This is the 5th 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.
In our last blog post, we left off with the Statement of Work for a condo or townhome. This post picks up where we left off and continues with a more detailed Statement of Work for a single family home. We move now into room-by-room budgeting and rehab details for our larger single family flips.
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 “#131: The Big 4 of Project Management for Flipping Houses: PART II” on the Denver Real Estate Investing Podcast
- Watch the YouTube video at the bottom of the page.
- Read the blog post.
The true key to a successful flip is having a detailed plan before you close on the property. We’ll continue our discussion on the final two pillars to our system and how it will save you time, money and contractor headaches. ELEVATION’S “Big 4 Project Management” documents have been continually refined over the past 5 years in projects all over metro Denver in various price points. We’ll dive into the last two key documents to running a successful flip.
- Statement of Work (SOW) – Single Family Home
- Fixtures & Finishes (F&F)
Check out the video to follow along as we discuss how to use this SOW and go into detail on each tab and section.
Statement of Work (SOW) for Fix and Flips – Single Family Home
We make our way from the outside of the home to the inside with the spreadsheet. This more detailed SOW has 15 tabs and once complete, will live on-site in project folders. We start by looking at the major systems and mechanical where we’ll typically spend ~60% of our budget. These items include:
We then go to the exterior of the home where we have roughly 30 line items detailing what is happening with the home. We break down the items into roof, siding, exterior doors, landscaping, and garage. Each section has its own categories, detailed notes, labor source, materials source and SKU. Here is the roof section:
We try to be as detailed as we can with our SOW to avoid miscommunication, grey areas and downtime due to contractor questions or uncertainties. Our project manager is responsible for this document and spends many hours completing it before any construction begins. The time dedicated to this thorough organizational process at the start saves us countless hours of headache as the project progresses. It could take about 4-5 hours to complete a SOW for a 4 bedroom/3 bath single family home.
The detail of the kitchen section includes walls/floor, room specifics, electrical, and extras. We also include pictures of our chosen rehab products to provide visual clarity.
Side note: We order the vast majority of our fixtures from Home Depot. We have ordered from a major online retailer in the past but found that most items (even name brand items) were made in China, and the valves did not match up well and were prone to leaking in the future.
The key to the success of our SOW is in the details. Again, the amount of time we spend planning and organizing our rehab before we start makes the actual construction much more efficient. We even include the size spacers, the exact grout and the type of texture to use for our contractors. Instruction is clear and thorough.
Each tab on the spreadsheet represents a separate room in the home which makes it easy for contractors to locate answers to their questions which saves time and money. We estimate catching an issue or preplanning for it with our SOW saves us three days work.
We walk through each tab of the spreadsheet and make sure all fields are filled out if relevant to the project. Once complete, the SOW is printed out and added as an addendum to the contract with our contractor. A separate copy lives in the project folder onsite at the property. As change orders are issued, they are attached to the SOW.
The next document we use to maximize efficiency and organization for our flips is our Fixtures & Finishes document.
Fixtures & Finishes (F&F) Spreadsheet for Fix and Flips
This spreadsheet was created with the goal of selecting finishes for our flips that have mass appeal to buyers based on the price point of the home. We’ve narrowed down the way we finish out homes to 4 different styles. Each style has all the finishes pre-selected, so we don’t have to reinvent the wheel and start over every time with our homes. Once we identify the style we want for a flip, we add that style’s spreadsheet (which includes all its finishes) as a tab on the existing SOW for the home.
We typically update each style every six months, so we stay on top of design trends. We stay current on discontinued finishes and update the styles’ finishes spreadsheet accordingly.
The four packages we use which are based on the best/widest buyer appeal to sell are:
- Contemporary/Higher End ($500k+)
- Farmhouse (inspired by Fixer Upper and Chip and Joanna Gaines)
We create a system and only change out kitchen backsplash and a few unique design areas (next episode) such as barn doors, tile to ceiling behind sink, ship lap, built in eating areas, fireplaces, pergola, cedar on exterior and window enclosing with cedar when you have older siding.
Our styles are further broken down into plumbing, doors, and lighting. We include the price and a live link to our source, so ordering is fast and easy. We buy all F&F’s using a credit card which gives us a 30 day float and points.
We also have corresponding paint colors that we update once a year. Currently we only use 2 wall colors in our properties which simplifies the process. We use one for the walls in the bedrooms and the bathrooms and the other for all other walls.
This Statement Of Work is not available for download, but you can schedule an appointment to meet with us!
Hopefully this blog post has been informative and given you a ton of knowledge. We have two episodes left in our ELEVATE Your Flip course. This course should serve as a great “Cliff Notes” overview from 30,000 foot perspective.
The next episode will look at our Monday.com tracker which automates every single step of the flipping project.
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 on the podcast.