#061: How to FINISH projects AHEAD of timeline, below budget
Read time: 6 mins 21 seconds
“A mystery is a mystery, because of unlearned knowledge” - The Emerald Tablets
Most project management tools suck.
I forget to update it, they’re not always free, I have to train my team to use it (and probably hate it more than me) and there’s usually features missing on mobile.
App developers don’t know your project. They use “project management” buzzwords to make you think it will solve your problems and open your wallet.
These management apps get in the way.
They’re not ready for prime time.
In a nutshell, how do I complete rental rehabs? Create a plan, post a web page and religiously update it with progress photos, dates, and time.
All on one link. Chronological. Then point everyone to it. They’ve seen a web page with photos and text before. It removes friction. The radical transparency makes them feel they’re not being managed.
So simple it doesn’t hurt.
“If you can’t explain it simply, you don’t understand it well enough” - Einstein
I wanted to post this so anyone with zero experience can leverage this to transmute chaos, and create harmony in construction. An intensive process if you have no idea what you’re doing.
A few days ago...
We just started a new construction rehab project on an apartment building. In ceebrstion, thought I would share our “one file, one page” strategy.
I’ve been involved in the apartment industry since 2013 after I left a cushy corporate position where I consulted with medical professionals.
I produced deep data reports where they could analyze their big medical center in Beverly Hills. It’s a bit nerdier than it sounds, but I digress. (A different post for another day)
Construction is different. It’s a game of people, money managing, and material management. All tied into a timeline that bleeds $$$. Fast.
That’s if you don’t produce income....fast. All while taking care of your #1 asset, your customer.
The one who goes to work everyday to pay you so you can eat.
It’s ok to care. Set the bar. It’s ok to set high standards for your contractors. We’re obsessed with what our customer values. They will be the ones who pay for it all in the end.
Did you know Arnold Swartzenegger was a successful apartment investor before he become an actor? According his interview with Tim Ferris it’s true.
The real estate industry tries to make housing a mystery to profit off you. They believe they can profit off a secret, that is not a secret.
Don’t let the news and agents get it twisted for you. “Real estate” is just housing and who has rights.
You can control a piece of land by exchanging a bunch of words on paper that points to ‘physical coordinates’ to where this land is located on planet earth.
When you buy it, you’re buying a contract. Not land. The land was there before you came, and will be there after you leave. The contract just says who controls it now.
Then contract is upheld by the law of the land.
The land is priceless. The contract is traded on the market for a price.
The best part of this is it’s simple math and simple to understand once you cut through the bullsh*t.
The worst part is the physical labor. It’s tons of hard work.
Long hours...contracts who hold secrets...and few people have the energy to do it right.
But those who do it right, can change their lives forever. Change others lives...and never have to work for someone again. Only for the people you give housing to. Who we should respect.
This page is dedicated to the hard work part of real estate.
To point energy in a direction that works. To a desired result.
I’ve lost gobs of money, touched all nasty parts of buildings, did the wrong thing, and got scammed many times more than I can count...and I always place the blame on myself for NOT DOING something I should’ve known.
Order out of chaos
Most of my lessons of life are deeply rooted in psychology from pains I experienced in real estate.
Because 80-90% of success is psychology. The mechanical part, physical part is directed by the mind.
Set precedence early, with yourself.
I’ve already declared that the first 7-14 days will be a lot of tiny adjustments. It’s rosy in the beginning, but it will be hell from 35%-99% done. A race against time.
Never expect a project to follow a straight line.
Problem: All projects are late, contractors quit, you go over budget, you don’t have the money for unforeseen problems, and you forgot to do that one thing on your checklist, and now you don’t the budget to complete the project or worse can’t pay your mortgage.
Vision: The one page that rule it all.
Write EVERYTHING down into one file like your life depended on it. I’m building a shower, how big is that pipe? I’m tearing out a wall, what’s behind that wall? Come back later and organize your one file.
Related Download free spreadsheets for construction.
The more you know, the less surprises. Then be upfront with everyone involved by posting checklists on each room. So the workers know exactly what’s next. When they sleep, their subconcious that owns 95% of their thoughts are working on what’s next.
There are 5 stages to a project. Literally everything you do, falls into these 5 buckets.
1. Concept: buy property, what you will you do with it?
2. Vision: Definition and Planning
3. Do it: Launch and Execution
4. Measurement: Performance and Control.
5. Finish: Collect complaints from new tenant, fix them right away. This was you get a tenant in and generate money, and also improve on anything that was missed.
Write everything about your project timeline, floor plan, and the workplace principles and post it. At the site.
To get everyone on the same page, it’s that simple. I’m amazed at how many projects could have 10x clarity if you posted your principles and “How you do business” and what “You're going to do next” at the entry of the home.
What’s #1 way to control contractors so they know exactly what they’re doing and you get the most for your money with the least amount of time?
Principles of Construction Success
Set up rules of thumb. Be public and transparent.
Explain what you don’t want, what will cause the project to fail, and post it.
Call it house rules.
Here’s a list.
The Public Timeline
1. Post your timeline publically. Time separates events in chronologically order. Allows every to see what’s today, tomorrow, and next week.
Don’t know how something works?
Ask deeper questions.
The deeper you go, the more you understand.
A property’s mystery is unlearned knowledge. You will find everything if you dig deep enough.
2. Have your mission with your principles posted in the home. You’re literally creating the environment for success.
It will take 7 days to get into a “groove of things” for your team to realize how you operate. Set precedence early.
3. Room checklists: Always have a checklist for each room. at anytime you can walk in to the room and see what needs to be done.
Right on the wall. So you know exactly what needs to be done. Once task is completed, check it off.
4. Materials: Always get your materials ready for the contractor’s the the night before or early in the morning. This way you have everything you need immediately. Picking up and dropping off material is a minimum 2 hr job.
5. Work publicly. Be a recorder.
The Power of Transparency. Have a blog page or a trello page with status updates. Lots of photos. This keeps everything in motion while you track of it. It’s like watching one of those time lapse videos on YouTube.
Hourly. Daily. Accounting.
Basically when your contractors feel like they’re being publicly track, they will produce. When you feel you’re being watched, you’ll do do things the right way. No one likes to be judged negatively.
Photos work much faster for us. You can take video too, but it can be hard to actively publish alot of it.
Transparency is key. Start a simple page on squarespace for $15/mo or get a site on bluehost for $5.
6. Find your “per day” cost. Remember it as a rule of thumb.
This is where you realize an hour wasted, costs you money and valuable labor. I’ll kee the numbers small so it’s easy to see how this can shift your mindset.
You have a 3 week timeline.
Mortgage, expenses, and tax:
A) $4800/mo divided by 30 days = $136 per day
B) Your 2 contractors time=
$320 per day
C) Total hourly =
$320/d contractors + $136/d mortgage = $456 per day when contractors work, and $136/d when the property sits.
This project is costing us $456 per day not including my own time.
If contractors work 20 days per month is $5400/mo + $4800 for my expenses on house = $10,200 per month.
See how valuable your productive timeline is?
Until this property is rented, this is my outlay cost until the project is done.
Another reason to be super clear on the direction of the project with everyone involved.
Things are not free, so don’t let anything slide by unrecorded.
Chaos vs. Order
Just look around you. Look at the people that know exactly what they’re doing, they’re calm, collected, and productive when they need to be. Now look at the people that have no plan, no vision. It’s a difficult state to work from. They’re indecisive.
If you work from chaos you’ll never have control of the project. The indecisiveness will bleed onto your team.
Cause & Effect
If you don’t work in a daily rhythm with clear objectives, chaos will happen and you will lose control of getting results. What can go wrong, will go wrong. Then you will be behind on your payments, your contractors leave the project half way because you have no money, and now you’re doing it yourself.
Operate as one organism
Without a public timeline, contractors will not feel a pressure to get things done early.
By being clear with every detail, your project system will operate as one cohesive system and will emerge a beautiful home for a happy family.
Like a basketball team winning a championship On TV, your workers get into flow.
They know what to expect. Just like a basketball player gets in the zone. These contractors are your team. You want them to be focused executing on your plan.
Communication is your power skill in getting your contractors to finish projects early and below budget.
Results will emerge from your one page system. Publishing progress. Holding your team accountable.
The daily rhythm
All tides rise and fall.
The best part is if you mess up, you start all over again the next day. We get tired. Our teams needs sleep. The results you see on your one page timeline, will help you project how long it will take to finish.
It’s a daily rhythm, physical labor needs its rest.
Start the day positive, implement this system, take photos, and measure it. Chronologically. Then do it again the next day. The law of cycles and rhythm. Build your own daily system. Enjoy.
If you need a spreadsheet to estimate your next project, check these out. Free spreadsheets for construction.