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by: Stephen Cook
This article is excerpted in part from Stephen Cook's
course, "Rehabbing for BIG Cash: A Real Life Guide to
Retailing Homes."
It is easy to be intimidated by the size of a rehab project,
particularly if you’ve never tackled one before. This chapter
breaks down the steps involved in completing a renovation
from start to finish and removes some of the mystery, and
hopefully some of the fear, surrounding a renovation. I hope
you find it a useful tool when eyeing your next fixer upper.
Step One - Meet With Contractor and Define Job
When starting a rehab, the very first thing that I do is
walk through and evaluate the project myself. Then I set up
a meeting with my contractor to get his input and finalize
my strategy including how to handle certain repairs and whether
or not we’re going to make any changes to the basic layout
of the property. Now that I work exclusively with one general
contractor, my life is much easier since I only have to meet
one person. He contacts everyone else and then relays the
results of his conversations with them to me.
As a result of my experience, I’m becoming fairly adept at
determining the best way to do the work. Therefore, my contractor
usually winds up doing completing the projects in the way
that I envision. However, he does offer advice and I'm always
open to suggestions as to better or cheaper ways to get the
job done.
Step Two - Define Job and Buy Materials
Once we meet and determine the work we are going to do, my
contractor and I put together a draw schedule. This is usually
required by the lender and lists the order in which we intend
to complete the work required. I like to shift things around
to keep the cash flow coming from the lender. My contractor
likes to do things in an order that makes his life easier.
We usually settle on something in between.
Step Three - Phase One: Demolition
Through experience, I have finally learned to do my entire
"demo" first. I used to get into my homes and start
the jobs immediately. However, this meant we were constantly
working around trash, having to haul trash away, etc. Now,
I just get a dumpster or two at the very beginning of a job,
bring in a crew, and begin to rip everything out. We clean
out all the trash and tear out the kitchen, bath(s), drop
ceilings, paneling, flooring, and anything else that might
get in our way of completing the job properly and efficiently.
Step Four - Phase Two: Roof, Windows and Siding
The rest of the job typically begins on the exterior of the
home. We start with the roof in order to ensure that the inside
of the house stays dry, and usually, I’ll have the windows
and siding done at the same time. One reason I like completing
the entire exterior rather quickly is that it starts to attract
attention from the neighbors and people who drive by.
Step Five - Phase Three: Plumbing and HVAC
The next two items on my list are the plumbing and the heating
and air conditioning system. In the past, I had contractors
who didn't do the plumbing right away and it only led to disaster.
After they hung, finished and painted all of the sheet rock
in the home, they turned on the water only to find that there
were pipes burst in the walls. Today, I ALWAYS make my contractor
check out the plumbing first, including the sewer lines.
It is important to have a working heating system in the home
upfront so that much of the interior work, particularly the
finishing and painting of the sheet rock, can be done. While
the plumber is working, I’ll have an HVAC crew installing
a new heating system which consists of a new gas furnace and
central air conditioning. I haven't always replaced functional
HVAC systems and even today, if the current system is fairly
new, I will avoid it. Primarily, though, I always install
completely new systems.
Finally, if the electrical system needs to be updated in
any way, I usually do this while the HVAC system is being
installed. In many instances, if I am installing central air
conditioning in a home that didn’t have it previously, the
electrical system will need to be updated to accommodate the
central air. Other than this, which isn't always necessary,
I rarely have to do any electrical work in my homes.
Step Six - Phase Four: Framing and Subfloors
Once the exterior and the HVAC, plumbing and electrical systems
are done, I begin to address areas such as rotten wood, tearing
down walls and building new ones. Of course, if I’m going
to remove or build a wall containing plumbing and/or electric,
then my crew has to do it before or during Step Five. I make
an effort to finish the basement of every house that I renovate.
It creates more living space, and for many of my buyers, my
finished basement is the reason that they buy my home.
Step Seven - Phase Five: Sheet Rock (Drywall)
Once I have completed all of the major systems, then I begin
to do my sheet rock (a.k.a. drywall). If at all possible,
I prefer to just skim and patch the walls, but I frequently
put a lot of new sheet rock in my homes. Hanging and finishing
the sheet rock is something that takes a while, but is goes
a long way toward making an old house look new.
Step Eight - Phase Six: Painting
Once all of the sheet rock is done, we get paint on the walls.
First, we'll put a coat of primer or a light first coat of
paint on the walls and then have the sheet rock crew fix any
flaws, which won’t show up until there is paint on the walls.
As soon as the flaws are repaired, we’ll put two more coats
of paint on the walls.
Step Nine - Phase Seven: Installing New Kitchens and Baths
Once the paint is on the walls, we get our vinyl floors in
the kitchens and baths before installing all the new cabinets,
commode, vanity, etc. We usually take our kitchen dimensions
to Lowe’s or Home Depot and have them design the kitchen for
us. It makes my contractor’s life easier and we always get
the right size cabinets with a good fit.
Step Ten - Phase Eight: Punch Out
Once the kitchens and baths are installed, we start to wrap
everything up. Contractors usually refer to this as their
"punch out" and consists of all the little details
such as outlets, switchplates, and light fixtures. Many times,
a homeowner will walk through and create a punch list with
the contractor. Since we’ve worked together for so long, my
contractor already knows what needs to be done and we don't
need to do this.
Sometimes it seems like the punch out is the hardest part
of the whole renovation since it takes so long to complete
everything on the list. However, this is also the part of
the job that makes your renovation a good one or an excellent
one.
Step Eleven - Phase Nine: Carpeting
Since we don’t want workers ruining the new carpet, this
is the very last thing we install. We usually put new wall-to-wall
carpeting throughout.
Step Twelve - Phase Ten - Clean Up and Landscaping
At this point, the home should be finished and we'll begin
the clean up. Since you want your homes to stand out, it is
important to get them clean and looking like a million bucks.
If I’m going to do any landscaping, it is usually done here
as the last thing.
Step Thirteen - Phase Eleven - Marketing
Once the home is complete, I immediately begin marketing
it. If the area is hot and the home is going to move quickly,
then sometimes I’ll start marketing before completion, but
most of the time I prefer to have the entire job done before
allowing people to see the home.
Step Fourteen - Phase Twelve - Final Repairs Required
Once the home is under contract with a buyer, they may select
to use a home inspector and their lender will order an appraisal.
As a result of the inspection or appraisal, you may need to
do additional repairs. Then the inspector or appraiser will
reinspect the property to make sure the repairs have been
done before issuing their final approval.
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