After a long way of work I have prepared a “Materials List” – as a part of the Scope of Work. And, obviously, this has several advantages. Now I will explain why.
First, I don’t need to spend time thinking about which materials to use once I start new work, because I already documented what I like. Second, using the same materials I always know, what will be the result, unlike other results, with which I may not be satisfied. Third, i think that “Materials List” eliminates any confusion between my contractor and myself, based on quality and properties of selected materials. And finally, it saves a lot of time of my contractors – it allows them to call in their orders to Home Depot and have the store workers pull everything for them on time. So, this saves them a lot of precious time – about 2-4 hours, that could otherwise have been spent because of my project.
I need to say that now I spend just about two hours one day in Home Depot, working with SKU numbers and prices, so in terms of the time it is easy enough. Nevertheless, you will spend time working or looking for your perfect materials, but once you have finished this process, your work will go faster.
Scope of Work – one of the most important moments in the process of the work with each contractor. In my Scope of Work, I can find the results of the problems that have relation with the quality of the work to be done. And I believe it’s important if one of the your purpose is to make each contractor understand what is that you want in the finished product. Of course, I don’t think that this is all to meet each contractor, but if you do your Scope of Work, being specific, it will help your vision for the final rehab project.
Quality is so subjective, and if your objective is to make contractors understand you, is important to explain detaily your needs in your Scope of Work – thus you will be satisfied with the results. If your dream is to obtain the smooth walls, or, for example, to make ceiling or textured smooth, tell about it!
Also you need to remember that with Scope of Work you can obtain the opportunity of comparison: compare your expectations from the work with contractor. All that you have recorded in Scope of Work (e.g., the quality of workmanship and materials expectations…) you can compare now with contractor, with perhaps only one difference between your and his bids – the price. After all, each contractor is instructed to utilize the same materials.
Here and now we need to talk about the second and, probably, the most important problem that contractor have – the problem of the money. One of the most big problems for project is mismanagement of funds – it can really hurt it. This fact is important, and let’s talk about several questions related to money of rehabbing.
Talking about the differences between the contractor and rehabber, we need to know, that contractor expects to receive as much money as possible for as little work, while the rehabber expects everything exactly the opposite. The rehabber starts the project of home renovation with the desire to make a profit, whereas the contractor wants to earn a living with the help of the project. But the same expectations to make some profit is what brings the contractor and rehabber together from the beginning. So, here we need to found the famous happy medium, and it will become possible later, when all will be said and done.
As I already said, rehabbers tend to receive as little money as possible for as much work as possible, and this expectations lead to one (or more?) little problem: they estimate too little money for a rehab. Sometimes this leads to a necessity of double payment – in order to acquire a project – and the possibility to complete the rehab is turning a difficult work, because of little budget. Anyway, they need to contact with a contractor, looking for all high and low, and finally the contractor is who finds a result to this problem, based on their limited budget.
Often passes the situation, when contractors say they can’t do the project for what has been reserved (in terms of money). This should be a warning, mainly because they are putting the rehabber in an awkward position. They weren’t prepared to spend more money, yet there are anyone who will be ready to do the work for the money they have budgeted. So, this is when communication between contractors and rehabbers begins to disintegrate.
When the negotiation between the rehabber and contractor starts, begin more problems. The first, rehabber, say that they can spend $X, and the second (contractor) disagrees, claiming they can complete for $Y – price that exceeds offer of rehabber. So, after this, the desperate rehabber starts to ask the contractor to do more work for less price, and finally the contractor agrees on a price.
But, anyway, one problem remains: the contractor often doesn’t hear everything, because the rehabber doesn’t plead their whole work. As a result, the relationship of both is becoming increasingly unstable, basically because the rehabber hopes to get more than they will receive, and the contractor expects to deliver less money than what is really needed – because of rehabber unwillingness to tell them all facts.
Getting Started in Real Estate Investing (Part 2)