This is the 6th episode in our ELEVATE Your Flip course. If you haven’t read the previous blog posts, the first episode, Denver Flipping Blueprint, is a good place to start.
The previous two episodes discussed the planning involved in a flip. Now it’s time to put the detailed plan into action! We’ll discuss how to run weekly meetings with contractors, subs, and vendors. Learn how to run a complete rehab project and only be on site 1-3 times per week. Our philosophy of addressing an issue “today” will save you multiple days or 1-2 weeks on the back end of a project. The ELEVATION contractor document suite will be discussed as well as not over improving a property for the targeted sales price point.
This episode covers:
- Weekly project updates
- Design tips for maximum returns
- Staying on budget
- Market sensitivities
This post is part of the ELEVATE Your Flip Course. The course gives you an introduction into fix and flipping properties in Denver.
Three Learning Options:
- Listen to episode “#132: Flip #6 – Running the Flip Project” on the Denver Real Estate Investing Podcast
- Watch the YouTube video at the bottom of the page.
- Read the blog post.
Check out our video of this blog post to absorb the material in video form. It is particularly helpful when we get into our Monday.com tracker application section.
We’re turning our focus from the detailed planning process to how a successful flip of any size is managed on a daily, weekly, and monthly basis. ELEVATION has shifted our project tracker from a spreadsheet format to Monday.com. This new software helps to increase our efficiency as well as contractor and staff communication.
ELEVATION Project Tools
- On-site folders
- Document suite:
- GC contract
- Weekly meeting recap form
- Neighbor flyer
- Lien waiver
- Change order form
We share these documents with clients who work with us on a one-to-one basis.
We standardize our project forms and keep a project binder for each individual flip. We have onsite folders that stay on the property to keep correspondence accurate and timely with contractors.
Our goal is to be onsite at our projects one or twice a week. If you’re organized and have a system, you don’t need to be there everyday.
Flipping General Contractor Contract
We had this contract drafted by an attorney to protect both sides. This agreement is created for each individual project and talks about how the flipper will work with the GC. It includes a Scope of Work (SOW) as an addendum and talks about how changes in the SOW will be addressed. There’s a start date and end date on every project we do. We have incentive clauses for our contractors where if they finish on time, or undertime then they’re eligible for a performance bonus.
We have liquidated damages which is a penalty for going over. What we’re trying to do is establish a fair way to keep everyone on track.
We address payments in one paragraph and break them up based on mile markers. We like to do draws based on percentage of completion. Also we pick specific markers of when a certain aspect of the flip is going to be fixed to set our draw schedule. For example, we may set up a draw payment once demo is complete and another once drywall is hung. We do anywhere from 2-5 payments for a typical project.
Final payment is done when work is 100% done. We also include a clause addressing any defects we might find once the property is under contract and we get an inspection report back from a prospective buyer. We also want to make sure our contractors carry liability coverage, builder’s risk and have workers comp coverage on their subcontractors.
We don’t withhold any taxes and make sure our contractors are aware that they are responsible for paying all taxes.
We like our contractors to provide a little warranty. We usually ask them to cover what is in their SOW for about 9 months.
The contract addresses assignment, severability, successors and assigns, and mediation.
Typically we attach our budget and SOW as addendums to the contract and have everyone sign it.
Contractor and Sub Meeting Recap
When we’re running our projects, my project manager and I use this standard form every time we’re onsite. We fill it in and write down everything we talk about while we’re walking the property. We found that there is so much gray area and uncertainty if things are not written down. We save all previous forms, so we can refer back to them if necessary.
We talk about and document all the property issues for that week including any change orders, surprises that may have come up, and any followup necessary. These forms also allow anyone who was not at the property that day to pull up the form and review what was discussed.
We always keep copies of our neighbor flyer onsite and hand them out to all the neighbors. It says we are a company that is working in your neighborhood and renovating a property. We tell them we strive to have a clean jobsite and work normal hours. We want to be their first contact (rather than the city) if they have any concerns at all with the property or jobsite.
We also mention that we buy properties for cash, pay all closing costs, don’t require sellers to fix anything, and pay a 2,000 bonus for referrals. We tell our contractors to give this flyer to any nosy neighbors who want to peek inside the flip and explain to them that it’s a liability for them to enter but the flyer will give them the info. We don’t want anyone to get hurt, and I prefer they contact me directly. We also don’t want our contractors distracted by talkative neighbors.
Change Order Form
We use a standardized general notes form to document anything that happens with the property. It includes areas for change orders and general note taking.
This is a super important form. We use it in absolutely every instance no matter how long we’ve been working with the contractor. We write down in each line every detail of every payment we make. We get contractors to initial each progress payment and total it at the bottom. Beneath that we have a paragraph that we had drafted by our attorney that essentially says we are paying our GC, and they have paid their subcontractors. If we pay subs independently (eg. roofers), we have them sign it as well.
This prevents unpaid subcontractors from placing a lien on our property if their GC does not pay them. Sometimes we withhold a last payment to a GC if we find out they are not paying their subs.
Monday.com Tracker Applications for Flippers
- Goal is 1-2 meetings per week
- Today’s issue resolved = 3 days saved
- Staying on track & budget
This is a detailed project manager software. We spent years building and perfecting our flipping process. We went from having a 110-step, multi tab spreadsheet and converted it into this Monday.com software. It covers planning, running the rehab, materials and listing prep. It is a subscription-based software that we are setting up to offer through Monday.com to our partner flippers who are enrolled in our partner program.
The ELEVATION board guides you on how to run a fix and flip. We have included anything and everything that you will need to do to complete a successful flip.
Once again, check out our video of this blog post to absorb the material in video form. Fast forward to about minute 22:15. It is particularly helpful here where we walk through the software step-by-step.
We’ve customized and color coded options for every aspect of the flip process. There are multiple timeline views. Our project manager is in here daily doing updates on every property.
We can add real time notes and use this feature to communicate with our team members. We’re trying to get away from texting and emailing to make project communication more efficient and streamlined.
Our next episode in the ELEVATE Your Flip course will talk about wrapping up your flip and includes:
- Blue tape punch list meeting we have with our subs and contractors
- Closing out the project and paying the subs and contractors
- Completion bonuses
- How to successfully prep a property for listing
- Listing a property
- Marketing a property
If you’re interested in working with us, here are options to consider:
- Level I: ELEVATION Academy. Intense 2-day learning academy. In person in a classroom and in the field in Denver.
- Level II: Individual Consulting on a project basis. You fund the purchase of your own property and your own rehab. We help take you through every step of the process. We meet with you 1-3 hours a week in person.
- Level III: Partnership Flip. We work with a client who has a property with good bones. We partner with the homeowner and use ELEVATION rehab dollars, team members, and contractors to run the project. We do a profit share on the backend with our partner who may not even be involved in the flip process but want to share in the profits.
Go to the Denver Fix and Flip Investing Consultation page to learn and more and schedule a call.
Webinar recording – Watch it here or listen to the podcast.