3 real estate rehab management models

3REHAB

MANAGEMENTMODELS

Most real estate investors set outto build an empire…

…but end up getting stuck justdoing 1 house every few years….

…which rarely even go as planned.

Many investors choose to ignore the fact that real estate investing,just like any business, has a learning curve.

It takes, time, effort, planning, andrepetition to improve your systemsand maximize your profit.

IT’S TIME FOR YOU TO GET UNSTUCK.

HOW MUCH TIME DO YOU HAVE?

A LOT?

SOME?

NONE?

HOW MUCH DO YOU WANT TO

MAKE?$$$

SOME?

MORE?

A LOT?

TIME

MONEY

What if I have very little time but still want to make a lot of money?

THE 3 MODELS

1: BYO GENERAL CONTRACTOR(be your own, not bring your own)

THE 3 MODELS

2: Project Manager

THE 3 MODELS

3: Site Supervisor

byoGC

Houses / Year

Margin / House

Site Super

ProjectMgr.

Simultaneous Projects

1-2 3-6 10+1 2 10+$20

k$15k

$10k

WHY YOU SHOULDN’T HIREA GENERAL CONTRACTOR

All of your eggs are in 1 basket.

Conflict of interest. (their income vs. yours)

Cost Prohibitive.

For houses under $200k,a GC is a luxury that

you cannot afford.

But I want to be hands-off,won’t hiring a GC allow me tocollect a profit without beingvery involved?

Sorry, it just doesn’twork like that.

Real Estate Investing

Anyone who tells you otherwiseprobably has a late night infomercial.

is a hands-on business.

Regardless of what model you use, as the owner you are responsible for:

SCHEDULEBUDGETCASH FLOW

byoGC

Houses / Year

Margin / House

Site Super

ProjectMgr.

Simultaneous Projects

1-2 3-6 10+1 2 10+

$20k

$15k

$10k

MODEL 1:Be Your OwnGeneral Contractor

EconomicalGreater Control

Benefits

Allows you to jump in

Easier to shift

Can be time consumingAccess to subs

Challenges

Basic rehab knowledge

Requires organization

HOW TO PLANTO BE YOUR OWN GC

MUST-HAVES Subcontractors Work Breakdown Structure Schedule

SUBCONTRACTORSRoofingWindowsSidingConcrete/FoundationsLandscapingHVACElectriciansPlumbers

FramersFinish CarpentersPaintersCarpetTileGeneral LaborersSkilled LaborersDumpster/Hauling

WORK BREAKDOWNSTRUCTURE

Provides an overview of the entire projectNon-chronological

Consists of Individual Work Packagessometimes called “Scopes”

123

4

Cont

rol

Acco

unts

Wor

k Pa

ckag

es

Demo1.1.3

Landscaping1.1.4.1

Ext. Carpentry1.1.4.2

Interior Trim1.1.5.1

Interior Handrails1.1.5.2

Rough Plumbing1.1.6.1

Final Plumbing1.1.6.2

Bathroom Tile1.1.6.3

Rough Electric1.1.7.1

Final Electric1.1.7.2

Prestige Properties Rehab Projects

Demo1.1.3

Exterior1.1.4

Framing &Carpentry

1.1.5

Plumbing &Bath1.1.6

Electric 1.1.7

Elm 123 - 2015.3.1

ORGANIZE YOUR REHABUSING WORK PACKAGES

They function as “mini” jobswith their own resources andtime frame.

Rough Plumbing1.6.1

budget: $1,000 time: 2-3 days$ RESOURCES

Labor

Bob Schiff - 513-555-1212($650)

Materials- shower body ($125)- rough plumb pkg ($50) x 2- tub ($110)

SCOPE OF WORKHall ½ Bath• Rough in sink supply• Rough in sink drain• Patch plumbing

Full Bath• Rough in shower body• Set tub• Rough in sink supply/drain• Rough in toilet

STAYING ON SCHEDULE

This weekNext weekBeyond next week

Asana is a lightweighttask management appyou can use to manageyour project schedule.

A TYPICAL WEEKPlanning, Pick up Materials,Meet with SubcontractorsMake sure subs showed upCheck on progress

Weekends

Thursdays

Mondays

Fridays Final check of work, release funds

SubcontractorsWork BreakdownSchedule

MODEL 2:Hire a ProfessionalProject Manager

Professional ManagementVolume Rehabs

Benefits

ExpensiveEggs in one basket

Challenges

You must have excellentmanagement & org. skills.

Full time commitment

Customer Successpurchase: $160krehab est: $35kARV: $260k

Customer Successpurchase: $160krehab est: $35kARV: $260k

$85k$325k

byoGC

Houses / Year

Margin / House

Site Super

ProjectMgr.

Simultaneous Projects

1-2 3-6 10+1 2 10+$20

k$15k

$10k

MODEL 3:Site Supervisor

Fills in the gapsKeep your day job

Benefits

Cheaper than a G.C.Can get you unstuck

Create success unitswith multiple SS’s

You still must stay involvedManagement is a must

Challenges

Could effect your budget

How do you paya Site Super?

By the Scope+ Completion bonusLimit to $5k above budgetEquivalent of $40-$50k/year

What are theirresponsibilities?

Material runsChecking other subs workMaking sure subs show upBeing your primary contactCompleting a portion of rehab

What are NOT theirresponsibilities?

Material selectionPlanningPaying other subsFinal approval of work

Scopes that the SiteSupervisor can handleDemoFramingCabinets, doorsPlug your Site Super as the2nd man on 2 man scopes.Post inspection repairs

Scopes that the SiteSupervisor can handleMust be willing to jump inand help with any part of the rehab.

A Site Supervisor CanHelp you Scale YourBusiness.

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC

HOUSE 2HOUSE 1

HOUSE 1 HOUSE 2 HOUSE 4HOUSE 3 HOUSE 5

JAN FEB MAR APR MAY JUN JULY AUG SEP OCT NOV DEC

Site Super 2

2

4

6

8

10

Site Super 1

1

3

5

7

9

11

Select a ModelBased on Your GoalThink and plan beyond1 or 2 houses a yearRemember why you gotinto this business.