using contractors to estimate repair costs

13 Replies

I'm trying to nail down my 1st rental property and one of the things I need to do is get a good estimate on repair costs via a walk through of the property.  Since I've never done this before and don't have a construction background I would need a contractor to perform the walk through with me and quote me the total repair costs.  My question is, are there contractors out there willing to quote the cost of the job for free or do they always charge a fee?  I can picture myself walking through multiple properties and paying a decent chunk of change just to see if the property would fit the formula where the numbers work.  I'm doing this in the Connecticut area if that makes a difference or if anyone has any referrals.

Thanks!

Pat, contractors in my experience are willing to do free estimates, however if you are just asking to give estimates on possible rental acquisitions they will not keep doing them free just to see if it fits your budget. There are some formulas out there that can help you figure out the cost of work base on square footage and geographic area to get a ballpark figure of the cost. These formulas help you figure carpet , HWF , roof, drywall , painting, siding costs. In terms of plumbing and electrical,,,, there is a base for the per hours of a job and the intricacy of the task , if a full panel update and plumbing if all new or partial replacement. Ask a plumber and electrician to come with you on site and ask them questions as to how they figure the cost and take notes , that would help you formulate your own estimates after speaking with several of them. Praise their skill with positive comments and their ego will pour more information that your can gather. Hope this helps you  Ed  

@Ed Canales they would be rentals needing work that I would be using the BRRRR strategy on. So essentially I'm looking for a contractor to build a long term relationship with to do the work needed on each property that I acquire. At the very least, once I get a property or two under my belt then I wouldn't care so much about whether the estimates were free or they charged for them, but starting off I want to make sure the 1st/2nd acquisition was fully thought out.

You're likely going to have to pay for the estimate, since contractors know that if you don't have the property under contract, they're not likely to get any work out of it, especially with you being new to this, and time is money for them too.  The whole "building a long term relationship, with a lot of work to come, blah blah blah...." rings pretty hollow from most.

I  was a contractor,now investing. Go to the neighborhood where the property is. drive around and look for contractors working on other houses. Ask them to look at your property. They don't need to know whether or not you own the property. SET A DATE AND TIME THAT'S CONVENIENT FOR ALL PARTIES.  if he doesn't ask for a consultation fee when he arrives, Give him 75.00. As he look at the job walk with him ASK QUESTIONS and take notes. If he's not a general contractor ask him if he knows plumbers electricians etc what ever you need. keep in mind you are trying to build a team.  

Originally posted by @Pat McCandless :

I'm trying to nail down my 1st rental property and one of the things I need to do is get a good estimate on repair costs via a walk through of the property.  Since I've never done this before and don't have a construction background I would need a contractor to perform the walk through with me and quote me the total repair costs.  My question is, are there contractors out there willing to quote the cost of the job for free or do they always charge a fee?  I can picture myself walking through multiple properties and paying a decent chunk of change just to see if the property would fit the formula where the numbers work.  I'm doing this in the Connecticut area if that makes a difference or if anyone has any referrals.

Thanks!

 You may get one freebie out of them. They will quickly notice you are at the very beginning stages of your investment career and at the most a longshot for them to get a paycheck. After that realization you will need to pony up the cash. Which is in itself not a bad thing. You wouldn't want your time wasted would you? Contractors are very busy and their time, like yours has value and they should be compensated for it.

As a contractor I do not offer free estimates to new investors.  I would strongly encourage you to use some of the formulas for calculating rehab on this site.  Once you get a property under contract contact a trusted contractor in your area for an estimate.  Best of Luck!

After 5 pays, you'll know the basics to give yourself enough knowledge. Same with the books though, the rehab book by J Scott should be a good start before field working

@Pat McCandless . Sometimes a good real estate agent/broker/investor is a great place to get information.  Are you using an "investor friendly" agent?  If you aren't, I know a pretty decent one :-)

The Book on Rehabing properties by Jay Scott is an excellent resource.  Get your preliminaries out of the way - decide if it's even close to your budget.. Then when you have the property under contract have a contractor (or three) come in to do an real estimate during your due diligence.  As has been stated - their time is money to them and they will want to be compensated for multiple estimates with no work.  After you have built a good relationship - then they will get more flexible..and you will be more knowledgeable about the actual costs.

A good objective for a newer investor like you is to screen the properties as you look at them.  Your goal is eliminate properties where the numbers won't work and perform some basic due diligence before bringing out contractors to do estimates.  This will help you avoid wasting other people's time.

To screen properties, find an agent who has done multiple rehabs...preferably an agent who owns a few rentals.  They can give you feedback on the level of repairs needed as you walk the house together.  Most will be reluctant to give you a dollar amount, but the best investor-friendly agents will give you a broad range and more importantly, tell you what rehab items will cost the most.

You can find a good investor-friendly agent at a local REIA or here on BiggerPockets.

I'm an architect and investor in Ridgefield, CT.  Fortunately I have a lot of contacts from my architectural work.  I've never heard of a contractor charging for an estimate; however, it would be perfectly reasonable to pay him/her for his/her time.  Like maybe $75/hour?  I'll do complimentary initial meets (2 hours max), then I am definitely on the clock.  The protocol in the industry is either (1) a walk-through of the property, in which case he's going to give you some rough, verbal, estimate.  This usually works to make a decision to put in an offer on the property . Or (2) a full bid, which would need to have drawings & specifications to back it up.  Contractors will NOT give you a "bid" or a firm price without any documentation.

And, my apologies to all realtors/brokers out there, but a realtor is not going to have the pulse on current labor and materials costs like a general contractor, who is constantly in the market buying.

Once you get a couple projects done, and pay people well and on-time, you'll be amazed at the level of customer service and loyalty you'll receive!!  I'm sure I could squeeze a few dollars out of my projects if I hired hacks and then beat them down on price.  In the long run, this doesn't work.  Hire good people, treat them with respect, bring them cookies to the jobsite, offer praise when praise is due (contractors are not numbers people as much as they are "aesthetics"...they enjoy being able to do nice work), pay them on time, and you'll have a devoted team in no time.  (GCs...am I right??)

In my project experience, it takes about $50/s.f. (materials+labor) to do a nice rehab/refresh of all the interior finishes on a property.  $75/s.f. if you are upgrading HVAC, electrical.  Granted, that's inflated Fairfield County numbers, and I can't help myself, I pick only materials that I would want in my house,  but I end up at that number pretty much every time.

I just talked to a GC company last week and they told me that they charge $150 for a walk though if the property does not belong to me at this point. This fee would be refunded once i buy it and use them to fix it up. 

They actually sent me an anonymized bid for another property so I could get an idea about how much it costs to fix up certain areas of the house. I could use that bid to extract costs for kitchen or bathrooms. That helped me a lot to see a real estimate.

@Pat McCandless we got pricing for our jobs (fix/flips) by getting just labor #'s from the contractors since material costs can be all over the board.  We spent some time figuring the materials we liked and figured out either a square foot price or an item cost for the majority of the items present in each job.  We had 3 contractors walk through the property with our notes in hand so we made sure we told them each the EXACT same scope of work.  We continue to select, pay for and coordinate delivery of materials because it allows us to watch/understand our project #'s closer and doesn't allow for contractor to mark up material costs.  Some contractors may even prefer that you get materials as they just have to show and get work done.  The downside--when something is wrong with an order it's on you to swap it out, however, this has been rare.  While this is probably contrary to most of what you're hearing it has worked great for us and our contractor loves having no logistics/materials to worry about.

Additionally if you're a member of your local REIA group you might have some luck offering some "labor services" like mowing grass, help with clean out of a property, etc in exchange for them mentoring you how they estimate costs for a job.

Hope this helps some!

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