I’m closing on a triplex (two 2bed/1bath units and one 1bed/1bath) on Monday that needs renovation and I’ve decided to GC this project on my own. I sat down and started getting my thoughts together about a calendar and timeline and I realized that this process would make a great post for anyone doing their first renovation or anyone who wanted to get more organized. My golden rule for renovations is to make a realistic budget and timeline and stick to them. Everyone strives for a high quality renovation that is both cheap and fast but as BiggerPockets’ very own J Scott wrote in a post titled “Better, Faster, Cheaper”, you can really only focus on two of the three at any given time, so focus on quality and cost at the expense of speed.
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
Here are the 8 steps I follow when renovating a property:
Step 1: Demo
Maybe the most critical step because having a clean working environment will actually save time and money. Have your demo crew take down walls and get everything out of your way before making any improvements. Also have them remove any trees or bushes that are in the way of progress. Then have the demo crew remove all of the trash and debris.
(Note: A beginner mistake is to perform these steps room by room or unit by unit but that actually ends up costing more time and money when contractors have to return so whenever possible have the contractors perform their task for the entire project before moving to the next step.)
Step 2: Waterproof Building Envelope
Another critical step because nothing would be worse than renovating a property only to have some or all of the renovations ruined after the first rainy day. In this step I focus on making the property is completely protected against the elements. This includes fixing or replacing the roof, the gutters, the windows, the window capping, masonry work, gradation issues, sidewalks, basement, parging, and foundation work. Make sure that by the end of this step the building is 100% waterproof.
Step 3: Preliminary Framing
Now that the property is a blank pallet and watertight you can be begin any structural or light framing you are doing on the project. Not every project requires this step but if you are moving or installing walls now is the time to build them. Also use this opportunity to repair or replace joists and subflooring if necessary.
Step 4: HVAC, Plumbing and Electrical
In the next phase the heating, cooling, electrical, gas and plumbing systems are put in place. Here are some common tasks that occur during this phase of the renovation:
- The HVAC contractor will run the ductwork so it can properly distribute to each floor
- Plumbing lines are installed
- Water lines for kitchens and baths are installed
- Main electric panel is replaced or cleaned up
- Electrical wiring is repaired/replaced
- Switches and outlets are changed/upgraded.
After all of the ducts and lines are installed your framing contractor will return for some secondary framing. All this entails is dry-walling and boxing in the ducts/lines that were just installed.
Step 5: Insulation and Drywall
The next step requires the installation of insulation and drywall. Make sure that the drywall contractor hangs, tapes, spackles and sands the drywall and leaves it ready for the painter to begin painting. Painters can sand and prep the walls but they are usually more expensive than dry-wallers so try to have the dry-wallers do most of the wall prep.
Step 6: Paint, Lighting, HVAC, Plumbing, Kitchens, Baths
This phase of the renovation covers interior paint, lighting installation, HVAC, and finalizing the plumbing. This is the home stretch and a great deal of work is done in this step. Common tasks include:
- Prime and paint interior walls.
- Install kitchen cabinets
- Order/install counters
- Install new interior doors
- Order/install flooring
- Install trim/molding
- Install light fixtures, switches cover plates and outlet cover plates
- Make sure HVAC system is installed and fully functional
- Install sinks, vanities, toilets and kitchen/bath fixtures.
Step 7: Interior Punchlist
If you’ve made this far take a deep breath because you are almost done! The interior punchlist phase is the time when you go around and put the finishing touches on your renovation project. Common puchlist tasks include installing HVAC trim covers, outlet light switch covers, doorknobs, cabinet handles, touching up paint and all of the small items that really make the project look great. Make a list and go down item by item and cross them off as they are complete.
Step 8: Exterior
The final step is exterior renovation. This step includes exterior landscaping, exterior paint touch up, mailbox installation, property address number installation, flower boxes, window shutters, door hardware and any other item dealing with exterior curb appeal.
Congratulations you’re done! As you can tell overseeing your own renovation project really isn’t that scary if you are super organized and stick to a timeline. Follow these steps and over time you will streamline your process and become more efficient. Best of luck and make sure to let me know how it goes!
Photo: M&T Bygg Consulter AB