Rehab, Scope of work, Contractor vs Project Manager, OH MY!

[James Baker]

I believe there is a lot of advice on basic and advanced rehab advice. I'm glad to see this. 

However, due to my own experience, I would assume a lot of investors start off with a rehab right smack in the middle of basic and advanced.

For example, I am currently buying a property that is a total gut job. While that may sound like a lot, this gut job is going to be very easy and I believe any beginner would be able to handle it if they used a good contractor. I'm not going to go into detail on the project, that's not what this post is intended for, but you get the point--- it would not be uncommon for a newbie to invest in this property.

As I do this rehab, I am noticing (and evening learning) some things that I definitely would not have understood when beginning my RE journey. I read a lot of books, watch a lot of podcasts, and a lot of YouTube videos, and I can't remember being taught this stuff.

I wanted to make a list of some questions I could see some new investors asking and maybe we could try and answer as many as possible?

Some of these questions I'm even wondering myself!

1. When doing a rehab, do you hire a project manager and a contractor. Do you just hire one? none?

2. Who writes the scope of work? Do you write it yourself? Does the Project manager? An outside source?

3. Do you use a scope of work templates or draft them yourself? 

4. Do you need an attorney to draft your scope of work?

5. How detailed does the scope of work have to be?

6. How to you manage change orders in a contract? Do you rewrite the contract and re-sign?

7. Can you have the project manager double as the contractor too? 

8. Is it best to have the project manager write individual scopes of work for each subcontractor, or just one large one for the contractor? What if you don't hire a contractor though?

9. Do I have to pay 50% up front to the contractor?

!0. Should I buy materials or should the contractor? 

11. Who gets the dumpster?

12. If I have cash, should I pay for the rehab in cash or with check? Will I get a tax write off with cash?

13. How do you keep your projects organized? Manage money, timelines, subcontractors.

14. Is there a special Home Depot account I should open?

15. Where do I go to get building permits and inspection? 

I'm not a beginner, but I have only been investing for 3 years. A lot of these questions had be guessing. I'm sure a lot of people are in the same boat as me. 

I hope this post can help some other beginner investors answer questions the internet just doesn't want to answer!

Thanks guys!!