Costco Bid

What it is

Get Costco bids. That’s rule number four in how I bid out work.

Most people think about a project almost like a new build — framers come in, then electricians, then plumbers, then HVAC, and so on. That’s not really how it works on a rehab. You’ll have one or two contractors that do a little bit of everything. And the more jobs you can give them, the better.

If a contractor comes in and he does flooring, he does paint, he does drywall repairs, he puts in cabinets, and he takes out the trash — great. Because that guy is thinking: this is a great job for me. This is going to line me up with work for weeks. I’m going to be able to put food on the table for the next few weeks. That is a nice safety net and I will give you a discount to have it.

Versus if you just say: hey, come in and do paint. Now he’s thinking that’s a couple days job, then what? I need to be looking for the next thing. So I need to be focusing most of my time on looking for what’s next, not fully lining up for your project.

Why it matters

Three bids is for burning bridges. Conventional wisdom says get three bids for every job. But if you really think about it, you’re wasting the time of two of those contractors consciously every single time. The better method is to build good relationships where you know you’re getting good pricing, and to understand the pricing yourself.

I built the Fliporithm calculator specifically so you have something to compare bids against. All those jobs together, say $12,000 according to my numbers. Contractor comes back at $13,000. Oh gosh, man. Am I missing something here? I don’t want to underpay you, but what am I missing? That’s how I use the pricing tool — not to be exactly right, but to know when someone’s numbers are off.

When you bundle work, the fear tax on each individual line item goes down. The contractor isn’t pricing each line like it’s the only revenue they’ll see from you. The bundle is the safety net. Even if one part of the job goes sideways, they’ve got eight other lines keeping them whole.

How it shows up

The Costco bid pairs with sub chunking — grouping as many jobs as safely possible for one all-arounder. You’re not sub-chunking a structural repair onto a painter. But you can sub-chunk painting, trim, door hardware, and caulking into one finish bid. Same principle, smaller scale.

There’s a limit. You don’t bundle across trades in a way that violates licensing. A licensed plumber bundles plumbing. A licensed electrician bundles electrical. A handyman bundles punch-list and cosmetic work. You keep the licensed work with the licensed people.

And remember: the more jobs that you can contract to somebody in one single thing, and the longer the pay periods are, the longer between the times I have to go to the job site. That’s the lazy pm goal — figuring out how to preserve bandwidth. Costco bids are a big part of that.

Related

sub chunking, fear tax, depth chart, jobs menu, lazy pm, bandwidth, fliporithm