How closely should I monitor my rehab?

Question

I invest at a distance with my properties being an hour from where I live. I buy and rehab to create solid rentals. I am starting my second rehab today with new contractors that I have exported the work to. My first rehab I did all the work myself. We are starting with the foundation being leveled this morning. I have an active realtor that is my eyes and ears on the ground that confirmed they arrived promptly at 9:00 this morning. The property needs 30k in work to get rented.

I wasn't planning on visiting the job site until next week to monitor because it is a 2 hour drive round trip. My question is how closely should I monitor this rehab? I was planning on doing a once a week walk though with my realtor to monitor progress. Is that enough?

I wasn't planning on visiting the job site until next week to monitor because it is a 2 hour drive round trip. My question is how closely should I monitor this rehab? I was planning on doing a once a week walk though with my realtor to monitor progress.  Is that enough?

Jason V. · Answer

I'd be there every day OR get someone you trust there every day OR have your GC send you pictures every day, and get there as often as possible.

You listen to the most recent podcast? Guy who's done 100+ flips in an expensive area with long-term contractors is at every job site, every day. Probably not a bad model to copy - even if yours will be rentals.

J Scott · Answer

It depends on the level of risk you're willing to take?

If you don't mind risking work not getting done, contractors getting lazy, contractors doing shoddy work, things getting stolen, etc., then there's no reason to be there every day.

If you want things to move along efficiently and you don't want to incur these risks, be there every day, or have someone there every day who you implicitly trust.

Brian Pulaski · Answer

I am on site every day. A few times a week my subs find items that need my input/decisions. Sometimes the item is an add and we discuss the costs associated it right on the spot. This helps him keep moving forward, and both of us happy with the added scope/cost. I couldn't imagine dealing with an issue over the phone. Not that your getting ripped off, but there is something about seeing the issue in front of you that makes figuring out the solution a lot easier/better.

With all that said I am working with a new contractor who so far has done good work, his pricing was where he needed to be (and continues to be with the little adds I keep throwing his way) and I know him through some good friends, so I trust him to not ever do me wrong. If I had someone of this caliber running a job/subs I might not feel the need to be there all day every day. Until then, I need to be at the job as much as I can.

Joseph Weisenbloom · Answer

@Steve FigueredoThank you for the heads up. We just did the foundation today but the rest of the house through the GC will happen starting Tuesday. I will be on site Tuesday during the start of the rest of the rehab. Unfortunatly I wont be able to be there everyday during the rehab but I will be able to make it down there 2-3 times a week. As per your advice I will call him monday and tell him if there are any questions or additional work necessary he should call me first.

@Nick Kutschke Some wise words. Its sounding like from all the advice I am receiving people are telling me the importance of setting more expectations and keeping the lines of communication open. This will be something that I incorporate for sure. In all honesty I am just looking for a great return on a rental property so rehabbing is not my core focus. That being said I am open to doing this again if this project works out.

Steve Figueredo · Answer

As a general contractor I deal with sub contractors on several jobs spread out over a fifty mile radius.  I make a point of "visiting"  the subs everyday sometimes more than once a day.

Your putting a great deal of trust in your GC with out much verification.

The unspoken message your giving them is that this job not important to you. are you reachable by phone any time of the day? or do they get voice mail?

When they come across an unexpected problem and need your feed back or ok to continue can they reach you, or do they have to hold off until you can be reached. These situations can  suck the profit out the job for you contractor. so if they can't get answers from you they will stop calling and just get it done and when they do that, it will be the easiest and cheapest way for them not necessarily the best way or even the right way for you.

i could see what you think is $30,000.00 rehab turning into $50,000.00 real quick.

Communication is key if you can't be there, they have to know how to reach you, and you have to be available to give the answers they need to keep working.

i wouldn't be comfortable not seeing the job every day

Christopher B. · Answer

how much does your agent know about construction? I've found most actually know very little about houses. I'd keep an eye on it as much as possible until you build a level of tryst with your contractor. You give people an inch and they'll take a mile unfortunately. At the end of the day it's your house and name that people will look at when judging the quality of work done. Not to mention your money at risk.

Steve Figueredo · Answer

Any time you open up an old house you will find the unexpected so its not unusual to find things that effect the scope of work  actually required. That's why I would be onsite as much as possible with a new contractor. I'm not saying you might get ripped off but... sh#t happens that you need to be aware, of and work with the contractor to make a plan to resolve any unforeseen issues as they come up.

Again communication, communication, communication.

Joseph Weisenbloom · Answer

@Steve Figueredo I appreciate the feedback. So even though they have given me a written scope of work for 30k they could charge me 50k? This is admittedly my first time hiring a GC so manage the contractors.

Joseph Weisenbloom · Answer

@Christopher B. My agent doesn't know much about construction but neither do I. I know some of the basic stuff but as far as leveling a foundation I wouldn't have anything to add. The only thing I could bring to the table is being there to see if they are actually working as they said they would. Which for the foundation guys my agent is already doing. I would agree with you that people are untrustworthy. That being said I haven't paid them a dime and don't plan on doing so until an inspector/appraiser reviews their work.

@J Scott This is a crucial question you are asking. I am a bit more hands off with my properties than the normal person so I am willing to take more risk. I hire out management, repairs, and rely heavily on my great agent to help. I haven't had much issues yet because I find my team members via refferals of people I trust and quickly fire them if they mess up (my old lender). In this case the money for repairs is in escrow pending my lenders approval of the work done. I am definitely taking a risk not being there all the time. That being said I am a believer in using trial and error. If this level of management doesn't work you better believe I will be driving down there 2-3 times a week. Either that or stop doing rehabs and go for basic rent ready rentals.

How closely should I monitor my rehab?

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