When it comes to real estate investing, your profit margin is directly tied to staying on schedule.
Job scheduling and job sequencing are extremely important when flipping a house or rehabbing a home as a property investor. The faster you can get the house on the market, the faster and more opportunity you have for profitable earnings. Realize that each day you hold onto a property is costings you something, whether it’s fees, taxes or paying contractors.
Why Job Sequencing and Scheduling is Extremely Important in Property Investing
Extra time flipping a house can cost you hundreds — maybe even thousands — of dollars a day in lost earnings. Timing is one of the most important factors in successful property investing.
To flip a house successfully, you have to develop an efficient timetable and stick to it. A good rule of thumb when it comes to a timeline for flipping a house is about $1,000 per day. For example, a $30,000 repair job should take about 30 days. However, if you get into a larger job, the cost per day should decrease. A $90,000 job shouldn’t take 90 days.
How to Cut Time to Get a Rehab House on the Market
The No. 1 tip to cutting time is having a general contractor lined up and ready to start as soon as you get possession of the home. Have a plan in place before you make the purchase.
A good contractor will immediately step in and manage all aspects of the repair, rehab or fix and flip project. He or she can hire, schedule, supervise, get building permits, order supplies, schedule inspections and more, to ensure the project stays on schedule. A general contractor will also oversee any subcontractors needed, from plumbers to painters to tree trimmers.
How to Find the Best Contractor for Flipping a Home
Hire a contractor with an investment mentality. Your contractor should understand property investing is a business where deadlines and details are important. You don’t want them delaying your job or costing you more money than you estimated in rehab work.
Before hiring a contractor for work on a property investment project:
- Check the contractor’s experience in home rehab work. Has he done a comparable size job to your project? If it’s a big job, has he done this scope of work before and did he meet deadlines? Has he worked on a home of this age? Homes from different eras have different needs, such as a 1940s home that needs asbestos removal vs. a 1980s home that has leaky synthetic stucco.
- Ask for at least three references from the contractor. Ask these people about the work the contractor did, their overall satisfaction and if the contractor stayed on schedule.
- Talk to mentors in property investing for recommendations and what they know about specific contractors. They will know which contractors understand property investing and work efficiently with house flipping projects.
- Get three bids, especially when you first work with a contractor. Make sure you compare apples to apples between the bids and take into consideration other factors, such as home rehab experience and scheduling.
- Ask the contractor his plan for job sequencing and scheduling. Don’t assume he will focus on only your project for the next several days. Weigh his project timeline into the bid. The cheapest bid may not be the best if the contractor plans a lengthy timeline.
- Verify the contractor is licensed and insured. Ask for proof and/or check with the state contractor licensing board.
- Evaluate communication skills and your overall desire to work with this person. You want to find a contractor you can trust and build a relationship with. You will be relying on them for guidance, good work, and quick turns on projects. Basically, trust your gut.
Timing can make or break a deal in property investing. That starts from how fast you secure the financing to get the property to how fast you can put it back on the market.
Investing in real estate is a business venture that requires quickness, efficiency and expert guidance. Catalyst Funding is an experienced hard money lender that provides lending for single-family residences, 2-4 unit residences, townhomes and condos in a variety of situations, including fix and flip, foreclosures, trustee sales, auctioned properties, outdated properties, neglected properties, permit issues, home inspection issues, vandalized properties, abandoned properties, fire and water damage.