Delays, delays, delays. Are they common?

Question

I started scaling up my flipping business earlier this year. Prior to,  I was doing about 1 per month, and was managing the contractors myself.  It all seemed to flow well and projects were always done on time and on budget.

I hired a Project Manager in February to manage 3-5 projects at a time.  I bought 3 properties in early February and my PM started the rehab projects.  In addition to a detailed Job Description, I gave him 2 phrases to adhere to.  As the investor, I want the projects "done on time" and "done on budget".  It's now May and he is struggling to get these initial 3 properties completed enough for me to list them.  We're close, but every day the date(s) gets pushed out another day or so.  I have been going onsite a lot lately as extra motivation.  Nothing seems to be moving.

In regards to his performance, I am starting to get past the "mentoring stage" and moving into the "corrective action" stage.

Since the purchases in February, I have bought 3 more and they haven't even been started yet.  Needless to say, I am sitting on 6 properties and see the money flying out, but none coming in.

My question and advice-seeking is along the lines of me wanting to know if I hired the wrong Project Manager, or are these types of delays common?  I am patient and I know that contractors typically don't meet deadlines.  HOWEVER, my PM keeps making promise after promise that he doesn't uphold.  I'm very committed to doing 3-5 concurrent flips, but it's not possible under these current circumstances.  Any suggestions or advice?

Martin Scherer · Answer

Just curious, you were doing one a month, you hired someone you say you had to train and you bumped up what you were doing to 3  a month, I think you know answer to your own question.

Why would you hire someone you must train and then expect them to do 3 times the work?

You should have hired someone experienced not someone you had to train.  Perhaps there is a learning curve for yourself as well in being a manager.

As to resolving this did you attempt to do 3 rehabs at once with the same crew you have been using and now expect them to do 3 times the work?  Did you hire someone and not give them the tools to do what you wanted done?  Are  there multiple crews and some of them are not people you have worked with before? Spend some time analyzing your part in this process.

Perhaps backing off to one a month with your PM to let him or her learn the process and how you want it done, or, if you feel he is learning enough go to two for a few months.  To jump up to three is a huge leap and pretty unreasonable unless you had the crews and staging set up for the PM in place.

I am not beating you up I just feel that you need to think things through before making a huge jump.

Linda Weygant · Answer

I agree with @Martin Scherer and @Aaron McGinnis

Running one project when you're inexperienced would be hard enough.  Three would be almost impossible.  I think you need to have different expectations, but one of your PMs next "learning topics" should be how to manage YOUR expectations.  He/she is giving you one day increments of time line slippage and that is clearly impractical.

You need to sit down and have a discussion with the PM about what it is **really** going to take to finish these projects, not set yourself up to have your PM tell you what he/she thinks you want to hear.  It sounds like he/she is afraid of your wrath and is trying to appease you by telling you "one more day".

Tell your PM that you want him/her to take a few hours and outline what needs to be completed on each project.  Then you want them to outline who is going to do each item and how long it will take.  With a realistic completion date on each project, you'll be happier and your PM won't be quite so stressed.

I'm also wondering what it is you're hoping to accomplish by having more site visits.  Do you think your PM is lying to you about stage of completion or do you really think that your presence is all that's required and that you looming over things will make people work faster?

Aaron McGinnis · Answer

3 'major' rehabs is a lot for one person to handle, assuming that person is handling all scheduling, materials, quality control, corrective scheduling, payroll, vendor payments, etc...

Manolo D. · Answer

@Joe Hughes after all things considered, you need to change PMs. There are several types of GCs, perhaps he is not the right PM for you. 1st form of GC 1 person with a contractors license plus 1-2 guys (couldn't really finish the job on time and on budget, tends to give you a low price but during the work, you get yelled at because it's not their fault that this or that happened), 2nd form 1 licensed person 5 workers + specialty subs (could finish on time, tends to give you a low bid but every nut and bold will be a change order), 3rd form 1 licensed + 2-3 supers + all subs (decent overhead, on time and on budget, they wouldn't issue a change order if it's something below $1,000), 4th form 1 corporate license + several project managers + several superintendents + a lot of supervisors (design and build contractors or above). Make sure your PM has the right experience, a supervisor is not a PM, you need a real one, a superintendent that worked his way to PM might work, as they know what need done first before doing the bird eye view scheduling and budgeting, but that's rare.

Linda Weygant · Answer

I think what tripped me that your PM might be new was that you said you were thinking of going from the "mentoring" stage to the "corrective action" stage.

That sent the message to me that a person who started off needing mentoring was pretty green.  It also sounded like you were getting pretty angry, thus my "wrath" comment.

So backing up then and assuming the multi-year manager for a GC.  That's a bit of a different scenario.

I still think you should take the approach of having the PM outline a To-Do list on each property, who is going to do it and what the scheduling is for it.  Once you've got a game plan in place on each property that you both agree is workable, manage to the new plan.  Also, find out what the most time consuming, onerous or difficult tasks are for your PM.  If it's something like the vendor payments or the bookkeeping, see if you can hire it out to somebody else to help ease the burden.  If things continue to slip from there, then I agree that you might have a problem and it's possible that you hired the wrong person.

Managing one project is like herding cats:

Managing three is certainly a challenge!  Good luck to you both!

Jesse T. · Answer

The top priority should be to close out the work on the flips you have currently.

Would it be possible to knock out one of the "on-deck" properties in 3 weeks, if both you and the PM were focused on it?  That is where I would start, also this should give you a chance to mentor the PM and honestly evaluate if you want to use him going forward.

If that goes well, tackling the remaining 2 properties in 5 or 6 weeks might be an attainable goal that would let you start to take a step back from the day-to-day.

If you get irresistible deals faster than you can work them, you might consider wholesaling some of them.

Joe Hughes · Answer

Thanks for all of the feedback.  There were a ton of questions thrown back at me, so let me answer them as best as I can, collectively,

~My PM has a 10 year background as a Supervisor for a General Contractor.

~We are using multiple crews and subs, not just one.

~The contractors handle a majority of the materials, but my PM does make 1-2 trips to Lowe's per week.  Total time spent:2 hours, maybe?

~The PM has a handful of major duties; scheduling crews, supervising their work and keeping it on schedule, paying contractors and subs, and getting a budget together for new properties.

~As for my more frequent visits to the sites, I am certainly not coming down with a "wrath" on anyone.  I am simply offering help (yes, getting my hands dirty), and offering solutions.

The majority of our rehabs are limited to plumbing issues at the outset, electrical/HVAC updates (if needed), kitchen and bath upgrades, then carpet and paint.  There is also typically some fixture replacements, such as ceiling fans, lighting, mirrors, etc.  I don't think any of this stuff is overwhelming and by using multiple crews and subs, it should be "fairly" easy to manage.  I was a small business owner (in a different field) for 27 years and managed a staff of 25+ on a regular basis.  I have a good sense of what expectations are, and should be.

The replies thus far are suggesting that I am dumping too much on an inexperienced worker.  I certainly don't feel that's the case, but I need to take a hard look at that possibility.

Aaron McGinnis · Answer

I'm also curious about what kind of tools your PM is working with, and what their actual job description/duty list is.

Additionally, what resources are you giving this person? Are they being forced to buy things from Lowes or Home Depot, or do they have better vendors to deal with? How much salvage/reclaimed/bargain bin material are you making them go after? (The worse your supply chain, the harder it is to manage... and Lowes/HD are some of the worst possible vendors to deal with for most things)

What are your subcontractors like? Are they professionals who show up when and where they're supposed to and need little or no hand holding, or overworked handymen who need help closing a door on their own? Do they have to be scheduled, and then rescheduled 10 more times because nobody ever shows up when and where they're supposed to and finishes on time?

In other words: When you had to deal with the subs yourself, how much screaming/fighting/fussing did you have to do for things to run on time? Most hired hands are going to burn out fast after they have to chew out a misbehaving sub the third or fourth time.

Let me give you an idea from my perspective -

We are a design build firm and handle projects including plans, design, permit, material logistics, payroll, book-keeping, ground/assembly management, scheduling, rescheduling, vendor management, quality control/assurance, and every other aspect of construction.

We typically have about 5 'ground active' jobs, and 5-7 more in the hopper in some phase of planning, design, or permitting.

To accomplish this, we have a meager staff of 2 designers (one of whom is a 20 year architectural veteran), a full time office manager, a full time site manager, a helper who splits time between being a carpenter's assistant and a gopher for materials, and someone who does scheduling and material takeoffs. (That's 6 full time people)

We also have a full warehouse to help with material logistics, an off-site accountant to run our books, and heavy investment in technology to make all of the above go faster (Such as Buildertrend and Exaktime)

... and there are definitely times when we feel distinctly understaffed.

Personally, running all of that myself, I could not imagine myself handling more than 1 or 2 jobs without absolutely losing my mind.

Now here's some caveats - our jobs are huge. Whole house, new construction, additions, restoration... giant, technical jobs with extremely demanding customers. At any given time we have 40 or 50 people in the field relying on us to keep the boat floating in the right direction.

If all you're running are paint and carpet jobs, with no book-keeping duties, and some kind of scheduling system, I would expect a single PM to be able to handle maybe 5-7 jobs by themselves. But again, those would be VERY basic jobs with limited subcontractor scheduling considerations (maybe 2-3 trades for an entire job and materials that are 100% standardized)

Delays, delays, delays. Are they common?

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