Effective April, 2010, the EPA’s new Renovation, Repair, and Painting Program (RRP) has landlords, contractors, and homeowners spouting locker room-like obscenities at lead-laden homes built before 1978. Heck, I cussed like a sailor-on-leave the day I got a call from The United States Environmental Protection Agency.
This isn’t just a paint program, uh, uh – its more than that. If you’ve got lead issues in your houses, you best listen up!
Fact: ingested lead paint particles are hazardous to young children. Last Fact: reported elevated blood levels in children decreased by almost 90% in 2007. Really Last Fact: risk for elevated blood levels in 2010 was down to about .5%.
RRP is SERIOUS
So most are asking “where’s the fire, EPA?” What’s up with this new lead program? There’s a ton of confusion out there. Contractors , landlords, homeowners and yes, even us investors are wondering, “Must I undergo training and certification programs, per the RRP, and must I also pay out the ass to adhere to the new law? (It’s at least $6-hunge, people)
Bottom line, rehabbers and landlords who hire contractors should be prepared to bend over and take what’s comin’ to them…..increased costs. And, you better be prepared to be anally probed if someone decides to drop a dime on you by calling in a complaint to the EPA. If that happens, YOU WILL get a call from the EPA, and they WILL investigate. So get your inner Cal Ripken on and keep those bases covered.
At the end of the day, contractors, landlords, and homeowners need to suck it up. As much as I’m a romantic dreamer, I don’t see the EPA going away anytime soon, and the RRP law, while vague and overreaching, will ultimately help save lives, and you’d have to be pretty obtuse to argue with that.
MORE THAN YOU EVER WANTED TO KNOW ON THE RRP LAW HERE: Click it Now.
And here I give you, the greatest name ever….Armando Montelongo. Rolls right off your tongue like John Smith, right? Anyone who has watched the famed series, Flip This House, knows the rehabbing antics (and massive success) of Armando Montelongo and his helium-voiced wife Veronica.
Where are you going with this one, Craig?
Well, I’ve been plagued lately with a lack of speed from my contractors. I’m a lucky guy in that I truly like my general’s, I really do – but lately, I feel like they’ve been performing slower than usual. So what’s a guy to do? Well, if I was Armando, I would simply roll up in my pimped out Hummer H2, step out in my Farragamo’s – walk up and FIRE THEM! (As an aside, I wear Sketchers and I drive a Sequoia)
Side Note: I was recently interviewed recently for an upcoming season of Flip This House. I didn’t really try so I didn’t make it far into the process, but I discovered that the producers of the show are really looking for drama. My belief: Armando and his wife were essentially whores for the show in that they played up the drama for ratings – and that some of the “situations” were actually pre-planned or scripted.
But handling contractors doesn’t always work like its does in Armando’s world. You’ll go through a ton of assholes and if you’re really lucky, you just might find a couple gems who you genuinely like. I’m takin’ about, guys who you’d invite to dinner with your family. Guys who you’d walk through fire for. I think rehabbers like Montelongo look at contractors as nothing more than, “expendable.” I tend to look at good contractors as business partners who are integral to my success. Now, that doesn’t mean that I would sink if my guys decided to leave me. To the contrary, I would most certainly find a away to stay afloat. That’s what professional, successful rehabbers do.
But let me just say this, right here – right now: As much as I think Montelongo came off as a complete DICK on Flip This House, I REALLY respect Montelongo for what he accomplished in terms of his rehabbing success. If you know his story, he truly came from nothing and earned millions rehabbing houses. And for that, I’ve got to give him serious props.
If you want to know more about Armando, check out his home study courses HERE I am in no way endorsing his products, but rather simply pointing you in the right direction so you can judge them and decide to or not to purchase them for yourself.
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I received more comments on my last post than any previous post. Looks like I struck a cord, huh? I could (and should) write a book on how to not get taken by contractors, but before I do, I’ll just share all my info here. Just call me, Mr. Good Karma! So this will be the kick off post; Part One of a series of posts on How To Sucessfully Work With Contractors so that you can (one day) be a Professional FullTime-Rehabber like your old pal; Craig Fuhr.
Let’s begin our journey with what NOT to do.
As an example, let’s say you’ve just purchased a crappy house for $68,000. Because you’re smart, you did your homework and have a pretty good idea that the rehab should cost about $65,000. Comps in the area suggest a back end (ARV) of $215,000. Sounds like a sweet deal, huh? <Shyly> Yeah, its one I just did.
You close on the purchase, and like every rehabber, you’re just busting at the seams to see some dust fly. So you set up a meeting with a contractor. If you’ve been doing this as long as I have, you’ll want to to swing some hammers THAT day! Time is money, right? Hold on there, Speed Racer. First thing you need to do is, get out a fresh pad of legal paper and a shiny new pencil. As you walk through your crappy house, understand (I mean, really internalize) that EVERY rehab no matter how big or small has a rhythm and rhyme. It has a flow. And, you can never go against the flow. Like the Ten Commandments hewn into stone, so is the precise logical workflow of a rehab. Do ya’ hear me? Don’t mess with the flow! You wouldn’t start drywalling before the plumbing was done, right? So, go through each logical step of the flow – and associate each step with a precise cost.
Something like this: demo will cost $7000.00, framing will cost $5500.00, roof $4500, mechanicals $21,000.00, doors & trim; $2500.00, windows… You get the picture, right?
If you follow my directions, at the end of this process, you will have a very basic Scope of Work (SOW). Now, let’s say you’ve decided to let a General Contractor handle the whole process for you, and miraculously, he agrees that you were right – the cost of the rehab will be $65,000.00. The first thing he’ll want is money. Like most greedy penniless bastards, he’ll have the balls to demand 1/3 of that $65,000.00 up front before the first hammer is swung. Get out your calculator. Mine says, “Are You CRAZY? OUCH! Don’t do it! That’s $21,400.00!”
I have a really fancy calculator.
First things first; how about getting something in writing? I’ve never been a fan of a written contract with contractors mainly because I know you can’t take blood from a stone. 99% of these guys have no money, so even if a judge finds them in breach of even the best contract – how do you suppose he’ll make the contractor pay you if the contractor has no money! What I do do (I said, “do do”) is make the basic Scope of Work (from above) into a much more detailed document. This post is not about writing a detailed SOW, so I won’t get into all the gory details here – but know this – once the formal SOW is developed, the contractor then signs it, and it becomes the work blueprint and best contract you’ll ever have.
So you have a signed SOW, and there he is; Mr CON-tractor standing there with his hand out waiting for a super-fat $21,400.00 check. You’re ready right? You’ve got your SOW and you’re swollen checkbook is burning a hole in your pocket. Wait! Hole on! You’re still not ready to go! You can not give him a dime yet. Doing so would be a GRAVE error and would be going against the natural work flow!
Stay tuned. I’m just gettin’ started here. I’ll tell ya more in my next post!
I want to hear what you have to say about Part 1 of How to Successfully Work With Contractors.