Real Estate Investing Depot
The World's Largest Directory of Resources for Real Estate Investors
SubscribeReal Estate Investing DepotCoursesBooksTapesSoftwareServices
     to our "What's New" Newsletter!
NEW Resources!   NEW Forms!
NEW Articles!   NEW Reviews!

FREE Foreclosure eBook
Search options
Learn how to make a Fortune Investing in Real Estate
Buy Complete Real Estate Investor Program
D I R E C T O R Y
real estate investing depot  
authors / gurus  
submit article  


M O R E    R E S O U R C E S
articles  
forms  
freebies  




The Complete Real Estate Investor Program

The Complete Real Estate Investor Program
by David Whisnant






Article by David Whisnant

Rehab Scheduling

 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.

Starting Your Rehab

 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!

David Whisnant is a licensed real estate attorney in Georgia. He received his B.A. from the University of North Carolina at Chapel Hill, and graduated from Law School at The University of Georgia School of Law in Athens, Georgia. He is author of the "The Complete Real Estate Investor Program"
==================================
Website: www.4realestateinvesting.com


Back to Real Estate Investing Articles

© Real Estate Investing Depot
     
Start Building Your Real Estate Empire Today!