Why Get Multiple Bids & Estimates from Contractors?

Investing in fix and flip or rental remodeling projects helps restore communities. To have a profitable fix and flip or rental refurbishment project, dealing with subcontractors, vendors, and laborers will be required. All areas of the project will have to be explored and documented with estimated costs. Being able to choose the contractor for the designated range of prices will be paramount. It isn’t as simple as finding the lowest bid. Finding the best quality at lowest cost is the goal.

Determining Tasks to Complete

The first step to any project is to determine tasks to be performed and their exact specifications. Each level must be explored. When gathering initial estimates, rough drafts on sketchpads can help start the ball rolling. While these are not final figures, they can be helpful to set a pre-approval amount.  Detailed drawings, blueprints, and specifics must be properly documented prior to making the decision to proceed with the project.

Determining Scope of Work

A Scope of Work (SOW) is created to determine the critical areas including materials, labor, ongoing reporting expected, and timeline for completion. This may include scheduled walkthroughs of the project including note taking, recommendations, and addressing any questions not specified in the original paperwork.

Creating and Posting Bids

The bidding procedure may be an open or closed process, meaning some projects may only be sent to a special set of contractors, while others may be open to all interested contractors. The project can be posted online, in newspapers, or other media outlets.  All bidders will be given a deadline to ask questions, request a walkthrough and submit their bid. A set time between the closing of the bidding process, choosing the winning bidders, and date the project is to begin is imperative for all interested persons to schedule the work if their bid is chosen.

Preparing a Bid Proposal

When preparing their bid proposal, hourly wages for the laborers is one of the most important areas to estimate. Having workers who can complete the job within the designated timeframe and with the right quality of work is imperative. Material lists must be scrutinized to make sure substandard materials are not being used for the project. They must remember providing the best possible quality at the lowest profitable bid price is the goal.

Reviewing and Choosing the Winning Proposal

The investor will review the proposals to determine the final planned cost of the project. (A buffer may be included for unforeseen delays or problems during the project.) They may want to turn to loan consultants, real estate advisors, attorneys or other professionals during the review process. Reviewing all facets of each proposal, not just the bottom line bid, is crucial for a profitable project.

Awarding the Bid and Setting the Starting Date

Once winning bid(s) have been accepted, all interested parties will want to meet to schedule the work ASAP. Drafting a contract with your contractor will be the next step before getting started in order to fully document exactly what will be completed, the timeframe, cost, and materials involved.