How to Plan a House Rehab Project

Whether you are a real estate investor trying to rehab distressed properties to “flip” or hold as a rental, or you are a homeowner trying to maintain more control over your own home remodeling project, these planning steps will help you stay on track and on budget. Learn how the seasoned rehabbers plan each new project and what steps need to be taken in order to keep the project on track.

1) PLAN THE SCOPE OF YOUR PROJECT. You will need to break the project down by each element. For example, if you are planning a bathroom rehab, then your list will include things like: move and replace toilet, enlarge the shower and add a separate bathtub, add a privacy “pony wall” between the new vanity and toilet area, add built-in shelves or linen storage, add new lighting, etc. This will allow you to decide what type of specialized sub-contractor or laborer you will need for each element of the project, and allow you to get more accurate quotes from your experts. You will also want to draw a rough sketch of your new proposed layout, along with ideas on the types of materials you want to use (tile or linoleum on the floor, tile or fiberglass inserts for the shower and tub surrounds, solid vanity countertop or tiled). Take accurate measurements to include in your rough sketch, as you will need these for estimating purposes for sub-contractor quotes, permit paperwork and the materials list.

2) RESEARCH, INTERVIEW, GET ESTIMATES FROM AND NEGOTIATE WITH YOUR CHOSEN SUB-CONTRACTORS. This will be your most important step because it will make or break your project. There are many shady characters out there, so please check references for each sub-contractor and expert laborer that you hire. Remember, these people will be in your house every day, and you will have to deal with them when problems arise. Never hire anyone that wants to be paid upfront, does not have his/her own tools or cannot afford to purchase the basic materials to get the project started. You can choose to control costs by purchasing supplies and materials as deemed necessary by your subs, or you can have them include all materials in their initial estimate. Just know that if you add to a project or change your mind on something in the middle of a project, you will usually incur higher costs. Make sure in your research and reference verification process that you ask candid questions about your subs such as: “Did he show up each day on time and complete the project in the originally quoted time frame?”, “Did she stick to the budget and original quote, without any surprises or threats as the project progressed?”, “Did they leave a clean work environment each day before they left, taking all debris and trash with them?”, “Would you hire these people again?”. Good sub-contractors will help you outline the needs of the project and bring to your attention anything you might have missed in your initial assessment of the project before they begin work.

A good place to start your research for outstanding workers is with other people you know who have tackled similar projects. Another great place to find subs is at other job sites and home-building sites. Ask around at your local home improvement store or actually troll the aisles for experts you need. Pay attention to the signs on the side of work trucks/vans as you drive around town. These are all great ways to find sub-contractors. Always get at least three bids for any project element, before you hire someone. You don’t necessarily have to take the low bidder, but check the references and then go with your gut, and get it in writing. Note: in order to maintain the time frame for the project, consider including an incentive clause to the contract (add 5-10% to the contracted price if they finish early.) You can also add a clause that penalizes the sub-contractor (deduct $100 per day/every day the project does not complete on time).

3) DEMOLITION AND SITE PREPARATION. Proper demolition and site preparation is essential to start a clean project. This allows you to the see “the bones” of the structure/room before any remodeling takes place. Check for load-bearing walls before tearing down any existing framing. Make sure there are no plumbing pipes behind walls you are smashing a sledgehammer through, and always make sure the water and electricity are shut off during any demolition procedure.

You will also have to plan for trash and debris removal. Do you have enough trash to warrant renting a roll-off container (large dumpster)? These are rented by the cubic yard and can run from $250-$700. Will your sub-contractors haul off the debris and dispose of it for you for a fee? Can you haul it yourself to the local dump? These are all things to take into consideration that will affect your budget.

Once the demo is complete and the site is clean, take measurements again and go over your design to make sure you can now make an accurate materials list. Double check with your sub-contractors to make sure they don’t add anything once they’ve started.

4) START THE PROJECT, MANAGE THE PROGRESS AND INSPECT EACH PHASE. You are now ready to coordinate the sub-contractors and begin the work. Once the demolition is finished, it is time for the “rough-in” and framing. This is where the plumber, electricians, and other skilled subs put in the pipes, wires and substructures. This will allow you to make sure that all walls that need to be opened or torn down have been done so that new plumbing, wiring, and ductwork can be added. This step will also include any additional framing required to install materials like new windows and doors, ceiling fans, built-in cabinetry, etc.

Once the substructures are in place, you can continue with the drywall or paneling phase. This is where the walls are formed, sealed, textured and painted. If you are doing a bathroom project, this is when the tile would be set on the floors and walls.

The next step is to install the flooring, cabinets, and countertops along with the wall/door/window trim (except for carpeting, which should always be last). Doors, windows, and trim should also be sealed with caulk and painted to create smooth seams.

Next is the “top-out” phase which includes installing fixtures such as toilets, sinks, vents, outlets/switches, hardware, faucets lighting, and carpeting. You’ll want to test everything to make sure it works before clean-up, and adjust items like doorknobs, faucets, etc.

The final phase is the clean-up. Never pay a sub-contractor until he completely cleans up his portion of the job site. Painters should touch up all mistakes and clean up all drips, electricians should make sure that all switches are flush with the face plates, etc.

5) FINAL WALKTHROUGH AND PAYING THE SUBS. Now that the job is finished, you’ll want to get down on your hands and knees and inspect the work completed. Has everything been caulked and cleaned? Do the seams on the trim align correctly, do the outlets and lights work and have the plumbers blown out all debris in the water lines, before re-attaching filters and faucet heads? Go over the contracts again with each sub-contractor and make sure they have completed everything in the contract. Do not pay anyone until you are 100% satisfied with their work. If you pay them and then decide that something is not quite right, you will be incredibly lucky if they come back.

Tips & Warnings

Get everything in writing and make sure that all parties involved understand the terms of any contract.
Never pay anyone before the work begins and not until the job or phase is completed to your satisfaction.
Check references and always get at least three estimates on any work to be done.
Take pictures before the project starts, after demolition and throughout the entire project to chronicle the progress and use for future reference.
Label and sketch all sub-structures so you know where all of the pipes and wires are behind the walls, in case you need to make a repair down the road.
Trust your instincts. If you get a bad feeling about a potential sub-contractor, then do not hire that person, regardless of how low his estimate is.
Never pay anyone before they have completed a job. Never. Never.

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