with those that say to make your own list. you can go off the inspection report yourself. there will be some things on the report that are minor and will not need o be addressed. the contractor just wants to know what you want done.
Investor / Developer / GC · Manassas, VA · Member since 2013 · 229 posts · 39 votes
12y
If the Contracrtor has knowledge of "EVERYTHING" that needs to be done then why worry about price inflation? Don't nickle and dime the Contractor but by no means don't get taken advantage of. Remeber the old saying "you get what you pay for". If it needs to be corrected then you're going to have to pay someone to do it if you don't do it yourself.
Now to keep your Contractors bidding apples to apples create that Scope Of Work (SOW). Make sure to include those items that must be completed in order to achieve your ends. You could ask for alternate bid items for those repairs you would like to see completed if there's room in the budget.
@J Scott Sounds like a great idea. I'll need to draft something up. Are there samples of Statements of Work anywhere? I checked http://www.biggerpockets.com/files but couldn't find anything. I have used some of your other docs in there though. There is some good work in there.
BiggerPockets has an entire book on the topic...
Sorry for the brief response...was on my cell phone...
Here's a link (and full disclosure, I'm the author of the book):
Rental Property Investor · Boca Raton, FL · Member since 2014 · 1k+ posts · 713 votes
12y
@J Scott Thank you for the link. I usually read everything I can get my hands on, however, being that I have a full time job (at about 60+ hours a week), I have no desire to flip houses... so I didn't read the book on flipping houses. If you are the author, I have full confidence that it is thorough. Your track record speaks for itself. Thanks again