House #2 Complete- Lesson learned

[Trey Pope]

I have completed the rehab of my second house and have it under contract. I bought the house in Feb and was hoping for a three week rehab and had a budget of 5-6K. Instead it took two months and cost me around 14K....the issue I ran into was using handyman contractors vs licensed contractors. On my first rehab I used a three man crew who work for me in another business doing repair and painting for utility companies. These guys are extremely handy and can do pretty much anything. They are smart about expenses and they did a great job on my first deal..(it was mainly a cosmetic flip). The first deal went so smooth that I decided to use them on my second job......the problem was that because of lack of experience with rehab jobs they did not always have the correct tools and they were extremely slow. They also were not up on the latest building codes and so I ended up having to do a lot of things twice example, they installed a new hot water heater but did not put an expansion valve on it and did not know the new code was for the heater to be 18 inches off the ground if in a basement. I ended up bringing in licensed guys and I basically rehabbed this house twice......I know there is a learning curve with this business so I chalk it up to a lesson learned. I will use both handymen and licensed people in the future but I will be more aware on which is best suited for which job. All in all I got bailed out by a tight market and made around 25% on the flip..........I have learned this lesson and applied it on my third house which will be complete and on the market in a couple of weeks.......now if I can just find more inventory but that is for another post......