My Biggest Property Renovation Mistake

I’ve been in the real estate space long enough to say I’ve made some pretty significant mistakes. One of those is the mistake of carelessly hiring people and trusting that they will stick to their end of the deal no matter what. In reality, not everyone has the work etihic and integrity to do so. In most cases, you’re going to run into people who are in it for they money and don’t care about the experience or connections that go along with each project. With that said, here’s a brief story of the time I made this mistake and learned an important lesson.

Here’s How it Went Down

I was looking for contractors to start working as the project manager for a few projects I had going on at the same time. I ended up getting a referral from someone and that person connected me with their friend from high school who does renovations. This was a two-person team; the renovations guy and his dad. I had never worked with them before and I had never seen the work they did either. 

That right off the bat was a red flag because I should’ve asked for proof and photos of what they had done in the past. My mistake was that I went into the interview unprepared and unaware of the questions I needed to be asking. In reality, I didn’t ask any questions, I just gave them the green light to proceed. To make matters even worse, I had two renovation projects lined up and I lined them up with both projects at the same time.

This was the second mistake I made. Instead of giving them a smaller project to see the outcome and the results they can provide, I went ahead and awarded them with 150k of work all at once. This was too big of a project to give to someone you’ve never worked with before, let alone someone whose work you’ve never seen at all. 

If you thought that was it, I somehow managed to mess this up even more… In fact, we didn’t have any written agreement between the two of us to hold each party accountable for their end of the deal. We went at it based on pure word of mouth and it was the biggest mistake I could’ve made at this stage of the project. What happened was that they started the work and claimed that it would take them 2 weeks to renovate a single unit.

There were 4 units involved in the project, hence, it would take them a total of 2 months to get it all done. In reality, they worked so slowly and inefficiently that it took them a month to get a single unit done. Besides not respecting the timeline, they also went way over budget. We initially agreed that it would cost 10 to 15k to renovate a single unit. However, the renovation ended up costing 25k per unit, which was way over the agreed budget.

You can see how this whole project quickly turned into a renovation nightmare where the prices were adding up and time was going by with little to no progress made on the contractor’s end. 

In the end, I ended up holding back the money that I owed them and I was holding it off until they finished the project. I hoped that this would get them to finish early. However, they just got frustrated to the point where they took my keys so I couldn’t actually show the unit. They tried to hold my keys hostage, which didn’t work of course. Coming out of this experience, I learned a lot of lessons about hiring the right people and managing projects correctly.

How to Avoid Rookie Mistakes

Long story short, I made several mistakes during this whole renovations fiasco. For starters, I didn’t ask specific questions about the timeline, who is coming in when, and what their schedule looked like. I should’ve seen that because, if I did, I probably would’ve been able to poke holes through the schedule and foresee the outcome. I also should’ve asked for the breakdown of expenses so that I could know where my money is going. 

Since I didn’t ask for any details, the budget went through the roof and there was nothing I could do to prevent the damage. In summary, I should’ve been more specific in regards to time and budget related details during the project interview and planning stage. Lastly, I should’ve had a legal contract put in place to ensure each party is accountable for their actions.