Rehab Punch List - Sell Your Home for More Money

In this video, James Daniard with BiggerPockets discusses the importance of correctly "punching out" your investment property to maximize its value and reduce the risk of litigation. James goes through the steps to punch out a property, such as hiring a pre-inspection, marking any deficiencies with blue tape, taking pictures, and documenting work. He explains that it's essential to fix any quality issues and ensure that all the mechanicals are working correctly.

Rehab Punch List - Sell Your Home for More Money

Building the right tech stack is key

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How to choose the right tech stack for your company?

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What to consider when choosing the right tech stack?

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What are the most relevant factors to consider?

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What tech stack do we use at Techly X?

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Punching out a rehab property is crucial to making your real estate investment profitable.

In this video, James Daniard with BiggerPockets discusses the importance of correctly "punching out" your investment property to maximize its value and reduce the risk of litigation.

James goes through the steps to punch out a property, such as hiring a pre-inspection, marking any deficiencies with blue tape, taking pictures, and documenting work. He explains that it's essential to fix any quality issues and ensure that all the mechanicals are working correctly.

James also suggests staging the property and having plenty of light to make it more appealing to potential buyers. 

Finally, he recommends leaving the pre-inspection report out to show potential buyers that all issues were addressed.

Sell Your Home for More Money Using This “Rehab Punch List” Transcription

Hey guys, this's James Daniard, and I am back on the BiggerPockets YouTube channel, and today we're talking about punching out your investment property. Whether it's a fix and flip property, a BRRR, or even your development site, it is so fundamentally crucial that you're delivering the right product to the consumer. 

We've been working on this project for over six months. We bought this home, and it was dilapidated; it had a ton of deferred maintenance and lots of different issues going on with it. We've systematically renovated the house by updating it, the bathrooms, the kitchens, the paint, and we spent over $130,000 on this project, and we're about ready to get it ready for sale on the market. But the last thing we want to do is affect that sale by having sloppy work. So punching out your investment can dictate all sorts of different things.

It can tell you how long your property could stay on the market and also whether that buyer's gonna fall in love with it and bid it to that high, high price. A lot of times, as investors are getting higher and higher dollars on the property, it's because they did a good job making sure it's totally punched out to where the end buyer came in, fell in love, and they weren't concerned at all the least amount of concerns, the higher the price that will typically drive up.

Today what we're gonna do is we're gonna talk about what we're doing with this project over the next couple days. We bought this property six months ago and we're about ready to list it in two days. So we wanna make sure that everything is completed.


So the first thing that we always do when punching out a property is we hire a pre-inspection. So we've hired a general contractor to work on this project. They're licensed and bonded individual, but that doesn't mean that they're gonna do perfect work. So once we complete any type of project, we always order a pre-inspection. The typical cost on this cost us about $500.

What this pre-inspector's gonna end up doing is bringing, taking us through, and notating anything that's not working and not, or working incorrectly so our guys can fix it before we put it on market.

We're also able to provide this to the buyers so they can make a quick decision. So what we always do is we have this pre-inspection done and then we list listed out on what we want completed or not completed. We deliver to the general contractor and then we verify it. 

Blue Tape Inspection

The next thing that we always do is we bring our blue tape, and we're gonna walk through the project and look at the actual deficiencies of the quality work. Many times pre-inspections not gonna notate things like the quality of paint. For example, right now, I'm at this flip property. We paid about $8,000 to paint this house in and out, and I’m seeing waves throughout the whole property.

I see break lines throughout the whole thing or on the app store. There are tons of different types of programs that you can download that can help you document that (SeeSnap is perfect for managing this).

So as we go through and we're marking our blue tape, we're taking the next step and also taking pictures and notes for the contractor on who does what in the project during construction, there's all sorts of different things going on. It's always a last-minute scramble. People are trying to get things done, not get things done. It's a fire drill to get it on the market. Communication is key in any of these projects, and so we like to not only just notate with the blue tape, but we also like to notate with pictures and a description of work of what we expect them to do.

For example, things like this that are not that great for finished work, you know, as we come in, we have an old fireplace box here, you can see it just dates the whole home. The floors are new, the paint's new, the fixtures are new, but this makes it look old.

We're gonna have them rattle can and paint this inside black. 

Quality of Paint

Things that we always wanna look for is like quality of paint. So right here, I'm looking at that. This is has bubbling going on. A lot of times a a pre inspector isn't gonna call this out. They're gonna go call like, Hey, is the hot water tank working? How, what's the age of the furnace? Is the roof in good working shape? But they're not gonna call out workmanship A lot of times. This here will tell me for as a buyer, like, if we don't fix this or we don't go through these fine details, it's gonna make 'em nervous. If I was a buyer and I walked through a house and I'm seeing bubbling paint and, and kind of overspray route, if they can't get the paint right, it's also gonna make me very concerned about what they on the mechanicals.

Then they may be replaced because paint's a very simple line item and if they can't get that right, they might have other issues like, you know, the plumbing could be in worse shape. So as we're kind of going through these things, we're notating little things that still need to be completed right here. This is something that's already on our work order, but you know, a post got taken out and the hardwoods haven't been patched through. That has to be done before we get on market. 


Other things that I'm looking for is just cleanliness issues. Again, when buyers are coming through, you wanna make 'em feel like you really put time and effort into the project. This is over spray on the window.

Even though it really doesn't affect the value of the house, it's not gonna affect the livability of the house. It affects the perception of what the buyer thinks of you as a seller.

If they go, well, these guys spent all this money on this house, but they won't even clean their windows, what does that say about you? So the, the house is actually telling a story about you as a seller as well. So don't forget these little items, paint over spray. We're seeing it on the door handles, we're seeing on the windows. All these things need to be cleaned up.

What’s Working and Not Working?

Another thing that I'm always doing, you know, we have our pre-inspection report checking them, but I'm also checking what's working and not working, right? We have cold water. Do we have hot water?

So right here, this is a pretty key important thing. The hot water's obviously not turned on right now. So like as a buyer comes through, if we list it and there's six buyers that come through that first day and the property's really hot and maybe they wanna bring their own pre inspector through, they're gonna get through this kitchen. They're gonna see the paint flaws, they're gonna see the data nest, they're gonna see the water's not working right. It's gonna make 'em feel uneasy and they might move on to the next pro project. That first weekend is so key for you to sell that property. The people rushing out to your house are your hottest buyers.

They're the ones most aggressively looking. So you wanna make sure this stuff's all done. So right here, hot water's not working. That goes on our punch list so we can have it in, in, uh, checked out.

Another thing I'm noticing right here, the, the dishwasher, I open it up, it's not bolted in, it's also not set up all the way, so it's not even turned on. Yes, it's brand new, it's shiny. If you walk through the kitchen, it's gonna look great, but it's not set up right. The more things you leave undone, the more people are just gonna move on to the next property. Every time we sell a property, we are staging it. We want to feel like people can move in right away when you have unfinished things in the, in the, in the fridges or you know, pieces of plastic throughout and makes it feel like it's just been rushed through.

And again, it gives a bad vibe. You only want good vibes in your house. As we go through, I'm always notating what kind of paint flaws we're going right here.

I've seen a texture issue going through. Again, this doesn't affect the value of the house, but affects the perception and perceptions everything. 

Do Additional Inspection on Areas Where Rehab Work Was Done

So as we get in, this is actually where we did a lot of different renovation work and the more scope of work that we do in a specific area, I'm always gonna slow myself down. So what we did in this specific house is we took two bedrooms and we combined them into one big in suite to get the highest and best use outta the value. But that also means the most amount of work went into this situation. So as I'm looking at things, I wanna make sure that this feels really good. This is also the master bedroom.

And so because it's a very important room, you know what they say is master bedrooms and kitchen cell houses. You wanna make sure you spend the time in the house to make sure everything's punched out.

So I'm checking everything right here. 

Racks and Shelves

One thing, always check your racking; make sure it's not gonna fall right off the walls. Uh, that's another thing where contractors kind of blow through and you get Contractors aren't bad people. They're not doing this on purpose. They're guys hiring different workers, and they have different subcontractors themselves, and they're all trying to check each other. Mistakes happen all the time. It's a team effort to make sure it's completed correctly. So as I'm going through good news is the light fixtures are working correctly. Uh, and then I'm checking things like different handles.

I got some paint overspray on this here. I'm checking to see if the toilet paper holder's not quite secured, right? And again, we're flushing all the toilets. When you go through these homes, is really important that you spend the time walking 'em through, making sure that they're perfected.

Tips for Managing Your Rehab Punch List

Bring your camera, take photos of what needs to be done, document it, and put it in a punch list app or a clean document that everybody can work up with. Write what needs to be completed and who needs to be done with things that we're always doing during our punch list as checking on them daily. So we meet our team on-site, explain it to 'em, and make sure that they're getting them done. And then follow through and check. You don't want to make just one punch list. Give it to the contractor and then let them run with it and not verify. As an investor, it is your job to verify your asset.

You don't want these things rushed out. You know, again, we paid for this property six months ago. We've been working on it for six months. We've been dealing with delays in scheduling, uh, shortages on the supply chain, different types of fires.

We had one issue with our neighbor that kind of ran through our yard at one point and it, we had a little bit of a dispute there. This is not an easy job. So to rush through and list your property rapidly is only gonna be detrimental. Remember, there are key things that you always wanna do as a flipper. Even when you do your next bird property and rent it to your next tenant, you wanna make sure that you walk through all the fine details. Part of it on a bird property is you wanna do all these punchless items so you don't get a bunch of phone calls later after your tenant moves in, where you gotta bring in more maintenance people to fix all these things.

The more you have to bring people out to your site, the more money it's gonna cost. So some simple tips for punching out your house always bring your blue tape, and make sure the people can see where the marks are.

Download an easy app (like SeeSnap’s punch list app or something that you can put into a simple format to where people can see what the issue is and then document it accordingly. Always have your property reinspected prior to selling a renting. So then you have a list prior to you even doing your punch list on what is gonna be on the radar. The pre-inspection is gonna do more than just the visuals of paint flaws or quality workman ships. They're gonna tell you the mechanical issues. Mechanical issues are what are deal killers. If people think you did your electrical wrong, they're probably gonna walk away. The mechanical inspections are also gonna be money savers when you do your bur property because they're making sure that the core mechanics work correctly.

So your tenant's not blowing you up on the phone. One thing that I always suggest is make sure when you walk through to do your punch list that all the lights are working and on.

The more light you have, the more brighter it is, the more flaws you can see. In addition, always bring your general contractor to the job site. When you're walking it through it, a lot of times if the general thinks that you're over punching it out, they kind of start to ignore it. I've had on certain houses, me blue tape the whole thing and I'll come back out and I noticed that their workers just pulled the blue tape off the wall and they didn't even fix it. So by bringing the general through and educating them, you're teaching 'em for, to prevent future problems down the rh. But then you're also agreeing on the scope of work that needs to be completed. Another tip is to always leave your pre-inspection out.

I don't care if it's got all sorts of negative flaws or it's really clean. The buyer's gonna know that we've seen these issues and that we've addressed them.

It makes 'em feel good about us as a seller and it's always gonna get me more money down the road. In addition to by doing these extra little steps, health prevent litigation. Not only did I hire a license and bonded contractor, I pull permits on the property. I had a a third party home inspector also verify it. So if something else happens down the road, it really keeps me in the clear because I really didn't know or it could be a new issue. So the more documentation, not only does it keep your sale put together, it protects you down the road after your sale. 

SeeSnap - Perfect for Your Rehab Punch List

Rehab punch lists can get out of control, especially if you are trying to use pen and paper, email, or spreadsheets to manage them. SeeSnap’s photo-based workflows allow you to keep your punch list items and all the photos and documentation attached to them, organized and easy for everyone to access.

Whether you’re onsite or on your way to the next job, download SeeSnap to manage your punch list without the fuss!

See What You Can Do With SeeSnap

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See What You Can Do With SeeSnap

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