Do You “Do It Yourself?”
Well, that’s somewhat of a personal question to ask – isn’t it? But, we are all a close family here at BiggerPockets after all, so what the heck… Do you do it yourself?
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Look at this Guy –>
The tee-shirt, the over-alls, the heavy-duty construction boots; the only thing missing is the checkered flannel shirt. This guy is definitely rugged and sturdy. You can almost smell the strong, stubborn, I can do this Irish flavor radiating from the page.
Now – you know this dude does it all himself. Can you see him with a hammer or a reciprocating saw in his hands? I can! I bet he spent two whole days last week laying carpet in one of his rentals. In fact, if you ask him he’ll tell you that he got it done in one day… Kinda sexy actually if you are into that kind of thing.
But, Then There’s This Guy:
Fine suit, nice shirt, a tie, dark hair, dark skin, dark eyes – the refined European type, wouldn’t you say? If you guessed that this guy wouldn’t know the working end of a hammer – you’d be wrong, but not by much. For the most part, the few things those hands are accustomed to handling are his kids, his violin, and his cell phone. While he also owns rentals, I would not be lying to you if I said that the last time he touched a piece of construction equipment was about 4 years ago; trust me – I was there!
Necessity and Practicality
I don’t mind telling you that this guy actually loves wood-working – he told me so. As a child, in Russia, he used to slip out of the house when his parents thought he was practicing the violin, and run to the shed instead to make spears, swords, shields, boats – you name it. So, why does he shy away from doing labor now days? After all, he could save himself so much money by doing it himself.
Two reasons – necessity, and practicality.
You may know that when in college this guy – let’s just call him Billy-Bob, seems appropriate. But, anyway, when in college he was diagnosed with Multiple Sclerosis, which is very likely going to impede his capacity to function physiologically as time moves on. The very essence of his involvement in real estate was to solve the problem of income-generation when the time comes and he is not able to punch the clock.
Thus, Billy-Bob views real estate investing as a passive income sport – as much as possible anyway. With this in mind, he made a decision early on that if it were not possible to succeed in this business without being in the middle of working construction equipment, then this business was not what he was looking for. Thankfully, it is very possible…
All of us define that which we would consider success. For this guy, success in real estate is defined as 100 units, fully leveraged, with $130 – $150 of monthly cash flow per door. As some of the leverage is amortized the cash flow would go to $200/door, which would constitute $20,000+ per month – this is the goal. He may not stop there, but this is the 1st point of reference for this guy.
Now – is it wise or practical to hope to take care of 100 units on your own? No – it is not; this requires a manager and a well-functioning team. Thus, this guy made a choice from the get-go to outsource everything, which frees his time to manage and build systems that will accommodate the growth of his business. This is what he deems as practical…
Besides, if the idea of income-producing real estate is PASSIVE CASH FLOW, passive being the operative word, that working for money doesn’t quite fit the bill!
I know a lot of hugely successful real estate investors who involve themselves in the construction/maintenance work on a daily basis, and therefore I will never judge that one way is better than the other. In the end, our decision-making process is driven by the realities on the ground, both in terms of our financial position, health, time, and more…
But, before you decide to do it yourself, I encourage you to consider the long-term ramifications of this decision. What kind of a business do you see yourself on top of 20 years from now?
Thanks so much for reading and please leave a comment 🙂
Photo Credit: Marsum