Can I talk to a contractor in the Rust Belt sometime tomorrow?
Flipper/Rehabber · Tacoma, WA · Member since 2016 · 100 posts · 34 votes
@William F. Hi William,
Some things specific to the North...lets start with making sure you get the water turned on before you close on the property. Buying investments here, especially foreclosures, you want to make certain there are no water leaks. Most banks and companies like Freddie Mac/Fannie Mae use preservation companies to "winterize" their properties. This means the water is to be blown out of the pipes, the meter disconnected, the water heater drained and anti freeze poured in pipes with p-trap or toilets. In my experience, these preservation companies are only good at preserving their business model and have a habit of cutting corners to perform their tasks on the cheap. As soon as the weather gets cold the pipes freeze because the "winterizing" was done half azzed at best and you have pipe bursts behind walls as a result of water still left in the lines. It can be a frustratingly expensive fix to track all the leaks down and make repairs. As a side note...make sure you have copper still, up here the copper is like gold to crooks interested in risking 10 years in jail for $100 in scrap copper :) - Proper response...no water on...no deal
Speaking of cold temps, make sure you order an HVAC inspection. You want to be certain that once you get the gas company to open your account, the furnace is actually operable. No heat is terrible on plaster walls and will in itself cause a lot of wall damage.
Have a good snow removal service for your walks & driveway. Ice is treacherous and if a slip occurs and causes injury...well you know where I am going with this. While your at it most do lawn care as well so you can avoid the city inspector tagging your house with fines for not mowing.
You need to pull permits in the Chicago area. The cities in and around Chicago are getting wise to investor flips and they are coming up with some very aggressive forms of policing rehabs. Buyers are n't dumb either at closing if you paid $100k for a house and want to flip it for $170k 4 months later they will want to see permits for repairs made. Make sure you know what is required as it is your responsibility as the owner.
Answering question 2 - Iphone has this real cool feature called face time lol...use it often and make your contractor walk you through the project weekly.
Answering question 3 - Rely on the building inspector for code issues. They won't pass if it's not right. Also rely on dated & time stamped before/after photos from your contractor for items repaired. Finally, have a relationship with a realtor who will list the property. Let them walk the property when work is complete to offer their two cents.
Lastly, making yourself a pleasure to do business with is simple. Be clear with what you expect, pay on time and understand that this is rehab and **** happens. So many unforeseen issues can arise when digging into a rehab project. Keep your cool and expect the unexpected, most contractors aren't looking to squeeze you so no need shooting the messenger. Understand that delays screw the contractor as well who has other clients with deadlines too that could be affected.
Peace to you and may your bottom line be above the water line !!
@William F. Hi William,
Some things specific to the North...lets start with making sure you get the water turned on before you close on the property. Buying investments here, especially foreclosures, you want to make certain there are no water leaks. Most banks and companies like Freddie Mac/Fannie Mae use preservation companies to "winterize" their properties. This means the water is to be blown out of the pipes, the meter disconnected, the water heater drained and anti freeze poured in pipes with p-trap or toilets. In my experience, these preservation companies are only good at preserving their business model and have a habit of cutting corners to perform their tasks on the cheap. As soon as the weather gets cold the pipes freeze because the "winterizing" was done half azzed at best and you have pipe bursts behind walls as a result of water still left in the lines. It can be a frustratingly expensive fix to track all the leaks down and make repairs. As a side note...make sure you have copper still, up here the copper is like gold to crooks interested in risking 10 years in jail for $100 in scrap copper :) - Proper response...no water on...no deal
Speaking of cold temps, make sure you order an HVAC inspection. You want to be certain that once you get the gas company to open your account, the furnace is actually operable. No heat is terrible on plaster walls and will in itself cause a lot of wall damage.
Have a good snow removal service for your walks & driveway. Ice is treacherous and if a slip occurs and causes injury...well you know where I am going with this. While your at it most do lawn care as well so you can avoid the city inspector tagging your house with fines for not mowing.
You need to pull permits in the Chicago area. The cities in and around Chicago are getting wise to investor flips and they are coming up with some very aggressive forms of policing rehabs. Buyers are n't dumb either at closing if you paid $100k for a house and want to flip it for $170k 4 months later they will want to see permits for repairs made. Make sure you know what is required as it is your responsibility as the owner.
Answering question 2 - Iphone has this real cool feature called face time lol...use it often and make your contractor walk you through the project weekly.
Answering question 3 - Rely on the building inspector for code issues. They won't pass if it's not right. Also rely on dated & time stamped before/after photos from your contractor for items repaired. Finally, have a relationship with a realtor who will list the property. Let them walk the property when work is complete to offer their two cents.
Lastly, making yourself a pleasure to do business with is simple. Be clear with what you expect, pay on time and understand that this is rehab and **** happens. So many unforeseen issues can arise when digging into a rehab project. Keep your cool and expect the unexpected, most contractors aren't looking to squeeze you so no need shooting the messenger. Understand that delays screw the contractor as well who has other clients with deadlines too that could be affected.
Peace to you and may your bottom line be above the water line !!
@Robert Leach has a lot of this dead on. I'm not in the "Rust Belt", but in general communication is the key in dealing with your contractor. As with any business dealing, building trust both ways is paramount. Certainly check references and get multiple bids and feel comfortable with who you're working with before hiring them. If something feels off, it probably is. If something seems too good to be true....i.e. a much lower price, something is probably missing from the bid or is not apples to apples. That's where that third bid comes in to help select the right number. Typically, at least two (or hopefully all) of your bidders will be grouped together and it will make your choice a little easier from the standpoint that you'll know that you have the scope of work properly covered.
Be thorough in what you're asking for, and be clear about what you want included and excluded from the bid. When reviewing invoices from your GC, be thorough and ask a lot of questions. Have them walk you through the bill and ask them why they are billing what they are billing if it does not make sense. Be wary of contractors who ask for large deposits up front, but also understand why they are asking. If you are having a lot of high end items that require a long time to get installed, they will be justified to ask for a deposit to cover those costs. There are other instances when asking for a deposit is quite reasonable and fair. Again, ask questions and keep an open mind. Many owners want to use a contractor as a bank to finance the work, and that's not fair to the contractor either. Again, find a happy medium that makes both sides happy and makes it a successful build. Don't let the contractor get too far out ahead of you on collecting money versus the work that's done. Ask for a list of their subcontractors, and ask for lien waivers (or proof of payment) to the subcontractors to make sure that the money is getting to the people who have earned it. Any legitimate contractor will have no issue with supplying these types of documents to you to build that trust.
Finally, and Robert hit on this already. Pay your bills on time or early. Once you've agreed that the billing is correct, pay your contractor. Especially in competitive markets, fast pay means faster work and loyal crews. Keep that money flowing, and they will keep showing up.
Good Luck!
One more thing....always leave yourself some wiggle room on your budget. Having a contingency fund of 10-15% on most projects will alleviate the stress caused when changes come up. Changes arise on almost every project. Don't cut it so close that a potential change creates a catastrophe on your project. Plan ahead and have that reserve ready to go.