The Five-Step Framework for Managing House Flip Rehabs

TLDR
Flipping houses, the rehab portion especially, sucks up your bandwidth like a vacuum. Most people never figure out the climb from the weeds to the aerial view, so they just buy themselves a stressful job. The five levels below are the same ones I climbed.

Table of Contents

Step Zero: Disorientation

I thought I had it figured out. I would wake up every day at four o’clock in the morning. I had a list of every contractor and every project going on. I was a one-man band. I had different tags in my task system. One was “vampire tag.” That was the work I would do while everybody else was sleeping.

I got so serious about my efficiency that I hired somebody to follow me around to see if there was any space in my day where I could fit more in.

Then my first daughter was born. What I realized is that my system was efficient, but my time was running thin. What I actually needed to do was figure out how to be more effective. How to have less input and get more output.

The goal here is threefold. Preserve your bandwidth. Mitigate your mistakes. Drop no balls. I always picture a plow pushing forward, keeping everything in front of it and letting nothing slip past.

Step zero is not really a step. It is where everybody starts. Everything is new. You are hearing information from every direction. You do not know what goes where. If you are lucky, you picked the right vendors and left yourself a contingency so you can weather the storm and stay in the game.

Stay in the game long enough to see around corners. That is step zero.

Step One: PM Planning (In the Weeds)

This was my life in the early days. I called it PM planning because I had a spreadsheet called the PM planning spreadsheet. Every project, every day, every contractor. I would walk through every one. I would check the receipts from the day before against what I expected to see purchased. If something was off, I would ask questions.

Not micromanaging. There is a right way to ask a contractor or a team member why the numbers look off. I went to job sites myself to verify things lined up with what I had in my head.

This is a great start. You need to know what is going on. You are learning. But you have to move past this phase to free up bandwidth.

This phase is called “in the weeds.”

Step Two: Weekly Expectations (Out of the Weeds, Into the Trees)

Step two is where we started setting weekly expectations. We would go through each project and write out every task, every subcontractor, and what we expected them to complete that week. End of the week, we would check what hit and what missed. Adjust accordingly.

This is where we began to keep records of what was said and what was actually done. Now we had a history on each contractor we worked with, each member of the team, and ourselves.

Pen and paper in a journal works. You do not need complex software. Write what you think you can get done for the week. Be reasonable with yourself. No stretch goals. Reasonable, maybe a little optimistic. Set up your team and your vendors to win.

What you are really doing with weekly expectations is setting the foundation for your daily meetings. Now the daily meeting is not reinventing the wheel. It is just confirming you are tracking to what you set for the week.

Pro Tip
Your daily meeting should take 10 minutes, not 45. If it is taking 45, your weekly expectations were too vague.

Step Three: The Forest Through the Trees

This is where you zoom out and break the project up into checkpoints. We call those checkpoints phases. Six of them on every project.

Before a phase starts, we know what contractors are on it, how much they will be paid, and how much money we need for that phase. We have checklists. We walk the property. We make sure everything is ready before we start working.

Each phase has stages inside it. A planning stage where we go through the checklist. A contractor-ready stage. An order-materials stage. Then work in progress, boots on the ground. Then billing and review. We confirm the money was right. We confirm the work was done as written in the scope of work. We hold accountability before the next phase starts.

Key Concept
Phases are how you reconcile. If you only reconcile at the end of the project, it is too late to save it.

Step Four: The Aerial View

Zoom out further. Now you are looking at the whole project as one thing. Project here does not just mean the rehab. A project is any work needed to carry out the strategy on a deal you bought.

On the rehab, you set up a ledger. That is your book for the project. Every dime spent. Broken up by phase. At the end of every phase you reconcile. If the budget is off, you figure out how to make it up or you decide to eat it and go get more money. You look forward all the time.

You cannot look forward if you did not make a big plan at the start. So the ledger is only half of it. The other half is a smart scope of work. With no scope of work, you have no real budget.

A smart scope of work is the difference between what is wanted and what is needed. You need to know what other properties in the neighborhood are selling for and what condition they were in to hit those numbers. You do not go past that condition. Everything past it is diminishing returns. We are here to maximize profit.

This phase is where you go from pre- and post-phase checklists to a pre-project checklist. We call ours the Office Block. Beyond that we have the 81 Point Checklist. Which is actually closer to an 88 point checklist now. It grows. These are all the things we check before we call a project complete.

When you finish that checklist, the project is still not perfect. If an inspection resolution is part of the sale, the inspector will find things. They are hired to find things. If they did not, they would not have a job. When a tenant actually moves in, they will find things too. That is fine. Do not worry about it.

Scope of work plus the ledger is the aerial view. Everything past that is the empire.

Step Five: Organizational Outlook

This is Google Earth. The whole organization, not just the projects. Here you focus on the things that really move the needle:

  • Building better scopes of work, and building the skills to build better ones
  • Leveling up your depth chart of wholesalers and contractors
  • Your own skills as a project manager, which is basically everything above
  • Finding better deals

Deals are what drive the business. Vendors are how the deals get executed. Scope is how the vendors stay in line. Your skills are how the scope gets sharper. That loop, run tight, is the business.

Those four things make up what I call the all-weather approach. Every time one of them gets better, the whole machine gets stronger.

Pro Tip
You do not have to do all five steps today. Take a few of these things and put them into practice right away. You will already be ahead of 80 to 90 percent of managers out there.

FAQ

How long does it take to climb from step zero to the aerial view?

Years. You will sit in step one longer than you want to, because in-the-weeds feels productive even when it is killing your bandwidth.

Do I need a fancy tool to manage phases?

No. A journal, a spreadsheet, or a simple project management app all work. The structure matters more than the software.

What if I only have one flip going?

Run the five steps anyway. Even with one flip, phases and a ledger save you from ending the project not knowing where the money went.

How do I know when to move from step two to step three?

When your weekly expectations stop telling you anything new, you are ready to zoom out to phases.

I am just starting out. Which step should I try first?

Step two. Write out your week. Hold your contractors to it. Review at the end of the week. That alone catches most problems.