A contractor hands you one page: "Full rehab, $48,000." You can't tell what's included, what materials you're getting, or what happens when something turns up behind a wall. You can't compare it to another bid either.
Reading a bid is a skill every investor needs. Here's how to take one apart, what to look for, and what changes when the deal is a BRRRR and the refinance appraisal decides whether the rehab worked.
What a bad bid looks like
- Kitchen remodel
- Bathroom remodel
- Flooring
- Electrical
- Paint
- One number for each, and a total
What's in the kitchen remodel? New cabinets, or painted existing ones? What kind of flooring, and how many square feet? What electrical work? A bid like this can't be compared, can't be held to, and leaves the contractor to decide later what "remodel" meant.
What a good bid looks like
The same kitchen, broken into tasks:
- Demo existing cabinets, countertops, and backsplash
- Install 10 linear feet of white Shaker cabinets
- Install laminate countertops
- Install tile backsplash, 30 sq ft
- Set sink and faucet
- Add two GFCI outlets
Each line has its own price, labor is shown separately from materials, and the materials are named with quantities. Now you know what you're paying for, and you can line it up against another contractor's bid and see where each one is higher or lower.
Five things to check on every bid
1. Line-item detail. Specific tasks with specific costs. If the bid is a list of rooms with a number next to each, send it back and ask for detail.
2. Labor and materials, separated. Bundled numbers hide markup. When materials are listed on their own, you can check the prices, or buy them yourself. How contractor markup works.
3. What's not included. Look for exclusions: permits, dumpster, paint, appliances, haul-off. Each one is a cost that shows up later.
4. Payment terms. How much before work starts, and when is the rest due? A large deposit puts your money in the contractor's account before any work is done. How weekly labor draws compare.
5. Timeline. A bid without a start date and a finish date is incomplete.
The low-bid trap
Three bids come in: $42,000, $47,000, and $52,000 (example numbers). The instinct is to take the lowest. Before you do, check its line items. The low bid is often the one with:
- Less detail, so it's unclear what's left out
- Labor and materials bundled together
- Missing items that come back as change orders
- No timeline
A bid with full line items, separated costs, and a firm timeline can end up cheaper than the low number once the change orders arrive. Compare line items and exclusions, not totals. The fix is a detailed scope of work that every contractor bids against.
Red flags in any bid
- Round numbers everywhere. Real estimates come from quantities and rates, and they rarely land on even thousands.
- No mention of permits. Either they aren't pulling them, or the cost isn't included.
- "Materials TBD." Material costs added later, on the contractor's terms.
- A verbal quote. If it isn't in writing, you can't hold anyone to it.
- A large deposit before any work. Your leverage is gone on day one.
Reading a bid for a BRRRR deal
On a flip, you judge a bid on price, timeline, and quality. On a BRRRR, add one more question for every line item: does this help the property appraise at the value the refinance needs?
What the appraiser compares
The appraiser compares your property to recent comparable sales. The items that usually get attention:
- Kitchen: working cabinets, counters, and appliances in line with the comps
- Bathrooms: clean fixtures, sound tile, no leaks
- Systems: working heat, electrical, and plumbing
- Flooring: consistent and in good condition throughout
- Roof and exterior: no obvious deferred maintenance
- Bedroom and bathroom count: matching the comps
BRRRR questions for each bid
- Does it cover what the comps have? If one bid skips the bathroom update to come in lower, and every comp has an updated bathroom, that savings can come back as a lower appraisal.
- Will the materials hold up to tenants? You keep the property, so the cheapest finish may cost more at the first turnover.
- Does the timeline fit the refinance? Your lender's seasoning rules, plus time to place a tenant, set the deadline. Check the bid's timeline against it. How rehab timelines line up with lenders.
- Is labor separated from materials? Every dollar of markup you avoid is a dollar less left in the deal after the refinance.
Compare value created, not just price
A hypothetical comparison. Replace these numbers with your own comps and bids:
| Bid A | Bid B | |
|---|---|---|
| Bid price | $33,000 | $38,000 |
| Scope | Skips bathroom update | Includes bathroom update |
| Estimated value added at appraisal | $45,000 | $55,000 |
| Value added minus rehab cost | $12,000 | $17,000 |
In this example, the higher bid leaves more equity at the refinance, because it covers what the appraiser will compare. The lowest price isn't the cheapest outcome if the appraisal comes in short. If you're still deciding whether to buy, you can send us the deal to price the rehab before you make an offer.
How we work
Seller's Little Helpers is a licensed and insured general contractor that works only with real estate investors in Chicagoland, and our crews handle every trade. A $150 scope visit takes 2–3 hours. Within 3 business days you get a proposal with the full project price, the timeline, your weekly draw amount, and a material list with quantities and timing. You buy materials directly from suppliers at cost, and weekly labor draws start at $4,000 a week for smaller projects, each credited toward the project total. Scope changes are discussed with you first, so there are no surprise change orders. See pricing.