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Spring is almost here, and for active fix & flip or wholesale real estate investors, this is often a time of increased activity. Even rental property investors who handle their own rehab work normally plan and shop for projects during the spring and summer in preparation for seasonal move-outs and move-ins.
In many areas of the country, winter weather slows down projects and increases costs. Come spring, we ramp back up – and our competition is doing the same. We must remember that the contractors and repair companies we employ for our rehab work will be getting very busy.
These vendors have their own independent businesses and employees they want to keep busy. According to the U.S. Census Bureau, money spent on residential improvements and repairs is higher in the second and third quarters. During the off season, companies will actively seek work, sometimes at a discount, to fill their work schedule. Once the demand for their services picks up, however, you might find it challenging to get the help you need when a new project hits your radar.
Even big box home stores like Home Depot and Lowe's get extremely busy during the spring and summer. It's harder to find an available associate on the floor, and you're less likely to see discounts. There are shortages of the most popular materials, and supply lines slow down - you'll need to allow for possible cost increases or job delays.
Involve your contractors early
Even if you don't have work for them at the moment, keeping your contractors in the loop about your marketing and home shopping activities can be a very smart move. If you have subs or contractors who regularly work with you, they might prefer to fit you into their schedule rather than bid on other jobs, so you'll want to help them to plan.
If you own rental properties, use your rehab contractors and repair people when possible to maintain those units. Sometimes general contractors will not be thrilled with small jobs, but they may refer them to their subcontractors to keep them busy and indebted.
Letting your vendors know about homes you've targeted and involving them in estimating rehab costs can go a long way; if they see a potential job and can reasonably estimate when it will kick off, they'll be inclined to make allowances in their schedules for your preferred work. Of course, this only works for so long if you never manage to get your projects off the ground.
Be an active referrer
Send business to your contractor partners. Let them do your own personal home work, and recommend them to relatives, friends and business associates. Build goodwill by being sure they know where the business came from. If you have stable, reliable and reasonable contractors, it's worth your time to be on the lookout for small jobs you can send their way - you'll get their appreciation and their consideration when you have a project jump forward in your timeline.
Ask for their help
Tell your contractors that one of your goals is to help them with business so your relationship can grow. Ask them to be on the lookout for possible rehab purchase opportunities and send them your way. Report to them what you find and explain why you either decided to go after the investment or not; the more they know about what you want, the more value they can provide in referrals.
Once you've built and tested a reliable and affordable rehab team, don't risk having to start over or fill gaps. Do what you can to keep them loyal and available when you need them.
