Rookie Reply: Doing The Work Yourself vs. Hiring Out

Ashley:
This is Real Estate Rookie show number 58.
Getting very close to the niner, Tony.

Tony:
Real quick. I got to do that when we get there.

Ashley:
Okay. Yes, yes. It will be a new tradition.

Tony:
There you go.

Ashley:
I am Ashley Kehr, your host, and I’m here with Tony Robinson, and today we are taking over the Rookie Reply with a question that we came up with that we hear often and we still ask ourselves that same question every single day.

Tony:
All right. So today isn’t so much of a question from a guest. Like Ashley said, it’s more of a discussion that we’ve had amongst ourselves and with other investors, but it’s when do you do the work yourself versus when you hire it out? And this is as much of a mindset question as it is a tactical kind of real estate question.
And I guess I’ll give my experience, right? I purchased my first two long-term rentals out of state and I did all of the work remotely, right? Or I manage all of the work remotely, which means I did zero work myself. I didn’t lay a piece of flooring, I didn’t do any of the demo, I didn’t even pick up a broom. I did absolutely nothing, but I still had this end product that was a finished and rehabbed house.
But for whatever reason, I almost felt like I had this kind of imposter syndrome because you see a lot of the other investors that are on social or on TV and they’re doing a lot of the work their selves, and they’re swinging the hammers. And I had to really ask myself what’s my definition of being a real estate investor? And does my definition mean that I have to be the one doing the work or does my definition of a real estate investor mean I’m finding the assets, hiring out someone to do the work, but then managing the overall process? So it was kind of this mindset shift that I needed to make to just kind of accept what my definition of being a real estate investor is. That’s a really deep way to start the show today, so I’ll let you give your insights on it or we can kind of go back and forth.

Ashley:
No, I think it’s great because it made me think about my first property and how everything has changed multiple times from doing nothing, to doing a lot, to doing nothing. But for my first property, we hired out the rehab for that, and it was very small rehab, just some flooring, some paint, a couple of cabinets changed, but I did all the property management myself. I did the leasing, I did the bookkeeping, I did all of that. So it was very hands-on and very time intensive and then it got switched to where I was doing the property management and we started to do the rehabs ourselves. So me and my partner would go in there and we turned over a unit, we decided vinyl plank flooring, that was us in there. Whenever we could get in there and do that. So now it’s definitely switched from that where I’m trying to do as very little as possible.
I mean, I’ve been investing since 2014 and I just had this mind shift in basically February 2020. So the end of 2019, I knew I definitely wanted to give up the property management, and then from there I just really started to get into rehabs and I’m like, “I love this. I don’t have to talk to anybody. I am my own boss. I don’t have to deal with contractors. I can do it on my schedule, my time, and I’m controlling the budget because if I mess up, I’m paying for that or not.”
Then Steve Rosenberg actually, you know me, big Steve groupie. He is like, “You’re not going to want to do that forever. Put your systems in place so that you can outsource that.” So I was like, “Oh, I love it.” And then just one day it finally clicked, I want to be able to pick what I want to do. So yeah, if there is an opportunity for me to do flooring, I can choose to do that, but I’ll also have a plan in place so that there’s somebody else who can do it if I don’t want to do it.
So when was that mindset shift for you? So you started out almost feeling guilty that you weren’t doing a lot of those hands-on things, but you’re also self-managing.

Tony:
Man, I think it was … That mindset shift for me happened I don’t know it was strange, right? Because if I’m being transparent, even coming onto the show as the co-host, right? I was like, “Man, am I going to be able to really give the listeners everything they want to hear because I haven’t done all these different things.” But again, it comes back to what my goals and what my resources were.
And my personal goal was never to get really, really good at painting the exterior of a house or getting really, really good at putting in new cabinets, whatever it is. My goal was to get really, really good at finding real estate that’s cashflow producing, right? That’s income producing. And when I kind of realized it that way, that’s when I became a little bit more comfortable in my own skin.
And my goal right now is acquisitions, that’s what I’m focused on. I’m trying to build my portfolio quickly, and I know that if my goal is to build it quickly, I can’t be the one that’s doing all of the work. Those two things don’t go hand in hand, especially when you’ve got a family, a W-2, all these different things you’re trying to balance. So I knew for me that hiring out all of the work was what I needed to do to reach my goals.

Ashley:
Yeah. Here would be my recommendation if you were looking at any task, any job, and thinking this question to yourself, do I do the work or do I hire it out? I would say no matter what you end up deciding, just start putting your systems and processes in place. So even now, if you’re just starting out and you’re going to do the rehab, everything like that, document everything that you do so that when you are ready to give it up, it’s so easy because you have your checklist, you have everything ready to turn it over to someone, because that day will come a lot faster than you think it will. Tony, can you imagine if you were flying out to your properties, doing the rehabs, I mean, you would not be to as many properties as you are now. How many are you at now?

Tony:
That’s a good question.

Ashley:
Every day, every time we come on the show, he’s like, “Oh, I got a closing.”

Tony:
I think we’re at seven right now. We’re at seven with another couple under contract.

Ashley:
Oh, just another couple under contract. But I mean, would you agree with that, as like no matter what you decide now is make sure that you’re putting something in place so that you can easily walk away from it or hire it out? Or if it’s a rehab job, start talking to contractors so that you have them in your network. You have the people, you have the resources readily available to you for when you do want to outsource.

Tony:
Absolutely. And I think your point about documenting the work that you’re doing is critical. So for me, with [inaudible 00:06:18] Capital, that’s like our team is buying all of our short-term rentals. It’s me and my wife and our third partner, but I’ve got an org chart of twelve different positions. I literally have an org chart that I built in Vizio or whatever it is, and it shows all the different parts of our business.
Now in all those positions, it’s my name, it’s my wife’s name, and it’s our partner’s name, right? We’re all holding multiple positions, but we know that as our business starts to grow, that we’ll start being able to kind of plug people in there. So your kind of advice of knowing what the work is that needs to be done and then documenting that is super critical.
If I can recommend, there’s two books that I love kind of about this topic, and it really ties into answering this question of when do you do the work yourself versus hiring it out? The first book is Who, Not How. Who, Not How by Dan Sullivan, and he was just a guest on the [inaudible 00:07:01] podcast, not too long ago. Had a great interview. And the other book is The E Myth by Michael Gerber.
If you read those two books and your goal is to build a relatively large portfolio, that is required reading. You have to understand how to build teams and put people in place to support your real estate goals. Now if you just want to have one or two or three investments and that’s it, then totally, do it all yourself. But if you want to grow this to be something big, you got to have the right people in place.

Ashley:
Yeah, another book too would be traction, and we’ll link these books in the show notes biggerpockets.com/rookie58. And Tony, I am going to ask if you would provide a template of your org chart that we could put into the show notes too so people could see how you have broken things down and maybe they can tailor it to their own business.

Tony:
Yeah, absolutely. I’d love to. That’s a great idea.

Ashley:
More work for Tony.

Tony:
But I got the right people in place to help me with it, so it’s all right. But you know what? It’s funny because I am thinking about hiring a VA. You hear this a lot, especially as people’s portfolios start to grow. So I’ve been talking with some other real estate investors to learn kind of how they’re using VAs in their business so that kind of goes back into hiring out versus doing it yourself. So yeah, we’ll see.

Ashley:
Yeah. Well, I have a great example for everyone as to why don’t procrastinate putting your stuff together and in order because okay, over the years I have I think five LLCs or something for my rental properties with different partners and I just decided this year that I’m going to have a bookkeeper takeover. So this I really hired her this summer and she’s doing my partner’s other businesses. I still have not turned over all of the bookkeeping to her because I’m just like this is the way that I like it and well, I have to log into the owner’s portal and pull this statement, then I like it attached like this.
So I am literally going through and making this step-by-step. I am sitting there and doing all my year-end stuff and making this list so that as I’ve given her I think maybe three of the LLCs. So from the start of the year to the end of the year, she’ll do it exactly how I want it. And my gosh, how I wish I would have done this years ago so that I could just hand it over, or as I got a new LLC, a new property, it was like, “Okay, here’s my checklist.”
And if you guys go listen to Shelby Osborne, she was on the Real Estate podcast with Brandon and David, and she talked about how any time she does a task she makes a checklist, especially if it’s something that she struggled through, so that way she’ll never struggle through it again. Or like if she sends an email that she thinks that might come up, she saves that email as a template. So I’ll try and pull up that show real quick so you guys can go listen to it. If Tony, you want to take over and talk about something while I quickly Google this.

Tony:
No, I think the biggest takeaway from this show, Ashley, is that as with all things real estate investing, it all kind of comes down to what fits your specific situation and your specific goals. Like I said, if your goal is to kind of remain small or to scale slowly, than doing everything yourself makes sense. If your goal is to build something a little bit bigger and scale more quickly, you’re going to need the right people around you to make it happen.

Ashley:
Yeah. So Shelby’s podcast was podcast number 406, for the Bigger Pockets Real Estate podcast.

Tony:
I’m glad my little tidbit was good enough for you to go find that piece of information.

Ashley:
Usually if you say something, I can Google it very quickly, but me talking and Googling, I’m not that great at that yet. Multitasking is not a talent of mine.
Well, thank you guys for joining us. I hope that you took some value from this and we would love to hear in the Facebook group what you guys think as to what you guys are doing yourselves and what you actually outsource and definitely what your goal is for this year to try and outsource. Or maybe you’re actually going to take something back over that you want to learn and you want to put a better system on that. So thank you guys for listening. I’m Ashley Kehr at Wealth From Rentals and he’s Tony Robinson at Tony J. Robinson. Make sure you guys check us out on Instagram. We’re going to be doing some fun stuff on there and lots of new things coming out and we’ll talk to you guys on Wednesday.