Every flip comes with its own unique landscapes, challenges, and victories. Yes, this means there are inconsistencies with each project. But, if you want to be more than a hobby rehabber—and certainly if you have more than one project running at the same time—you need to be the consistency. The best way for you to accurately determine the outcome of any project is for you to manage it effectively from the start.
So, how do you do that?
The upcoming Project Management Specialty Lab doesn’t have enough seats for everyone (I may have a few left, call 800-533-1622 to find out, or go HERE for more information) so, let’s unpack the basics of project management in a FREE crash course.
First things first, repeat after me. “I do not leave my success in the hands of others.”
Again, aloud this time. “I do not leave my success in the hands of others.”
Good. Let’s dive in.
You have very specific goals as the Project Manager:
– Your job as the Project Manager should be detail oriented, hands-on, and should last from acquisition to sale.
– Your project shouldn’t last more than 40 days from the time laborers are in the property to when they are done (from demo to decorating). You can count on 2-3 weeks of planning before that, as well, while you are insuring the property, pulling permits, getting electric on, etc.
– You should manage the schedule and everyone on it. EVERYONE SHOULD KNOW when the project is expected to be done, and when they are due to complete their job. If you coordinate this with the contract they sign at the beginning, there should be no confusion at the end. It also helps to keep a detailed calendar onsite.
You’re the chief. Lead them to success, and you’ll find success.
Common Mistakes to Avoid:
– Taking too much time. Every property, every day, someone is there doing something. The costliest overrun that you have is time. Move quickly, schedule contractors and subs back to back or even on top of each other (I’m talking someone upstairs and someone down, not causing mayhem).
– Not preparing for the challenges (like a canceled or delay jobs). Have 2-3 painters, electricians, etc. in case you need to replace one at a moment’s notice. You also don’t need to go with the cheapest bid, but you should factor in the quickest completion. Time is money! Why hire someone who can do a job for $100 less if it means the property will sit empty for 5 days? If you’re paying $70 per day in holding costs, that’s a loss of $350 to save $100, which doesn’t make sense!
– Doing too much on the property. Do what is necessary to make the job safe, clean, and produced with quality craftsmanship.
– Overpricing your properties. You can demand top dollar if it’s worth it and you know it will sell, but make sure it will appraise. Otherwise, get it priced to move.
– You give the contractor the control. If you don’t know what you’re doing, and especially if you’re new, it can be tempting to rely on the “professional” to take control. But if you allow your contractor to dictate (or mandate) what will happen to your projects, the materials, and the timeline then you will pay for unnecessary projects, expensive materials, and overtime. Meekness doesn’t work. If confidence doesn’t come naturally, you’ve got to Fake it ‘Til You Make it. If you don’t control the project, the person who wants to make money off you will control it. Remember that a “scope of work” is a wish list. And again, do not leave you success in the hand of others!
– You don’t stage. An unstaged house will have less overall viewings, will stay on the market longer, and will cost you more. To understand the importance of staging and learn 8 ways to stage your property better (plus BONUS photography tips), click HERE.
For more on making the most money on your rehab, click HERE or sign up to watch the next CEO Fireside.
If you retain nothing else, remember this:
Every single day costs you. Start as soon as the appropriate permits are pulled, contracts are signed, and a schedule is in place. Every property, every day, someone is there doing something. This also includes selling it as quickly as possible by pricing the house reasonably, staging it well, and holding your real estate agent to high standards.
…and…
Most importantly: Do not leave you success in the hands of others!
There’s so much more to it than this, folks! If you have a property or plan to acquire one, don’t go at this blindly and risk the worst case scenario. If seats run out for my Project Management Specialty Lab, get to a Rehab for Riches event, a Funding Tour, or gee whiz, do something! Don’t let the excuse of “I didn’t know any better” keep you from being profitable.
To Your Success;
Lee A. Arnold
CEO
The Lee Arnold System of Real Estate Investing
To read more articles click here.
For more information on the education that best fits your needs, talk to a specialist at 800-533-1622.
As always, if you have an “Aha!” moment, please comment! We’d love to hear about it.