What the hell was this contractor thinking???

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01. so it's pretty common for me to get asked hey Kevin how do you find good contractors how do you deal with headaches in rental property renovations or you know what renovations in general see most of us in our lives we plan to probably own some form of real estate whether it's your own place that you want to renovate or rental property or apartment buildings whatever and you got to deal with a handy folk you got to deal with contractors you got to deal with people dealing with people is funny because you know as humans we we make a lot of mistakes well I checked it on this property briefly I'm like two minutes to pop my head in this morning and I saw something that I wanted to share now I've got a little bit more time so I want to bring you along with me and show you how I handle problems when they come up and some of the rules that I follow when it comes to investing in real estate it is dealing with remodels and contractors in general because look I was just in San Francisco doing the real estate investing crash course over at the Fairmont which was really really great but one of the questions that came up at this event that comes up pretty much at all of the real estate investing crash courses I do it even comes up in the real estate investing course although I have lectures teaching this is how do you prevent problems how do you actually deal with them and how do you get contractors that just aren't gonna screw up all the time and the easiest thing for me to do is just show you so here we go we're rolling up on this place right now and we'll start I'll show you a few small problems and then we'll go to the bigger one this place my goal was to have photos done this week and get this thing rent ready problem is I was in Puerto Rico for five days then I was in Ohio for about four days and then I went to San Francisco for four days did the real estate investing crash course out there at the Fairmont in San Francisco and I've been gone for a while so when I'm gone one of the downsides is you know things can sometimes come to a stop and one of the things I kind of forgot to do is and this is just you know I said humans make mistakes one of the mistakes I made is I forgot to actually hire the concrete person to pour this concrete hi hey it Evan you know that's gonna delay things a little bit obviously but I'm not so worried about that because I've already got a guy I've already got a price I just I just never said go as well that is one of the downsides of not being local to your real estate you know one of the things I always teach as well in the real estate investing course or my programs is you want to be local to your real estate you know if you have to get on a plane to go visit your real estate it's very difficult to be reminded oh that's right you know that's something we still have to do or that's something we added you know it's one thing to sit on a computer and a spreadsheet and try to plan everything out and pretend you've got everything set squared away that's another to actually go to the project can go didn't think that would happen or didn't think that would turn out that way and then that way you can come and fix it or deal with it in fact here's a really good example the painter I use he's really really good he's affordable does a great job he gets the quality paints that I want him to and overall he does great I mean when I look around I generally love the work he does but sometimes it's either him or some of his guys either like the the you know that the tarp or whatever gets blown away and then stuff like this happens you know there's some overspray that comes on the concrete that kind of stuff drives me nuts and I don't like leaving properties like that so I've kind of come to expect some things like this to happen and you know initially you might think to yourself oh my gosh like that's terrible hire a different contractor but then you have to evaluate oh wait a minute great pricing I've built a relationship with this person and basically during the touch-up phase I see these things again that doesn't work if you're just trying to renovate off a spreadsheet and put blue tape over and then just tell them hey go clean it and then they scrub it and if they learn to fix it and stop that from happening in the future great that's at least my hope but I kind of just expect that you know what no matter who the contractor is they're always going to be little mistakes and that's something that has frustrated me but I've kind of just grown to get used to I found that honestly no matter how expensive the contractor is or how expensive the painter is or how expensive the drywall er is they're always going to be these little annoying problems the heck is this like honestly this I didn't see this earlier why why like why is this but anyway setting up the expectation for touch-up work is something that I've just gotten very used to like for example this looks really nice to me but obviously we're gonna have to come remove the lead so I've gotten pretty used to coming out to my projects my renovations and just realizing okay I hired the painter to paint the fences I hired the landscaper to put in grass and I hire people to do work and sometimes I make mistakes and I forget things but then when I come out here I can send a few quick text messages hey concrete person you're ready to go hey landscaper need a little bit of touch-up hey paint person all right ready for you to come to touch-up because I've sort of built in to the way I renovate that you know what I know contractors are going to end up having to come back and do touch-up I don't lose sleep over this stuff I don't get anxious I don't get stressed out I just look and go no problem you know they should all be able to come back this week concrete should be done this week this place will be rent ready by next Monday or Tuesday that's including this problem that I'm about to show you which is honestly a little bit ridiculous and before I show you another problem I'm just gonna point this out really quickly this is sort of these are all older cabinets here that we repainted and sort of lightly sanded and repainted with my favorite paint color and then obviously put the hardware on a lot of people would look at this kitchen before and say oh my gosh you got to throw that out one of the problems I had though was I really wanted to put in a built-in microwave but the cabinet wasn't sized for a microwave it was sized for an oven back then so with the trim kit and the microwave in there was still this large and gap underneath and look what we actually did we built a custom drawer right underneath it which pretty nice some sliders on guides and everything and now you look and go wow you know this is a pretty effective way to keep this kitchen intact without having to demo the whole kitchen and still have things look really functional and nice you know a lot of people look and they go oh my gosh should keeping the cabinets that's being a slumlord you know I look at this and go no actually another big tip for dealing with contractors is do less the less you do the less problems you're going to have because pretty much every project you pick up you're going to have problems so to me I look at these cabinets for example and go okay well if I'm gonna tear out all the cabinets what extra problems usually come up I'm probably gonna have to replumb the walls that has read leveled the walls make sure everything's straight I'm gonna have to do a lot more drywall work maybe you're gonna have to rearrange where outlets are where switches are and basically your project can balloon very quickly it's kind of the same thing as when people are like oh yeah yeah we'll just go ahead and remove that load-bearing wall right there and then they realize oh wait now I have to hire an architect and that's gonna take me six weeks then I have to hire an engineer and that's gonna take me another two weeks then I'm gonna have to submit it for plan review and that's gonna take me another seven weeks to get a response from the city and then if they want corrections that's gonna take another three to four weeks it's a disaster the more you do with construction the more setbacks you have and the more headaches you have to deal with so that's why I've gotten to the point where I look and I say hey you know what what's my solution and I'm gonna show you another one here but what's my solution towards dealing with contractors well I've already given you a few one simplify your projects and number two be local so that when you visit the jobsite you can shoot some quick text messages out and say hey you know ready for touch up on this hey would you mind coming back and doing some touch up on this and then you make that final payment so there's actually a third rule don't let payments get ahead of the work I always make sure there's a balance left outstanding when it comes to making payments so that way they're like hey you know I can I have the rest of my money Kevin let me go visit the job and then you do a walkthrough you put some blue tape out sure sure you don't knock out the blue tape and then go you know here's your pay this establishes good relationships with your contractors anyway because then they know okay you know they get used to the sort of touch up phase but also the big thing you want to train your contractors to know is hey don't leave things that I have to blue tape you know try to get this done the first time around and you know what as long as they know you're gonna have a touch of phase they're not bitter about you sort of waiting to pay that sort of last ten percent or whatever it is and you know then I do get people that say hey Kevin I'm all for buying these wedge deals I want to buy some below market value real estate I want to build my net worth investing in real estate much like this but every time you know I have to meet a general contractor they're really expensive or they book out eight weeks or twelve weeks and that's one of the reasons I actually like keeping your remodels simple see once you get really complicated with your models yeah you have to go to a general contractor and you're sort of stuck at the whims of a general contractor schedule but I look at a property like this and I say well wait a minute flooring okay I call the local local flooring store I go hey this is the flooring I want these are the baseboards I want go have at it call my painter please paint the inside outside I call my window cleaner go clean the the window so you know like it can even be little text messages or my favorite I needed something done with heating and air or plumbing or electrical I called a plumbing guy or the HVAC guy or the electrical company and the cool thing about those companies is they usually have staff that actually answer the phone rather than maybe a general contractor where you're dealing with that one contractor now you're getting a staff assistant who answers the phone and schedules you a plumber to come out so to me when I look at jobs like this I go okay I got my floor guy I got my painter my electrician now I've got what flooring baseboards light switches outlets fans I got my drywall guy he comes scrapes the ceiling textures that's done windows are clean house cleaners clean the actual property what do I have left you know usually what I have left are things like door handles may be installing the odd door or a vanity the amount of work that's actually left for a general contractor is usually pretty low now if I tore out the kitchen there'd be more work for a general contractor and then I'd be at their whims again but here where I paint the kitchen cabinets and I place the hardware there's just a little bit of handyman stuff see the painter comes in they paint the doors handy person throws on the knob done good to go simplifying the project is a key to actually minimizing the contractor problem for example over here really nice bronzed glass door here for the shower what do we got the painter painted this bronze the plumber installed the new fixtures a refinishing guy did this and the glass company threw the glasses that was like five text messages or emails I didn't even talk to the glass company I just shot him an email I go hey I need a shower door at this place no problem we'll go measure it will email you a bid they send me an email with the bid I go you're good to go here's the lockbox combination go have at it same thing with the plumbers same thing with the refinishing guy like you know I think people get the impression that Oh well real estate should be passive income well look you don't buy a property for $160,000 below market value to where your net worth goes up a hundred thousand dollars day one and expect to do nothing right you have to expect to be able to put in a few hours at least every week just to come by and check in on the stuff but again simplifying your project is a big solution so let me now show you the headache that I'm dealing with here so you'll notice well you tell me you'd notice it you'll notice the stove isn't installed yet which isn't that big of a deal it's gonna go right there it's in the garage it's ready to be installed it's fine I should bring it out right now and slide it in it's not a big deal but I just got back from these trips and check out where my vent hood is my vent hood would pretty much exhaust my food on the countertop it's a stove so definitely a little bit of a problem here and I mean to me this is just an example of pretty much whoever installed this was probably not the main contractor and that's the other thing you get with sort of general contractors or really any kind of contractors anyway is you're usually not getting the really skilled person doing the day-to-day work anyway they're just all employees that come out and do it and there's nothing wrong with that i mean people make mistakes but obviously this needs to be moved now I see the challenge and this is a challenge that I didn't see beforehand but if we are probably going to have to have this installed somewhere right around here to actually be Center over the stove any gonna happen because there's framing here so realistically I need to come in here frame this out another couple maybe foot foot and a half and then actually move this vent over and do it appropriately so that it's correctly centered over you know that now creates some extra work in this project now I wish I weren't gone for the time I was gone because I would have noticed this you know 10 D ago but it's not that big a video it was worth going to the trips and sort of I look at it as hey the trips you know compensated me for not being here anyway because their work trips but now I'm back how do I solve this now well number one is I send a picture to the person who installed this vent hood and I go hey you know what you mind taking this off my bill I'm gonna have to kind of redo this anyway yeah okay so I'm not out any money having them basically start this set up now I'm gonna call one of my handy folk and what we're gonna do is basically frame out a new soffit here move this over reinstall it drywall it paint it solve it done it'll be done in probably a day to day and a half of Labor stuff happens but the other thing this is just another good bit of advice is plan for this stuff this stuff happens sure could I have come in and noticed that way earlier probably but you know what even really good contractors miss some things and honestly I mean I hate to say it but like I kind of assumed that the prior vent would have been vented in such a way that it wasn't funky like that but then I realized we had cabinets there and that's why you know the old vent was vented through cabinets and this one's gonna be a hood so the hood has to be Center where before the cabinets kind of let let the contractors or the builders cheat a little bit so and now I got to deal with that problem but I don't really care it's still an amazing property it's still an amazing deal and I build that into my timeframes anyway my expectations for these remodels are that they usually take me about six weeks to do but I just tell myself I got two months to do it so that way I build in some extra time and we're on time on this deal this deal closed October 4th and I don't think we actually got started on the project until October fifth or sixth and so our two-month date is gonna be right around December fifth or six and the place is pretty freakin much done and for what it was before to what it is now I think I got a lot of good work done even despite the fact that I was pretty much gone for the last two weeks now just a couple of extra notes that are worth mentioning pay your contractors on time but don't let payments get ahead of work I touched on that part but pay them on time is important if they're done you're satisfied with everything pay em I hate to say it a lot of contractors live paycheck to paycheck and the last thing they want or the best thing to make them bitter at you is your not paying them on time so give that money I don't want to wait for you to get paid to get paid themselves so make sure you hire people when you got the money to pay them and seriously this one goes way further than anything else be nice to people it's so so easy to be bitter and upset with contractors and just realize look people make mistakes even the job I just showed you I totally forgot to hire the concrete person it happens all right so what the vent guy totally screwed up it happens the painter did a little bit of overspray happens every single job is like that it doesn't matter how high-end the work is there are always callbacks my father installs kitchens that are worth 300 to 600 thousand dollars so when he gets paid to install a kitchen he gets paid like 60 grand sometimes to install the kitchen like it sounds mind-blowing but yes you can make sixty thousand dollars spending a month installing a kitchen because they're just so high-end it's so expensive and have to be so perfect and guess what even he builds into his pricing for the install to call backs because stuff happens it can't be perfect it's not a perfect world when you realize that and you limb innate that stress a lot more chill good luck out there now I hope that helps you a little bit with your contractors so just a recap as to what I'm doing as soon as I stop recording this is I'm sending a text message to my painter hey ready for touch-up for you sending a text to my landscape or hey ready for some weeds to be removed before photos next week got to get those messages into my cleaners that are gonna come in right after that handy person awesome person fixes the kitchen and then I'm gonna send a message over to the person who installed the vent and go hey you know can we can we get this fixed and off the build all in the same time shoot a quick message over to the concrete person make sure hey we can definitely get this done this week and then have photos scheduled for Tuesday so everything will line up and you know what worst case Friday comes and I need to end up pushing things back to Wednesday no big deal although my goal is definitely to get this stuff done by Wednesday because there's these Thanksgiving Friday's Black Friday I'd like to be done before those days and then it's on to hunting for another wedge deal so there's sort of a realistic set of issues you would run into hopefully you got some advice out of thi link below use that coupon code thx 24 as our Thanksgiving a coupon code to join me in the real estate investing courses so you too can get these deals at below market value it's also and you