If you have a day job, is the rehab something you can hand off?

Question

The part of BRRRR I get stuck on is the middle. Buying I can do on weekends, renting I can pay someone to handle, refinancing is paperwork. The renovation looks like it wants my Tuesday afternoons for three months, and I already have a job I like.

So the choice as I understand it. Hand the rehab to a general contractor on a fixed scope, or to a project manager who runs the contractors for a fee, and accept that the fee comes out of the same margin the refinance depends on. Or run it yourself and accept that the schedule owns your evenings, and that every decision made without you costs a day of waiting.

People who've done both, which one actually kept the deal alive? I'm honestly not sure whether the delegation cost is a rounding error or the thing that turns a 9k leftover into a 25k leftover.

samantha_ruiz · Accepted Answer

I ran the first two myself and hired a project manager from the third on. The fee was 10% of the rehab budget, so about 5,200 on a 52k scope.

What I got back for that wasn't quality, the finish was about the same. It was calendar. My self-managed second one ran 19 weeks against a 12 week plan because I couldn't be on site to make small decisions, and the delay cost me interest on hard money plus two months of rent I never collected. That was bigger than 5,200.

Where it bit me is that I stopped learning. Deal five, a subcontractor walked and I didn't have the relationships to replace him myself. @marlow, if you delegate from day one, be honest that you're buying time and not building the skill.

chriswalton8 · Answer

Can someone spell out the difference between the GC and the project manager here? I've been reading about these deals from the money side and I've assumed the GC was the one managing. If you're paying both, what does the second one do that the first one doesn't?

aaron_fitz10 · Answer

@sable, my understanding is that a GC prices and delivers a defined scope with his own crew and subs. A project manager sits above that and represents you, checking work against the contract, approving draws, chasing the permit office. On a small single-family rehab with one competent GC, the second layer is often redundant. On a scope split across four separate trades because no single GC would take the whole thing, it isn't.

Which is the part I keep landing on for myself. The delegation question is downstream of what you bought. A gut rehab needs management. A paint, floors and one bathroom job mostly needs someone to show up and check.

devon_pierce · Answer

That's how I'm screening. My list has a hard filter now: no roof, no foundation note in the inspection, no permits beyond electrical. It rules out a lot of the deeper discounts, and I've watched two properties I passed on go to people who probably made more money than I would have.

I'm fine with that for a first one. The lighter scope also gets me to the tenant and the refinance faster, and after reading this room for a while I've decided that months are the expensive part, not materials.

jordan_ellis2 · Answer

Six months in and no deals yet, and this thread is the clearest argument I've seen that the rehab you choose decides the workload before you hire anyone.

If you have a day job, is the rehab something you can hand off?

5 replies