Better to DIY or Build a Team?

Question

Every new sponsor has a decision to make ... DIY or Hire.

Each task that you DIY or outsource comes with a cost and benefit.

Sponsors: What common business tasks do you keep to yourself, and what do you outsource?

@Omar Khan @Brian Burke @Kyle Mitchell

George Pauley · Answer

I haven't ever thought about when to hire as a long term investment strategy. Instead what I find is that as my portfolio has grown, I repeatedly found myself in a situation where I had to admit: I don't have time (or inclination) to do activity X anymore. I then asked myself if I could afford to pay someone to do X, and the answer was almost always yes, and then hired them.

I will say that my real estate "empire" seems to grow every time I hire the next team member. Some of this is just the team freeing up my time. But I think a lot of it is that team members want to see me grow (so I give them more business) and so they push me. ;) Team members often give me new ideas which is really useful too.

Brian Burke · Answer

@Tyler Kastelberg I don't outsource much.  When I first got started in this business (30 long years ago!) I did everything myself.  I went to the store and bought refrigerators and rented U-Hauls to get them to the property.  I placed ads looking for tenants.  I wrote checks to pay the bills.  While all of that seems like a poor use of time (and it probably was), it made me who I am today--which is to say that I know my business well because I've done a lot of the tasks myself.

As the business grew, I started hiring.  I hired an employee to handle bookkeeping and office work.  I hired contractors to do rehabs.  Ultimately I built a company that is approaching 50 employees and will soon blow past that number.  To this day, the only things I outsource are some technology support and social media/marketing related tasks.  Everything else is handled by our own staff.

Brian Burke · Answer

I don't fear being too heavy because I scale my human resources in parallel with our workload and revenue.  If I had people sitting around doing nothing, I'd be concerned.  But at the end of the day, I have to pay someone to do these tasks.  For me, it might as well be in-house staff to the extent that the workload justifies the full-time or part-time role.

Tyler Kastelberg · Answer

@George Pauley

Yes - All those people are part of your team that make your business successful.

One of the traps I fell into as a young founder was focusing too much time on the minutia rather than on building a great team. As I settle further into the leadership role, I'm finding that how you build your team is very important. I answer questions like:

• Do additions to my team add to our P&L/liquidity risk?
• Does my team have a positive return on investment?
• Do new team members add to the agility of the team?

Brian Ellis · Answer

You can do both.

At first I did everything, because it was all I could afford, or I didn't know enough people. The more ive gotten involved in REI (like @Brian Burke mentioned), the less hands on I have become.

I still do mostly everything, but its a lot easier for me to outsource now. I have learned what im really good at, and what im really bad at. So I stay away from things that are more difficult for me. Because of that I have been able to get more done.

Im not a sponsor by the way, just an avid DIYer.

Greg Dickerson · Answer

@Tyler Kastelberg it all depends on your goals, skills abilities and time available.

As @Brian Burke said I too stated everything from the ground up myself 23 years ago but it was my full time job when I stated the business.

Now I outsource everything. GC’s, PM, accounting, admin etc. I had all this in house at one point but I am in a very different stage in my career now.

It’s going to be different for everyone

Tyler Kastelberg · Answer

@Kyle Mitchell

I like it! Great leaders know how to build great teams.

Kyle Mitchell · Answer

@Tyler Kastelberg I am quickly learning that outsourcing is a necessity.  Although I have not outsourced much at this point we do plan on outsourcing many of our tasks.  Over the next 12 months I would like to outsource the following tasks.

-Accounting

-Underwriting/Modeling

-Podcast editing/posting/booking

-Social Media/Marketing

Nick Rutkowski · Answer

@Brian Burke

I think in the beginning, what you did was a great use of your time. I was always told, “you can’t manage someone if you don’t know how to do the job yourself” I’m hoping later in life I will make the switch and outsource as much as I can. But I’m following the same path you did.

Frank Wong · Answer

When you don't have money but have time you DIY when you need more time and have the money you hire.   Time is the most important commodity in this world the rich know this.

Better to DIY or Build a Team?

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