When the contractor is over the timeline, by A LOT.

Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes

I’m on my first flip, and the official start for renovations was November 1st 2018. I was told it would take 12 weeks to complete the project and now we are well past that and still having issues. All of a sudden I need a new electric panel, and as of today “something” is wrong with the plumbing, and little things that I could (and should at this point being that I’m so frustrated) just do myself are taking too long.

•

My questions: How do I expedite things, and how do I prevent this in the future? I’m very new so go easy on me. I have made too many mistakes to count and have beat myself up worse than anyone else could.

•

Off topic: is having panic attacks a normal side effect of real estate investing? Asking for a friend.

8 Reply

191 views

Most Popular Reply

Jared W SmithBusiness Member

Architect · Westchester County, NY · Member since 2018 · 682 posts · 476 votes

Originally posted by @Mandi Martinez:

@Brian Pulaski ok that is good to know. See he actually created the SOW which in hindsight is not as detailed as it should have been but it did not have an electric panel.

They are close to being done. It really is just little things that are incomplete. They are dragging their feet and I’m not sure why? Don’t they want to get payed? As far as the plumbing : last week it was the toilet, then three days ago it was the shower draining, and today there were people under the kitchen sink.

First thing's first, you never let the Contractor create the scope of work. And if they do, you should be reviewing it against the property to make sure everything is included. Usually a set of engineer or architect plans would detail everything that is needed and the Contractor would price the project off these.

It's a huge conflict of interest for him to determine his own work and fee and you being a novice, he likely left these items out of the SOW so he can now charge you for it and say "oh it wasn't in the original SOW." No way a good Contractor wouldn't know by his first walk through if a toilet or sink needs to be replaced. Quite suspect if you ask me.

Architect Owl PLLC521 Reviews

Website View Page

6 Reply

See this reply in the discussion

70 Replies

Jump to latestLatest

Sort by

Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
Controlling disbursements and being quick to fire. Just make sure you have more money in your pocket than they have work completed.
1 Reply
Ron Joseph
Monroe, NY · Member since 2016 · 20 posts · 10 votes
7y
Does anyone have a contract template I can use for contractors?
0 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Patrick Fraire I really like both ideas of a fee and also a bonus. I also like that that you gave a few extra weeks. I was under the impression that when I got “12 weeks” that it would take less, not more. I see now with everyone’s responses that it is normal to be over. Thank you for taking the time to respond to me. I will take your suggestions and use them in the future.
1 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Jimmy Deringer thank you for your response! These are great suggestions and I will use this advice in the future. I didn’t think of going together with the contractor to get materials. I appreciate you taking the time to share your advice and experience.
0 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Destiny Holmes thank you for the suggestion destiny. I was thinking once this project is done I should get some books on construction and understanding the process better. I’ll purchase this book to tonight. I am appreciative of your encouragement!
0 Reply
Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
7y
@Mindy Jensen
0 Reply
Bradford Clark
Charleston, WV · Member since 2017 · 113 posts · 50 votes
7y
@Mandi Martinez
Did you get an inspection of this house before you started?
I use these as a blueprint to my action
If the contractor found additional problems, then it’s not his fault
1 Reply
Curtis Mears
Property Manager · Raleigh, NC · Member since 2014 · 728 posts · 596 votes
7y
@Mandi Martinez
appears your contract did not have any language regarding not finishing on time. this leaves you with only firing him to regain control. I would sit with him and review all outstanding work and have him give you a timetable. I would verify that he is able to do the job. if not, then let him know you are discussing getting someone who can get it done. I have done this with my contractor. and I did actually interview other contractors. maybe walk through with a potential contractor.
add fir additional work popping up, were these issues that should have been known? they're are often hidden issues that you will not know until you get into it. but some issues should be known. I would ask why these issues were not in the intial quote.
0 Reply
Marie Holmes
Member since 2019 · 9 posts · 2 votes
7y
Originally posted by @Mandi Martinez:

@Marie Holmes I still have about 8k to give him. That’s so true about the buyers inspection. I didn’t even think about that. I thought I have to pay him in full so he can close out permits and then I put it for sale? Is that not right? How would I “hold” his money for the buyers inspection?
It depends on how you negotiate the deal. If you can't hold the money you might want to consider paying him via PayPal. That way you can submit a dispute if the inspection report shows he didn't do the job correctly. Best of luck during your learning experience!
0 Reply
Michael Ealy
Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
7y
I won't add to the answers you've gotten @Mandi Martinez but I would like to give you this word of advice and to all the newbies who want to fix-n-flip properties.
Sometimes bad things happen to good investors.
So, before you do a flip, be prepared for the WORST CASE scenario. A lot of newbie rehabbers get enamored by a project and they base their decision on the best case scenario numbers. Well, don't.
The worst case that can happen to any flip are:
1. The rehab budget is 20% over; and
2. You sell the property at 10% below market; and
3. You sell it 6 months longer than expected
The only way I will do a flip is if the Worst Case scenario happens and I can still breakeven. If the answer is NO, then I won't do a flip even though the projected profit is huge.
Believe me, there are instances that a project can have a worse than the worst case scenario.
3 Reply
Mike Garrett
Architect & Investor · Bothell, WA · Member since 2015 · 102 posts · 78 votes
7y
Mandi, It is not uncommon in the AEC (architecture, engineering and construction) industry to have a middle man between the owner and the contractor (typically an architect or CM). This entity receives the 'application for payment' from the contractor and confirms that the work stated on the application has been completed. They then adjust and approve this payment application and send to the owner for payment.
It is also common to 'hold back' 5-10% of the submitted payments till the end of the project to ensure the punch-list (a list of everything that needs to be completed after final inspection from the jurisdiction) is completed before "occupancy" (not to be confused with the Certificate of Occupancy issued by the jurisdiction). As architects we have a trained eye to look at things like paint, trim, caulking, and finishes and see things which have not been completed or done satisfactorily. I imagine, many architects in your area would be willing to do a punch-list based on your SOW for a small hourly fee.
As this architect will not be directly invested in the job, it might be a great opportunity to ask them lots of questions regarding the 'construction administration' process (if you want a list of services commonly provided by architects, please ask, as I am sure @Jared W Smith, I and others would be glad to share with you). Most flippers are essentially construction managers that provide construction administration. These positions require different and important skills (as you are learning rapidly!). It is also not uncommon to have a retainer (5-10%) for the 'unknowns' in a construction project set aside in the contract. Something will ALWAYS come up that needs to be dealt with.
2 Reply
Aaron Revere
Developer · Beverly Hills, CA · Member since 2015 · 13 posts · 7 votes
7y
hey @Mandi Martinez
i have been there done that.
I started a small group investing in flips and hired a project manager to manage the contractors. But the project manager (despite having a glowing resume) was no good! so i had to fire him and learn construction on the spot to save y investors.
3 years later and now i am a GC. i feel like i had to become one to both make sure the job is getting done correctly and keep the cost under control. The real good contractors really know how to charge can have that in a flip. One contractor quoted me $500,000 for my job, and i got it done by myself for 110,000.
you may like me that the best way to get projects is to manage them yourself. I know there are some investors who say no way and they focus on finding deals and everything else is a distraction. I have not made it to that level yet.
You may want to partner with a real good contractor when you find one, kinda like i did when i started.
man, have i had stressful moments, when all your investor cash is sitting in a decrepit house with no GC or project manager and i dont know the difference between OSB board and green board, and who's Hardie Backer?
man, i'm glad i'm passed that now, and you will be too, these are the moments that will make a pro in the future,
All the best, go forth and deal!
3 Reply
Karen MargraveBusiness Member
Moderator
Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
7y
It's important to understand that the goal is to work with the contractor you currently have and try to work out the issues, and clarify the what needs to be done and why. Get things nailed down as to timing, etc. Only if you cannot come to a reasonable solution should you consider trying to get another contractor.
Most contractors won't come in and do work behind another contractor, it's too risky, with liability issues, etc. I would NEVER go in behind another contractor.
0 Reply
Jared W SmithBusiness Member
Architect · Westchester County, NY · Member since 2018 · 682 posts · 476 votes
7y
Originally posted by @Mandi Martinez:

@Jared W Smith in all honesty if I created the scope of work I’m afraid I’d miss hundreds of things. Do I include every electrical outlet? Do I included aesthetic decorative things like accents walls? I assure that I will be taking a step back after this and assessing ALL that I have done incorrectly. I am so grateful for you taking the time to respond to me and hope I can contact you in the future.
I see. Putting together a SOW list comes with experience in construction and renovations. Elec. should be all encompassing depending on what needs to be done. For example, with elec. outlets, you'd have a blanket statement to replace all receptacles including GFCIs in proximity to water sources. Essentially, you should include everything that you want the contractor to complete, so as detailed as possible.
Glad to help, wish it was in a better circumstances though. Feel free to reach out.
Architect Owl PLLC521 Reviews
Website View Page
0 Reply
Jared W SmithBusiness Member
Architect · Westchester County, NY · Member since 2018 · 682 posts · 476 votes
7y
Originally posted by @Ron Joseph:

Does anyone have a contract template I can use for contractors?
This would be very difficult to provide. It would very much depend on the project and its complexity.
Being an Architect, and an owner asked me this, I would reference the AIA contracts. Specifically the A104-2017 which is the "Standard Abbreviated Form of Agreement Between Owner and Contractor" as a basis. However you need to understand the contract verbiage especially the various contract/payment types and terms.
Architect Owl PLLC521 Reviews
Website View Page
1 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Michael Ealy I really like your response and your advice. Unfortunately I did use the best case scenario and am fearful things won’t work out. I do appreciate your guide lines and I hope to be able to implement them if the future ( if I don’t throw in the towel). You are so kind to take the time to help me. Thank you.
0 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Mike Garrett hi mike! Thank you for your response! I would love to contact you and discuss what you do and look for. I think what hurts me the most is that I don’t know what to look for to even put into a SOW. Small things like caulking matter, but does it do in there? I sure as hell don’t know. I appreciate you being kind enough to give your input and hope you don’t mind me contacting you in the future.
0 Reply
Mandi Martinez
OP
Flipper/Rehabber · Tampa, FL · Member since 2018 · 60 posts · 20 votes
7y
@Aaron Revere I love your response and your advice. I actually have looked into what it would take just for me to be a GC so I get why you went that route. Thank you for taking the time to respond and encourage me. Lots of good karma your way.
0 Reply
Christi HawkinsPro Member
Columbus, OH · Member since 2017 · 237 posts · 142 votes
7y
@Will Mace great advice!!! The best way to get a contractor to finish the job is to be at the property as much as possible asking all the questions you can think of. You should go through the property without him there, make a list of everything he needs to complete and you both sit down and go over it. Establish the timeline and then keep him accountable every day. That will also keep you accountable and is great practice for your next flip!!
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.