How to Get Multiple Estimates/Bids From GC's

Question

Hi Everyone,

I have a newbie question regarding how I should go about getting multiple GC's to give you estimates/bids on a rehab. For instance, if I wanted to look at a distressed property with my real estate agent would I need to bring my GC along with me so they can access the property and do their estimate? Also, if I wanted to get multiple bids should I bother my real estate agent to set up individual appointments so all the GC's can do their estimates on the property, or is it better to just have all the GC's meet at the property at the same time to do their estimates? Or should I just have the GC's get in touch with the real estate agent directly to have them run through the property to do their estimates without my involvement?

Sorry, I know it's a lot of questions but I am just unsure of how this whole process works. Please if someone could let me know how this process works and could give me a detailed step-by-step on how to go about getting multiple estimates/bids from GC's I would appreciate it greatly.

Thanks!

David Robertson · Answer

Generally speaking, a GC is not going to give you an estimate for a property that you do not own or have under contract, unless you pay them a fee to compensate them for their time.

Real estate is a fast paced game, and if you are buying off the MLS, there is no way you will have enough time to receive multiple contractor bids before you make an offer. Not to mention, you are wasting your realtors time & the sellers time by setting up multiple appointments before you make an offer...just not realistic...

That's why it's so important to be able to estimate repairs on your own, so you can quickly make deal decisions and get a property under contract before your competition.

Once you get a property under contract, you can use the due diligence period to have contractors walk the property and provide you with estimates.

Here's a general overview of the deal process:

• 1. Find a Prospective Rehab Property
• 2. Perform Quick Analysis to Determine if #'s Make Sense to Walk the Property
• 3. Perform Initial Property Walkthrough & Inspection
• 4. Create a Detailed Estimate of Repairs
• 5. Analyze the Maximum Purchase Price you should offer for the Property
• 6. Make an Offer / Negotiate Offer with Seller

After Deal Acceptance

• 7. Develop detailed Scope of Work for contractor proposals
• 8. Establish Inspection/Contractor Walkthrough Date - Try to have everyone show up on one date & time
• 9. Solicit contractor proposals
• 10. Receive contractor proposals
• 11. Make go/no go decision to purchase the property

Note: You may or may not be able to receive contractor proposals during the 10 to 14 day inspection period. Contractors are very busy these days & the turnaround for a bid proposal can take a week or more...

Again, that's why it's so important to be able to accurately estimate repair costs on your own, so you can confidently & quickly close on a property without contractor input...

Russell Brazil · Answer

@Robert Haviland You will need to learn to ballpark the costs of things on your own. You may build up some bad will amongst contracts if you have them going out to give you bids on 30 or 40 properties that you dont own.

Learning this skill does take time, but it is an invaluable skill being able to estimate rehab costs.

J Scott · Answer

You're either going to want to have the knowledge to generate a ballpark estimate yourself, or you're going to want to have someone with you when you view houses who can give you a quick ballpark estimate.

Remember, you might look at 20, 30 or 50 houses before you get one under contract -- if your real estate agent is going to have to schedule multiple showings for contractors for every house, that could mean literally hundreds of extra showings. No real estate agent is going to be willing to do that.

BP sells a couple good books that cover the process, as well how to learn to estimate on your own (disclosure: I'm the author). Barring that, find someone to accompany you to the houses to help you out...

Robert Haviland · Answer

Awesome, thanks guys for the information guys. I will have to check out those books and maybe see if I can find an investor in my local area who I can shadow as they run through the numbers on potential deals they look at.

Thanks again!

How to Get Multiple Estimates/Bids From GC's

How to Get Multiple Estimates/Bids From GC's

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