Finishing 2nd flip - steep learning curve
Here's the link to my first flip if you feel like reading. Great profit but did most of the work with the help of my family. Not exactly the best way to grow a business and my day job suffered because of it.
http://www.biggerpockets.com/forums/223/topics/140...
I wanted to do another one but because the issues above and I now have a 5 month old son, there was no way I could do the rehab myself. So I set out to use contractors to do the work for me. I originally planned to have a friend of mine GC the project as that's what he does for a living. We talked about some numbers and I THOUGHT I had a good idea where he was going to come in for certain things. Apparently not.
I get the 2nd house under contract and with a $30,000 rehab budget. My GC and I start going through the numbers and he ends up around $42,000. So I take a step back and decide that I'm going to GC the project myself. Not really knowing where to start with contractors, I put an ad on Craigslist and got about 50 calls/texts/emails within 36 hours. I had to take the ad down because there was just too much coming in! I setup about 10 meetings back to back and have all the contractors come in to do walk throughs and provide bids. I ended up receiving labor bids for the entire project that ranged from $9k to $24k.
Stupid me.....I take the $9k bid. They seemed knowledgeable and had their sh*t together. After 2 weeks of work, I let them go. The 1 guy was basically working the job part time and the other guy didn't have the experience/knowledge that I was led to believe he had.
I call another contractor that came through during the initial walk throughs and we agree to have him complete the work. This was the week before Christmas and he asked to start the week of New Years. I reluctantly said OK because the house had been sitting idle for 3 or 4 weeks now. Well, he was a no call/no show.
Feeling frustrated and defeated, I call my GC buddy back and ask him to finish it. He walks through and then I don't hear much from him for almost a week. He gets back to me and says he has too much going on and gives me the numbers of some of his subs. They end up not working out either.
Around this time I go to a real estate meeting locally and end up talking with a contractor there about the project. Him and his partner come over and give me a bid in the range of where I need it to be. We all agree and they start the work. They provided a completion date of 2/7/15. Well, they completed the work on 2/25/15. We agreed to a $200/week penalty for late completion, which is just my holding costs for the house.
I had my fair share of frustrations with these guys though. They initially told me they had 5 guys in their crew, well they really had 2 full time guys and 3 guys they used as needed. So that was a large part of the delay in getting the work completed. I was also not overly impressed with the quality of the work they did and had to constantly go back and tell them to fix things or do things a different way. They got it done but its not up to the standards they I would like it to be. My wife and I will most likely be going over there this weekend to do some final touch up and cleaning.
Its definitely frustrating that the rehab came in at pretty much the same price as what my buddy GC quoted originally. I could have been completely hands off and let him handle everything and it would have been done MUCH sooner and with a whole lot less hassle for me. Live and learn I guess......
Purchase Price - $100,000
Materials - $31,060.70
Labor - $12,980.00
Holding Costs - ~$5000
Total Invested - ~$149,040.70
Will be listing the house for sale for $189,900. Potential profit of ~$27,500 if it sells at full asking price.
Before pictures
https://www.dropbox.com/sh/2977dj0d2x09xdt/AADqpHX...
After pictures
https://www.dropbox.com/sh/vl9nu3belutmnyb/AAANc9r...
Sorry for rambling on. :-)