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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.