All Forum Posts by: Jason Rivera

Thanks @Marcia Maynard, I do keep a "lessons learned" list for each project so this project went better in terms of making sure that I didn't repeat some of the mistakes I made in the first house.  So things like not picking certain materials early, making sure that certain jobs didn't happen too early (like painting) and mapping out layouts so that we don't have to reconfigure a space because the refrigerator was too big.      

I'm not flipping full-time and I think not knowing construction leads me to not know when it's time to start pushing harder.  For example, I do know that framing isn't a long project so I knew that he wasn't performing there but he would give me reasons for certain things not being done and explaining why it would take longer and I wasn't sure if they were valid or not.  It wasn't until I brought the 2nd guy in that I found out that the roof wasn't done properly, the framing wasn't done properly, and some other things that caused some rework.  I think in time, I'll learn to spot some of that or I'll bring others in to inspect those tasks for me.  I think my focus is ok (not bad, but not great).  I feel like I communication well with my contractors.  I write up what I need and approximately by when.  I made milestone based payments so I was ok for the obvious but there were things that I paid for that I was told were done and turned out not to be.  Luckily, the 2nd contractor picked up where the 1st left off for the balance of the work and I was able to wrangle in the budget.  I did go over budget but it wasn't too bad.  I have a partner who's communication skills could use some work.  He has a tendency to argue w/ contractors about stuff, then ask them to come back to fix things.  I think that contributed to some of the slowed progress near the very end.       

Thanks a lot for the suggestions.  I have been refining my statement of work to have a clearer picture of the end and I'm sure in time, it'll get better (my 2 flips were very similar in terms of scope).  I'll remember your suggestions when it's time to find the next crew.  I did recently get a referral from one of the supply stores that I use, another from a 2nd supply store, and there's a 3rd contractor who I didn't reach out to because I lost his number but luckily, I bumped into him at a supply store.  I've seen his work and he was working on 3 projects near my first flip.  I watched him come in after I started and finish before us.  

Yep.  The first guy was a recommendation from my father-in-law so I gave him the benefit of the doubt.  After I saw that he wasn't progressing fast enough, I explained what I expected and when it didn't change, I fired him.  I turned to our original contractor at that point.  I knew he wasn't going to be fast but I felt that I could trust him because I've worked with him before and he does a lot of work for a relative.  I was concerned about the budget so I went with the familiar contractor vs taking a chance on another unknown.  I do need to learn how to manage those situations better and I need to find a good contractor.  

I'm in the last week of my 2nd flip.  I stand to make a good profit as I did in my first flip but like my first flip, we spent way too much time on it.  The first took somewhere between 7-9 months while this one is going on 10 months.  Despite that, I will continue doing it because my wife and I recently had a child and we would like to move into a home w/ more rooms around the time that our kid turns 1 year old.  

So this flip was again plagued with bad contractors.  The guy who started the project was 4 months into the project and still wasn't done the framing.  The 2nd guy took over and we knew he was going to be slow.  He was the same guy that I used in the 1st project so I knew his 3 week estimate was going to be far more, and I accepted that, but I didn't think it would be 6 months.  He's good at what he does but is bad at managing his time and money, so I knew I was taking a risk.  

So what's next?  Well, my plan was always to flip 6 properties.  5 would go toward a new home and the 6th flip was meant to jump start my entry into rental properties.  I looked at a few multi-family properties to buy and live in but haven't pulled the trigger.  I recently started considering moving into an apartment with additional bedrooms which would solve our space problem within our timeline and I considered converting my home into a rental.  I'd essentially break even except for months with vacancies but I would have a rental property without needing a down payment.  I can then continue flipping and can take my time if I continue to strike out w/ contractors.  On the plus side, I've flipped 2 properties of different sizes so I understand what my costs will be.  I've met other investors and contractors in the area, so I know how much investors are paying and what contractors are charging.  So the math will be manageable, it's just a matter of finding good contractors.  

@Matthew Paul The contract states that we can terminate for any reason with 7 days written notice.  

Yeah, early on, he mentioned that he was wrapping up a project but he mentioned it once as a reason for not showing up one day and hasn't mentioned it since.  It has felt like he's been making things up.  There's always an excuse for lack of progress and he constantly tells me what he plans to work on but doesn't.  For example, I'm partnering w/ my dad on this project and he went to see him on Monday.  Contractor says he's going to wrap up the framing on Monday which was just closets.  I then speak with him on Tuesday and ask what he's going to work on that day and he says closets.  My dad goes to the house Wednesday, and they are working on closets.  Today it sounds like they're still working on some framing (but the 3 closets are finally done).  The house was a shell when they started so I feel like if framing has taken 2 months then there's little reason for me to believe that the rest of the project will finish in the remaining time.    

@Matthew Paul The contract has an end date which is sometime during the end of March.  I believe it was the last Monday of March.  So he's 2 months into a 5 month project and is only now wrapping up the framing.  

@Sam Shueh I called one of the contractors who I interviewed for this project and had them stop by.  They saw what was done and said they'd be comfortable completing the job if necessary as long as an inspector came in to look at the work that was already done.  They were concerned that parts of the framing wouldn't pass inspection.  As far as finishing their mess, at this point, that would only be framing and picking up where they left off.  

Hi all,

I hired a contractor to work on my 2nd flip.  In the 2 months that he's been there, he's only completed the roof.  He's still working on the framing (which should've been a 2 or 3 day job).  He knocked down a bad wall over a month ago and has left it fully exposed since.  So basically, he's done less than 2 weeks worth of work in 2 months and I don't see any improvement.  With that said, I need to terminate his contract.  

I essentially used the same contract as the one provided when you purchase ' The Book on Flipping Houses'.  For the scope of work, I listed out all of the tasks that I needed completed and the payment schedule was similar if not the same as the one outlined in the template.

10% paid after Signing the Contract

20% paid after 2 weeks of work on the project

30% paid after half of the work has been completed

30% paid near the end of the project after a substantial amount of the project has been completed

10% paid after work has been completed

He received the first 2 payments and is no where near 50% complete.  I'm drafting the termination letter now and was wondering if there's anything that I should consider?  The contract says that I can terminate for any reason with notice.  I'm planning on handing him a Mechanic's lien form.  I suppose that when I hand him the letter and take the keys, that'll be the end of that.  I've reimbursed him for any material that he's purchased and since he's no where near 50% done, he's not due any more payments.  I was planning on having the inspector check his work before the letter but he seems anxious to get to the electrical and plumbing work which I keep telling him to hold off on and don't want him taking it upon himself to start purchasing that material.

thanks @Wayne Brooks

Hi all,

It's been a while since I've been on.  I'm starting my 2nd project and I have a contract written and ready to go for a contractor that I've chosen but... I've asked for proof of license, proof of insurance and proof of workman's comp and all I received so far is a text with his license number, an expired certificate of liability insurance, and a verbal confirmation of workman's comp insurance.  Is there a way that I can verify this myself or should I just hold off on signing the contract until he provides me with physical copies of the paperwork?  Should I make copies of this paperwork for my records too?

He was referred to me by a relative and he seems capable so I haven't bolted just yet.

Thanks,

Jason

@Caleb Smith sounds good. Let's set something up.

I have always toyed with the idea of owning rental properties as a buffer in the event of a downturn or job loss but I never got serious about it. My wife and I recently came to the realization that we'd like to move out of our condo and into a home but stay in the same general area. That means that I would need a sizeable down payment that I just won't get to without supplemental income. That prompted me to partner with my dad on our first flip which is currently on the market. I figured out approximatley how many flips I need to do to get to my goal and then I'd like to change over to multifamily rentals for financial freedom. I also have a rough idea of how many I would need for that. So for me, it's 2 "why's" based on specific life stages. If I go beyond my targets, it'll be for the fun of it vs the need. (A potential 3rd why)