Rehab Project

2985 Views 8 Replies 5 Participants Last post by scpainting, Sep 23, 2008

Brian

Discussion Starter · May 14, 2008

I looked at a 248 unit apartment complex yesterday. The place is a mess-- broken windows, weeds over my head, missing drywall, etc. Apparently it was crack head heaven until they ran everyone out.

I've bid a few projects like this in the past, and never won the job. (I'm not sure if getting the job is winning or not.)

I know I can't use my normal production rates for 2 reasons: 1. They aren't looking for the same quality we normally deliver; and 2. This is primarily simple painting-- i.e., the same stuff over and over and over.

So what kind of production rate gains can I reasonably project on a job like this?

I have come to the conclusion that money can be made on projects like this, but only if they are properly planned and executed. I'm interested in trying some bigger projects.

Three years ago our biggest project ever was $25K. The past three summers we've done projects between $60K and $90K. I was scared to death the first year, a little concerned the second, and looking forward to the third. Each was our most profitable project of the year. Thus my interest in moving into something bigger.

In the past year I've bid about 10 jobs that came in at the $200K+ level, but we have not won any yet. I've tried to modify our normal rates because of economies of scale, but suspect I'm not doing so properly. Many of these are nice properties that aren't going solely on price, but 10% or 15% higher is a pretty big number at that level.

Am I in the wrong game? Or am I trying to play it by the wrong rules?

Brian Phillips

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Brian

Discussion Starter · #7 · May 15, 2008

vermontpainter said:
On the quality issue...I have found it really challenging to "dumb down" our process and product for jobs or customers that require it. If you go down that road, its critical that you communicate clearly to the painters exactly where in the process they can dial it back. It is difficult for them to figure this out on their own, and they typically will do what they have always done, budget or not.

I understand your point and agree that it is always a concern. This is where my situation is beneficial. I have crews with differing quality levels as their MO. I have crews that won't have to "dumb down" their quality much for a job like this.

vermontpainter said:
On economy of scale...as you know, I estimate projects in the 10k s.f. range each year. An inexperienced painter will convince himself that it ought to cost about the same as two 5k houses. This doesnt work. With large scale, if quality is a constant, your production rates and unit costs should still apply. The largest variable is if the job is run by a GC. The question becomes, how much of the place is available to us at once, and when? The difference is, in the 3-5k s.f. house you are more likely to get the place to yourselves for a while. On the 10k house there will be dozens of other tradespeople in the house for the duration. We always try to have an entire floor as much to ourselves as possible. This way you can multi-task like crazy. Big picture benefits are your burdens are lessened in the amount of advertising, estimating, scheduling, receivables, job to job transition, daily set up and breakdown that it takes to keep a crew working.

This is where I'm not sure I totally agree. Two years ago we did the interior of a private school. It was mostly walls and the guys became rolling machines. Their rates went up 20% to 25%.

I would expect something similar on an apartment complex. If they are doing the same building 24 times, or the same apartment interior 250 times, I would think they'd get into real groove. I might be totally wrong about this, but based on what I have seen in the past, it seems reasonable.

I do agree that the savings in set up, break down, etc. are very real and significant. How much more is part of what I'm trying to figure out.

I'm also aware that this is a different market. A lot of the value I sell to a repaint home owner isn't as important to the apartment owner. I dont have any trouble selling at a higher price to the home owner, but I'm finding it is much more difficult doing so in this market.

Anyhow, thanks for the input. You guys have given me some things to ponder.

Brian Phillips

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