How Do You Manage a Rehab Project?

Question

I used a few different companies to do rehab work. I have used them in the past, know their work. One is also a GC, the other not. Both do great work and are reliable. A Realtor told me I should use an independent GC or knowledgable Realtor to act as project mgr to assist them in developing a SOW and to manage their work. Not sure that's needed but I'm open. While I'm out of state, I feel reasonably confident that if I use a known entity with whom I have a history, that I can ask them to prepare a SOW with medium finishes (for example), granite countertop, and kitchen finishes to match that I don't need to actually be much involved in the finer details of fixtures and finishes but wait and see what their SOW will offer.
I then work with whoever gets the job to fine-tune the SOW into a draw schedule. I don't do percentage completion, but identify and attach specific tasks - carpeting, kitchen cabinets, roof, exterior paint, interior paint, etc. - to specific draws so that I can send out an independent draw inspector with the SOW and draw schedule to tell me, for example, 1) roof done? Look right?, 2) flooring done and looks as I intended?, etc. Based on that inspection that includes pics, I pay or have a discussion with the rehabber.

Are you more hands-on as an out of state investor, and to what extent, or how do you approach developing a SOW, project management, and draws for a flip as an out of state investor?

Kerry Noble Jr · Answer

My partner that I have a flip with is out of the country to i manage the flip.....did everything on the ground....i manage a GC for bigger things......for smaller stuff i have subs that I can use if its just paint and carpet

David de Luna · Answer

Excellent feedback. It's what I was thinking. Thank you very much.

Evan Polaski · Answer

@David de Luna, I agree that finish selection should be outlined in detail, as this can make or break a rehab, and a "medium" grade is very subjective. There are some finishes that look great almost universally (white 3x6 subway tile) and are very inexpensive.

But I also agree that you do not nnecessarily need a project manager if you have a detailed scope of work and an inspector already lined up. I am guessing the realtor is trying to mitigate surprises for you and the contractor if the draw inspector says the work is not done to expectations when finished. Versus catching an issue much earlier in the install, when the contractor can fix more easily, and your timeline and materials aren't wasted.

As for finish selection: I am guessing Greg means you specify exact tile to be used, grout color, flooring, light fixture for kitchen/bath/bedroom/etc, paint color for walls/trim/doors, etc. You do not leave any guess work at all for the contractor. It also makes it easier if budgets start to change. But mostly it protects you from the contractor picking something you don't like and the contractor from picking something you don't like, and then figuring out who has to pay for the replacement.

David de Luna · Answer

Thank you SO much for this feedback. Excellent! What exactly do you mean by a finish schedule and a selection submittal? Thank you.

Greg Dickerson · Answer

I always do turn key in or out of state for all projects commercial or residential. The GC will come up with SOW based on my guidance but I supply detailed finish schedules and selection submittals so there is no guesswork or allowance schedule to deal with. I pay upon completion but get lien waivers before releasing the payment.

How Do You Manage a Rehab Project?

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