Risk Management for multi-family rehab project

[Robert Bracken]

Hi everyone, 

I just officially made an account (though I've read my posts over the past 18 months), so I am definitely newer to the game. My question is regarding how to best manage my risk during a large renovation that is about to commence on a four-unit multifamily property, in Washington, DC.

Background:

I recently purchased a four-unit property (through NACA), in Washington, DC. Currently, two of the four-units are vacant, and the core plan is to do a full demo of the other two units - I will then live in one unit, and rent out the other (in addition to the current units that are occupied). The project size is relatively large $200,000 - $300,000, and I have been allocated PITI-free phase, so the mortgage payments will not start until July. The project is set to start in the next two weeks.

Question: 

How can I best manage the risk throughout the project, specifically with respect to project timeline? 

My best guess:

My initial thoughts are to are place a Liquidated Damages Clause in my contractor agreement where the cost of each day of delay would be the lost rent per day plus the mortgage cost per day ( if the project goes past the PITI-free period).

Additionally, I was thinking of getting a builders risk policy, however I don't think those kinds of policies will cover project timeline issues?

Thanks!

[Russell Brazil]

@Robert Bracken

No contractor in this area will agree to that since delays are common and largely out of their control when dealing with the District. In fact, plan on delays, thats how you mitigate your risk.

Most large renovation projects in DC are going to run 9/10 months.