Do You Tell Contractors Your Real Rehab Budget Before They Bid?

New to Real Estate · Houston · Member since 2026 · 80 posts · 64 votes

I’m split on this.

Say the most I can spend on a rehab is $70K. If I tell the contractor upfront, we can work backward from that number and figure out what stays, what gets cut, and where the money matters most. But part of me also thinks the quote will somehow come back at $69,800.

Do you share your actual budget before getting a bid, or keep it private until the contractor prices the scope independently? Has showing your hand ever helped—or did the bid just grow to meet the number?

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Ken M.

Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes

3mo

Quote from @Ali Kalaei:

I’m split on this.

If you are going to quote numbers (I wouldn't) but let's say you do, tell them your budget is half of what you'd actually be able to pay. Let them try to convince you why they need more. It may be legit and maybe not, but at least they have a say.

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
3mo
I never share my budget anymore. Once they provide a bid, we can look at it and see if there are ways to save money, if needed. If you share your budget upfront, you're in danger of them bidding under your budget, and then running into "surprises" once work starts. At that point you're really stuck. Of course, you should have a contingency built in to handle some surprises anyway, but I've found that there are more surprises when the contractor bid to fit your budget initially.
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Ken M.
Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes
3mo
Quote from @Ali Kalaei:

I’m split on this.

Say the most I can spend on a rehab is $70K. If I tell the contractor upfront, we can work backward from that number and figure out what stays, what gets cut, and where the money matters most. But part of me also thinks the quote will somehow come back at $69,800.

Do you share your actual budget before getting a bid, or keep it private until the contractor prices the scope independently? Has showing your hand ever helped—or did the bid just grow to meet the number?
If you are going to quote numbers (I wouldn't) but let's say you do, tell them your budget is half of what you'd actually be able to pay. Let them try to convince you why they need more. It may be legit and maybe not, but at least they have a say.
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
3mo
@Ali Kalaei I am more focused on your comment "the most I can spend on the rehab is $70K". What if your assumptions are incorrect? What if there's issues the experienced contractor identifies? Are you still stuck to your $70K budget? That could be problematic and lead to deferred maintenance, and inefficient construction.
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Alan FaitelPro Member
Real Estate Coach · estero FL · Member since 2015 · 295 posts · 47 votes
3mo
You should never tell a new contractors a price.

The only time you would tell a contractor a price is if they are on their fourth job working with you, and they’re basically almost an employee, and you disclose what you’re thinking, and they helped you bid the job, to get the deal. They looked at it before you bought it.

If you tell a contractor, you got 70 grand to spend that could ruin your life.

For new contractors, you want to give them as small a job as possible. See if they do it.

See how they do on: speed, their price, and quality. If they do good you give them another piece of the job.

In a perfect world, you would have 20 different contractors showing up the day after you buy the house and complete rehab in one week.

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
3mo
I typically will ask for a ballpark from them so I can then determine and finalize scope based on what they mentioned and know what it isn’t am willing to spend. This is also why relationships are important as if you have a GC you want to continue to work with you can be blunt with them. Also understanding what things cost is also very important so if they tell you a $10k roof is $20k you can dig into the details of why
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Theresa HarrisPro Member
Member since 2019 · 15k+ posts · 11k+ votes
3mo
Tell them the scope of work and ask for a quote broken down by major projects so if it is not in your budget, you can prioritize what you get done. Make sure you factor in unexpected finds.
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- Kacey Betts
  CO · Member since 2026 · 21 posts · 10 votes
  3mo
  Quote from @Theresa Harris:
  
  Tell them the scope of work and ask for a quote broken down by major projects so if it is not in your budget, you can prioritize what you get done. Make sure you factor in unexpected finds.
  
  Agreed, always get a cost breakdown.
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Kacey Betts
CO · Member since 2026 · 21 posts · 10 votes
3mo
I would say it really depends on how well you know them. I have a contractor that gets all my referrals and he takes care of me and the referrals because it keeps him and his crew busy. I feel I get better than fair pricing because of all the referrals. In Colorado Springs we have a ton of construction going on and contractor bidding wars. I'[m not a patient person so I like to get things done quick and RIGHT, so I made a good relationship with a contractor and I get the best work for the best price. Relationships and referrals get the best outcome.
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Troy DeLong
Real Estate Agent · Lansing, MI · Member since 2020 · 172 posts · 94 votes
3mo
@Ali Kalaei

Most of the time I do NOT share my budget.

There are a few exceptions where it's a 'Labor Only' scope of work and I like / know / trust a certain contractor and have worked with them a bunch. I will usually have an idea of where they've landed on price before and I can give them a fair and reasonable starting budget. This keeps them from bumping their price up over the next handful of projects and keeps me from having to "work backwards" when they give me a higher than expected estimate.
Your best leverage item is to get several other bids if you feel the price is high. Good contractors are extremely valuable and worth their money most times, but you also need to realize that THEY need YOU just as much as you need them.
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Jordan RayBusiness Member
Real Estate Agent · Memphis, TN · Member since 2023 · 642 posts · 337 votes
3mo
Quote from @Ali Kalaei:

I’m split on this.

Say the most I can spend on a rehab is $70K. If I tell the contractor upfront, we can work backward from that number and figure out what stays, what gets cut, and where the money matters most. But part of me also thinks the quote will somehow come back at $69,800.

Do you share your actual budget before getting a bid, or keep it private until the contractor prices the scope independently? Has showing your hand ever helped—or did the bid just grow to meet the number?

I usually tell the contractor what my maximum rehab budget is, but I also make it very clear that I'm not asking them to "find a way to spend it." Instead, I want them to help me prioritize the renovation so we can maximize my return on investment. If my budget is $70,000 and the scope comes back at $55,000 while still accomplishing my goals, that's a win for both of us. If it comes back at $85,000, then we start discussing what can be deferred, what adds value, and what doesn't. A good investor-friendly contractor should understand that every dollar spent needs to produce a return, not just create a prettier house. I also think being upfront about your budget builds trust on both sides. As an investor, I'm showing the contractor exactly what I'm trying to accomplish instead of making them guess. On the contractor's side, I've had plenty of jobs where they included everything they thought the project needed and still came in well under my maximum budget. That actually increased my trust in them because it showed they were pricing the work honestly instead of simply trying to spend every dollar I told them I had available. That's the kind of long-term relationship I'm looking for. It's especially important if you're using the BRRRR strategy, where the renovation directly impacts the appraisal and refinance.
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Janice Carter
Real Estate Broker · Atlanta · Member since 2024 · 1k+ posts · 608 votes
3mo
@Ali Kalaei I never tell contractors my budget. In my experience, once they know your budget, many will price the job to match it even if they could do it for less. I think you lose leverage when you put your cards face up on the table. I would rather have them bid the scope independently first, then negotiate based on competing quotes and the actual work involved.
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Caleb Brown
Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes
3mo
I try to have a rough number and walk the property with a GC. My 2 go to's do line by line bids so it's easy to analyze. I can see what each piece is costing along with the finish/material. This avoids be assuming they are inflating the number or things possibly being missed.
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Frank PyleBusiness Member
Specialist · USA · Member since 2024 · 280 posts · 130 votes
3mo
I'd have contractors bid a clearly defined scope independently before sharing the full $70K ceiling. Once you have itemized bids, you can compare pricing and then work with the strongest contractor to value-engineer the project if needed. Sharing the budget too early can cause the bid to expand toward it, but withholding it forever can also waste time if the scope is unrealistic. Feel free to DM me if you want to compare a rehab budget against the projected ARV and financing structure.
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James J. Rezendes IIBusiness Member
Real Estate Agent · RI · Member since 2026 · 19 posts · 8 votes
3mo
Honestly, it depends on the contractor and the relationship — but my default leans toward not leading with the number, especially with someone new. Get bids first on a well-defined scope (you write the scope of work yourself, detailed line items, so there's less room for interpretation gaps to hide behind). Once you've picked your contractor and built trust over a project or two, then get more open about budget parameters so they can help you make smart scope-vs-cost tradeoffs.

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Raymond Duplessis
Lender · Princeton, NJ · Member since 2026 · 24 posts · 7 votes
3mo
Coming from a project-management background, I usually did not give contractors my true ceiling even the ones I trusted.

If $70K were the absolute maximum I could spend, I might tell the contractor we needed to build the scope around $55K–$60K. I’d provide a detailed scope of work and ask for itemized pricing so I could see where the money was actually going. From there, we could value-engineer the project and decide what stays, what gets cut, and where spending more would actually improve the finished product.

On the financing side, though, I took the opposite approach. When submitting the rehab budget to the lender, I would add roughly a 15% contingency to the projected costs. In construction, the only thing you can almost guarantee is that something will change. Whether it’s an unforeseen condition, a material increase, or an item that wasn’t fully accounted for in the original scope.

So my approach was: don’t hide the fact that there’s a budget, but don’t reveal the absolute ceiling either. Give the contractor a realistic working number below your maximum, require an itemized bid, and protect the remaining funds as contingency. If the full $70K is committed before the work starts, you don’t really have a $70K rehab budget. You have a $70K contract with no room for the unexpected.
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Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
3mo
Why would you NOT want to know:

1) What a contractor sees wrong with your property?
2) How much it will cost to fix it?

So, no, I would not tell them my budget.

BTW, you should get bids from at least 2-3 contractors - you will find about 80-90% the same stuff, but 10% or so unique to each.
- Combine ALL the bids together for a solid Scope Of Work
--- Ask for rebids if necessary

Then prioritize the ITEMS by:

1) Health & Safety - highest priority to avoid tenant lawsuits

2) Government Required - you want to pass city & S8 inspections

3) Property Preservation - fix it now or for a lot more later.

4) Marketing Impact - does a purple bedroom need to be painted? Only if you want to appeal to the most tenants.

5) Miscellaneous - anything that doesn't fit above, lowest priority.
Use all this to determine what to spend your budgeted funds on!
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Eric Gerakos
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
3mo
No.
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Ismael El Hamdouchi
Member since 2025 · 68 posts · 28 votes
3mo
One thing I found interesting reading through the replies is that almost everyone separates choosing the contractor from discussing the budget. It seems like getting independent bids first gives you a much better sense of the true scope before deciding what to cut or keep. Appreciate everyone sharing their different approaches.
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Adam TafelBusiness Member
Real Estate Agent · St. Paul, MN · Member since 2017 · 599 posts · 403 votes
3mo
Don’t share your budget, have them bid every job individually, labor only. Some contractors get very specific, I keep it to a single part of the home (ex bathroom renovation rather than itemizing each job within the bathroom). I would never give them my number upfront, unless you think your number is an extreme longshot and they’d be doing you a solid by keeping the job within that amount, or if you don’t want to waste someone’s time.
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Jake YuskaitisBusiness Member
Lender · New Jersey, USA · Member since 2022 · 254 posts · 68 votes
3mo
i would never share your budget. their number needs to be unbiased and they need the pressure of having to come in as low as possible.
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Richard Golding
Contractor · NYC/Los Angeles · Member since 2019 · 91 posts · 55 votes
3mo
I'd usually give the contractor the scope first and let them price it independently.
Once I have a complete proposal, I'm happy to have a budget conversation because now we're talking about specific line items instead of negotiating against a target number.
For example, if the first bid comes back at $82k and your budget is $70k, you can work together to remove or defer work:
Keep structural and life-safety items.
Delay cosmetic upgrades.
Substitute materials where it makes sense.
Separate owner upgrades from required repairs.
That keeps the discussion focused on scope instead of guessing what can be omitted.
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Andrew Vogelaar
Contractor · Marietta OH/ Parkersburg, WV · Member since 2024 · 22 posts · 17 votes
3mo
I have regular guys and I tell them "Hey we've got 20 grand -- paint, flooring, cabinets, safe + functional and lets go home." Or "Hey we've got the budget on this one - it's y'all's time to shine."
One of the investors I contract for will send me videos of deals he's looking at and we go over them together. He will tell me "Hey I want x,y, and z here what do you think?" Then he will tell me where he needs to be all in and I'll tell him where he needs to be purchase price for it to make sense for both of us.
Another investor I work for just tells me what the budget is and says get it done, and we do within reason.
These are guys I work with all the time. I give a round about number on where I think I'm going to be labor and materials and if we are under budget we split the extras.
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- Kacey Betts
  CO · Member since 2026 · 21 posts · 10 votes
  3mo
  Quote from @Andrew Vogelaar:
  
  I have regular guys and I tell them "Hey we've got 20 grand -- paint, flooring, cabinets, safe + functional and lets go home." Or "Hey we've got the budget on this one - it's y'all's time to shine."
  One of the investors I contract for will send me videos of deals he's looking at and we go over them together. He will tell me "Hey I want x,y, and z here what do you think?" Then he will tell me where he needs to be all in and I'll tell him where he needs to be purchase price for it to make sense for both of us.
  Another investor I work for just tells me what the budget is and says get it done, and we do within reason.
  These are guys I work with all the time. I give a round about number on where I think I'm going to be labor and materials and if we are under budget we split the extras.
  
  That's what I have here! You're from the good ol' boy club is what all my buddies say. We do the handshake deals and the same oh same here. I get a lot of priority and I am able to give clients that same priority. It's an unspoken friendship, but it's all about who's on your team.
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Josh HandlerPro Member
Contractor · Memphis, TN · Member since 2026 · 72 posts · 86 votes
2mo
Coming at this from the other chair. I run a construction company and I also own rentals, so I'm the guy bidding and the guy writing the check.
Here's what actually happens when you tell me your budget is $70k. If your scope is written tight, the number does nothing, I bid the work and it lands where it lands. If your scope is loose, the number becomes the scope, because now every judgment call gets made in the direction of your ceiling. That's not usually a contractor being crooked. It's that "paint the kitchen" has a $900 version and a $4,000 version, and if nobody decided which, somebody's going to decide for you.
So the question isn't really whether to share the budget. It's whether your scope is specific enough that the budget can't fill in the blanks. Room by room, what gets replaced versus repaired, what grade of material, who supplies the appliances, who hauls the debris. Do that and you can hand me your budget on day one and it won't move my price a dollar.
The other half nobody's mentioned: bids float up mid-job because of unknowns nobody priced, not because of the ceiling you named. Sewer line, panel, subfloor, whatever's behind the tub. Ask every bidder to list what they did NOT include and what they're assuming. The guy who hands you that list is the guy whose number you can trust, and it's a better filter than any of the games about hiding your budget.
One thing I'd push back on from earlier in the thread: telling a contractor half your real number. Do that to me and I'll price it honestly, come in over your fake budget, and you'll never know if I was fair. Meanwhile the guy who tells you what you want to hear wins the job and finds the rest of the money later.
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