Over the next month and a half (fingers crossed), I will be providing a weekly journal of our latest flip. I will be starting with the day our bid was accepted, until the day we list the property. I am keeping this journal for three reasons: 1) to hold myself accountable for the performance and timeline, 2) to be able to reflect back on the experiences after the house is completed, and 3) to share with you, the BP community. I know every flip is different, but I hope you are able to learn something helpful through these journal entries.
Day -17: Whoohoo! We heard our bid was accepted. Now the craziness begins, as we have approximately two weeks till closing. The very first thing I did was pick up the phone and call my business partner, who also happens to be the Project Manager (PM), and most importantly is the BEST Dad a girl can ask for (note: he's my Dad!). I let him know the good news, and follow with the need to set-up some calls to start outlining our plan for the next two weeks. He is available for our first call tomorrow, so until then.
Day -16: The excitement has worn off, and anxiety moved in its place. Both the Agreement of Sale and Seller's Disclosure are signed-off, so there is no turning back now. I speak with PM and we go over the work we want to do, and highlight the areas for which we need sub-contractors. We wrote in our agreement with the Seller, that we want two days where we can bring in sub-contractors. I thought this would be beneficial for two reasons: 1) we should know a more accurate rehab cost and timeline, as the estimates will come in prior to settlement, and 2) we will not waste time getting bids after settlement. I started putting together a document with the lists of subs from which we would be soliciting bids. I also researched some unknowns (township permit requirements, appliance pricing, and a few subs).
Day -15: Had a call with PM today. We started a list of questions we have for the homeowner, as well as, points to look at in the house when we go there for one of our days. We also made a list of Exterior and Interior work. This is a rough start, and will be finished before we close. We have two semi-major changes: 1) Kitchen, and 2) Master Bath. With the Kitchen we are refinishing the cabinets, moving the counter-top stove (which is currently on the small island), adding granite, replacing the microwave oven combo with a stainless steel, removing the island (as it is too close to the back cabinets and refrigerator) and making a breakfast bar, and potentially changing the backsplash (neither one of us can remember the current backsplash color). With the Master Bath, we are more uncertain of our changes. We are definitely replacing the countertop and fixtures of the vanity (we might change out the vanity all together, or alternatively, we might paint the vanity). We are adding seamless glass to the shower. The unknowns are the bathroom flooring, and tiling around the bathtub and shower. So basically, is it a full gut, or partial? Other more minor changes to the house include: minor exterior stucco work to the front of the house, minor roof repair, paint the entire interior, refinish all of the floors, replace the carpet in the basement, update some of the bathroom fixtures and lighting throughout the house. There are also a few fixes we are not sure if they will be needed: exterior landscape trimming, two concrete slabs near the pool have a few cracks and are sinking, MasterBedroom closets might need some updating, and a few doors might need to be replaced.
Day -14: Had a call with PM this morning. We went over what subs we spoke with and who we are waiting on call backs. We have set-up our first day of contractors to come in for bids, for this Saturday. Although we have used a majority of the subs before, for most jobs we are getting at least 2 bids, to make sure our pricing is still competitive. We also agreed that the Master Bathroom needs the money put into it. So we will find a way to get that handled. We are getting a wide range of quotes for the stucco on the front of the house. This may prove to be a new risk, so we need to look into this a bit further to solidify our plan. Another discussion point that came up during one of the sub calls, concerned the floor refinishing. On the last house we waited to do the floor refinish last. This is quite standard, but what we realized, is during the sanding process, a lot of dust covered the fresh wall paint. Thus, for this house we are most likely going to do the sanding and the first coat of the flooring first, and then after all other interior work is complete, we will come back and do the second coat of the flooring. Administratively, we also needed to pick a new title company. Too long of a story for this posting, but our last deal with our normal title company did not go well, so we now are on the hunt for a new one. Will be decided today.
Day -13: It wouldn't be a flip, without weather becoming a factor! The forecast for Saturday (the day all of our subs are coming for estimates) is calling for a major snow storm. Of course it is! We are going to make a decision on Friday on whether or not we will postpone it till Sunday. Also talked to several Stucco people today and it seems that the stucco issues might be resolved very easily. Possibly even PM can resolve them, but we will know better once we get a few more people's opinions. Not sure if I mentioned the house has a pool. So I got in touch with the company that completed all of the servicing for the owners, and confirmed the history of the pool. There was a comment about the heater being repaired last summer. It was also noted the equipment is the original equipment (2001). We will need to look at that a bit further, as well. Of course I touched base with PM multiple times during the day to provide these updates. He also provided a few updates concerning the subs he spoke with. I once took a seminar (back when I worked in Pharma) that said good project management is 80% communication; I definitely believe we are reaching that quota!
Day -12: Zeroing in on all of the subs that we are bringing in for estimates. It looks like the weather may still pose a problem; however, we are going to wait one more day to make the decision. With respect to the Title Company, they requested a Good Standing Certification and a Corporate Tax Lien Certification. I was a bit confused on the need for the first document, as when I researched it online it seemed to only be for finance purchases, and we are paying in cash. With the second document, I explained we are a newly formed LLC and this will be our first year filing taxes. The Title Company is going to look into both documents with their underwriters and get back to me. Hopefully that one simple phone call, and a quick google search, saved us $165! I will keep you posted:)
Day -11: UGH the weather!!!! We had to postpone our day of bids, as of course the FIRST snowstorm of the season is set to hit Friday night through Saturday. Therefore, we have postponed it to Sunday afternoon. One of our subs went out to the house today (thank you so much current home owner) as they were bidding on exterior concrete and were concerned about accessibility with the snow. Other than a few calls to reschedule all of the subs, not much more to report for today.
Day -10: PM and I failed to connect today. The time difference between us doesn't help (that is for a different posting). So I worked on a lot of administrative documents. If you and your team have yet to learn about Google Docs, I highly recommend you go to the site right now! It is absolutely amazing, as you can share documents with someone instantaneously. With respect to the documents I worked on today, I worked on our Master File on the house. What is our Master File on the house? It is an excel spreadsheet with multiple tabs, so all of the major information is in one place. The first tab has our number analysis. The second tab has the original estimate, when we walked through the house. The third tab has a listing of the Subs needed, multiple options for each job, points we need to look at when we go back for one of our two days, and schedule for when the Subs are coming out to give their bids. The fourth tab is a material list, specifying what is needed, who is responsible (us, or the Sub) and the cost (only tracking if we are providing the material). The fifth tab is one type of Timeline Manager, that looks like Microsoft Project (again if you don't know what Microsoft Project is, spend a few minutes watching youtube videos, and you will significantly increase your project management skills, and thus the project timeline). To be honest, I can't imagine managing a project without it! The sixth tab is another type of Timeline. It is not a project management tool, but more like a calendar by day of what “should” be happening. As an aside, I have witnessed people claiming they are managing a timeline for a project, just because they have a calendar of what “should” be happening that day. That is not project management. The reason why I say this is good Project Managers are able to not only see what is going on at that moment, but how it fits in the big picture (meaning how it impacts other things, good or bad). If you are looking at just a daily/weekly view of a project, you will fail to see the full impact a half-delay on one simple task could have on the entire project. Enough of that rant, and back to discussing the other documents I worked on today. I also customized the following documents: Independent Contractor Agreement, Lien Waiver, and I created a New Sub Checklist document. Ok this post is getting a little lengthy, for what I initially intended, so that is all for now!
Day -9: Good thing we rescheduled the Subs, as the storm hit hard! PM and I don't even know if tomorrow is going to work! We only spoke briefly today to confirm that we might need to reschedule Sunday as well. Decision will be made Sunday morning. We also spoke about the color tone of the house. On our last house, we did the trendy light grey walls, white kitchen cabinets, grey granite, blah, blah, HGTV look, blah, blah. However, for this type of house, both PM and I believe the purchaser(s) will be of a different demographic. We believe a tan/brown clean-look combination will not only compliment the exterior, but will also meet buyers' expectations.
Day -8: We spoke today and LM made the call to reschedule for Wednesday. Now time to hit the phones, and let everyone know.