Having a general contractor during walk through

Baltimore, MD · Member since 2016 · 30 posts · 6 votes

As I'm readying myself to purchase my first property this year, I'd like to know if it is common and highly recommended to have a general contractor to accompany me during a walk through of a property of interest to help in estimating repair/renovation costs? Thank you.

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Account Closed

Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes

Been investing in Baltimore, NY and Florida for 50 years. It may be hard to find a contractor that will look at properties with you.

My suggestions - if you don't know much about things to look for, find a local handyman to go with you; contractors are too busy and expensive. You will be looking for "value deficiencies" items that are deficiencies to seller will be a value negotiation to you.

look at 25-50 properties before you make an offer on one - this is the quickest and best way to understand values in your local market! DON'T VIOLATE THIS - it is important. Don't be too quick to make a buying decision!

you should make offers often, use your own contract of sale, I use a one page contract I call the "Skinny", it is easy to read and to be understood by sellers and it has all I need to make a great deal (disclosures, automatic extensions, delayed settlement clauses, and assignment and out clauses if you are not sure of the condition, always put in an inspection clause in your offers - you can always do what we call "second-stage negotiations, this is where you adjust your offer lower based on inspection report.

Be careful of real estate agents, most represent the commission, unless you pay a "Buyers Broker" to represent you!

this is NOT an easy business to start making money, understand values, make many offers that will give you an equity position NEVER offer full price unless you have some creative seller financing like "delayed settlement, cash back, hybrid offers, assignment and auction clauses"

Watch out for the sharks out there that will tell you anything to sell you junk properties. Don't make any buying mistakes!

I am in Baltimore - glad to give you some ideas.

For 50 years now my wife and I have enjoyed the benefits of real estate, we made mistakes in the beginning, but not any more, we've created a nice portfolio of houses and businesses, a 11,000 s.f. nightclub on Charles St, a pizza shop on North ave several apartment houses.

take your time only listen to advice from experienced people who don't have an interest in selling you something.

You can be success, make money and create cash flow - but trust only your own instincts, and those you trust who are a proven entity!

This is a fun business, do not take yourself too seriously, enjoy the hunt and negotiate EVERYTHING!

Charles

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
It's a great idea to get one to come in and give you a bid during your due diligence period. If you can convince one to come with you prior to making offers, that's even better. Most GCs don't like doing this though, because it's too speculative, and not a great use of their time.
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Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
6y
It will work , but only if you are willing to pay the contractor his going rate for his time and expertise . If you are looking at many properties it could get expensive .
3 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
Thanks Matthew and Joseph!
0 Reply
Alex Deacon
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Quiana Chandrasekar I would completely agree with @Matthew Paul and @Joseph Cacciapaglia. When and if you are able to find a reputable and established GC you should compensate them. That initial investment will pay dividends for you in the long run. Dont be like a lot of investors and treat a good contractor like most are treated. The good ones are hard to come by.
4 Reply
James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
6y
Originally posted by @Joseph Cacciapaglia:
It's a great idea to get one to come in and give you a bid during your due diligence period. If you can convince one to come with you prior to making offers, that's even better. Most GCs don't like doing this though, because it's too speculative, and not a great use of their time.

They'll come out, but not for free. Nothing is free in Real Estate.
3 Reply
Account Closed
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
6y
Been investing in Baltimore, NY and Florida for 50 years. It may be hard to find a contractor that will look at properties with you.
My suggestions - if you don't know much about things to look for, find a local handyman to go with you; contractors are too busy and expensive. You will be looking for "value deficiencies" items that are deficiencies to seller will be a value negotiation to you.
look at 25-50 properties before you make an offer on one - this is the quickest and best way to understand values in your local market! DON'T VIOLATE THIS - it is important. Don't be too quick to make a buying decision!
you should make offers often, use your own contract of sale, I use a one page contract I call the "Skinny", it is easy to read and to be understood by sellers and it has all I need to make a great deal (disclosures, automatic extensions, delayed settlement clauses, and assignment and out clauses if you are not sure of the condition, always put in an inspection clause in your offers - you can always do what we call "second-stage negotiations, this is where you adjust your offer lower based on inspection report.
Be careful of real estate agents, most represent the commission, unless you pay a "Buyers Broker" to represent you!
this is NOT an easy business to start making money, understand values, make many offers that will give you an equity position NEVER offer full price unless you have some creative seller financing like "delayed settlement, cash back, hybrid offers, assignment and auction clauses"
Watch out for the sharks out there that will tell you anything to sell you junk properties. Don't make any buying mistakes!
I am in Baltimore - glad to give you some ideas.
For 50 years now my wife and I have enjoyed the benefits of real estate, we made mistakes in the beginning, but not any more, we've created a nice portfolio of houses and businesses, a 11,000 s.f. nightclub on Charles St, a pizza shop on North ave several apartment houses.
take your time only listen to advice from experienced people who don't have an interest in selling you something.
You can be success, make money and create cash flow - but trust only your own instincts, and those you trust who are a proven entity!
This is a fun business, do not take yourself too seriously, enjoy the hunt and negotiate EVERYTHING!
Charles
9 Reply
Joe Cassandra
Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6y
The key is learning what stuff costs.
So get 2 properties under contract, take 3-6 different contractors to walk you through what theyd charge for everything.
Write it all down. Every detail down to switching light fixture covers.
Make sure they send their bids itemized and in pdf.
Put in excel and get average.
Give them each a $20 bill for their trouble.
Now you don't need to do it again :)
2 Reply
Brian Gibbons
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
6y
@Account Closed can you PM me?

Thanks!
Brian
1 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
6y
Originally posted by @Joe Cassandra:
The key is learning what stuff costs.
So get 2 properties under contract, take 3-6 different contractors to walk you through what theyd charge for everything.
Write it all down. Every detail down to switching light fixture covers.
Make sure they send their bids itemized and in pdf.
Put in excel and get average.
Give them each a $20 bill for their trouble.
Now you don't need to do it again :)

A $20 bill ? Really ? A Franklin will get you a quick walk thru and a verbal estimate from a cheap contractor .
2 Reply
Joe Cassandra
Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6y
Originally posted by @Matthew Paul:
Originally posted by @Joe Cassandra:
The key is learning what stuff costs.
So get 2 properties under contract, take 3-6 different contractors to walk you through what theyd charge for everything.
Write it all down. Every detail down to switching light fixture covers.
Make sure they send their bids itemized and in pdf.
Put in excel and get average.
Give them each a $20 bill for their trouble.
Now you don't need to do it again :)

A $20 bill ? Really ? A Franklin will get you a quick walk thru and a verbal estimate from a cheap contractor .

If you tell a contractor the house is under contract and you want them to bid on the project...they come...do the walkthru...you give them a $20 for lunch...they send itemized bid.
I've done this exact thing that I laid out...
Most contractors get nothing for bids. It is different if you're calling the same guy out 10x to walkthru a house.
any contractor will go through one house with you for free.
or maybe only in GA...?
0 Reply
Matthew Paul
Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
6y
@Joe Cassandra I qualify my customers first and foremost . And if somebody doesnt have a clue or just wants numbers they get charged . And here in Maryland $20 bucks , honestly is laughable . Georgia must be very cheap to live .
1 Reply
Terrell Garren
Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
6y
Off the top of my head, this is what I usually spend rehabbing a 3BR/2BA 1,000 sf 20 year old SFH: roof $6K, hvac $6.5K, water heater $.5K, prep/paint $7K, floors $3.5K, appliances $2K, misc (junk removal, electrical, plumbing, landscaping, door h/w, blinds, cleaning, etc) $2K. A wet/damp crawl space can add another $3-7K. New exterior doors can add another $.5K each. If everything is broken, I usually just figure $30K. Obviously, structural problems / renovations, mold, rot, re-wire, re-plumb, will need more specific estimates.
3 Reply
Joe Cassandra
Rental Property Investor · Woodstock, GA · Member since 2017 · 517 posts · 772 votes
6y
Originally posted by @Matthew Paul:
@Joe Cassandra I qualify my customers first and foremost . And if somebody doesnt have a clue or just wants numbers they get charged . And here in Maryland $20 bucks , honestly is laughable . Georgia must be very cheap to live .

You have a great business that's successful. Which is great.
90% of contractors that do work for me will offer to walk thru a place for free before I say anything. They're usually scrapping by.
I know what you mean about $20 being a joke for your time. I'm a self employed copywriter in marketing and I don't take on projects less than $5k.
Others doing what I do will beg for a $50 project.
Just depends how you structure your business. Not arguing with you Matthew :)
Contractors I call, I get a ballpark first for their prices. One GC told me he doesn't step on a jobsite unless the customer is dropping $100k. That's obviously not someone I'd ask to walk thru.
2 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Account Closed all I can say is, WOW! I’m actually going to print your post and keep as a very valuable reference. I appreciate the details and issues to consider in the buying and negotiating process. I have so much to learn. I’m still in the research process of vetting CPAs, general contractors, real estate attorneys, handymen, and property managers. I’ve requested recommendations. Again, thank you.
0 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Terrell Garren thank you for providing a ballpark figure. All of this helps, especially with better understanding estimating repairs.
0 Reply
Alvin Uy
Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
6y
@Quiana Chandrasekar
If you’re not experienced enough to do rough estimates then its a great idea... but that’s if u can find one willing.
You can also bring them in later once your on contract and if you have an inspection contingency in place. What would be best is if you have a home inspector and GC there at that time so you have less chance of missing anything and have an idea of cost right away.
1 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Alvin Uy thanks Alvin. Actually the recommendation of bringing in a GC during an inspection contingency sounds and feels much smarter to do. I would have of course had an inspector but to have both inspector and GC as part of the inspection contingency process satisfies my question. The biggest challenge is finding a GC given that many investors aren’t liberally share this resource.
0 Reply
Alvin Uy
Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
6y
Originally posted by @Quiana Chandrasekar:
@Alvin Uy thanks Alvin. Actually the recommendation of bringing in a GC during an inspection contingency sounds and feels much smarter to do. I would have of course had an inspector but to have both inspector and GC as part of the inspection contingency process satisfies my question. The biggest challenge is finding a GC given that many investors aren’t liberally share this resource.

That's always the biggest challenge when there's a lot of construction work / developments happening everywhere. That said, when things slow down... (and i have a strong suspicion it likely will happen given the economic impact of covid), you will start to see GC's lining up to bid on your projects. This is what happened after the last crash.
1 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Joseph Cacciapaglia as I’ve been reading the replies to my question, your response matches that of many. It definitely makes more sense for a GC to walk through during due diligence. Thank you!
0 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Alvin Uy Great point Alvin! As of now, I haven’t been able to land a gc based on personal recommendations. Thanks!
0 Reply
Alvin Uy
Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes
6y
@Quiana Chandrasekar. This is why I started managing my own projects. GC’s are mostly project managers. Most are overrated. It was easier to find subcontractors. More work but i learned a lot. Now i can look at a property and can get pretty close to actual rehab costs.
1 Reply
Reinaldo Lopez
Inspector · Fort Lauderdale · Member since 2019 · 223 posts · 51 votes
6y
you can try this website to have a good idea of repair cost.

https://www.homewyse.com/

1 Reply
Quiana Chandrasekar
OP
Baltimore, MD · Member since 2016 · 30 posts · 6 votes
6y
@Reinaldo Lopez Will do. Thanks for the resource!
0 Reply
Anne ShoemakerPro Member
Rental Property Investor · Wichita, KS (wichita) · Member since 2020 · 6 posts · 6 votes
6y
@Quiana Chandrasekar. I must be lucky. I’m looking at a property tomorrow and bringing a contractor. No charge.
I’m also in a unique situation as I have used this contractor with my W-2 job repeatedly. So we already have a great connection.
1 Reply
Account Closed
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
6y
Originally posted by @Quiana Chandrasekar:
@Account Closed all I can say is, WOW! I’m actually going to print your post and keep as a very valuable reference. I appreciate the details and issues to consider in the buying and negotiating process. I have so much to learn. I’m still in the research process of vetting CPAs, general contractors, real estate attorneys, handymen, and property managers. I’ve requested recommendations. Again, thank you.

Thank you for the"WOW" I appreciate that - you know I try to give good advice on Bigger Pockets as often as I can, there are so many folk who want to make it in this business, but they are detoured by bad courses, spending money on useless programs and wasting time and destroying their motivation and reading junk comments, since 1980 I have been teaching professionally and ethically systems of making money in real estate, I am not giving my comments, replies and blogs to sell anything, only to help others in this crazy business!
I do enjoy and profit from networking nationwide using transnational engineering to control real estate and assign properties for profit.
thank you again - stay healthy, make offers and assign deals.
Charlie
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