Apartment Turns

Has anyone used a contractor to do there apartment turns? Was is fast and cheaper. What advantage di you see.

Hello George,
Wow that one is big and I guess the real answer to your question is, it is based up on where you are in the country as to whether it is cheaper and the pool of contractors that you have to pull from in your area. The more competition out there the cheaper it all will be as a general rule. The other thin is the size of your property. I mean if you are real small it may be cheaper; if you are a large property, then look at what your average turnovers are to determine which would be more cost effective as well.
All of that being said here are some basics to assist in getting the best prices as well as quality work:
1. Do a solicitation with what your requirements are.
a. It should have the unit floor plans.
b. Appliances
c. Paints used
d. Repairs that are required on average.
e. Put in a minimum guarantee of work
f. Have a penalty clause
g. Require they have a quality control person

2. You want then for them to come by look at your units and give you a bid.
3. You want to ensure you are on the lookout for increases in your contract. Some will low ball the comp, just to come back and be more expensive in the end.
4. Remember as well that a lot of times you get what you pay for. You want references and if they have none, then use your judgment and as a bargaining chip for a better deal for taking them on and being a future reference that they cut you slack on the pricing.
5. Be sure you have a good quality assurance person and a surveillance plan for your side. Be sure they have a check sheet. I do not allow the company I am hiring to see my check sheet as they may only ensure the areas you check are straight.
You may want to check with your local Apartment Association for some references on companies that have been servicing properties in your area as well.
Hope this helped!

Apt turns should always be quoted in flat rates using the same color paint to reduce costs of re-painting. You supply the paint and they supply the labor....much less expensive that way....it is only painting.....most importantly do background checks on any painting vendor....some are neat and some are sloppy and some are not the type of person you want walking around your property. They should wear painter's whites and act professional and courteous to your current residents.

Hello Boyd,

I always try to be a little careful on the advice that I give to a property in this area as there are a lot of moving parts to consider and what works in one place may not in another. For instance if it is not broken down what does a flat rate give me and does it cover all the needs? There are the basic things that are required and then there are the cases where there is something special. For instance you have damages that go beyond the normal. Does it mean that your contractor will do these regardless? A paint being the same are good, but who purchases them is who has the best purchasing power. The property may have a management that has a national account with a vendor and can get the paint a lot cheaper than the contracted person or company. Back ground checks on the vendor is a must, but also ensure that it is not that bad company that just changed its name. On individuals in the company the background checks are what the company should ensure they have and you hold their feet to the fire about this and that they are also insured and bonded in case of some mishap. Their uniforms I do not dictate as their company has to set that, but the quality of work to what standards will be in the contract. Now for a small property you may be OK, but when you are dealing with over $3.5 million a year in contracted services it gets a little more complicated and there are steps you have to take. This is when you need to be in tune with contract law, and or have a good lawyer that is well versed in it to keep your company from spending more money than it has to. For instance I have penalties for the contractor if they do not perform to standard. Also if an apartment is supposed to be ready on Tuesday and I have given over to the contractor the order in the appropriate time, then they are liable for monies lost and it comes out of their payment. I have it tight enough that it stands up in court if we have to go there. I have seen people take a dive because they did not have a tight contract with the contractor.

Boyd, please do not take anything I said as not agreeing with you, but placing that caution out there for George. Because George's property and what he has to deal with may be a lot different than what you have to deal with.

Yes, I understand being careful....but economy of scale makes it even easier to get a better flat rate. Anything in addition to the flat rate of painting the apt is to be approved per the Property Manager on site within his/her purchasing authority. If you have 3.5 million in vendor serviecs/contracts I would love to dig into those invoices and start cutting edges immediately...especially in this economoy. Certain parts of the country the flat rate for a 1 bdrm should be no more than $150.00 add another $100.00 per bedroom and that gives you a realistic flat rate for reputable vendors. Any flat rate lower than that and you will not be getting quallity work. Rough plumbing, drywall, light electrical can usually be perfromed by the turn man/woman and if not switch to someone who can provide all encompassing services which will save you even more money. Inspect the turns on a spot basis especially when the vendor calls and says it's going to cost more in addition to the flat rate and you can save a bundle of cash. As far as paint costs I've found Sherman Williams gives you the best deal over all when purchasing the paint for the turnover person. They can pick it up or Sherman Williams will deliver.

Turn 'em, Rent 'em, and then work on your NOI!

Have a Great Day!

At my last property; with the exception of early on when the management company changed (I inherited some 30 units that were HEAVY turns); we did all turns in house. Those 30 were completed using maintenance guys from other nearby properties and we hired a paint crew. It helped that all these units required new flooring and a contractor did the installation. I even had one unit where the resident was a heavy smoker and was in the SAME unit for 20 years before we transferred them across the hall. That turn took 2 weeks and was done in house.

I did hire a hauling company to remove all items left behind, including the old carpeting (we removed that before the new carpet was installed because we needed to thoroughly treat for pest control before new carpet was installed and while the units were vacant as the property had a recent major bedbug infestation and we wanted to prevent any future reinfestations; so we needed to be agressive). The hauling company was faster, actually cost less than what it would have if we did it in house and it did not put my maintenance guy at risk for injury. I cleared 4 units (all 1 bedrooms) in 2 days with a crew of 4 and 6 trips to the dump; one of these units was a hoarder, another was a resident death.

@Nate and Johnny....sounds like you two are on top of things....turning apts (and I have done this myself in an earlier life.......is really quite expensive after all is said and done and with pests involved it gets even more costly. Bedbugs are our current scourge nationally...the University of Nebraska at Lincoln has a current infestation that is affecting over seven dorms!....I always check hotel room bedding and toss the mattresses because I am so afraid of bringing the little bloodsuckers home from vacation. You even have to be careful when going to the movies because that is a great place for them to survive. I have sent out a letter to all the current residents informing them of this issue so that we can catch any infestation in it's earliest stages.

Thank you guys, been interesting on your thoughts. I have 12 complexes that compose of luxury to bad so I understand totaly. I just find overhead incresing having men on staff that having good specifcations and good contractors might be cheaper. I find myself having crews that do just turns. Has anyone heard of paying staff per turn?

I would not pay per turn; but I would establish an acceptable maximum time a unit needs to be turned in (say 5 days from the time keys are turned in) and pay a $50 bonus per day less than the max the turn is complete (say the turn is completed in 3 days, that would be 2 x $50 or $100). I would utilize contractors as much as possible. Here is how we did turns:

Day 1 AM: trash out unit (including carpet removal if needed)
Day 1 PM: aggressive pest control (schedule exterminator)
Day 2 AM: Paint unit
Day 2 PM: Maintenance unit
Day 3 AM: Carpet replacement* if carpet not replaced; at the very least thoroughly cleaned and deodorized.
Day 3 PM: Final touch up and manager walk

Adjust this for your property and unit size. If you have several units at the same time; I would do it like a production line and have the crew go from unit to unit.

Hello George,

I did not use the in-house except if there was an emergency. In my former life I was overseeing a portfolio of 18,421 units ranging from single efficiency to 5 bedroom units. So the average cost was from $190 - $211 per unit no matter the size.

Now the contractor on the high end had 10 days max for turn around and 5 days was the target. I had a quality assurance program that was 100% and there were penalties for anything that took us outside of the 10 days, or if an inspector had to make more than two trips for contractor faults.

I cannot stress enough the importance of a written contract that outlines the requirements. My approach was not telling the contractor how to do the job, but telling me how he was going to do it first and then it was back to me to accept or say no and move on to the next contractor.

I surrounded myself with people smarter than me in different areas to hammer out the details and to advise me why this and not that. I always had the final say, but with that if it went wrong I took the blame! When I compared what my management company was paying compared to others we were way under and did not have half of the contractual headaches.

No matter what road you choose, have a team and if you are not up on a certain areas ensure you have someone that is and can give you the correct information. I am by no means the sharpest axe in the wood shed, but I have been smart enough to ensure that I have some sharp axes around me if you get my analogy!

Now, I said that I did not use the inhouse except for emergencies. In this one depending on the size of your property and the experience of your personnel it may be viable for you. You will have to maybe run an analysis first to see which will give you the best bang for your buck!

Expended my two cents on here unless you have some specific question of me.

@ George: if you do have a turn only team, might I suggest that you hire 1 maintenance person per property you represent to form this team and have the whole team go from property to property on an as needed basis?

When your team is not spending so much time turning units, these guys can stay at their home property and do property preventive maintenance work.

We use contractors all the time. Be sure you have a clearly defined scope of work signed off by the property manager. This includes all work to be done and the price. These guys love to add to this number. Don't do it. This needs to be set in stone. If you set it up this way you can turn a bunch of apartments with little trouble.