{"id":132555,"date":"2020-12-03T15:00:28","date_gmt":"2020-12-03T22:00:28","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=132555"},"modified":"2021-03-16T17:05:44","modified_gmt":"2021-03-16T23:05:44","slug":"properly-assess-renovations-contractors","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/properly-assess-renovations-contractors","title":{"rendered":"Hang on To Great Contractors for Dear Life\u2014Here&#8217;s How"},"content":{"rendered":"<p>Let&#8217;s talk real estate investments, exterior renovations, and contractors. We&#8217;ll use one of my multifamily complexes as an example.<\/p>\n<p><iframe loading=\"lazy\" src=\"https:\/\/www.youtube.com\/embed\/qcP3kkxboPM\" width=\"560\" height=\"315\" frameborder=\"0\" allowfullscreen=\"allowfullscreen\"><\/iframe><\/p>\n<h2>How to Assess What Needs To Be Renovated<\/h2>\n<p>The very first thing that you may notice needs renovation are the roofs. A good indication that the roofs need to be replaced is a tarp or missing shingles. In the complex in the video above, there&#8217;s a total of 16 buildings, 12 of which have pitched roofs. But there are four that actually have flat roofs.<\/p>\n<p>The windows are outdated, as well. Older properties will frequently have this kind of inconsistency.<\/p>\n<p>We also have to address the AC units and the parking lot. <span class=\"s1\">With the parking lot, we&#8217;re going to do a restripe and a seal coat and then, in addition, patch any holes. So those are some extra things that needed to be done. <\/span><span class=\"s1\">The brick and the masonry are fine. We&#8217;ve already painted the doors and the common areas.<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/2014-01-26-14-questions-contractor\" target=\"_blank\">14 Killer Questions to Ask Your Contractor<\/a><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">In terms of the cost, we would take our initial $2,000,000 divided by the 156 units to determine the average cost per unit. A significant amount of those costs actually went to the roofs. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">You want to have all of your money raised up front to take care of the improvements and also have it in your underwriting, because all of this is going to affect your returns on your money.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">With an older property, you want to have a buffer in there for the renovations. It\u2019s about 99.9% likely that there is a surprise that is going to happen when you&#8217;re going through a large-budget project of this nature. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">What we&#8217;ll get into next is the AC units and how to find a contractor, because a contractor can really make or break a deal.<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-120281\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/12\/contruction-floor-plan.jpg\" alt=\"House model and blueprint plans, residential building project architectural design\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/12\/contruction-floor-plan.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/12\/contruction-floor-plan-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h2>How To Choose Contractors (&amp; Foster a Great Relationship)<\/h2>\n<p class=\"p1\"><span class=\"s1\">One thing that I&#8217;ve learned when finding a contractor is that the cheapest option is not always the best. I&#8217;ve had experiences where contractors have just walked out on the job entirely. Then, you have to get another contractor in there to go over what the last person had previously done, and you actually end up paying more. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So, it&#8217;s definitely worthwhile if you have a good contractor, a great contractor, to treat them well. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">For this project, I consulted with one of the greats: Rick. He&#8217;s one of our go-tos. I asked him about the HVAC. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">This property has 156 HVAC systems, which is something you want to have factored into your assumptions when you&#8217;re underwriting a deal. You&#8217;re going to have to take care of those.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">I asked Rick if he could, based on his experience, discuss what he anticipates going into this project. How many will need to be replaced?<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">&#8220;I was not initially involved in the determination of what was to be replaced. The criteria were based on certain styles of cabinet, certain brands. For example, one has a wire cage around it. That&#8217;s no longer a current design, but as long as it was correctly installed in the first place, it&#8217;s got legs.<\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">&#8220;They asked me about the longevity in some of them. <\/span>I don&#8217;t want to be a smart aleck, but they run until they quit, and that&#8217;s a crystal ball question. So don\u2019t replace it if you don\u2019t have to replace it\u2014that&#8217;s absolutely not necessary.<\/p>\n<p class=\"p1\">&#8220;Typically, if it lacks maintenance on the outside, it lacks maintenance on the inside, as well. A lot of the failures are due to a lack of airflow in the evaporative coil in the quarters. <span class=\"s1\">And then what happens is it builds the heat up and then they have compressor failure. And nobody likes failure. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">&#8220;Another contributing factor to premature compressor failure is congestion in units, because they&#8217;re unable to distribute the heat.&#8221;<\/span><\/p>\n<p><em><strong>Related:<\/strong> <a href=\"https:\/\/www.biggerpockets.com\/blog\/home-renovations-find-great-contractors\" target=\"_blank\">7-Step Process for Finding Great Contractors for Home Renovations<\/a><\/em><\/p>\n<p class=\"p1\"><span class=\"s1\">This is why it&#8217;s great to have a team. And when it comes to finding contractors, it\u2019s best to get a referral and to really establish that relationship. You can see when they do what they say they&#8217;re going to. We pay them on time, they come back, and vice-versa. So they get things done, and we enjoy working with them. <\/span><\/p>\n<p class=\"p1\"><span class=\"s1\">So again, it&#8217;s vitally important when you do have a great contractor on your team to treat them well, pay them well, and pay them on time and build a positive relationship.<\/span><\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/webinars\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-91217 size-full\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg\" alt=\"\" width=\"700\" height=\"85\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2017\/08\/blog_ads-01-300x36.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>How do you find and keep quality contractors?<\/em><\/p>\n<p><strong>Share your relationship-building secrets in the comments.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>When searching for a contractor, the cheapest option isn&#8217;t typically the best. Improve your real estate investment success by finding a good one\u2014and keeping them around.<\/p>\n","protected":false},"author":12140,"featured_media":129252,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[4241],"tags":[],"class_list":["post-132555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-business-management"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/132555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/12140"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=132555"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/132555\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/129252"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=132555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=132555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=132555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}