Hi there - not sure if this is quite the right forum or not for this question but thought it fit if you're in this space.
I'm more of an idea guy who has participated in a lot of the trades (plumbing, electrical, decks, concrete etc) simply by doing work on my properties -- I'm not the guy you want out there doing the work on a daily basis (I can build and plan out a helluva privacy fence though) so anyways I get how stuff goes together and am pretty good at the planning/sourcing and handling money aspects.
I've worked with a contractor who is a damn fine finish carpenter - So far we've worked on 2 larger projects together the most recent being the gut remodel of the kitchen and most of my first floor at my personal residence -- we simply did what we had done on another project where I came up with the main plan, sourced all the material and then him/his small crew went to work and only charged me labor.
He's really good at his job which I think is evidenced that he stays very busy with builders who do custom mid to high end homes -- for instance one project I took a look at he did some unGodly amount of stair rail in a $$million or so territory custom home that personally took him a full week to do. (A $million or so custom house around here is a fricking mansion).... He's good and as I've watched him work through the kinks of things that would take me forever to figure out since I have not encountered them I managed to learn a lot.
I dont know all aspects about him but think he'd be a great person to partner up with and as he's seen a couple of the projects I've done and we've talked about rentals/rehabs it's something that interests him as well. I learned recently that before the housing crash he had 20 + employees and it got to a point he had to lay everyone off and he had to scratch by doing odd jobs to make it through...I think the downturn was pretty hard on him as the market he was in came to a screeching halt -- now I think it's 3-4 people that work with him. He did say over and over how much he enjoyed working on my personal residence as he mainly does new construction and very rarely will do a remodel. He was really liking the transformation that took place.
If all goes to plan I should have more deal flow and capital to work with going into next year and I'd like to make him a part of the business in some way simply because of his work product and his knowledge.
I was thinking maybe at first if I get projects he could bill me the labor as he does then give a cut of the profit or some sort of bonus at the end if the property is flipped or refinanced and turned into a rental? I'm just looking to give an incentive to want to work with me and place me higher on the list than some of the builders he works for. I think it wouldnt take much to move up higher than a couple of the builders he works for as they do not treat him very well.
I like real estate investing and to me it's not about how much money I can make, it's about freedom and hopefully helping someone else out with success too if they work hard and are a reason I'm able to be successful. Hope that makes sense -- watching the local community we have too many ME first business people - they'll be successful for a while but I just dont see how they can get any sort of fulfillment out of life with their low quality product and mentality of only seemingly wanting to enrich themselves to live a ridiculous lifestyle.
But back to my point - do any of you have any creative ideas on how to properly reward good people or make them a part of your business if they would be key to it's success?
I was half way through reading the post and made me realize that my answer will be the same... You don't. You hire them as contractor, pay them good money, repeat. I remember my commercial door guy had the same story, 2 houses, state wide door supplier, 40+ employees, union contractor, then market crashed, lost everything, now it's him + 1. Paid him good for a 2 day job, 3
doors, 2 guys in 2 days, $2,750 for only 3 doors, yeah, labor only. good payday for him and me.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing