any investors do the dirty work??
Investor · Greenville, SC · Member since 2013 · 252 posts · 92 votes
I have done a few flips, and currently rehabbing a buy and hold in greenville, sc. I do most all of the work myself, which is pretty slow going since i only have so much time to devote . I enjoy carpentry, and the feeling of turning an ugly house into a nice property. does anyone else out there do the work themselves, or do most people hire everything out. Once my youngest son is in school next year... that will free me up more time to make more progress. Just wanting to see how everyone else is getting it done. Also, it seems when i do hire certain things out.. i am usually not satisfied with the results. Thanks for the input.
Adam
I have done a few flips, and currently rehabbing a buy and hold in greenville, sc. I do most all of the work myself, which is pretty slow going since i only have so much time to devote . I enjoy carpentry, and the feeling of turning an ugly house into a nice property. does anyone else out there do the work themselves, or do most people hire everything out. Once my youngest son is in school next year... that will free me up more time to make more progress. Just wanting to see how everyone else is getting it done. Also, it seems when i do hire certain things out.. i am usually not satisfied with the results. Thanks for the input.
Adam
In the beginning I swung the hammer. Havn't done so in years though. Truth be told i'm not all that handy I just kinda got in the way most of the time. We have 800+ properties & 60+ employees now so it wouldn't make any sense for me to be doing any of that stuff still. My partner still swings it every now & again. He can't help himself. He loves it. He's probably more useful in the office at this point but it's his passion to be in the field & get dirty so he makes time to go out to the projects as much as possible.
He's been going out to this property of ours last couple days with this major sewer issue that the plumbers are working on. Dude keeps sending me the photos. I'm like bruhhh your name is on hundreds of buildings, you shouldn't be in the same room as human poop anymore. He can't help himself. He loves it.
I work a full-time day job still and when we started, so did my wife, so due to a lack of time we have mostly hired the rehabs out to a GC. The one thing I like to do is the landscaping/tree trimming, which I will spend a day or two with on the weekends. We follow the BRRRR strategy, so a quicker turn at the hands of a trusty GC helps me get it rented and refi'd faster.
Andy
The house that i am working on now is for a brrr buy and hold property. Do you pull out the maximum amount on your brrr properties? I was planning on just financing the amount that I have in the purchase price and closing costs only. I am going back and forth on pulling out more money vs maintaining a small mortg amount while paying it off quicker.
We buy with hard-money and refi out typically within 3 months, so we do rate and term refi's. No cash to pull out (except for a little bonus - max up to smallest of 2k or 2% of appraised or loan value, I forget which).
In your case, what are your future plans: do you plan to hold this one for a long-time? If so, a lower payment sure is great. Are you planning to buy more houses and need cash to do so, then I would trade out the lower cash flow for higher purchase funds, up to a point. Of course, do you have minimum returns you have set for yourself (e.g. 20% cash-on-cash return, or minimum dollar amount cleared per house) - if so, how far can you push the cash out before you cross those thresholds?
We buy with hard-money and refi out typically within 3 months, so we do rate and term refi's. No cash to pull out (except for a little bonus - max up to smallest of 2k or 2% of appraised or loan value, I forget which).
In your case, what are your future plans: do you plan to hold this one for a long-time? If so, a lower payment sure is great. Are you planning to buy more houses and need cash to do so, then I would trade out the lower cash flow for higher purchase funds, up to a point. Of course, do you have minimum returns you have set for yourself (e.g. 20% cash-on-cash return, or minimum dollar amount cleared per house) - if so, how far can you push the cash out before you cross those thresholds?
We buy with hard-money and refi out typically within 3 months, so we do rate and term refi's. No cash to pull out (except for a little bonus - max up to smallest of 2k or 2% of appraised or loan value, I forget which).
In your case, what are your future plans: do you plan to hold this one for a long-time? If so, a lower payment sure is great. Are you planning to buy more houses and need cash to do so, then I would trade out the lower cash flow for higher purchase funds, up to a point. Of course, do you have minimum returns you have set for yourself (e.g. 20% cash-on-cash return, or minimum dollar amount cleared per house) - if so, how far can you push the cash out before you cross those thresholds?
I bought the property for 32k cash. I will put about 12k out of pocket in to the property for rehab, and it should be worth 75k+. I hope to rent it out for at least $700 per month. I plan on keeping this house for the long term as a rental. I have another property for sale that i own free and clear. I bounce back and forth on what is the best to do. I want to be able to pay off this house sooner than later. I also would like the extra money to be able to have more options. I have always used cash or bank financing on properties. I have never used hard money or any other type of investor money. For example, i own another property free and clear. i would like to eventually build a house on the lot, and rent it out (it is very close to downtown greenville, sc). I would prob need the extra money to make that happen. Thanks for your input.
Adam
Here are a few things I ran into while doing my current rehab
1. Contractors are busy working other projects or are unavailable all together. Sometimes it will take them weeks before they can even get to your property. I actually saved time by doing some of the work on my own.
2. Contractors charging completely outrageous amounts for relatively simple projects. Sorry but if I can pay a few high schools kids to help me do something for less than half the cost that you charge, I'm doing it myself.
3. Low quality workmanship. I have no problem paying to have things done, but for the premium I am paying, your workmanship should be top of the line.
4. A desire to learn and grow as an investor/rehabber.You will know if a contractor is dragging their feet getting a job done. You will know if a contractor is charging outrageously for parts or labor. You will know inexpensive fixes and substitutes that will save you big money.
5. True enjoyment of working with my hands and seeing something transformed. The truth is that I absolutely love working on my houses. The skills I gain I will use to work on my primary residence.
I've seen a mix of this. I have a friend with eight houses that has house hacked each and done almost all the work himself. To me, if you have the time and are handy, doing the work yourself is a good way to get started. But as you increase you wealth and cash flow, the opportunity cost becomes too much of an expense and you should outsource the construction work.
Hey Adam,
A few people are talking about the general contractor route on here which could be great depending on your goals going forward.
I don't have much experience but there's a guy out of Wisconsin that exclusively works as a GC for his rehabs and he has a fun Youtube series documenting his interactions with his sub-contractors and employees.
His name is Nick Ruiz, and he has an awesome book called "Starting From Scratch". He works out of the Wisconsin area.
Here's the link to his channel!
http://www.youtube.com/channel/UCrG53uJIhSAJ4OACLE...
Duane
We do the usual homeowner stuff ourselves, plus demos, and hire out the heavy lifting. So we paint, clean, replace light fixtures and faucets, shovel snow and do landscaping.
We could afford to hire it out, but between finding and scheduling competent contractors, it is faster and easier to do it yourself.
I have done a few flips. They are generally 100% inside and out to the studs. All mechinical and often HVAC as well. Since I have no desire to scale up and time is not a concern I do all the work myself except drywall tape and mud. That is the one job I hate and have no desire doing anything I hate.
You have to keep in mind that carrying costs will bite deep not your profits if you take too long.
@Adam Drummond I laugh when I see that you want to get your youngest son involved in the real estate, because my husband and I joke around about the day we can utilize them for labor. My husband's parent did the same with him when he was young and while he invests in real estate now he got as far away as possible from it the second he had a chance for a decade. Early on I think it makes sense to do the deals but you can't really grow as a company if you are trying to manage everything. At some point you will need to focus on finding the deals. Now at times a contractor will no show that will show up your progress so, we definitely have picked up a paintbrush, or put on some gloves but you can still have the feeling of turning a house into something beautiful without building it by managing it.
We built our portfolio around the concept of self performing most labor/rehabs. It worked for us as we worked in the trades and it made sense.
I would disagree that it slows your ability to scale. We were able to force massive amounts of appreciation, which fast tracked our progress.
I really think it depends on your skill and your goals. If you have the skills to do so and don't mind doing it go for it. If you don't no sweat! Although I think it will limit your options if you have to completely rely on contractors. Good contractors are expensive and you need to budget that..
I do everything except HVAC. I'm currently doing one house where, while checking a soft spot in the kitchen floor, I discovered the floor joists in the kitchen, dining room, and living room were bad. Removed all those floor joist, am currently replacing the majority of plumbing with PEX and putting in new subfloor. The new subfloor has to be a double layer of OSB, at 80 lbs. per sheet, because one layer wont match existing heights. oh my aching back. LOL. I'm also going to paint inside and outside, am building a separate utility room and walk in closet in an extra large bedroom that had previously had the washer and dryer out in the open, replace some doors and do some drywall work. I should be able to go from 810 a month to 950 a month when I'm done.
We do a good bit when we renovate our units: We have an HVAC guy, we hire drywall finishers and we hire plumbers for "in the wall" stuff (we install toilets, faucets, garbage disposals do under sink repairs. We do everything else. We really try not to do routine maintenance work.
I think there is definitely something to be said for the learning experience of doing a bunch of these projects yourselves.
But it also sometimes contrasts with the idea of treating it like a strict zero-emotion business. sure, you might be able to save some money by hiring it out. and you might not be 100% satisfied with the finished product. But if the tenants don't care and it's not going to raise your rents then you might be overthinking a little bit.
@Adam Drummond I think there will never be a right answer to this question. I started out doing everything I could on my own when I purchased my first four unit in Lyons, IL. I was painting, replacing exterior fascia, fixing windows, etc. I did save a lot of money, which helped me drive returns when I didn't have as much spare income.
This past year I ended up purchasing a 20 unit apartment complex in South Bend (out of state), and a nine unit apartment complex in Berwyn. Of the 29 units, 13 were renovated last year! There is no way I could have done enough of the work, and this really forced me to think of apartments as a business.
The only thing that makes me hesitate now on doing my own work is the value of my time. As I have focused on my realtor business, my time has become more precious and more valuable. I have also found less expensive contractors who do solid work. I now try my best not to get caught up doing too much of the manual labor, but do not regret any of the work I did to get myself started!
Reading this from a hotel in another state before I go to our current rehab project. 11-12 hours a day for the past few days. I feel it is safe to say that a lot people in here know how to get dirty with their hands. Go BP! It's cool reading through these and seeing what everyone is working on! I'll take some pictures today and post them back on here.
I have done a few flips, and currently rehabbing a buy and hold in greenville, sc. I do most all of the work myself, which is pretty slow going since i only have so much time to devote . I enjoy carpentry, and the feeling of turning an ugly house into a nice property. does anyone else out there do the work themselves, or do most people hire everything out. Once my youngest son is in school next year... that will free me up more time to make more progress. Just wanting to see how everyone else is getting it done. Also, it seems when i do hire certain things out.. i am usually not satisfied with the results. Thanks for the input.
Adam
Also wanted to re-iterate something that I have been told and hear a lot. No one will care and put in as much as you for your property. So if their work isn't to the quality that you want. That's probably why.
I love doing the work myself. for me it's therapeutic, i enjoy a hard days work in manual labor. gives me a chance to unwind from my regular stress filled day job. I have done cabinet install, ceramic flooring, electrical, plumbing, painting, roofing, windows, finish carpentry. about the only thing i wont tackle is working boiler system. And i am thinking roofing isn't so much fun anymore :)
I have done a few flips, and currently rehabbing a buy and hold in greenville, sc. I do most all of the work myself, which is pretty slow going since i only have so much time to devote . I enjoy carpentry, and the feeling of turning an ugly house into a nice property. does anyone else out there do the work themselves, or do most people hire everything out. Once my youngest son is in school next year... that will free me up more time to make more progress. Just wanting to see how everyone else is getting it done. Also, it seems when i do hire certain things out.. i am usually not satisfied with the results. Thanks for the input.
Adam
Also wanted to re-iterate something that I have been told and hear a lot. No one will care and put in as much as you for your property. So if their work isn't to the quality that you want. That's probably why.