Even in the best of economic times, the completion timeline for your house flip can be negatively impacted by contractor scheduling mix-ups, mistakes with materials, and missed delivery dates that wreak havoc on your project calendar, resulting in delays that cost money and take a bite out of ROI.
With all of the knowns and the unknowns associated with the Covid-19 pandemic, it is only wise to expect there might be a significant impact on house flip completion timelines. Smart investors will have a plan B (and maybe even a C, and D) for how to deal with any delays and additional costs that might come along with the effects of the coronavirus itself, and also with the interventions many state governments are issuing in an attempt to slow the spread of the disease.
What are some of the ways Covid-19 might impact your house flip?
Social distancing procedures at house flip job sites
If your state requires masks, gloves, temperature checks, and distancing for all on-site workers, you can expect the work on your house flip to progress more slowly than usual. If possible, take a closer look at your construction schedule and be as strategic as possible about which crews you have on-site and when.
The CDC has advised that person-to-person spread is most likely occuring among close contacts, and six-foot social distancing rules should be practiced where possible to avoid infection. Covid-19 can also be contracted simply by touching a surface or object that the virus has landed on, and then touching your mouth, nose, or possibly eyes — so wearing masks might be an effective way to slow or stop transmission.
Depending on the state you are operating in, stay-at-home orders may be significantly impacting the wait times for permits and inspections. Get these requests submitted and inspections scheduled as soon as possible to avoid having to pause or postpone work for weeks at a time. Also, be prepared to make numerous phone calls to check up on the progress of your requests, as this is an instance where the squeakiest wheels may get the grease.
Sick or absent employees
If a contractor or employee contracts Covid-19, they may remain symptomless the entire time the virus is present in their system and they may continue to come to work, placing other workers at risk. Or, Covid-positive workers may become ill and need to be out for days or weeks. Workers with ill family members may also need time away from the job.
Hopefully, your crews will practice social distancing and keep themselves and their families as safe as possible, but you should be prepared for the possibility of needing to replace workers, or wait for them to return to the job site.
Delayed material shipments and materials shortages.
In many industries around the world, COVID-19 has disrupted supply chains and significantly impacted commerce. In the event your contractors are struggling to find materials that are normally in stock, for example, if there are imported materials that are sitting at a dock on the other side of the world due to the pandemic, you may need to have alternative materials choices in mind—and be prepared to absorb any impact those choices may have on your project budget.
Your completed house flip may take a bit longer to sell
Homebuyers will most likely be finding and touring your house flip via an online real estate portal. Waiting for buyers to navigate these new online house hunting norms may add a few weeks of holding costs to your projects.
To make your listing as attractive as possible, consider hiring a virtual staging expert to provide an enhanced tour experience for prospective buyers. With a virtual home staging company you send in photos of your empty rooms, and they digitally insert furnishings and decor. Virtual home stagers can provide high definition photos for a reasonable price.
It is encouraging to note that house flippers are among the small businesses in the U.S. that are poised to profit from Covid-19 conditions, but in the meantime, fix and flip investors will experience many new challenges that will change the way business is done—at least for the next several months.