House Renovation Management: The Chips You Need to Move

TLDR

Managing a renovation comes down to knowing the critical path, picking the right type of manager you want to be, hiring the right type of contractor for each job, and building relationship capital instead of micromanaging. Miss any of those and the project runs you, not the other way around.

Table of Contents

• The Critical Path
• The Four Types of Manager
• The Three Types of Contractor
• Holding Accountability
• Relationship Capital
• The Tool That Ties It Together

The Critical Path

I was making my kids’ lunch one morning and thought this would be a decent way to teach project management. Stay with me.

To pack a lunch, I need three things in the box: a peanut butter and jelly sandwich, a bag of veggie straws, and cut fruit. The sandwich takes the most steps. Get bread, peanut butter, jelly. Spread both. Bag it. Put it in the box. The veggie straws take two steps. Fruit takes three. The sandwich is the longest path.

In project management, the longest sequence of tasks is the critical path. Speeding up the shorter paths does not speed up the project. Only the critical path does.

Now put that on a job site. A kitchen remodel has cabinets, counters, backsplash, appliances. An exterior paint job has material, masking, painting. A bathroom has tub surround, vanity, floors. The kitchen is almost always the critical path. That is where your attention belongs.

Focus on the path that determines the finish date. Everything else is support.

The Four Types of Manager

You have to decide what kind of manager you want to be. Each one trades time for money in a different ratio.

DIY. You make the sandwich. You bag the veggies. You cut the fruit. On a job site, that is you swinging the hammer. Cheapest in cash, most expensive in time.

Foreman. You hire laborers and manage them directly. They do the peanut butter, the jelly, the bag. You are on site telling them what to do. Cheaper per unit than hiring a contractor, but you are the full-time crew lead.

Manage it yourself (MIY). Instead of making the sandwich, buy Uncrustables. Instead of bagging veggies, buy pre-bagged. Instead of cutting fruit, buy pre-cut. On a job site, that means hiring one kitchen contractor, one exterior painter, one bathroom person. Your job is managing contractors, not crew members.

Vacationer. You just buy lunch at school. You do not touch the lunchbox. On a job site, that is hiring a general contractor who manages all the subs. You manage the GC. This frees you up to focus on finding the next deal, running other projects, or your family.

I want most investors aiming for MIY or vacationer. You are not in this to be a full time crew lead. You are in it to build wealth.

The Three Types of Contractor

Once you know the type of manager you want to be, you have to know who you are hiring. There are three types of contractor, and they are not interchangeable.

Specific job contractor. These are the guys on the billboards. They do one thing. Roofers. Electricians. Plumbers. Some have grown into two related things, like siding and windows. They will not do your plumbing because that is not their skill.

All-arounder. These guys do floors, paint, cabinets, trim, take out the trash. They do a little of everything. There is a graduation of the all-arounder I call the handyman. High skill, high variety, highest price of the three types.

Laborer. Low price, low skill, works hourly. Usually you are the one telling them what to do. You have to show them the job before they can do it.

Here is how they compare on the parameters that matter.

People mess this up when they think “contractor” is one category. It is not. Matching the type of contractor to the job is the whole game. Hiring a specific job contractor for a multi-trade turnover is overpaying. Hiring a laborer for electrical work is dangerous.

Common Mistake

Hiring an all-arounder for HVAC or electrical because they said they could do it. They cannot, or they can but not to code. Licensed trades have a license for a reason. You want specific job contractors on mechanical, electrical, and plumbing. Full stop.

Holding Accountability

Early in my career I got run over by contractors. I got mad. I told myself nobody was going to take advantage of me again. So I became a micromanager.

It worked. I showed up every day, breathed over shoulders, got great results. The problem was I spent all my time on job sites. I could not grow the business because I had no time left. And I was not making friends.

If you are a homeowner trying to do this with the person working on your house, you will hate each other within two weeks. Micromanaging is not sustainable, even when it works.

So the question becomes, how do you hold accountability without standing over their shoulder all day. The answer is relationship capital.

Relationship Capital

Think of a relationship with a contractor like a savings account. Every time you pay fast, treat them right, understand their situation, you put money in the account. Every time you have to push back, ask for a redo, or hold a payment, you take money out.

Keep the balance high.

Four things happen when relationship capital is high.

They trust you. You do not have to micromanage as much because they know what you want.

Efficiency goes up. They understand your vision more over time. When you set expectations wrong by mistake, they cover the gap because they remember what you like.

You become their priority. If you treat them right, they put you first in line ahead of other customers.

You save your bandwidth. Less time on site. Less energy on fights. More time on finding deals or running other projects.

This is how project management becomes as passive as it can be.

The question people ask is how do you hold accountability and build relationship capital at the same time. They seem to fight each other. They do not. The key is setting great expectations on the front end.

Set the vision clearly up front and most accountability takes care of itself.

The Tool That Ties It Together

The tool that makes this work is the scope of work. A real scope of work paints a clear picture for everyone coming onto the job. It names the tasks, the materials, the finishes, the pay schedule. It is the shared document that both of you reference when there is a question.

When the scope is strong, the contractor can bid accurately, the glue between jobs gets picked up, and your expectations match theirs before a hammer swings.

I have a whole separate piece on how to build one. If you take nothing else from this, take that. The scope of work is the most important document in your business.

FAQ

Am I really going to save time by hiring a GC instead of managing subs myself?

Yes, if your GC is good and your scope of work is strong. You pay more per dollar of work, but you get your time back. For someone running 10 projects, that trade is easy. For someone running one project, MIY might be cheaper and close to the same speed.

How do I find a good all-arounder?

Word of mouth from other investors. Trade show signs on job sites. Facebook groups for local builders. You will go through three or four before one sticks. That is normal. Keep a pipeline open even when you are fully staffed.

What do I do when my contractor stops showing up?

First, figure out if it is a real issue or a rhythm thing. Some all-arounders disappear for a day to finish another job. If it is more than three days without communication, call them. If you cannot reach them in 48 hours after that, start the conversation about parting ways. Never pay ahead, so you are protected.

Is the critical path actually that important on a small flip?

Yes. On a 30-day flip, if the kitchen slips three days, the whole project slips three days. If the exterior paint slips three days, you do not care because it finishes before the kitchen anyway. Knowing which task is the critical path tells you where to focus attention every single day.

I am brand new and I am scared of managing contractors. Where do I start?

Start small. Do a cosmetic flip. Paint, floors, hardware. Hire one all-arounder for the whole scope. Build the relationship. You will learn the rhythm of managing before you get into mechanical, electrical, and plumbing.