Find A General Contractor To Bid On Your Hawaii Rehab Project
If you’re just starting out with rehab projects, it’s a good idea to hire a general contractor to give you some preliminary bids. I find it best to have the contractor bid on a home before I even write an offer. That way you reduce the need to renegotiate later if you underestimate the needed repairs. Ultimately, however, you should gain enough experience to walk through a property in 30 minutes and be able to reasonably estimate the repair costs.
Although prices vary between contractors, not all contractors are created equal. The cheap contractor may cut corners and will end up costing you more money in the end. I would not recommend choosing on price alone. Instead, try to find someone who is honest with their bids and sticks to their deadlines.
When dealing with contractors, communication is vital. Rehabbing a property is costly, and the more time it takes the more it costs. If you can’t depend on your contractor, you could end up losing big time. Make sure whoever you work with knows that you mean business. You should ask for referrals from fellow investors. Inspect work they’ve done elsewhere.
Understanding How To Rehab Your Hawaii Investment Property
The reason you should start out with a general contractor is to get a feel for how a project works. Follow them around, ask a lot of questions and don’t be afraid to get your hands dirty; just don’t get in their way.
Do your due diligence on the lingo/terms of a project. You don’t have to go to construction school, but understanding what’s going on will save you money. Take note of tools and techniques a contractor uses to get a job done fast.
How To Create A Hawaii Rehab Team
After learning enough to feel confident, you can take the general contractor out of the equation if you wish and start hiring sub-contractors on your own. Many investors I know used a general contractor early on and then moved on to managing the project themselves once they gained some experience. You may need to get your own GC license to do this, but it will save you money in the long run. Ultimately, it’s up to you to decide whether you want to spend time managing your projects or if you want to pay a GC in order to free up your time for other entrepreneurial activities.
To start you will want a good:
- General Handyman
- HVAC Guy
- Drywall/Siding Expert
- Flooring Guy
- Cabinet Installer/Painter
Your general handyman should be the backbone of your team. If you can find a great handyman, it will make your projects that much easier. A good handyman should be able to handle much of the basic HVAC, basic carpentry, painting, flooring, etc.
Jobs that a specialist would charge anywhere from $60-$80 an hour, a handyman may charge $20-$30 an hour for the same work. Just be sure to keep the licensed specialists for the jobs that need a specialist permit, and keep your unlicensed handyman out of those areas.
Common Rehab Pitfalls To Avoid
1. Inspections – After your rehab is done, hire an inspector to go through the property before you put it on the market and fix everything he recommends. The last you thing you want is a buyer’s inspector throwing up red flags once you’re under contract.
2. Don’t do too much over ‘over-rehab’. Remember, this property is an investment and you’re not going to be living there. Don’t tear down walls that don’t need it. Don’t rearrange floor plans unless you have to. Stick to your budget! Have a look here at the rehab techniques in Honolulu that give you the most bang for your buck.
3. Re-use materials as much as possible. New cabinets are expensive. Instead of going brand new, if you can, put new knobs on the old ones and repaint them using a spray gun. This could save you thousands! Remember, though, the finished product still has to look super attractive to a new homeowner!
When doing a rehab project keep these three things in mind: It will cost more than you think. It will take longer than you expect. It won’t sell for as much as you hoped. If you spend less, take less time and sell for more than you expect, you’ll have more money in your pocket. If you expect too much, you may end up with less profit at the end of the day.
So do your homework, manage expectations and choose a reliable contractor who understands your goals with the property. Good luck!