Renovation Construction is a B****

Saturday, February 10, 2024

The Larossa Workshop Blog/Renovation Construction is a B****

Renovation Construction is a B****

The top 3 reasons Renovation construction is the worst….and the 3 that make it that best

Renovation construction is a whole different beast than other types of construction like new building and even commercial work. Now I’m sure that these other types of construction have their own issues, but we are experts of renovation construction not the others. Here are the top 3 reasons renovations are the toughest followed by the 3 reasons it's where I’ve chosen to focus.

What makes Renovation Construction the Worst

-The contractors are less business savvy
This means that you get a lot of “hey text me if you’ve sent me an email” types. Which can be frustrating when you’re trying to be at the cutting edge of technology to take advantage of the efficiency that it has brought us.

This also means the margins get cut really thin because they is always a person working out of their basement that will do it for cheaper usually not understanding that they are actually working at a loss. They are constantly robbing Peter to pay Paul. Usually the end of that line isn’t very far away and that's when you start getting corners cut or worse. See “The 5 Hidden Costs Of Remodels” for more on that.

Pay out needs to be quick. Pay in never is. Meaning that a lot of times it is urgent to the relationship to pay quickly with a contractor because they have bills to pay and families to feed. The tough part of this is that as a business owner your payment is always coming slow.

-Abundance of Problem Solving
With a new build or building from scratch, you can basically use one plan over and over again without many variables. This allows you to become very systematic across multiple projects. With commercial work the projects are a lot bigger so when you start a work on a project there is a lot more time before the next job starts. This gives you time to prep, plan, mobilize and problem solve. For example you may have the job of painting followed by installing new flooring but it is in a 4000 SF space with tall ceilings. The painting will take multiple days before the flooring starts giving you time to deal with detours from the plan if any should arise. In residential remodeling you may only be doing 1000. This may get done in just a day or two so if anything goes wrong then you back up the next job which causes issues all the way down the line. This causes big issues because you always want to have jobs lined up back to back. As we know, timelines are killed by the time in between jobs. However, if you have a contractor lined up to do the floors on Thursday and the paint isn’t done then you have one pissed off flooring contractor. This will drain your relational savings account almost as fast as slow payment.

-The work environments can be pretty rough
This one is pretty self explanatory if you’ve been around the residential real estate investment industry for any time at all. A lot of the deals we get are because the houses are not in the best conditions. Somebody has to be the ones to deal with it.

Here are the 3 Reasons that Renovations are the Best

+The contractors are less business savvy
You will find the types of blue collar business people that you can shake hands with and take them on their word. However, don’t get blinded. There are also a lot of fly-by-nights in this business.

+Abundance of Problem Solving
These variables make projects expensive for most companies and scary for most. This makes for an abundance of deals on broken houses as long as you know how to fix them.

+The work environments can be pretty rough
This may be a personal one. After working in many different environments with many different type of people, I’m confident that the types of people who will go into these type of houses without complaints are the types of people I want to spend my days with.

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Hi, I'm Ross Paller

CEO Of Larossa

After flipping over 300 houses, holding a portfolio of 150 properties, and creating a successful construction company for over a decade, I felt compelled to pay it forward by sharing the wealth of knowledge and experience I’ve accumulated on my journey.

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