contractor and wholesaling

[Jawad Ihmoud]

I am very confused when it comes to getting estimates from contractors. My idea of it is that I would call several contractors and have them estimate (bid) how much everything, such as rehabbing would cost, but do I pay them and those who do it for free how do they get awarded? I am asking this since I would be wholesaling and so I would not know who the buyer would want to use as a contractor. Also, how much should a contractor be paid for estimates? As well as, how do I know the contractor is accurate in his estimates?

Thank you 

[Eric Black]

Hi Jawad,

Some contractors will charge a bid fee but will then credit that fee if you use them to do the work. Others will do the bid for free, making their money when they get the job. It's up to you if you want to pay and how much. It can be anywhere from $50 to a few hundred.

As for how to know if they're estimates are accurate, well, you can't really. You can compare, if you get more than 1 bid to see if they're all over the map or relatively close. Also, you have to expect the unexpected, especially if you haven't had a home inspection. I always add 20% to any bid for unexpected items. 

Get J Scott's book on estimating rehab costs if you really want to learn about it.

Cheers!

Eric