When Did You Stop Doing It Yourself and Start Hiring Out?

Question

I'm not sure what category to post this question so I figured this would be a safe bet.

When did you make the switch from doing everything yourself to hiring out repair work and rehabs? What was the reason for choosing that point in your career to do so?

I only have one duplex at the moment but I'm noticing a lot of time going towards fixing up the property, repairs, and managing tenants. I bought the property knowing it needed a lot of work but lately I've been getting to the point where I'm more inclined to pay someone who will do a better job and get it done quicker instead of trying to spend hours fixing something myself. I really feel this is the better way to do things as it also frees you up to do more investing and grow your business, but it also seems like a waste of money/not being frugal when you could put a little sweat equity in and save money. I'm just getting started and money isn't as readily available as time.

Thanks in advance for all the advice!

Christopher Blanco · Answer

From Day 1 for me. I work a full time w-2 job making six figures. Doing the labor for rehab on the home is a $10-$20 an hour job, so I know my time is worth more than that. So then I pay someone else. That's my deciding factor. Treat it like a business, unless you want to buy yourself another job.

Jake Thompson · Answer

Hi Jonathan, my wife and I were both active duty when we got our duplex so qualifying for the loan was pretty easy fortunately. We used VA loan with 0% down. Bought it in San Diego off the mls. It wasn't the greatest deal and we've made a lot of mistakes but it has taught us so much! We're househacking and fixing it up as we go which allows us to lower our monthly payment (which is only partially true since the rehab costs pretty much bring it up to what we were paying in rent anyways, but that will eventually be over with soon and I'll just have regular maintenance and repairs to worry about.

Also as far as my original topic I did find a reputable property management company that charges $79/mo and 1 month's rent for placing a tenant. This to me seems ideal if I place my own tenant that way the PM service doesn't break the bank.

Jonathan Jaime Velarde · Answer

This is kind of off topic, but I am about to get out of the Marine Corps next summer and would love to get my hands on a multiunit. How did you manage to purchase one? Did you buy it while you were still in using BAH for the income..?

I'll be going to a community college in Ventura County and living at home for a little while pocketing the monthly housing allowance so I can save up that way.

Long story short..what financing, where did you buy it, when, etc??

Thank you in advance I'm looking for military success stories.

Andrew Johnson · Answer

@Jacob Thompson I always have used a property manager.  Right in the beginning when we had the post-marriage two-houses-become-one scenario we did self manage that single SFR.  But we didn't fix anything, ever, it was always a call to a vendor when those little issues came up.  When we sold that for a multiunit I went the PM route and never looked back.

For you it could be a different scenario.  Look at whatever your gross rents are and take 10% of that.  Divide that dollar amount over how many hours you spend working on the property, fielding calls, doing showings, etc. in the average month.  If it's $1,000 rent, $100 PM fee, and you work 2 hours a month it's $50/hour.  If you end up with 10 hours of "stuff" to do with the property you're at below minimum wage.  I think it's $11.50/hour for San Diego now, but I digress...

It should be really easy to figure out the ROI for your time managing the property.  That assumes those hours can be put to productive use somewhere else and you aren't trading "unclogging the drain" for "Xbox time!"

Cody L. · Answer

I had a full time job and about 100 units before I hired a property manager.  At ~500 I hired operation manager to manage my managers and staff.   I feel I'm reaching another point now where I need to hire someone to do the stuff I'm still doing but that'll be a harder position to fill.

Jake Thompson · Answer

That makes sense, however I recently got out of the military and have just been going to school. My only job really is school and taking care of the property. So maybe if I wanted to get a job and then hire out repairs that will make more sense. Instead of just trying to be a lazy bum! haha

When Did You Stop Doing It Yourself and Start Hiring Out?

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