Flips: How have you improved staying On-Budget and On-Time

[Daniel Feldman]

BPers,

We have traditionally done a good job of staying on budget and on time with our flips, but our last couple of projects have definitely pushed us to a point where we need to implement some new strategies to improve our model. We deal with multiple sub contractors form our Main Sub, to HVAC to pool installers, electrical, etc.

I'd like to ask you guys specificially: What systems or tactics have you implemented into your fix and flips that have improved your ability to stay ON-BUDGET and ON-TIME with your projects? We were considering possible bonus or deduction structures based on projects or deadlines but would love to hear all suggestions to keep projects and subs on schedule.

Thanks so much!

[Chuck Russell]

@Grant Rothenburger thank you  for tagging me in here. I’ve been super busy but wanted to make sure I chimed in. 

As far as staying on schedule with work going in place with subs or even tracking your own progress I personally like a reverse phase schedule. Essentially I start at the desired finish date and work backwards. I just finished one for a 2 month project I’m starting at the beginning of June. 

The first thing I do is write out each task and how long each will likely take. For instance I think demo can be completed in 3 days and all mechanical rough ins will take 5 days. I gave myself a couple extra days for the mechanical rough in because I’ll be using subs and will need the leeway to accommodate their schedules. 

The next thing I do is make a note of any long lead time items that I may need to get ordered in a timely fashion such as granite and a custom sized door. These will be important to track when it comes to keeping the moving. Nobody wants their house sitting 98% done for 2-3 weeks because you didn’t order your cabinets in time and they couldn’t measure your counter tops until they were in.

Now I take all this information and put it in reverse order on a calendar working back from the finish date. If you do this and run out of days you may need to “stack” some of your activities. Such as getting your painter started painting trim and doors in the garage while the drywall is being finished. The more construction experience you have the more opportunities you’ll see to save time. If you have good relationships with your subs the better the chances are they’ll want to work with your timeline as well and perhaps be able to shave some time off. If I’m going to only get this one job from you, I’m less likely to bend over backwards to make a little less profit keeping you happy. Putting this all on a calendar that you and your subs can see and track will benefit all parties involved. 

I have an investor that makes me sign a contract with a $100 a day penalty for going over. I don’t have a problem with signing because we have agreed to all the terms and we always agree to a timeframe that is better than reasonable. Doing this allows him to set up the next sub with more confidence that I’ll be gone when I say I will. As far as incentives go... sounds good but typically the only incentive I need is the check at the end of the job and a phone call when the next one is getting close. 

I hope my almost 18 years of construction experience is helpful and I’m always eager to answer any questions I can.