How to rehab a Flip in under 30 days

Question

Here's my proposed rehab schedule for a 3br/2ba ARV in 150K range... rehab in under 30 days: *I only use supplies in Stock.  I also screen subs well to ensure they will work my timeline before i hire.  If they do not show up at the day time i want to start that first day, they are terminated.  I get replacement sub already on speed dial.

1) Trash out w/Safeguard - 1 day

2) Demo -2 days max.

3) interior Painters/Exterior painters - 2 separate crews working same time.  -3 days max.

4) Tile Flooring/ Bathroom Shower tile rehab/ Carpets - Done simultaneously by 3 separate crews.  1 day carpet/ 4 days max tile in room floors and showers.  -4 days total

5)  kitchen rehab- granite countertops, new cabinets, i only choose what i find in stock. 3 days max.

6) Button up- New light fixtures/cover plates/ new toilets/ landscaping.  3 days max.

Total Rehab time: 16 days... I will add 14 days padding for mishaps = 30 days total

For my 100% outsourcing flippers... Look about right?

Greg H. · Answer

Scott A.

I hope you don't take this as a criticism as I am just trying to help you with your flip. I have done this a few hundred times and My guess is J Scott has done a lot more than me

- Contractors are often going to be off schedule. It doesn't matter how much pull you think subs would value the business of those of us who have done this forever, things just happen. They just aren't going to beat to your drum all the time......but they say they will ! lol

- I commented a couple of times I the thread you cited to me. Of course we try to guide buyers away from loan products such as FHA but sometimes it is just not possible. I was just trying to make you aware of one of the pitfalls of financing that occurs in your price range on this flip

- Are you using an agent ?  Most of the time I am my own agent but occasionally I use agents when I have a property in particular areas of Texas. I tend to look for the agent that is a problem solver and not a problem creator. I want him/her to understand first that this is a business to me and not personal. Meaning at the end of the day, the only way my business keeps score is by $$$ in a timely manner so I can buy another. Pretty brochures and a high suggested asking price are nice but are they going to make me the most money in the quickest time. I want an agent that might know the appraiser, knows the guy who can run over and flip the breaker on a moments notice or the right loan officer to get the deal done

John Whittle · Answer

Your also not counting the fact that a lot of subs will charge a lot more for fast turn around.  When I have a job I can go hit when I get a break in my schedule. I can do it quite a bit cheaper than I can when I'm being rushed.

They say fast, cheap and good pick two.  I try to provide all 3 for people without heating, cooling or power but I'm not going to rush in a vacant house unless I have some incentive.  Its sounds like good way to lose a relationship with a good sub too.  Even if I agree to your tight schedule for a price. If theres an emergency some where I'm not going to be on your job site.  I would think you would expect me to drop what I'm doing and go to your personal house if your electric service catches fire or something.

Greg H. · Answer

What is your plan after the property is complete ?  In many areas of the country in the sub 150 K  your end buyer is going to want to purchase using an FHA loan. With this you are going to run into the 90 day rule.  With this , you will not be able to officially contract with a buyer until day 91 of your ownership.  I have also run into some pushback from non-FHA lenders in regards to this. Some are requiring 2 appraisals and require additional documentation from the seller. In areas where this is the case for me, I tend to wait until day 60 or so until hitting the market

J Scott · Answer

This is going to be very location and house specific.  In some areas, not selling to FHA buyers won't make any difference in your ability to sell.  In other areas, and with certain types of houses, FHA buyers will make up a large portion of your buyer pool.  In those situations, you can decide not to target FHA buyers, but it may mean not getting your house sold.

You need to figure out who your target buyer demographic will be and what type of loan product they are most likely to use.  Only then will you know the potential impact.

Scott A. · Answer

understood.

Scott A. · Answer

I Google to find the Thousand other subcontractors out there that will work on my terms how I want at my time window.  it has it has nothing to do with picking good fast or cheap.

Scott A. · Answer

See this post. Basically Guy Jimenez said it best, 'I will almost never sell to FHA / VA / USDA buyers..." He goes on to say his last buyer's had their parents co-sign to get a conventional loan.  Then Derek Tyler goes on to say, "All of my listings I started to market only to non FHA buyers and it hasn't decreased my showings or offers yet (have done on the last 3 houses.... Since the beginning of 2015).  I highly encourage my potential buyers to use the 3% down conventional programs or even the 0% down program that one of our local credit unions offer.  I was scared at first to limit my pool of buyers but if they want the house bad enough they will switch to one of these programs. So I don't even touch FHA buyers anymore.  Just my findings so far in 2015."  -There is your answer.

Scott A. · Answer

Super helpful J Scott.  Thank you.  I called a granite company today too.  So I'm revising my 30 day Outsourcing plan for everybody.  Now it looks like this:

Here's my proposed rehab schedule for a 3br/2ba ARV in 150K range... rehab in under 30 days.  I only use supplies in Stock.  I also screen subs well to ensure they will work my timeline before i hire. If they do not show up at the exact day/time i want them to start on that first day, they are terminated.  I get replacement subs already on my speed dial.

1) Start Day 1: Trash out w/Safeguard - 1 day max

2) Start Day 2: Demo -2 days max.

3) Start Day 4: Interior Painters/Exterior painters - 2 separate crews working same time. -3 days max.

3.5) ALSO Start Day 4: IF tiling floors in kitchen or bathrooms FIRST have granite countertop subs do their template around cabinets BEFORE laying tile.  This way your granite can be processed for cutting and ready within 10-14 days.

4) Start Day 7: Tile Flooring/ Bathroom Shower tile rehab/ Carpets - Done simultaneously by up to 3 separate crews. 1 day for carpets/ 4 days max tile in main room floors and showers. -4 days total

5) Start Day 10: Button up part A- New light fixtures/cover plates/ new toilets. Have landscaping Sub get to work. 3 days max.

Start Day 14: Button up part B: Granite Subs come back and Install Granite Countertops & Sinks in Kitchen and bathrooms.  1 Day max.

Start Day 15:  Other subs put in faucets.  Get cleaning Sub.  1 Day Max.

Total Rehab time: 15 days. I will still add a 15 days padding for mishaps = 30 days total.

J Scott · Answer

Assuming that's your full scope of work, you shouldn't be off by much.  Some thoughts:

-  Are you sure that's the full scope of work?  For example, will you need to do any drywall repair before the painting or do any waterproofing before the shower tiling?  Those things can add a couple days to a schedule.

-  Most granite companies will require that the cabinets are installed before they take measurements for the granite.  Then they'll need at least a week or two to cut and install the granite.  So, you'll likely have a week or two lag between cabinets going in and granite going in.

-  After the shower and granite is done, you'll need to install sink and fixtures.  Don't forget about those.

How to rehab a Flip in under 30 days

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