Hello all. I am contemplating rennovating some properties that are about 90 minutes drive (no traffic) away from where I live. I’m new to rehabbing, but have seen shows like ‘Flip That House’ on TV, and it seems those investors are spending A LOT of time supervising their contractors. I’ve also heard some horror stories from other investors online about contractor problems. It seems that as the investor, you need to make sure the contractors are on site and are working according to schedule. So my question is, as a new rehab investor, is it better to locate houses much closer to home so I can visit it every day if needed? Thanks for you’re responses.
Closer to you is better. 90 minutes there and then back is a long day. You need to supervise your contractors unless you have absolute trust in them (and even then, you need to check in to see how progress is going).
every day. every single day and twice on Fridays.
if the goofs are doing sloppy work, or using the wrong color paint, or the tub doesn’t fit yada yada yada, the ONLY thing that will save you headaches is being there EVERY DAY to see what’s going on, make decisions and, most importantly, STOP THEM if they’re screwing up.
Not to be too harsh here, but many contractors are lazy and will “make it fit” rather than go back to the store for the right size/color/type/etc.
It’s not their house. It’s YOUR investment.
I agree with Mark,
On site always. I stay on site and set the example. I don’t want to be there long so I double and triple the crews needed. I have morning meetings introduce all and set the schedule. Then I baby sit for ten to 12 days till completed. whole house remodels last 12- 16 days. That is my comfort level.
Real estate investor is a glorified word for baby sitter. You will have to sit your realtors, sellers, buyers,contractors, lawyers, helpers, and title people etc…etc.
Although the bank ladies are easy to work with now !
I agree with the others that constant supervision and involvement is needed. Unless you hired architects, drafted plans, and have an on site project manager, no one knows what and how the place should turn out is YOU.
As an example, a recent kitchen rehab I did, I dropped by each afternoon. I ordered the cabinets, and I used a contractor, a pretty reliable and experienced guy. He had the blueprint hanging on the wall, following it scrupulously, but when I arrived one day, noticed he starting screwing the cabinets in, but they were on walls opposite of where they should be, and the error wouldn’t be obvious till the last cabinets go in. He was thankful that I caught the error several hours into it, rather than days after, where he’ll have to uninstall everything, rush it (he’s got another job after this), not to mention damages involved in the uninstallation.
As another example, another rental, I had “new sidings” put up, got a good price, left the guy alone for the two or three days he needed as I was busy. When he called to say the job was completed, I found:
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He only had the front and right sides done, said I didn’t need the left side done since it’s in an alley, and quoted the job accordingly. The back we agreed I didn’t need as it was done separately. No wonder his price was cheaper.
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Sidings didn’t line up as in goes around corners. He did a good job on a roof for me, but told my tenant that this was only his third siding job, and my tenant, a retired home improvement contractor, went through his job and told me a dozen things that was wrong with it.
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Two entrances had doorbell buttons, and both sided over. A light fixture was reinstalled crooked, on top of the siding, instead of the siding cut around it.
I withheld a thousand dollars from his final payment, he screamed like a madman, and I hired another guy for $1,700 to take off and replace different sections that didn’t line up, and do the left side. The second guy installed a “new fixture”, the one that went on crooked, mentioning he throws ine extras to make customers happy.
I then spent another week (I’m slow), bought my own ladders along, to caulk, screw on tight, all the things that was loose, and about to fall off.
Had I just spent a few hours each day while he was there, watching, I would notice the sidings not lining up as it was going up, and had it done right to begin with, instead of hiring a second guy to redo the work of the first, and spend another week there afterwards.
Then, I had a paint job done, a simple 2BR, and I didn’t go by to check on it during the job. As paint jobs cost from $500 to $1,000, I figured I’m paying this guy $1,000, he should know how to paint. When I started telling him I want Benjamin Moore ceiling white on the ceilings, he stopped me and said he’s a painting contractor of many years, and know what should go on the ceilings.
I came by after the job was finished, to check it out before paying, only to see “Navaho White” on the ceiling and the walls. I was paying this guy a higher rate to schedule the job sooner, a tenant needed it quickly, only to have the ceilings redone, delaying the rental, and almost losing the tenant, and few weeks rent.
The problem could have easily been avoided had I showed up on the morning of the job, and watched as the ceiling was being painted.
The contractor explained that he subcontracted the job out, and didn’t come by himself, didn’t know about the problem himself, when I berated him. He even tried to convince me off white is OK on the ceilings. I just said “I’m the customer and I paint a color I like”.
Bottomline.
Only you know what you want, what the job should look like, and you’ll wind up spending days or even weeks straightening things out, arguing with contractors on what went wrong, losing tenants, if you think you can take the lazy way out.
Mr Chin,
You are my hero ! That is the best education money can buy. I too learned that way. Many times I have been told with “authority” how a certain project should be done by a Contractor only to call Baloney and show him how to do it proper.
Being on site really gives a guy a good education in many area’s of construction and you will end up with more whole job knowledge than most of the subs, then you truly “run” the job with Authority ,speed and awesome results…= profit
Have fun, Darin
This is a great post. Thank you to everyone who has responded. I recently hired a couple of contractors and was there the whole time they were. However, my primary reason was so I could learn a little bit about the trades. I also wanted to make sure things were done right and the way I wanted them. A lot of the time that I spent there was just watching, which at points I felt was wasting my time, but this post has shown me that it is not. It’s great if you have the ability to be there everyday and not have to be at a full time job. Tough to balance both, near impossible in my opinion.
Frank Chin and GOD WNZ, and everyone, thanks for you’re great replies. Its seems that I need to either rehab closer to home, or simply wholesale until I can commit to a detailed supervision.
One last question on this thread. In the real world, how realistic is it to complete a full rehab in less than 30 days, like these shows on A&E document? Can a small 3 bedroom, 2 bath rambler that needs a full gut be rehabbed and put on the market in 3 weeks? And if so, is there usually a premium charge for a timeline that fast?
Thanks again in advance.
GOD WNZ can do it in 12 days. Time is money, so I’m willing to bet that there’s a premium charge in most cases.
Hey Guys,
Not really a premium charge just mentally taxing. There is a finite amount of time it takes to do your remodel. Just hire enough guys to do it in less than three weeks. It actually costs less as everybody is hustling to get their portion done to accomodate the next trade in line. What it also does is make the contractors stay and finish verses slipping out and working on another job . I set the perameters during the bid process and expect results. I am fair and firm on the job and pay on the spot at completion, I demand emmediate results, kindly and pay bonuses regularly to excellent tradesman and that also gets them answering the phone when I call and have another job. They also appreciate that I work for them to some degree like creating a professional work enviroment, the right materials, well laid out plan and plans,immediate decisions when not so well laid out and payment on site when done and inspected.
All subs appreciate an owner who is available when decisions are needed and “have a clue” on how it is to be done. In the old days if I did not know how to do it I would hire someone and work for them till completion. I now am qualified( I think) to run the job site effeciantley, at least my own.
16 days has been the max time spent on site for whole house remodel. Interior/ exterior.
I’m going to hire an English Teacher next, Darin
I had gut rehabs done within in less than 30 days. This includes kitchens, building the entire bathroom, sheetrocking walls and celings, moving a furnace from one side of the house to the other. It involves good project planning. It depends on how quickly the contractor can start work, how many men he put on it, time of year, inpections etc.
The big contraint I find usually are “kitchen cabinets”. With stock cabinets, you’ll have it delivered relatively quickly, usually within a weeks time, but often over two… But sometimes, with unusual room configurations, we have to get a custom cabinet done, which could take a few weeks to get built and delivered.
I had one rehab where we bought cabinets from a “kitchen place”, good price, we’re in NYC, the cabinets came somewhere from the “Carolina’s”, and I recall the wrong sizes were delivered, and there was quite a bit of back and forth between the contractor and the factory. The was some assembly required.
By contrast, in the last kitchen rehab job, we bought standard cabinets sold by a local cabinet manufacturer, they can build what they don’t have in stock within a week, with the advantage they also can custom make cabinets to go with the stock ones. In this case, the factory is located in my county, 20 minutes drive if there’s a problem.
I learned that if I have to get a rehab job done quckly, spending a few dollars more locally is worth the extra money compared to the hassle of calling up a factory in the “Carolina’s”, when I’m in NYC, when something goes wrong.
And often if the job is big, permits pulled, you’ll need electricians and plumbers scheduled, and come in on schedule, and inspections done on schedule.
In these cases, you might find you’ll have to leave a wall open for the plumber to do the pipes, then wait for the plumbing inspector to show up, and finally closing up the walls after the inspection is done.
Of course, if you don’t get permits, you’ll avoid these issues, but risk running into problems later on.
In comparison to a gut rehab of a house I had done in 30 days, a simpler gut rehab of an apartment within a 3 family took almost 3 months. This was the one where the wrong cabinets were delivered, but the other problem was the contractors was two former “unions guys” who still think they’re on a union schdedule, 7:00AM to 2PM, with 3 to 4 hour breaks.
Unfortnately as I’ve been doing this for almost 25 years, I had to try out new contractors every so often as people retire or move on. The contractor who took 3 months to do the apartment rehab sells financial products for Citibank the last I heard.
Frank, thanks so much for sharing you’re experiences on this thread. It is very helpful! I think I need to reconsider rehabbing right on properties that far away. Thanks again.
While it is possible to complete the projects in under 30 days, it requires experience. Your first one may take more than 30 days, but with each subsequent project the duration of the project should decrease. You will eventually establish a rhythm and find better suppliers, subcontractors, etc. You should make more money on your later projects.
The people on the shows you mention have prior experience. Their very first project probably didn’t go so smoothly. Try watching the “Property Ladder.” They include novices and it is a little more realistic. That show saved my sanity on the my first project because I saw other becoming making the same stupid mistakes as myself.
You live, practice, and learn.
Property Ladder might as well be comedy, I laugh everytime. Those people lose their a**es 9 times out of 10 and if there is more than one person in the deal they end up hating each other. Wives and husbands at each other’s throats, friends becoming bitter enemies. Oh the harsh realities of REI are fun to watch.