After we talked the basics and how I go about getting my flips, I figured the next logical step this week is how I actually go about renovating them. Do you use the same contractors for each flip?
This has been an evolving process, but I try to. As I find contractors that I like working with, they get brought back to the next project. For example, my plumber has worked on all 4 flips, my electrician on 3, and my contractor and flooring guy on 2. If I like you, not only will I use you again, but I'll recommend you to friends and clients (as long is it doesn't get in the way of my flips ;-) ). Here's the toughest part- HOW do I go about finding people I like and trust? Recommendations are always the best place to start. I've found that while, friend's and family recommendations are a great jumping off point, getting recommendations from other contractors is even better. They'll only keep working with people who they trust and do good work, so if they give their stamp of approval it has a bit more weight. My plumber recommended my electrician, and my electrician recommended my contractor. This isn't fool-proof, no way is, but it's been my best way of finding new talent so far. If I have a project that I need a new contractor or sub for, I'll get several quotes and "interview" them. I'll find a few to talk to, maybe a contractor or friend's recommendation, and 1 or 2 that I locate from Angie's List or local google searches. My trusty flooring guy was from Angie's List. While a lot has to do with the work they can do, the rest has to do with personality. If you do a good job and I think we work well together, you're in like Flynn. If you do a decent job but I find you to be antagonistic, you need to go away. I spend a lot of time with these people and I can't deal with people that cause me more stress than necessary. If I'm working with someone new, I admit that I do hover and ask many questions. I make sure they know I'm a picky client and expect it done right.
How do you decide what to hire out vs. do yourself?
My very basic rule on this one is if it has to do with structure, plumbing, or electrical, I call the pros. I'm only willing to deal with aesthetics (tiling, light woodworking, painting, etc). Even then, I can't do it all myself so that's when I start weighing time vs. $$ and that's different on each project. I don't have time to tile 2 bathrooms, a kitchen, and an entry way all by myself and have the project done in a timely manner. So I'll take on a tiling project or 2 and hire out the rest. I generally make it known to my contractor that if I'm running out of time, I may have them take over one of my pet projects, or alternatively, if I'm running out of money, I may cross an item off their list and do it myself. I know it's possible to frame walls and hang drywall myself, but you know what? I just don't want to. If I try and do too much, these flips would never get done (*coughlikemilliecough*) so I really need to work on improving my delegation skills.
How do you determine your timeline?
Seasons definitely have a HUGE part in this one here in Massachusetts. When we bought Millie late last summer, we talked about when we wanted to have it back on the market. We could have rushed to get her done faster and hired out more of the work, but that would have had us listing right around Christmas. Christmas is not exactly a peak real estate selling time. We decided to take a bit more time so that we could get her back on the market early Spring when the market was hot, which totally worked in our favor. Aside from seasons, timeline requires thought and planning, just like determining the budget for the projects. How much work needs to be done? What can be done simultaneously (scraping wallpaper and rough plumbing and landscaping), and what needs to be sequenced (rough plumbing before drywalling before tiling). If we want to have the house back on the market by a specific date, I look at all the work and see if its feasible. Admittedly, this one may be my toughest part. I always seem to under estimate how long painting is going to take or something gets pushed back for some reason and throws off other planned items. No matter what you're renovating, this always happens though, so just be prepared. If you want a project done by X date, expect it to be actually done a few weeks later (and try to plan accordingly). Ce la vie renovations.
Are you on site pretty much every day?
You betcha. Just because I work for myself now doesn't mean that I don't get up, put on my boots and head to work. In fact, I work more hours and harder now than I did at my old 9to5. I'm there usually 5 or 6 days a week painting, fixing, tiling, etc. The beauty is that since I'm the boss, I can be flexible when I need to or pop over to my sister's for an extended lunch and cuddles with the niece and nephew. I'm working towards being able to be on site half the week and working on design clients the other half, but it's a process. Now that I have a group of contractors that I trust, it'll be easier for me to take a step or 2 back, but as I already mentioned- delegation isn't my strongest quality. I'd always prefer to be there to make sure that even if I'm not doing it myself that things are getting done in the way that I was envisioning.
Do you feel more confident now that you have a few projects under your belt? Does this translate into making bolder decisions or a willingness to take on bigger/more complicated projects?
Yes to all of that. Clark, the first flip, was a very good one to get my feet wet on because it didn't need much. Clark was like taking a dip in the kiddie pool and Millie was a cannon ball into the deep end. Each flip thus far has needed more work which means a bigger budget and hiring out more. It worked out that we've ramped up gradually from flip to flip so now, I can be a bit fearless. If the numbers work, I'll figure out how to fix the house, even if it's falling down!
How many projects would be your “ideal” number per year?
My answer here varies by the day, but it would be nice to have 3 projects completed in a year. If I could be much less hands on, I wouldn't object to 2 at a time. It all comes down to $ though. If we find 2 houses that we think we can rescue and we have the funds to make them both happen, we'll see!
Do you feel like you make enough profit in the end to make a decent living?
Yes, although flipping isn't for the light hearted. It's a bit nerve-wracking to get 1 paycheck every 6 months or so, but it's pretty rewarding when that does happen. Since I'd prefer not to share the actual numbers, I'll share this pretty little graph.
As you can see, Millie has been the biggest investment, but the biggest return. Frankie was a bit of a hiccup, but we still ended up in the positive, so it wasn't a waste of time or money. Hubby and I have always talked that flipping is a "get rich eventually" scheme, not a "get rich quick" scheme. Flipping isn't where our plan stops, it's a tool to get to the next steps. Eventually we intend to fix up a few properties to rent out, but while I can still be more hands-on, we'll keep 'em flipping!
Next Friday, I'll wrap up the Q&A with a few fun flipping questions. For now, however, I'm off to Disneyland Brimfield!