Renovations 101: Estimating Costs, Working with Contractors, & Managing Rehabs
Real Estate Rookie
Deep Dive
What is Serena Norris's background in real estate and home renovations?
Serena Norris has completed over 200 real estate deals, including more than 130 flips, in the past 10 years. She has also worked on BRRRR (Buy, Rehab, Rent, Refinance, Repeat) projects, with 30-40% of her flips turning into long-term rentals. She currently owns a dozen long-term rentals and one Airbnb.
What are the key roles Serena Norris took on in her real estate partnerships?
Serena took on roles such as design, quality control, project management, systemization, underwriting for acquisitions, and acting as the real estate broker. She was responsible for managing contractors, overseeing rehabs, and ensuring smooth transitions from acquisition to disposition.
How does Serena Norris approach building a pricing sheet for a new market?
Serena starts by reaching out to her network in the new market, particularly those actively involved in flipping houses. She analyzes deals, creates a scope of work and budget, and seeks feedback on her estimates to understand current market rates. She also collects multiple contractor estimates to refine her pricing sheet.
What is Serena Norris's method for creating a scope of work for rehab projects?
Serena uses a detailed 400-line item template for her scope of work, which includes all possible tasks. She deletes unnecessary items for each project to ensure nothing is missed. The scope is organized by order of construction, starting with initial services like trash removal, followed by exterior and interior work, and ending with pre-listing tasks.
What are the most common mistakes new investors make in rehab projects?
The two most common mistakes are starting rehab projects without proper planning and feeling the need to be on-site every day. New investors often rush into projects without a detailed scope of work or budget, leading to cost overruns and delays. Additionally, being overly reactive instead of proactive can hinder project efficiency.
How does Serena Norris manage contractors remotely?
Serena manages contractors remotely by taking weekly photos of the property to monitor progress and quality. She communicates proactively, sets clear expectations in the scope of work, and includes policies like returning keys to the lockbox and setting heating below 65°F when leaving. She also incentivizes timely completion with bonuses and penalties for delays.
What is Serena Norris's approach to handling contractor disputes?
Serena approaches disputes with contractors by assuming good intentions and seeking to understand their perspective. She asks questions like, 'Do you have a plan for this?' and provides specific feedback. When there are misunderstandings, she takes accountability if the scope of work was unclear and negotiates solutions collaboratively.
What tools does Serena Norris use to estimate material costs for rehab projects?
Serena uses online resources like Home Depot and Lowe's to estimate material costs. She looks at mid-range products that align with the after-repair value (ARV) of the property and calls installation companies to get quotes for labor. This helps her build a comprehensive budget for each project.
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