All Forum Posts by: Ryan Collins

Originally posted by @David Robertson:

Hi Ryan,

1. I noticed "temporarily shore ceiling" throughout this document several times. Can you explain what this means? 

On this particular project, we removed a structural wall, so the Contractor needs to temporarily support the ceiling joists by installing shoring until they get the new structural beam installed.

2. How are your floor plans constructed? Is this something you work through with your contractor? Do you manage this yourself? Or is there a third party architect involved?

If I'm just changing a few walls then I design it myself.  If the project involved a significant floor plan change then I would likely get an architect involved.  Homestyler is a pretty easy design app (not too technical, like CAD).

3. Can you explain to me what is meant by the "rough-in" terminology for several items? (i.e under Miscellaneous Items - "Patching of walls/ceilings for plumbing/electrical rough in (if required)

Rough-in refers to the installation of plumbing & wiring behind the walls.  In order to re-wire or re-plumb a property, you will likely need to remove drywall.  This note tells the contractor that they are responsible for patching any drywall that was removed for the rough-in work.

4. It seems like some items were not worth the trouble of you becoming involved with so you had some "CFCI" line items is that because you've had experience with this contractor? Or is this normal? 

CFCI (Contractor Furnished, Contractor Installed) is for materials that I don't want to deal with and want the contractor to provide and install such as wiring, piping, studs, drywall, roofing, decking, etc.  OFCI (Owner Furnished, Contractor Installed) is finish materials that I want to manage such as tiling, light fixtures & plumbing fixtures.  If you don't want to manage the materials you could make your Contractor provide everything on the project, but you will need to know your SKU#s upfront.

5. Last thing, do you happen to have any before/after pictures of this project you'd be willing to share? As well as are you open to sharing your costs on this?

Unfortunately, this SOW was our personal residence that we moved in last second and still had some finishes going on, so never actually took some good after shots, here's the kitchen.  Hopefully we will have some better ones, when we list the property in a few months.

I just looked over the proposal and the total was $18,915.  Most of the work was Labor only, but the deck, drywall & plumbing was Labor & Material.  I also subcontracted out the Electrical work, & Tile Work to other contractors.

Contracted Work w/ Contractor

• Demolition $800 Labor only (no dumpster)
• Site Work (exterior cleanup) $200 Labor only
• New Deck $4,000 L&M
• Exterior Doors & Windows $1,250 Labor only 
• Drywall & Framing $6,500 L&M
• Cabinetry Installation $1,225 Labor only 
• Interior Doors & Trim $2,080 Labor only 
• Plumbing Work $2,860 L&M

Total $18,915

Unfortunately, on this project the Contractor stopped showing up, and the writing was on the wall that we weren't going to get the project completed on time for us to move in, so I had to do some of this myself.  

The good news is I don't pay my contractors a deposit upfront, I only paid as the work is completed so I didn't lose any money here (just lost my time and the my hair on my head (which was probably inevitable anyway)...

 This is amazing! Terrible the guy stopped showing. To me that's one of the worst parts of the process. I had a similar experience when I renovated my first home before moving to Texas with the guy sporadically showing and screwing up my timeline. Funny/crazy story for another day. I wish I could blame that for my hair loss but this is all genetics here lol. Thanks for being open to sharing. 

Originally posted by @Ritch Bonisa:

Here is a sample scope of work I have saved in my BiggerPockets fileplace.

https://www.biggerpockets.com/files/user/RitchB/file/sample-scope-of-work

Thank you again as well. Would you happen to have any additional pics on the before/after you'd be willing to share?

Originally posted by @David Robertson:

As Greg stated, you need to tell your Contractor's what they should include in their Bid proposal.

Your Scope of Work should clearly define a list of all repairs, floor plans, & material SKUs so your Contractor knows what to include in their bid.

I have a sample Scope of Work Word Document in my fileplace which should be a good starting point:

https://www.biggerpockets.com/files/user/drobertson/file/sample-contractors-scope-of-work-documents

Thanks again for all of this. I did want to see if I could ask you some questions about what some things in this scope of work doc meant. 

1. I noticed "temporarily shore ceiling" throughout this document several times. Can you explain what this means?

2. How are your floor plans constructed? Is this something you work through with your contractor? Do you manage this yourself? Or is there a third party architect involved?

3. Can you explain to me what is meant by the "rough-in" terminology for several items? (i.e under Miscellaneous Items - "Patching of walls/ceilings for plumbing/electrical rough in (if required)

4. It seems like some items were not worth the trouble of you becoming involved with so you had some "CFCI" line items is that because you've had experience with this contractor? Or is this normal?

5. Last thing, do you happen to have any before/after pictures of this project you'd be willing to share? As well as are you open to sharing your costs on this?

Sorry to be so long winded but I'm really glad you were able to guide me to your resources.

Thanks @David Robertson, @Ritch Bonisa & @Greg Dickerson. That information has been helpful and the example documents are great reference for me. 

The reason I asked is because I finished reading David Greene's book on investing remotely, which is what I'm aiming to do in my hometown market (with the help of a partner who still resides there). One of the big things he covered in that book is how investors should have everything clearly listed out and itemized in the contract with new contractors. Then once that's been taken care of it makes it easier to order the supplies and materials to be delivered to the project site.  I've done some renovation work and have actually somewhat flipped my primary residence before but I'm not as well versed with some of the construction jargon. Nor would I feel 100% comfortable ordering things by myself. Just for the fear of forgetting items or misinterpreting what is needed, in turn costing time and money.

Does anyone have any examples of how they have their contractor’s clearly label out their scope of work for them? - i.e. an actual bid or picture of one you’d be willing to share I’m a visual learner and I’m looking for some of the best ways to apply this with kicking off my business.

@Kendall Short that’s great man! This is inspiring. Thanks for sharing. Quick question, I saw you said there is a good amount of equity left in the property.... So, what was your determining factor in taking only the $38k out as cash for your re-fi? Was it the decrease to your monthly margin from the mortgage going to rise? And what are your plans for the future with that?

Intriguing post... I can personally attest to what others have said above. Knowing what I know now, I would have done what many of you did and had her clean it up beforehand. But you live and learn...long story, short... have them get it together before diving in and things get complicated or just don’t do it is my best advice. Save yourself the headaches and stress of having to get your partner financially stable in the long run. I was naive in thinking our setup of separate accounts, etc. would insulate me because now that we have a child it’s been a struggle and I’m just now getting to kick off my REI journey (something I’ve been aiming to do for almost a decade now)

@Brandon Penn thanks for sharing this is inspiring to continue pushing towards getting going.

Thanks for that response @Mitch Messer... So I had thought of doing something like that to kind of get the ball rolling. The problem I uncovered is that the concept of wholesaling in Ohio is illegal (bummer) unless I become an authorized agent. I live in Texas now but I’m nowhere as near connected down here as I am back home in Ohio. So, it could be a little harder for me to wheel and deal but you’re right it could be something worth looking into here since the rules are different.

Hello Everyone, 

I'm hoping to get perspectives and suggestions on if I'm taking the correct approach to FINALLY beginning my REI journey. Or even someone to play devil's advocate and challenge me on something I may not be thinking about. Talking things through with other knowledgeable folks is always helpful! It's sort of a lot but I'll try to keep it as brief as possible.

Cash has always been an issue so I'm partnering up with a family member to get our fix-n-flip business ambitions off the ground. We've got our plans and agreements in order and are now making the steps towards actual formation and funding. My dilemma is that I want to be sure I am using the best approach to source my initial contributions to the business. I have about $6K in liquid cash available to me and I am planning on liquidating a combination of retirement accounts from my previous employers. The total of those is somewhere in the neighborhood of roughly $12.5K, so after the penalty and additional 10% withholding I'm assuming the actual payout will be approx $10K. So it's not a ton by any means but it's just what we need to get us over the hump to get going. My partner has $7.5K to contribute so we will have just under $25K to put to use. We will be in the Ohio market so with leverage this should be more than enough in some cases to get our first project(s) underway.

The reason I am considering liquidating the retirement accounts is because they have been underperforming. I might make 1-3% a year at best with the current setup, when I'm missing out on opportunities for potential returns of 35%+ in the markets I want to operate in. I believe it's worth taking the tax hit at the end of the year and paying the penalty to jumpstart things. I tried looking into alternatives like self-directed IRA's to avoid the penalty & taxes but it's extremely restricted, and it seems that the only purpose is to make money for the IRA. Which is a great thing by all means, but my ultimate goal is financial freedom NOW and in the future.

To give some other background information. I will not be completely liquidating all of my reserves. I am planning on remaining in my job full time and I actually have one of the better retirement setups I've ever had. My employer matches up tp 6%, and in working there just slightly over a year I've been able to amass just over what my aforementioned retirement accounts combined (approx $15k as of today). 

I know this topic has been brought up numerous times but I've scoured the forum and couldn't find anything similar to my situation. I just feel it's better to take the plunge now than for something else to impede my progress and never do anything. If anyone can offer any insight or opinion it is greatly appreciated.