All Forum Posts by: Isaac Lane

Investors, curious to hear: what’s the toughest budget overrun you’ve dealt with mid-project, and how did you handle it?

We had a client project where the GC submitted a change order for $18,000 tied to “unforeseen” plumbing reroutes. After reviewing, we discovered a large portion of the work was actually included in the original scope.

Here’s how we resolved it:

• Compared the CO against the signed contract scope.

• Negotiated the CO down to ~$7,500 (actual extras) instead of $18,000.

• Updated budget tracking to make sure no future “double dips” occurred.

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  How do you push back or validate mid-project cost increases?
  
  

Question for the group: what’s the worst “hidden issue” you’ve uncovered once demo started?

On one of our flips, demo revealed that several basement support posts had been shimmed with scraps of wood instead of set on proper footings. The GC’s original bid didn’t account for structural repair, and the investor was staring down a costly change order.

Here’s what we did:

- Brought in a structural engineer the same week for quick specs.

- Negotiated the repair scope with the GC to keep pricing tight.

- Got approvals and work underway within 5 days, minimizing schedule slip.

 What surprises have you run into once the walls came down?

Hey BiggerPockets community,

One thing I always like to ask other investors is: have you ever had a contractor or sub walk off mid-project, and how did you handle it?

As a construction project manager, we ran into this on a duplex renovation we were managing for a client. The GC’s subs stopped showing up after demo. The GC wasn’t communicating clearly, and the project sat idle for nearly two weeks. For the investor, that meant holding costs piling up fast.

Here’s how we resolved it:

• Got on-site immediately to document status and secure the property.

• Started calling vetted backup contractors to step in for plumbing and electrical.

• Negotiated with the GC to either replace the missing subs or risk losing the contract.

• Within a week, new crews were in place, and we recovered most of the lost time in the schedule.

It wasn’t pretty, but it kept the project moving and prevented a major blow to the investor’s budget and timeline.

 Curious to hear: Have you dealt with contractors walking off a job? What’s worked best for you to get things back on track?

Franklin County is doing a mass re-appraisal process for property taxes in 2023. The county gives you the opportunity to dispute the initial values before distributing the updated tax amount. Has anybody had experience disputing the property values in prior years and if so, what would you recommend doing to make a strong case that the value should be lower?

I wanted to share my experience and the valuable lessons I've learned from my venture into out-of-state investing. It has been an incredible journey filled with both challenges and rewarding outcomes. If you're considering investing in a location different from where you reside, I hope my insights can help you navigate this path with confidence and success.

Research, Research, Research: The foundation of any successful out-of-state investment is thorough research. Get to know the local market, economic trends, population growth, job opportunities, and the overall investment climate. Look for areas with strong rental demand, low vacancy rates, and a diverse economy. Engaging with local real estate agents, property managers, and investors can provide invaluable insights.

Build a Reliable Local Team: As an out-of-state investor, having a trustworthy and competent local team is essential. A reliable property manager, real estate agent, contractor, and attorney can be your eyes and ears on the ground. Interview potential team members, check references, and establish clear lines of communication. A competent team will save you time, money, and headaches.

Embrace Technology: Leverage technology to bridge the geographical gap. Use virtual tools like video calls, property management software, online marketplaces, and document signing platforms. These technologies enable you to streamline processes, conduct virtual property inspections, and manage your investments remotely. Embrace the power of data and analytics to make informed decisions.

Visit in Person: While technology can facilitate many aspects, nothing beats visiting your investment location in person. Familiarize yourself with the neighborhoods, meet your team, and develop a firsthand understanding of the local dynamics. This will help you build stronger relationships and gain confidence in your investment decisions.

Understand Local Laws and Regulations: Each state has its own set of laws and regulations concerning real estate investing. It's crucial to educate yourself on these aspects to ensure compliance and avoid legal issues. Consult with local attorneys who specialize in real estate to stay informed and protect your interests.

Account for Vacancy and Repairs: When investing in a property that you won't be able to visit regularly, it's crucial to account for potential vacancies and repairs. Maintain a healthy cash reserve to cover unexpected expenses and mitigate any income loss during vacancy periods. A conservative approach to financial planning will help you weather any storms that may come your way.

Network with Local Investors: Engage with local investors who have experience in the market you're investing in. Attend real estate meetups, join local investor groups, and participate in forums like BiggerPockets. Learning from those who have navigated similar paths and hearing about their successes and failures can provide valuable insights and guidance.

I hope these lessons I've learned along the way can be helpful to those considering out-of-state investing. Feel free to share your experiences or ask any questions. Let's continue to learn and grow together!

What is the average time it takes for your property manager to get a unit fixed up and rented out? I know there will be a little variation based on size and condition, but I wanted to see if there was some expected industry standard. Thank you!

Pros: Guaranteed partial or 100% monthly payments.

Cons: Initial inspections

Is anyone aware of a mastermind group focused on small multifamily? I've completed 3 deals and looking to further grow! I need some new people in my circle to learn from and/or work with.

Why do you do real estate investing and what is your end goal?

Congratulations on the deal! I've completed a house hack in the past and it's a great way to acquire a property with low money down!