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Investor Flips and Rehabs

I'm inspecting the work done in a rehab / flip property. Unfortunately, this project has been, currently is, and will continue to be a nightmare for both the flipper and the contractor for some time.

In this article, I will lay out some ways to avoid many of the issues that arose on this project, starting with 'the cheapest bid' mentality.

The cheapest bid method always misses crucial steps you may not even know exist. Here are the most common:

Permits

Nothing will get your project more highly scrutinized by local code inspectors than a contractor trying to slip work through w/o getting permits and inspections. In most cases the work the local inspector wants to see has been drywalled over, with cabinets installed, etc., so they are going to want all that work removed to see the pipes and wiring in the wall!

A General Contractor

The general contractor is often thought of as the person who gets paid the most and does no labor... but, understanding the full depth of the problems, project, and proper construction order is very important. Different trades always overlap or fall short of one another on hundreds of details. Additionally, a 'self generaling' one man army or small handyman crew is likely lacking experience and/or the quality workmanship in at least 1 of the trades they may tackle. Electric, plumbing, HVAC, roofing, tuckpointing, you name it, and the guy or gal who does it every day will deliver better results, at likely the same or less cost when it all boils out. The cheapest bid usually misses crucial steps, which will be added to the bill later, and then likely be done in a less planned manner, or left undone and not even be mentioned. That's the general's job, to make sure, up front, that bids and bidding cover all the bases, are comparable, and include well written scopes of work (best when written by the general themselves vs. the contractors).

Proper procedures

Let's say we want the floor of 2 rooms leveled out. A flooring contractor bids building up these floors as requested (not realizing a beam should have been leveled from below before nearly any other work was done). They do the job. Now, when the post and beam issue are discovered, fixing the root problem properly would require removing all the newly installed flooring materials.

I am called to check on a contractors work, and to inspect items from a contract, or scope of work, occasionally. The issues I find most often stem from poor planning, under-skilled attempts, and are usually at the edges of the trades, but off the edges of the contract(s).


Proper Construction Order

Sounds simple, but the easiest thing you can let happen is create more work than necessary, by getting ahead of the project. For instance, materials for work *to be* done being delivered before the trade ahead of it *is* done. Drywall being stacked before electrical, plumbing, or HVAC rough-ins are finished, or paint in the drywallers way, etc, are only going to slow the job and ruin materials.


An Investor Home Inspection

(from Sunshine Certified, of course) at time of purchase, can help guide the whole project, and make sure many of these issues are covered by good scopes of work for bidding, basically serving as a checklist for the general contractor or experienced flipper.


An inspection would also ensure fewer discrepancies on the (typically dreaded) occupancy inspection, FHA/VA mortgage inspection(s), or Public Housing Inspections that the home is likely to need to pass at some point before someone moves in, too.

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