Hello all, I'm new to the forum but have been consuming a lot of helpful information over the past several months. I am about to close on a rental property in Buffalo NY, this will be my second investment property in Buffalo. The new property will need substantial work to get it rented. The property is a double and is adjacent to the single family home I currently live in. It is in an up and coming neighborhood that upon completion of renovations would garner good rent. This will be my first time undertaking a project that requires substantial work (all new windows, kitchens, baths, re-configuring walls, electric, plumbing, roof, exterior), so lacking experience with such a project I would welcome any helpful feedback. My thinking is to go one of two ways. Option 1 would be to do some of the work myself and hire out the skilled trades and maybe take the reno one unit at a time. Finding and choosing reliable, quality people is where I see this option being an issue, along with the time, which with 2 little ones at home on top of working full time is tough to come by. Option 2 would be to hire a G.C. to take on the project, which would likely be a substantially more expensive option. Again any recommendation would be greatly appreciated. Or anyone in the Buffalo area that could point me in the right direction regarding contractors would be awesome.
If you start swinging the hammer during the little time you have left after the full time job and spending time with your family, it might take you months to finish the renovation. This is on top of being exhausted and possibly miserable. The holding costs before the units are rented might outweigh the point of diy. Do you want to be in the Investment business or the contractor business?
Finding quality contractors is a challenge, however is not impossible. J. Scott recommends in his book, for example, to look for them when the local HomeDepo or similar chain just opens in the morning. He has more simple but brilliant ideas in the book. I would strongly recommend it before you do anything. You can act as a GC to save on some costs and time. Get multiple quotes and compare them. If you don't understand something, bigger companies have enough man power to answer the question and when you get the info you need you can come back to less expensive contractors and negotiate with them, if they are within the range. This process most likely will take you less time than first figuring out how to swing a hammer properly and then swinging it. Also, getting everything in writing might help you to make sense of things and to make sure you are on the same page with everyone you are negotiating.
Finally, if you choose an Option 2, but act as a GC, you can start from your "circle of trust". Your friends and family members had to do some renovations in the past, right? Ask them for references. A lot of contractors like to work with other particular contractors in a team. Ask them for references. If you start this process, you will get enough recommended contractors to finish your reno.
Congrats on adding another two units to your portfolio. I am also very new to real estate investing and have been learning a ton on BiggerPockets.
In regards to the couple of options you are considering...
I would say there are really two things to consider.
1) Timeline - how long can you comfortably carry the property expenses without having a tenant? - If you need a tenant in ASAP, then it would probably be better to have a GC handle the project quickly. For example, if the carry costs are $800 monthly, and it will take you four months to complete the project the it will cost $3200 in expense before having a tenant in the property. Add that expense to the cost of materials and it can really add up.
2) Budget - If the budget will permit for you to hire the GC to complete the project, I would imagine that it will save you a lot of time and allow you to focus on screening tenants to have them ready to move in as soon as construction is completed. If you can have a tenant move in within 30-45 days after close of escrow then it will allow you to begin recouping your rehab costs.
IMO - I would have a GC bid on the project, review and examine the scope of work that needs to be completed, and identify smaller (more labor intensive) projects that you may be able to easily complete on nights and weekends. For example, demo work (cabinet removal, flooring removal, debris, etc). Creating a strategy with the contractor to cut costs in certain areas will help you save some money without having to be responsible for all of the work yourself.
What part of Buffalo? I have some guys I use, but they're old school so the part of the city impacts whether or not they'll take the job.
Thanks everyone for the very helpful insight!
Chris, the property is just west of Richmond between Allentown and Elmwood Village.
Whatever you choose to do, make sure that you gain as much from the project as you can. I would get down into the weeds about every detail. Sometimes when a contractor does a project for you, he just fixes something and you have no idea how difficult or easy the task. I was a contractor for many years and there is a huge advantage to experience. If you don't do the work, ask a bunch of questions. You can learn a lot, and you will be able to use that on the next project. As a former upstate New Yorker I would also advise you to move south. Its awesome!