PART 2: So, investing in real estate in Nashville must be easy, right?
Welcome to part 2 of our blog series "5 recurring themes that have reduced our bottom line and how to avoid them". Number 2 on our list is Bad Contractors. So let's begin by clarifying that 90% of the problems we have had with contractors have been our fault! Yep, you heard me right, we are the ones to blame for the bad results we got from contractors. Intrigued? Read on:
So I like to compare contractor relationships to the likes of a new relationship with someone special, you know, the beginning phase is the exciting phase when you first meet someone, things are unknown, you have great expectations for how things are going to go, a little excited, a little scared, anticipating what is going to come next. You meet, walk through and go over the project and what you want done, they say all the right things, you check their references, verified insurance, you even go and look at a previous job they have done, you agree on a price and off you go, all seems great, right? We call this the "getting to know you phase". Well, guess what, one crucial step has already been ignored: preparing and reviewing a DETAILED Scope of Work with a payment schedule and timeline. When I say detailed, I literally mean marking the walls that need to come down, marking the floor where new walls are to go, giving them a hardcopy of the new floorplan, electrical plan where you want switches and plugs to go, creating a room by room list of that you want done, etc. The more detailed the better so when they come back and say "well I didn't know you wanted that done" you can say "well look at the detailed Scope of Work you agreed to and signed off on", then they have no way to dispute it and have to correct it before they get paid. And nothing speaks louder to a contractor than MONEY! CLEAR COMMUNICATION, that can not be emphasized enough. Don't leave anything to chance, like nothing, literally "remove the old kitchen sink fixture during demo and install a new one at trim out, SKU # --- from Home Depot". I will admit this has taken us a while to learn after doing numerous renovations and learning this the hard way and we still do not always get it right. Once we started preparing detailed Scope of Works, typing them out, and going over it with them, things have started running alot smoother for us. It is time consuming, but understand this is better than being frustrated and having to go back later and correct something once it is 2 steps in the process too late. In our world we call these "redos", and we are trying to eliminate redos from our projects altogether.
NOTE: Let me also say our renovations are project managed which means we manage the renovations ourselves and just plug in subcontractors for all of the different trades. This helps us keep our overhead down since of course we are in this to make a profit in the end. There may be GC's (General Contractors) out there where you do not have to be as detailed but of course they charge more and we just can't pay that kind of overhead.
We used to complain that "these guys just aren't doing what we want" and being frustrated. And then we realized, we really weren't giving them CLEAR direction. Now there are some with clear direction that still seem to fizzle out, or just can't seem to make it to the finish line, or make the final product look as good as what we want (because it is all in the details in our world) and those are the ones we have to "breakup" with (referring back to the "relationship" comparison). If they follow our clear direction, do what we want, provide a great finished product (and if we don't like the end result are willing to go back and get it to where we want it), then you could say we start "going steady" as they used to say back in the day. My grandmother who I loved dearly called it "courting' " LOL . We have numerous contractors that we are in the "courting" phase with. These are the ones that get it to the finish line every time, are proud of what they do, get the attention to detail right (and if they don't will come back if asked and NOT ask for more money as they realize they didn't meet our expectations that we agreed on the first time), and are ready for the next project.
We could write multiple posts on contractors alone but will stop here so as not to bore you, but this is the single most important thing we can emphasize: be as DETAILED as possible. Let me also say this is not a contractor bashing post, I respect any and all contractors and the services they provide. This post is to share what we have learned after doing over 50+ renovations and working with MANY contractors from all walks of life, different nationalities, etc. If you have worked for us in the past or are helping us now in the present we THANK YOU! We couldn't have gotten where we are without you.
Again, we are sharing these posts to hopefully save you some headache down the road if you find yourself facing a home renovation whether it be your own home or someone elses.
Part three of this blog series will discuss "Home Inspections" and ways to make it through without killing the deal.
Do you agree? Disagree? Have something to share that has or has not worked for you? Want to ask a question? Feel free to comment in the section below. Also, please like us on Facebook and follow us on Twitter to receive our blog updates and other relevant real estate tips.