Managing Your Rehab Projection
Whether you manage the team and rehab project independently or use a General Contractor, ORGANIZATION & COMMUNICATION ARE KEY. The more organized you are, the faster you can respond to questions and situations that may surface with your team, contractors, financiers, or local government. In addition, having organized systems and processes helps to ensure you don’t miss important details. Communicating defined expectations with each team member from the start helps to limit mistakes & misunderstandings.
From an organizational perspective, you should be completing the following tasks when you close on your investment property:
- Save & File All Closing Documents (ensure you have easy access)
- Schedule the Change Over All Utilities; Electric, Gas, Water & Oil (this can typically be set up in advance, effective for your closing date)
- Change All Locks and Get Three (3) Copies of Keys (one for the lockbox, one for you & one for back-up).
- Install Lock Box (hidden from view)
- Mow the Lawn if Needed (avoid complaining neighbors & city fines for code violations)
- If Survey is Needed, Order It
- If Permits are Necessary, Your Contractor(s) Should be Ordering Them
- If Dumpster and Jobsite Porta Potty are Needed, Your Contractor(s) Should be Ordering Them
- If Architect or Engineer is Needed (or both), Order. (follow-up and ensure they are drafting plans, then finalize & submit for permitting)
Once any necessary permits have been issued, the rehab work begins! Having an agreed-to-plan with clear expectations makes oversite much easier.
Typically, your rehab team will begin with the exterior work, as those permits are often issued more quickly. Starting with the exterior also makes it visible that you are making improvements that will stir interest in the property.
Exterior work includes but is not limited to:
- Siding, Roof, Soffit, & Gutter Repairs/Replacement
- Windows & Screens
- Exterior Painting / Power Washing
- Landscaping / Attractive Mailbox
NOTE: There is an exception to starting with the exterior. If foundation work is necessary, start with the foundation first, even by delaying the start.
Post a “Coming Soon” Sign in the Yard or Window when the exterior work is finished if allowed. This is a great way to start marketing your business and property!
With the exterior finished, the next step in your rehab is the interior. Interior work includes but is not limited to:
- Cleanout & Demo
- Ceiling Repairs / Resurfacing (for example – Popcorn removal)
- Framing (if changing walls/layout)
- Major Systems
- Rough Electrical
- Rough Plumbing
- Also, Repair / Replace Water Heater if Necessary
- HVAC Repair / Replacement
NOTE: Contractors for each specific area should be present for Building Department Inspections of their work (Electrical, Plumbing & HVAC), and if inspections fail, any/all re-work should be done at no additional cost.
- Installation of Front Door
- Installation of Insulation
- Install Bathtubs / Shower Pans
- Sheetrock Installation, Spackle, Sand & Prepare Walls for Paint
- Painting Entire Interior: (Sherwin Williams Paint Preferred)
- Primer First
- Two (2) Coats on Walls
- Walls with Flat Finish
- Interior Closets & Garage Doors with Semi-Gloss or High Gloss Finish
- Trim & Interior Doors with Semi-Gloss or High Gloss Finish
- Ceiling with Flat White Ceiling Paint
NOTE: Interior Painting Complete BEFORE Flooring Installation
- Install New & Matching Hardware for All Doors (doorknobs, hinges, etc.)
- Kitchen Cabinets (existing refinished/new ordered)
- Install Flooring (hardwood, luxury vinyl, carpet)
- Tile Work (floors and bathrooms)
- Kitchen Cabinets (installation)
- New Kitchen Hardware (knobs & pulls)
- Counter Tops (measure, template & installation)
- Install Trim (around doors, windows & base)
- Touch Up Paint
- Install Backsplash & Undercabinet Lighting (WOW)
- Refinishing / Cleaning Floors
- Appliances (order & install)
NOTE: Inspect all appliances when delivered & test all appliances after installation!
- Paint Trim & Doors & Final Touch Up
- Installation of Kitchen Faucet, Toilets, Vanities, Bathroom Faucets, Shower Heads & Hardware
NOTE: RUN ALL FAUCETS to ENSURE NO LEAKS. Also, CHECK UNDER ALL SINKS AND AROUND EVERY TOILET to ENSURE NO LEAKS.
- Install Smoke Detectors & Fire Extinguishers (follow your city/town requirements)
- Complete Detailed Walk Through
- Punch List
- Order ALL FINAL Inspections & CO (if necessary)
- Clean, Clean, Clean … Sparkling Clean!
- Ensure All Construction Debris Is Removed
If your exit strategy is to FLIP, then you will add the following steps:
- Professional Photography
- List the Property “For Sale”
- Contract with Buyer
NOTE: If your state has a Bulk Sale Provision, ensure your attorney includes a rider that keeps you exempt from the Bulk Sales Provision.
- Buyers Home Inspection
- Have your contractor/handyman present at the inspection
NOTE: If repairs are requested after the inspection, you can 1). Negotiate and agree to do some or all repairs 2). Offer a repair credit or 3). Offer to purchase one (1) year home warranty (provided by outside provider)
- Complete Repairs
- Send reports with Pictures (Before & After Repairs)
- Schedule Walk Through w/ Buyer/Buyers Agent
- Appraisal (if required by lender or buyer)
- Mortgage Commitment Received (If Buyer is using a lender)
- Time To Celebrate!
NOTE: If you are using a General Contractor, at a minimum, you should do Check-Ins after the completion of each of the following milestones on your rehab: