Real Estate Investing Basics

The Easiest Way to Get Started in Real Estate (Gain Experience and Get Paid, Too!)

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Businessmen are meeting with contractors about business plans.

When I started flipping houses seven years ago, I knew nothing about construction. I grew up in a home where my dad would call the handyman to screw in a lightbulb. That’s not an exaggeration.

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A lot of kids in America grew up without any chance to work with their hands. And as the world gets more tech-savvy and less handy, quality construction will come at a premium price.

It’s basic economics.

Why Project Management Is in High Demand

It’s a simple measure of supply and demand. In the 1970s and 1980s, the trades were taught in schools and technical colleges. It wasn’t sexy, but those careers were stable.

Now, as those guys are retiring, a new crop of contractors is entering the market. Instead of going to college, a kid could learn the trades in high school and easily make over $75,000 a year running their own construction businesses.

In my mid-size market of Cleveland, Ohio, construction is booming. A massive stock of older homes are being bought by out-of-state investors, and an elderly population is dying, leaving dated and abandoned inventory in good neighborhoods.

Related: Looking to Invest Out-of-State? Here’s How to Pick and Analyze a City

On the construction side of things, every good contractor is booked solid. Some guys are booked for months in advance, especially crews who do custom work for homeowners. But not every contractor is good, either. There are plenty of guys out there with drug and alcohol problems or those who are just plain lazy and looking for handouts.

So, how are investors supposed to hire a contractor, give them a deposit, and hope the work gets done without getting ripped off?

home framing during home construction against cloudy sky

Why Project Management Is So Important

Ultimately, the more you layer the protection of human capital on your projects, the higher your chances for success. Whether you are interested in doing a project out of state, partnering on a flip, or buying a rental property, here are some noble pieces of advice from my mistakes as an investor.

1. Hiring a project manager will help keep projects on time and on budget.

A project manager is hired almost like a middleman between the investor and the construction crew. They’re required to be on the job site daily, turn on utilities, keep track of expenses, and confirm contractors are working diligently. They’re there to support the contractors, too!

Contractors usually call investors for two things: materials and money. As investors, we just want our projects to stay on time and on budget. One of the worst possible things is to have lost labor time—from losing a contractor to driving to Home Depot, standing in line, and driving materials around. It kills timelines on projects. So, hiring a project manager will reduce headaches and increase efficiency.

2. A project manager has your best interests at heart, because they can be given equity in the deal.

I say this to people all the time: Starting out as a project manager is the easiest way to start a career in real estate, especially if you have little money or credit. You really only need your wits, ethics, and time.

Related: How to Invest in Real Estate With No Money (Seriously!)

And if you’re an experienced investor who’s sick of turning on utilities, delivering materials, and checking up on contractors, maybe giving an at-bat to an eager 20-year-old for 25 percent equity is a good decision. There are hundreds of newbies on BiggerPockets that would take that opportunity.

3. Project managers have a ton of construction knowledge.

It’s surprising how quickly you learn to do small things just from watching contractors, delivering materials, and maybe even physically helping out on the job. This year, an investor friend of mine and I learned how to sealcoat a driveway by watching a YouTube video. It saved us probably $2,000 by doing the job ourselves.

So, whether it’s your own house or a larger project, getting your hands dirty with someone who knows what they’re doing pays itself back tenfold in the future.

hire-a-contractor

4. Cutting down on material cost is key.

A contractor usually factors in his time and markup on materials. So, having a project manager run materials to the job site (and having receipts for reimbursement) will help you save on material markup and streamline the process of delivery.

5. Not everyone drives a truck!

Even for those of you BiggerPockets pros out there who drive a truck now, think back to how hard it was to fit an exterior door in your 2002 Honda Civic. (OK, that’s my old car.)

But seriously, if you’ve been there before, you know that having your own truck is huge. If you have a truck, a driver’s license, insurance, and you’re physically fit, that’s really all you need to be a great project manager.

Why Project Management Is the Easiest Way to Get Started in Real Estate

Full-time investors manage multiple projects at a time, and sometimes they’ve gotten so used to their rhythm that they don’t even realize they need help. If you’re new and asking, “How do I get started?” This is the easiest answer.

Another factor that plays into these opportunities is location. There are plenty of out-of-state investors. If you live in Charlotte and you meet an investor who lives in Atlanta but flips houses in Charlotte, make yourself the guy or girl to go to for construction management there!

Learn a bit of construction and put yourself out there in the BiggerPockets community as a project manager. Negotiate a little bit of equity with an experienced investor, or maybe just take a small weekly salary. Whatever the arrangement, the time and money has to make sense for both parties.

So, do your due diligence on people on both sides. If you’re working for an investor, Google him or her and make sure other people have good things to say about them.

And as a busy investor looking to hire on project managers, realize that you might have to wait a few weeks to find the right person. They have to be in it for the right reasons. If it seems like quick money is their key performance indicator, it might not be the right fit. You have to vibe with that person and spend some time with them to get a good feel.

Interested in hiring a project manager or becoming one yourself?

Network with each other in the comments below!

Jared is a full-time real estate investor, attorney, and real estate broker in Cleveland, Ohio. He has been flipping houses for seven years and puts out a ton of free real estate investing content on his YouTube and Instagram accounts: @JaredLichtin.

    Wenda Kennedy JD from Nikiski, Alaska
    Replied about 2 months ago
    This job is all about creating a stress-free project for all of the workers and the owner/investor -- that ends up with a beautifully completed project. It's like being a general in the Army. You must know where you are going, how you're going to get there -- all while you make the manpower and the materials available at the correct times to get the job done. It sure not a job for wimps. I know. I manage my own jobs.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    reducing stress for successful people always gets you a piece of the pie. organization is key too which I lack sometimes but hey we all try our best!
    Todd Horton
    Replied about 2 months ago
    Ive been looking to get into this field to get the feel of the industry. Looking to start flipping homes very soon and managing projects for someone whos already experienced and if theyre hiring a project manager they're likely already successful seems like almost a mandatory prerequisite to gain experience and a little wisdom. Just not sure how to get my foot in the proverbial door?
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    Seriously you'd be surprised what would happen if you hit up the busiest flippers in your area and asked them to help manage projects. Just have conversations to start man!
    Lori Blad
    Replied about 2 months ago
    This is a great article with good tips, I'd love to help someone as a project manager while I'm getting started. I'm licensed as an agent and want to start flipping but I'm intimated by making the jump with hard money- this would be a good way to start small, anyone in the North Texas area want to meet up and talk about options?
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    Lori you can partner on deals with investors who can qualify for hard money without being on title. But if you're part of the LLC you'd get credit for doing flips under that company, and be able to qualify for hard money after doing 1-2 deals that way. As far as project management, dealing with people is a niche skill and NOT everyone can do it!
    Roger Leblond from Skowhegan, ME
    Replied about 1 month ago
    This article may be the perfect solution to my own dilemma. It fits my situation almost to the T. This is a case of ignorance on my part because I assumed that most project managers were previous contractors or other real estate pros. I have the hands on skills in most areas of residential home construction. Thanks for this great tip, however I live in Maine and new construction is winding down. Come on spring time!
    Janeile Cudjoe-Myers from Toledo, OH
    Replied about 1 month ago
    I thought the same - that project managers need construction experience. So what is the difference between a PM and a general contractor? I thought it was the GC's job to make sure the project ran on budget and on time? I guess a side-by-side of job duties would be helpful.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    and a project manager is definitely better positioned to make sure things are getting done on time and on budget!
    Chris Ehlert from Tucson, AZ
    Replied about 1 month ago
    You need a license and take a test to be a GC, you don't for a Project manager.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    hey man seriously you'd be surprised what would happen if you hit up the 10 busiest builders/flippers in your area and asked them to help manage projects.
    George Herchenroether from Naugatuck, Connecticut
    Replied about 1 month ago
    I'm going to ask the rookie question. If I want to become a project manager for an investor or even a builder - what skills and experience are they looking for that is relevant? I can talk about many, many years as a PM in technology - and, of course, I think these are transferrable skills - but how to get an investor or builder to see the same?
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied about 1 month ago
    entrepreneurs don't care as much about experience and background as much as they do your personality and work ethic. basically being able to keep a project going on time and on budget can mean many things. but it's mostly communicating between the investor and the contractor daily, their needs, timeline, and materials. You could go in with almost no construction knowledge, but a basic understanding of what things cost, and what good & bad work looks like... and you'd be set. hit me up if you ever have any questions, id be happy to answer!
    Brad Shepherd Syndicator from Austin, TX
    Replied about 1 month ago
    Great topic! This is exactly how my first flip went. Partnered up with a very experienced guy, and then I became the gofer, spending my days running back and forth from the house to Home Depot, and trying to keep the workers busy and supplied. I learned A TON just having to figure out what a certain part was and what it did, and being involved in the discussions at the house. Then I'd come home with a stack of Home Depot receipts and track the expenses. My partner saw the house just a few times, while I felt like I practically lived there, but he provided all the guidance needed. I felt happy to split the profit the way we did. This is a great suggestion as a way to get started. An experienced flipper may have some of these pieces in place, but most don't. Put yourself out there as willing and able, ready to do the crap jobs that are just a hassle, and you'll get tons of benefit out of it.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    that's awesome man! Thanks for reading.
    Cheri Bell
    Replied about 1 month ago
    Hi Jared, I'm a PMP interested in gaining knowledge in investing. I had not thought of offering or working with local investors and flippers, that's a great idea! I'm very interested in offering my project management experience in exchange. I'm coming to your Pop-up event in Cleveland on Nov. 8th, so maybe we can meet then! Great article.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    Hi Cheri, I'd love to have you. If you're still open to coming let me know. Regardless, I'll probably be doing them about once a month this year!
    Jeffrey Brence
    Replied about 1 month ago
    Jared, thanks for the interesting article. I'm an investor with a few properties in the Cleveland area, and would love to touch base with you about finding a recommended project manager. I'd love to reach out to you directly sometime in the near future. Thanks! Jeff
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    Hey Jeff, absolutely, thanks for reading & reaching out! Send me an email [email protected] and I'd be happy to jump on a call or meet up.
    Seth Travis from Clemson, SC
    Replied about 1 month ago
    Jared, great article! I am currently a senior at Clemson University majoring in Business Management with an emphasis in Entrepreneurship. Upon graduation in May of 2020 I am looking to get a job in the commercial real estate industry. I am wanting to get involved in real estate investing shortly after getting a job. This article was very helpful with learning about different ways to get involved with it and learn throughout the process. I'm heading over to your youtube channel now to check out some more of your content. Keep it up!
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    Thanks man! I've been posting a ton on Youtube this year, focusing on growing my brand the right way. If you ever need anything lmk!
    Stephanie Adler from MI
    Replied about 1 month ago
    This is a great read and a great article for tips on how to get started in this! My wife and I have yet to get our first deal in investing, but I would love to learn more about becoming a project manager for one so I can try and learn some of the ins and outs for my own type of investing. I live in the Detroit area and would greatly appreciate being able to meet up with any experienced PM's or investors on how to get started into this type of process.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    Hi Stephanie, thx for reading! I would be happy to talk about my experience from both sides of the coin. feel free to send me a message.
    Daniel Gengaro from Bloomsbury, NJ
    Replied about 1 month ago
    Glad I read this and I am definitely going to look into doing this.
    Jared Lichtin Flipper/Rehabber from Cleveland, OH
    Replied 27 days ago
    Awesome. I put out a ton of videos on youtube as well if you're interested in seeing my projects! Thx for reading.