The 4 Steps to Rehab Success
Rehabbing a house is not as simple as throwing some paint on the walls and replacing some rotten wallboards; a rehab is a large undertaking that needs careful consideration, planning, budgeting and the right professionals involved.
#1 Evaluation of the Property, the Land and the Fittings
Prior to purchasing the property engage the services of a professional inspector, builder or someone that has completed several successful rehabs in the past. This person can guide you in your assessment of which items are in good condition and where work needs to be done. Qualified inspectors can be engaged for this purpose. One of the most complicated an expensive part of a house are the ‘systems’. These can include:
- Air conditioning
- Electrical wiring & mains connections
Ensure you take plenty of high resolution photos when you identify an area of need and ask the inspector to give you an estimate on the spot of how much it will cost to repair or replace and the time it will take to complete the task. This is critical as any delay could reduce the profit you hope to yield.
#2 Lists, checklists and Cross-checks
You will need to prioritise the work to be done in terms of both your budget and the time you have available. An example is contrasting landscaping with plumbing; replacing shrubs and improving the walkways will be much less than replacing a copper plumbing system with acanthine. The plumbing system resides in the walls and under the house, so any work done in this area will require additional repairs, repaints and remodelling. The natural next step is the budgeting process.
#3 Budget twice, spend once
A traditional builder’s saying is, ‘measure twice, cut once’. The same goes for creating your rehab budget. Get more than one quote for the major pieces of work. Your inspector can give you an estimate, but don’t build your budget on anything less than a set of formal quotes. Once you are happy with a quotation, you will want to be sure of the contractor’s skills, experience and availability. Three-year’s experience and their own equipment for use? Great. No insurance and no positive referrals? Bad idea. You will want the inspector to outline the number and type of permits you may need for the rehab. Your contractor should be able to secure these for you prior to starting the work and can explain clearly to anyone that asks what is being done and why it is needed.
#4 The Process of Communication
The contractor should have their own portable toilet ordered, commercial waste collection and disposal, and clear communication with you should there be a payment made to him or her for the disposal. You may not have thought of it, but each item taken out of your house has a value to someone. The contractor may be paid by you for the work, paid for the old equipment or fittings that thrown away and make a commission on new fittings or supplies. Be clear what you will tolerate and what needs to be shared with you. Your goal is to save time, pay less cash and make a greater profit. This necessitates a formal sign off after the work is completed and a final payment. Predominately the largest portion of your payment to the contractor is after successfully completing the job – not half way through and most definitely not at the start.
Jam Properties have successfully completed numerous rehabs and renovations of distressed properties. Contact us now to see how we can work with you to build your family’s wealth.