Wanna Be a Successful Rehabber? Follow This Recipe (Part 2)

From Craig Fuhr, The Fix & Flip Artiste …

In my last post, I detailed steps 1 through 3 of the rehab recipe for success. If you didn't get a chance to catch that post or you need a refresher, check it out now. I know you hungry rehabbers are looking for your next installment - so here goes!

Okay, so now that the framing is 99% complete, your town will more than likely require a building inspection. Following the green light from the inspector, your framing contractor will be looking to get paid – so here’s a HUGE TIP (are you ready?):

Do NOT pay your framing guy 100% of what you owe him.

Why? Your plumber and HVAC contractors will inevitably add large main drainpipes, and big gnarly metal air supply and return ducts as part of their rough-ins. Those rough materials have to go behind the walls, (unless you’re going for that New York “industrial-loft look,” that went out of style in 1985) and those items need to be framed in.

So, your framing crew will have to return for that final framing work. And THAT my friend is why you never pay them 100% of what you owe them following the framing inspection!

Yeah… you can thank me now, but I’m just gettin’ started here!

Following the completion of the framing, and just before you pay the framing contractor – you’ll want to have a site meeting with your drywall contractor.

"Why Craig?"

Well, I’m glad you asked….

Just like each properly laid brick makes for a strong foundation, properly framed walls make for an easy, fast, and clean drywall install. And who better to examine the workmanship of your framing crew than your drywall contractor who has made a living nailing drywall to framing studs?

Do you see how these guys can keep each other honest, thereby saving you a lot of time and money?

In addition to signing off on the framing, your drywall contractor should use this meeting to draw up a complete list of materials that he’ll need to complete the job.

Step 4: Mechanical Rough-Ins

I mentioned the plumber and HVAC contractors above. The 3rd part of any residential mechanical system is the electric.

During stage 4, these guys do their thing. The HVAC installation is the most intrusive, so you’ll want to schedule that first. He’ll install all your ductwork and perhaps even the furnace. The plumber will install all of the water-supply lines to your kitchen and baths, as well as vent pipes and drains.

Just before they are done, call your electrician to get him engaged. The electrical rough-in includes wiring all the switches, lights, outlets, smoke detectors, and other circuits in the electrical panel. The electrical rough-in may also include a new breaker panel (if needed) as well as main electrical lines on the exterior of the house.

As with all of your contractors, your mechanical sub-contractors should always be licensed and insured – and they should come with several pristine references. These guys can kill a rehab, so be sure to hire only reputable firms.

Upon completion of their work, each will schedule a rough-in inspection. When they are each green-lighted by the inspectors, each will be looking to get paid. Make sure you don’t pay each sub more than 1/2 – 2/3’s of the contracted price. You want to make sure you hold back enough money so that they’ll be highly motivated to return to complete the mechanical trim work.

Step 5: Insulation & Windows

It doesn't matter where you live in the country, you need insulation. And thanks to our federal government, building codes are rapidly changing to lay down the law for exactly how much insulation you need – so be sure to check your local building code.

As rehabbers, we make a living finding smaller, leaner, hungrier contractors. I break this rule only when looking for insulation contractors. In Maryland, I use a company called DeVere Insulation. They charge less for labor and materials than I can even buy the materials for (I know that’s horrible sentence structure – but you get my point).

Upon completion of insulation, in most cases, you’ll need another inspection. That’s right – another day waiting for the inspector to come and waive his magic hand to say, “You’re all good here.”

If your job requires new windows, now would be the time in the rehab process for the window install. This assumes of course that you’ve already measured and pre-ordered your windows (which should have taken place in the demo stage or just after framing.

Rehab Tip: With each inspection you’ll get a sticker. If all goes well, the sticker will be green and signed, initialed or stamped by the inspector. If you fail, the inspector will usually post a red sticker, or he will write FAIL on the green sticker. These stickers should be posted in conspicuous places on the job site. In most municipalities, you’ll get a sticker for the HVAC and plumbing, a sticker for the electric, and a sticker for the building. We post our stickers on the electrical panel.

See if you can guess what comes after insulation...

Next time I’ll answer that question for you – and I’ll cover the next few steps! Until then…I welcome your comments and questions.

Craig

P.S. Need a mentor?

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