Wow -- this is going to be a project. Hope you got a screaming good deal.
You are going to have to prioritize. Inspect the properties. First priority is going to be deferred maintenance causing ongoing structural damage -- like leaking roofs causing more wood rot. Try to get a volume discounts from all your contractors.
You may need to sell individual properties to get the cash to continue the rehabs. Identify the properties that have the highest resale potential. They are priority #2.
With 28 properties, you are bound to have some vacancies (unless your rents are WAY too low) . As units become vacant, improve, paint, replace rotted floor in bathrooms, new flooring and countertops. Do not over improve. Flip or raise rents. Develop a standard inspection list for all properties and parts list. (Make your own pick list -- do not ask tenants, it will be never ending!) You should be able to keep teams working steady if you have the cash to fund 3-4 rehabs at a time (the flooring guys install in 123 Elm Street and then move onto 125 Elm Street)
If you are keeping this portfolio as rentals, this is a great time to standardize colors, flooring and appliances to make future turnover easy peasy.
I know some rehabbers who act as their own general contractors. They order the ALL the supplies needed for a rehab from Home Depot pro desk, get the 15% discount and free delivery. You will have to provide security if you go this route to make sure supplies are not stolen.
It seems daunting, but you will get more efficient and it will get easier. I have never done a project this size, but when we stared rehabbing apartments, it just got easier and easier. Invest in some project management software to help with scheduling teams.
if your going to purchase 29 properties and are not doing any of the work yourself. I would consider hiring a part time handyman to do work every week until you get caught up
Originally posted by @Kim Wendland :
Oh, one more question. Why would you sell the best properties instead of the worst to raise funds?
I would sell the properties that raised the most cash and would be easiest to sell quickly. That might be the highest end properties, might be the one's near the better schools, etc. You need to know your market. I am a class B LL -- I like class B properties because they have an easy to rent price point but you can still find decent tenants. I would wholesale any class C or lower rentals and try to flip the "best" houses to the retail market.
That being said, I don't know your market or your properties. Talk with several realtors and other investors in the area to get an idea of all your options. Go with the option that makes the most sense for YOU -- gets you the cash you need to improve your properties and works with your long term investment goals.
When we started, we budgeted for a 10% vacancy rate. We have been doing much better than that. After a few years you use your historical average.
Sell what you can sell to quickly generate cash. I suspect you need two or three teams to work on them. Most need painting, re-flooring, kitchen, bath. Another resident maintenance on site to take care of some of the repairs.
On Home Depot no one gets 15% off on material purchase, it is based on accumulation of dollars actually spent up to 5%(most contractors do not reach it). Active military ID members get 10% off. Know any military personnel who also works as a contractor? The exception on discount is paint. Their paint is of average quality and most painters suggest better quality manufactures by paint stores. Lowes has 10% off and credit card discount rewards. But their prices are slightly higher in general.