Construction companies have poor presence on BP
Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes
Construction companies have poor presence on BP
Most Popular Reply
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesI think part of it and based on my personal experience in Indy.. is there are two opposing forces working.
the investor who wants to buy and rehab a property for as cheap as possible to make the numbers work.
and contractors who give honest quotes but don't get a lot of work with rehab investors because there is no money in it for them doing 15 to 30k rehabs..
that leaves very much bottom of the barrel hand to mouth contractors running around that will take on those small jobs.. they have no money to buy materials.. and we as consumer take on huge risk paying in advance.
103 Replies
- Contractor · Evansville, IN · Member since 2019 · 142 posts · 208 votes7y
Investors and property managers have a bad reputation down here, and most contractor won't even talk to them. I've been a contractor for 7 years, so I am still getting myself off the ground.
I tried residential, and gave up. I am not a mover, and people can't seem to read a scope of work to save their lives.
With investors and property managers, it's champaign taste on a beer budget.
But evansville has become a hotbed for a new wave of investors who will pay for quality, a changing of the guard if you will. The slumlords are cashing out.
It's nice to be appreciated for a change.
I don't think the lack of presence here is because they are busy, they just have no desire to deal with investors, as that is viewed as bottom of the barrel work.
For me, the hardest part is getting paid. Too many times I have to walk away from a decent client because they want to stall out writing a check or nitpick their way out of paying.
Its a great industry to be in as there is definitely volume, it's just a matter of finding the right investors.
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes7y
@Bill Kramer I agree man.
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes7y
@Matt Michaelson that’s one of the reasons I’ve targeted them as well. Moving furniture and having smaller windows or work or access can get in the way and often makes it more difficult with tight schedules.
- Atlanta, GA · Member since 2018 · 66 posts · 32 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
- Rental Property Investor · Los Angeles · Member since 2019 · 284 posts · 184 votes7y
Originally posted by @Joshua Howaniec:
@Dutch Langley glad you are guys are busy.
So then what I’m hearing from an application standpoint is I need to be finding the investors and contractors working for the higher margins, higher projects and such.
Thanks for the input
That's exactly what Im doing right now. Im partnering with other investors/developers right now on bigger projects with higher margins... doing bigger builds new constructions, high end, multi unit conversions, etc... while learning the construction side ( all the while making relationships with the GCs and really learning how to build my own team of subcontractors to use for future projects of my own). Yes, barrier of entry can be very cash intensive to play with the big boys... but its all worth it because now I'm seeing all sorts of possibilities.
- Atlanta, GA · Member since 2018 · 66 posts · 32 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
Ah, I see. We plan on investing no more than 1.5-2 hours outside of Atlanta and hoping to quickly scale up to multi-family. The only part about BRRRR that scares me is possibly being over leveraged once the refinance happens. I've seen you mention that so many people get stuck on the refinance part. That really does concern me.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
Ah, I see. We plan on investing no more than 1.5-2 hours outside of Atlanta and hoping to quickly scale up to multi-family. The only part about BRRRR that scares me is possibly being over leveraged once the refinance happens. I've seen you mention that so many people get stuck on the refinance part. That really does concern me.
yes we are seeing post after post on BP of those that think they are getting all their cash out but don't.. not the worse case scenario of course but more equity in a property than they intended.. we handled that when I did this for a living by having the refi loans approved and ARV appraisals done before we even closed on the B side of it.. I am a little out of touch how it works now in the mortgage market if that's acceptable practice like what we did.. but I would sure want to be fully vetted and approved at least on the financial end before I did the B part of the transaction.. I can see people doing all this and then for whatever reason the refi does not happen .. I guess worse case they could be flippers and just sell and hopefully make a few bucks for the value add they did or at least get their cash back
- Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes7y
I try to have lunch with a new GC every month. I have a few in my network that we use frequently, but they do not like to work directly with investors. If I send them out... they will bend over backwards because they know that I am not a tire-kicker and will protect their time. If an unknown investors asks for an estimate, most of them are charging now. People will ask for contractor referrals and I don't give them out unless you have an offer, a home inspection scheduled, and everything is on track to close. These people don't make hourly wages... realtors, GC's, etc. Protect their time and help them be efficient and they will do anything you ask. Run them around and watch them quit answering your calls, texts, or emails.
I've had too many GC's talk about spending 40 hours/week visiting properties and building budgets and on homes that never even close to that investor. They'd rather make money than be run around for free. Like anything else, build relationships.
Personally, I don't like to use "new" contractors most of the time. I see more change orders, slower work, more unanticipated problems, etc. I will pay for value. I've seen too many people get stuck with poor work that took twice as long as it needed to thinking that they were going to save a few dollars. They actually lost it in the inability to sell or rent at the top of the market and extended vacancy time.
Like so many things in this business... building relationships will provide some of the best benefit.
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes7y
@Alvin Uy ok that’s awesome. So maybe I can pick your Brain.
I’ve been doing a monthly networking meeting to meet investors, and while that has gotten some small opportunities it’s a long term exposure play because there aren’t really big projects happening at these meets. Over half in the room have never done a flip. There’s nothing wrong with that, but you get my point.
I’ve also been more active on BP and getting a little traction here, but do you have any suggestions for finding investors at the price point I need? And for getting seen by them? What are you doing to garner their attention?
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Ross Denman:
I try to have lunch with a new GC every month. I have a few in my network that we use frequently, but they do not like to work directly with investors. If I send them out... they will bend over backwards because they know that I am not a tire-kicker and will protect their time. If an unknown investors asks for an estimate, most of them are charging now. People will ask for contractor referrals and I don't give them out unless you have an offer, a home inspection scheduled, and everything is on track to close. These people don't make hourly wages... realtors, GC's, etc. Protect their time and help them be efficient and they will do anything you ask. Run them around and watch them quit answering your calls, texts, or emails.
I've had too many GC's talk about spending 40 hours/week visiting properties and building budgets and on homes that never even close to that investor. They'd rather make money than be run around for free. Like anything else, build relationships.
Personally, I don't like to use "new" contractors most of the time. I see more change orders, slower work, more unanticipated problems, etc. I will pay for value. I've seen too many people get stuck with poor work that took twice as long as it needed to thinking that they were going to save a few dollars. They actually lost it in the inability to sell or rent at the top of the market and extended vacancy time.
Like so many things in this business... building relationships will provide some of the best benefit.
this is why when Morris threads first popped up and they said they were selling 50 D class or low C class a month.. I shouted from the roof tops there is no way no how enough manpower to do rehabs on that many homes in those asset classs for what they are saying the rehabs will cost.. many of those folks were told 9 to 15k for a rehab.. Morris was just clueless if he at all believed those houses could be turned over for those dollars.. and the buyers hell they had no clue.. its why turn key works in these markets today.. at least the house is done and the risk is on the local flipper..
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes7y
@Joshua Howaniec most people that get into construction are not tech or marketing savvy and often not even business minded. They start out swinging a hammer and move up from there. Large contractors will do more advertising and networking, but they are chasing bigger fish than you typically find on BiggerPockets. Of course as others mentioned, the economy is great now, so work is flowing in without the need to be proactive.
I think small investors believe they are a dream customer for contractors, but they are often a big pain. Usually they are asking for big discounts and fast schedules. If you work with a standard home owner, it is emotional. They want a high quality job and are willing to pay more. They are also willing to wait. Yes the repeat business aspect of an investor has value, but you need to prove that over time and you still need to pay enough so they make money.
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes7y
@Ross Denman let me know if you would have lunch with me during your monthly GC lunch. I am a project manager for a flooring company near you and we do a lot of work in Fishers and Carmel.
You being a project manager, do you think it would be more beneficial for me to target calling PM's more heavily?
- Atlanta, GA · Member since 2018 · 66 posts · 32 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
Ah, I see. We plan on investing no more than 1.5-2 hours outside of Atlanta and hoping to quickly scale up to multi-family. The only part about BRRRR that scares me is possibly being over leveraged once the refinance happens. I've seen you mention that so many people get stuck on the refinance part. That really does concern me.
yes we are seeing post after post on BP of those that think they are getting all their cash out but don't.. not the worse case scenario of course but more equity in a property than they intended.. we handled that when I did this for a living by having the refi loans approved and ARV appraisals done before we even closed on the B side of it.. I am a little out of touch how it works now in the mortgage market if that's acceptable practice like what we did.. but I would sure want to be fully vetted and approved at least on the financial end before I did the B part of the transaction.. I can see people doing all this and then for whatever reason the refi does not happen .. I guess worse case they could be flippers and just sell and hopefully make a few bucks for the value add they did or at least get their cash back
Would those processes be started in the due diligence period or before you're even under contract? At the speed the market moves down here, we'd lose every house we were interested in if we did that before each offer.
I also don't understand how one goes about getting an ARV before putting any work into it. Do you just talk to the appraiser and show him your planned renovations? And how in the world do you get pre-approved for a refinance before you even finance the first time? I'm NOT arguing with you, I'm just new enough not to understand how that portion would work.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
Ah, I see. We plan on investing no more than 1.5-2 hours outside of Atlanta and hoping to quickly scale up to multi-family. The only part about BRRRR that scares me is possibly being over leveraged once the refinance happens. I've seen you mention that so many people get stuck on the refinance part. That really does concern me.
yes we are seeing post after post on BP of those that think they are getting all their cash out but don't.. not the worse case scenario of course but more equity in a property than they intended.. we handled that when I did this for a living by having the refi loans approved and ARV appraisals done before we even closed on the B side of it.. I am a little out of touch how it works now in the mortgage market if that's acceptable practice like what we did.. but I would sure want to be fully vetted and approved at least on the financial end before I did the B part of the transaction.. I can see people doing all this and then for whatever reason the refi does not happen .. I guess worse case they could be flippers and just sell and hopefully make a few bucks for the value add they did or at least get their cash back
Would those processes be started in the due diligence period or before you're even under contract? At the speed the market moves down here, we'd lose every house we were interested in if we did that before each offer.
I also don't understand how one goes about getting an ARV before putting any work into it. Do you just talk to the appraiser and show him your planned renovations? And how in the world do you get pre-approved for a refinance before you even finance the first time? I'm NOT arguing with you, I'm just new enough not to understand how that portion would work.
same way an owner occ gets pre approved before they shop for a house to live in.. you send in all your financials and get pre approved subject to the home your buying.. which is much easier for owner occ than investment loans.. talk to your mortgage professional.
then you make your offer you should already know your ARV yourself.. appraiser just confirms for bank..
- Atlanta, GA · Member since 2018 · 66 posts · 32 votes7y
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Julia Fair:
Originally posted by @Jay Hinrichs:
Originally posted by @Matthew Paul:
I am a contractor , I have no web site , I am booked into next year . Prices are up . I have never had the need . And I have to agree with @Jay Hinrichs there is no money in working for investors .
this Is why I take the position BRRR as talked about on this site and endorsed.. is just so Risky to a first time investor.
these can work .. but boy can they go bad if you have no experience dealing with contractors or out of state and you think your first investment is going to be a sub 100k house in a rental area of the US>.
@Jay Hinrichs, I know you don't love the BRRRR strategy, so what is your recommendation for a first-time investor? One with a bit of money (not what you have in developing of course, but also not needing to do the whole job with other people's money, as is often touted here). What's the middle ground? If you're a first-time investor, how do you get from A to B? I'm always interested in what you have to say, I know you have a really diverse experience in real estate.
I love the BRRRR I did a few thousand of them.. my point is in low value assets and managing a contractor that will take on a 15 to 30k job out of state where you cannot over see it.. is fraught with risk .. how U mitigate that is
1. no advances
2. find an construction inspection service like banks use.. they are out there.
there is only so much a dream team who works on commission is going to do for you.
and or your in ATL there are plenty of deals to be had there were you could over see them
Also using a good HML will keep you safe as they will demand inspections..
Ah, I see. We plan on investing no more than 1.5-2 hours outside of Atlanta and hoping to quickly scale up to multi-family. The only part about BRRRR that scares me is possibly being over leveraged once the refinance happens. I've seen you mention that so many people get stuck on the refinance part. That really does concern me.
yes we are seeing post after post on BP of those that think they are getting all their cash out but don't.. not the worse case scenario of course but more equity in a property than they intended.. we handled that when I did this for a living by having the refi loans approved and ARV appraisals done before we even closed on the B side of it.. I am a little out of touch how it works now in the mortgage market if that's acceptable practice like what we did.. but I would sure want to be fully vetted and approved at least on the financial end before I did the B part of the transaction.. I can see people doing all this and then for whatever reason the refi does not happen .. I guess worse case they could be flippers and just sell and hopefully make a few bucks for the value add they did or at least get their cash back
Would those processes be started in the due diligence period or before you're even under contract? At the speed the market moves down here, we'd lose every house we were interested in if we did that before each offer.
I also don't understand how one goes about getting an ARV before putting any work into it. Do you just talk to the appraiser and show him your planned renovations? And how in the world do you get pre-approved for a refinance before you even finance the first time? I'm NOT arguing with you, I'm just new enough not to understand how that portion would work.
same way an owner occ gets pre approved before they shop for a house to live in.. you send in all your financials and get pre approved subject to the home your buying.. which is much easier for owner occ than investment loans.. talk to your mortgage professional.
then you make your offer you should already know your ARV yourself.. appraiser just confirms for bank..
So is your method here not needing to take an original loan out for the initial mortgage? I'm not understanding how you could get pre-approved for both a single loan as well as the re-finance. I'm guessing you're assuming using hard/private money for the initial purchase and not a traditional bank?
- Contractor · Indianapolis, IN · Member since 2016 · 267 posts · 144 votes7y
@Jay Hinrichs @Ross Denman Do either of you have a good idea on where to meet investors needing the quality I provide at a price point that makes sense? It seems that most of the good guys are busy getting stuff done (as they should be) and are thus less likely to be at a meetup. I go to a local REIA once a month, cold call realtors, network on BP, and have a kind of driving neighborhoods approach where i stop at homes where there is a dumpster or clearly construction getting done. All of the above included I am just looking for a way to drive this faster.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Joshua Howaniec:
@Jay Hinrichs @Ross Denman Do either of you have a good idea on where to meet investors needing the quality I provide at a price point that makes sense? It seems that most of the good guys are busy getting stuff done (as they should be) and are thus less likely to be at a meetup. I go to a local REIA once a month, cold call realtors, network on BP, and have a kind of driving neighborhoods approach where i stop at homes where there is a dumpster or clearly construction getting done. All of the above included I am just looking for a way to drive this faster.
the money is made doing it for yourself not for others at those price points.
- Chicago, IL · Member since 2018 · 32 posts · 26 votes7y
Carpenter / RE investor here, chiming in with my own observations.
9-5 I work for a small contractor in the Chicago suburbs. Our website is functionally non-existent and - save for Facebook and Nextdoor.com, we have no other online presence. We’re booked well into next year.
1) Friendly networking on Facebook and honest replies to local homeowners on Nextdoor.com drums up a lot of business, but the majority of signed contracts are generated word-of-mouth. We do good work & clients happily share their experience with friends and family.
2) Referral sites like Angie’s List or Home Advisor are typically used by those who can’t build a local network and grow organically. Those contractors are paying for referrals because - in my experience, they aren’t professional or talented enough to experience word-of-mouth growth. You aren’t going to sign new clients if previous clients speak poorly of your work.
3) Quality projects take priority over cheap rehabs, and there’s no shortage of quality work in Chicago right now. In the words of my employer, “When the economy forces us into fix n’ flips for investors, I’ll shut the business down.” Profits are low and there’s nothing to be proud of. Not all, but many, investors could care less about quality craftsmanship.
- Flipper · Friendswood, TX · Member since 2017 · 401 posts · 368 votes7y
there is tons of money for the small job contractor. I worked with investors for 20yrs on small projects. Its about communication and figuring out the win-win for everyone. Start with your budget and have an honest conversation about cost and timing. Its not that hard, unless the investors aren't buying right and needing to screw-over everyone so they can save their credit or are just greedy, then 20-30k jobs 3-4x a month was my bread and butter.
- Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes7y
From what I’ve seen:
Most smaller contractors (no expertise to build large properties) are either going to want to work for retail consumers or investors. The ones who deal mostly with retail consumers want to charge top dollar because they can. Non-investors at the end of the day don’t know what things costs.
The ones that deal with investors want consistent work and a realistic investor who understands reasonable pricing. If you can give them a 10-12 houses/year, you can probably get their price down.
They don’t want an “investor” who does 1 house a year and wants to pay bottom dollar. If you do a handful of houses, you’re a part time investor. You won’t get the same pricing someone like myself or @Jay Hinrichs will get.
Also many of us start bringing labor in-house. We are the GC, and we sub certain things out.
Now how many people on BP are doing 10+ flips or builds a year? I’d bet 5%-10% at best. They already have their crews. For a contractor to come here and advertise would get their inboxes flooded with estimate on properties that they’ll never transact on.
- Real Estate Consultant · Whitestown, IN · Member since 2014 · 547 posts · 933 votes7y
Originally posted by @Joshua Howaniec:
@Jay Hinrichs @Ross Denman Do either of you have a good idea on where to meet investors needing the quality I provide at a price point that makes sense? It seems that most of the good guys are busy getting stuff done (as they should be) and are thus less likely to be at a meetup. I go to a local REIA once a month, cold call realtors, network on BP, and have a kind of driving neighborhoods approach where i stop at homes where there is a dumpster or clearly construction getting done. All of the above included I am just looking for a way to drive this faster.
I think that BP and local REIA's and meetups are the way to go. I'm the business developer for a property management company, so we mostly deal in rental properties. I get unsolicited emails and online inquiries from various vendors throughout the month and don't usually have enough time to even follow up with them, but as I mentioned above, I do try to have lunch with at least one each month. I do the same thing with realtors, investors, and lenders as well.
The biggest frustration that I have is that investors simply don't want to pay much, even if it's advantageous. Many of my more successful investors have been switching over to LVP flooring and getting rid of carpet for a few years now, but a lot of investors simply don't want to pay for the better flooring even if it lasts a lifetime. We typically have to change carpets every 2-3 tenants so the higher end flooring will pay for itself over time, but the biggest ROI is attracting and keeping higher quality tenants. Less vacancy and faster turns. Hard surface flooring not only doesn't have to be replaced, it's easier to clean and maintenance overall.
If you're doing higher quality work, you will probably want to work with flippers as opposed to buy/hold projects since flippers spend more money and usually place a higher importance on quality. I would recommend trying to get in touch with Dave Short as he's one of the most active flippers in the area. He holds a monthly flipping workshop through CIREIA.
Another thought would be to comb through the active listings for home sales that have been recently rehabbed... especially in the big market neighborhoods. Search the address in the permit database for Marion County https://accela9ca.indy.gov/citizenaccess/ and look up the GC who pulled the permits. I would reach out to them and see if they need flooring subcontractors. I've used the permit database before to find several contractors over the years. By searching there, you can verify that they are licensed, pull permits, and actively working. As mentioned above though, most of them stay pretty busy and may be difficult to get in touch with... especially this time of year.
- Real Estate Agent · Santa Barbara, CA · Member since 2016 · 518 posts · 283 votes7y
@Chris Mason I disagree with your definition of off market. I often bring deals where I’ll call a apartment owner and I convince the seller to sell directly to one of my clients, and I don’t take a listing agreement. There was one realtor involved, me but the deal was still off market.
- 7yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Originally posted by @Storm S.:
@Chris Mason I disagree with your definition of off market. I often bring deals where I’ll call a apartment owner and I convince the seller to sell directly to one of my clients, and I don’t take a listing agreement. There was one realtor involved, me but the deal was still off market.
from my limited experience that is SOP for multi family.
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes7y
Originally posted by @Jay Hinrichs:
I think part of it and based on my personal experience in Indy.. is there are two opposing forces working.
the investor who wants to buy and rehab a property for as cheap as possible to make the numbers work.
and contractors who give honest quotes but don't get a lot of work with rehab investors because there is no money in it for them doing 15 to 30k rehabs..
that leaves very much bottom of the barrel hand to mouth contractors running around that will take on those small jobs.. they have no money to buy materials.. and we as consumer take on huge risk paying in advance.
Pretty much the nail on the head. You aren't going to find a lot of contracting companies who's core customer demographic is the let's get at least 3 bids on everyone of the 100 houses we tour before we make an offer crowd. All the self help stuff that is taught to teach investors to save money sounds great in theory but in real life practice this is one of the side effects of an entire customer demographic acting like that.
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