We are facing a nationwide talent vacuum of skilled trades. I’ve mentioned it before and I’ll continue to talk about it because it’s so important – and so dire.
I hear ads on the radio as I drive along the streets of Detroit, advertising trade schools and programs for HVAC and other specific trades. These commercials hawk the notion that their degree is better than a four-year college degree because in less than a year, you emerge with a skilled trade with which the graduate can immediately go out and earn a living.
When we consider bidding on properties that need rehabilitation, we see a huge variation of the work needed to be done on each property. We can bring 101 different contractors to a property, and they’ll give 101 different scopes of work, much of it conflicting.
They’re going to say adamantly that this work needs to be done to make the property right, yet there’s no consensus. Even when we give specific tasks to quote, we get bids ranging from $40,000 to $5,600 for a whole house renovation – no joke!!
This is an astronomical order of magnitude variation, with an average of a $14,000 variation in cost. How can we work with this? In a vacuum, who emerges with strength?
Of course, the variation in pricing is usually accompanied by a variation in quality. You might expect a $40,000 rehab to far exceed the $6,000 one, but that’s not always true.
From missed deadlines to broken promises to a promise of higher quality work than what they can really pull off, the variations are extraordinary. And unpredictable.