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by David Whisnant
One of the most common questions new investors have is --
"Once I have a property, and once you have found and
identified the subs you want to use (covered in my course),
how should I go about scheduling the job?" We’ve probably
all seen rehab jobs that seem to take forever. I pride myself
in getting my jobs done faster than just about any other local
investor I can think of. This takes no special abilities,
only some solid planning before you begin work. If you take
a year to get each house done, and I’ve seen some take as
long as a year and a half, your profit will fly out the window
in the form of payments and holding costs. The purpose of
this article is to give you a structure and method for organizing
your rehabs. The goal here is to do these steps in a certain
order so that workers will not tear up what the workers before
them accomplished. Scheduling is the key to making sure that
"Worker B" does not destroy what "Worker A"
did.
I am assuming for this article that you are not required
to permit this job. If you were required to permit, you would
need a list of repairs you plan to make to the property, and
the projected total cost. Take these down to your local permit
office, and you will receive a permit. The price you pay for
the permit is usually a flat fee plus a percentage of the
value of the repairs you intend to make. If you are adding
a bathroom, or addition to the house, you will need a plan.
It doesn’t have to be pretty, or by an architect (at least
here in Georgia), but it needs to be drawn to scale.
To start a project, the first thing to do is get at least
a 30 yard dumpster, and probably a 40 yard dumpster. Dumpster
prices don’t increase much to get a bigger one, and you’ll
be amazed by how much waste each job generates. Hire some
day workers, or dependable labor to go in and get out all
of the prior occupant’s junk. (Many of the properties we buy
have couches, clothing and general junk left by the prior
owners. I like to get that out first). If anything is good,
you can donate it to the Salvation Army. You get a tax write
off and someone else can put it to use.
Street-Wise Tip: If you are in an area that has low-income
residents (perhaps an area that middle class residents are
moving back into), do not put bags of trash by the street.
The other residents will dump them out looking for items of
value, and destroy all the clean up work you have done. We’ve
learned this the hard way SEVERAL times.
Your cleanup will take a day or two at most. If any sheetrock
is in terrible condition, where you cannot cover it with thin
1/4” sheetrock on the walls, or 1/2” on the ceilings, rip
it out now while you have your labor. The prime example of
the wall that should be torn out (gutted) is one that has
suffered heavy water damage and is bowed or not solid anymore.
If the kitchen is going to be replaced, rip out the cabinets
as well. Tip: See how the cabinets are attached. If they are
screwed into studs, provide screwdrivers or a drill with a
screw bit for your laborers to use. If the cabinets are nailed
in place, provide a pry-bar. Make sure to tell them to be
careful with the kitchen walls. You don’t want to tear up
anything that you don’t have to tear up.
If the yard is a wreck, have the guys spend an hour or so
mowing, trimming overgrown hedges etc. The neighbors will
be VERY thankful, will probably come over to thank you, and
will be a good future source of referrals.
You presumably have your general plan by this point. You
may be planning on adding a bathroom, or just simply repainting
and putting in new trim or doors.
At the start of the job, and after the old cabinets are removed,
invite your kitchen designer out to look at your kitchen.
You should be down to bare walls in your kitchen at this point.
I use a company to install my kitchens that does nothing but
kitchens. They primarily cater to builders, and are priced
40% less than you would pay at Home Depot or another superstore
for cabinets. As part of their service, they send out a designer
to measure and design my kitchen. I cover the brand and style
of cabinets that I use in my course. Also, make sure to find
out how long it will take between when you actually order
your kitchen and when they install it.
You will next want to have your electrical rough work and
your plumbing rough work done. I’ll give the electrician (or
plumber) a seven day head start, starting the plumber (or
electrician) seven days later. We are only worried about large
repairs here, i.e. running new wiring, replacing a fuse box
with a breaker box, replacing bad plumbing/fixing leaks, installing
water lines for new bathrooms. We want to do all of the rough
stuff that would tear the house and walls up if we did them
at the end of the process. If there is an area where both
electrician and plumber will have to work together, make the
first contractor finish his job in that area as the first
thing they do. That way, the second contractor will not have
anyone in his way if they overlap. I am not installing new
sinks in bathrooms, new outlets, or anything that could be
damaged by the painters/carpenters at this stage!
Repairing rotten wood on the exterior of the house can be
done either before or after the electrician. The electrician
will probably need to turn off the power to the house, so
carpenters should be scheduled before or after the electrician
comes for the rough in work. (Carpenters need their power
tools!) Place them under strict orders to not work inside
where they’ll get in the electrician’s/plumber’s way. Replace
all rotten siding at this point, check for rotted fascia board,
and make repairs to porches or decks. This is also a good
time to work under the house, addressing any structural repairs.
Once the plumber and electrician are gone, make sure to complete
all carpentry items on the exterior of the house, structural
work that involves jacking up any floors, and any new framing
inside that you plan on doing. (For example, we often have
bedrooms in older homes that have 2 entry doors, one to a
hallway and one to the kitchen. We usually close the kitchen
door off to give more usable wall space, and “sell” the room
as a bedroom and not a den.)
The next subcontractor is the sheetrock man, who will come
in to skim and repair any walls that are in poor condition.
I typically schedule him for one week after the electrician
and plumber told me that they would be done. He may hang some
new sheetrock, or skim areas that are heavily abused. Many
of the houses we rehab are in bad shape, and there usually
is a good deal of work to be done on the walls. Make sure
that absolutely no jacking is going on underneath the house
when you reach the sheetrock stage. This jacking can crack
the walls and/or ceilings that the sheetrock contractor/plasterer
has already fixed. If you are going to replace all the trim
and moldings in the house, these will need to be removed prior
to the arrival of your sheetrock person. These trim items
should be removed by your laborers at the start of the job.
Remember, at this point, rough plumbing, electrical, and
outside carpentry are complete. Next, focus on the inside
carpentry work. This means replacing doors, putting up new
moldings, etc. The goal is to get everything ready to paint.
It also should be about time to order your kitchen. I usually
try to get my tile work done during this period as well. This
would include new tiles in any bathrooms, and tile or wood
floors in your kitchen as well. I usually run new flooring
wall-to-wall in kitchens, and not to the base cabinets after
the new kitchen is installed.
I schedule the painter for one week after the carpenter told
me he would be done. If the carpentry is lagging behind, and
the painter cannot change their schedule and come back a week
later, I get them to start on the outside work first. This
buys 3 days for us. After the exterior is completed, the inside
is painted. Note that you always want to have in your agreement
with the painter that he will come back for touch-up at the
end of the job. I specify 16 hours of touchup. (2 guys, one
day.) Hold back $200-300 until this is complete. Agree to
this hold-back before the painting work starts.
When the painting starts, get an estimate for the amount
of time it will take to complete. Usually, accounting for
weather and missed days, it takes my painters about 10 days
to really complete the job, inside and out. My wood floor
contractors need two weeks notice, so I usually call them
when the painting starts and line them up for 2 weeks (14
days) ahead.
Wood floors are refinished after painting. This process usually
takes 5 days, depending on how quickly the floors dry. Notes
on selecting the appropriate stain, and sheen are detailed
in my course along with the color that I use to conceal old
stains. I now put wood floors in my kitchens, so these are
done at this time.
My outside landscaping is being done at about this point.
I never want to do it too early, because I don’t want to have
to water the plants for too long.
Next is the kitchen installation. Your kitchen contractor
will handle his job for you. Always make sure that you don’t
have any outlets that will be covered by cabinets, or have
a need for more outlets. Your electrician should have taken
care of these needs at the start of the job. This is another
good reason to meet with your kitchen designer early.
The plumber and electrician come back again at the end of
the job. The plumber mounts toilets, sinks, and connects the
ice-line in the kitchen, etc. The electrician hangs light
fixtures, hooks up the disposal, etc. Your carpenter may also
come back for minor items like door knockers, door knobs,
and other final items.
Finally, the painter comes back for final touch-up. A cleaning
crew comes after the painter, and the house is ready for the
market.
Note that I do not list or show the house until everything
is done. Buyers cannot visualize what your completed product
will look like, and you are far better off to wait.
If you follow these steps, I am confident that you will cut
a good deal of time off your rehab time, and do more homes
each and every year. Your subs will also thank you for building
a flexible schedule that allows extra time for the inevitable
delays that happen.
Congratulations if you have taken the time to read our entire
series of real estate articles! If these have been helpful
to you, I invite you to check out our 300 page course, which
I am currently offering for the "give away" price!
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