Real Estate Rehab Contracting 101, Part 2

Today I would like to get into the rules we spoke about on the last blog.  If you remember the rules of contracting, or hiring contractors, you need to understand that all contractors are not created equal.

 

And here is my disclaimer about this subject:

I am a contractor, I make mistakes in contracting, I do not always have an awesome ending but I do provide the customer what they paid for whether I make a profit or not.  I am not covering everything in this blog, I am simply trying to make you the reader aware of potential issues that you may avoid if wisely selecting your contractors.

 

Let us unpack Rule #1 – The cheapest bid is usually not the best value. (Seriously?!)

 

Lets say you have a room to paint and you have two contractors Bob and Jack provide a cost estimate for this work.

Bob’s estimate is $1,000.00

Jack’s estimate is $500.00

Wow, that’s a great value to get Jack to paint the room isn’t it, it is half of what Bob wanted to charge for the same job.  Bob is really trying to make some huge profit on this job isn’t he?

 

But Jack’s price is full of short cuts and assumptions.  Jack will not move the furniture, Jack will not use drop clothes, Jack will not put the furniture back in place when complete, Jack did not include patching holes in the wall first before painting, and Jacks paint quality is very low.  Oh, and Jack wants to work at nighttime.

 

Bob has been a painter for a long time and has a good customer relationship history; he charges more because he does more.  He will move the furniture, he uses thick drop clothes and covers the entire floor the whole time, his paint quality is great, and he patches the nail holes before he paints the room.

 

So what is better? Whatever you are willing to live with or do you value Bob more than Jack now?  Even though he is double the cost?

 

As a customer you could have prevented this disparity in costs couldn’t you?  You could easily take an hour or two of your time and prepare a scope of work for the contractors to provide a cost proposal. Then you would have detailed scope including the type of paint, precautions necessary, working hours allowed at the property and wall preparation before applying paint.

 

So it really comes down to you the customer being knowledgeable and protecting yourselves from being taken advantage of and also getting what you really want and not what you paid for.

 

In our next blog we will discuss Rule number 2: Verify the contractor, their licenses and specialties, insurance, and qualifications.

-Forrest

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