To swing a hammer or not?

To swing a hammer or not?

Rental Property Investor · Englewood FL & Prior Lake, MN · Member since 2012 · 107 posts · 33 votes

Brandon Turner instigated an unofficial Bigger Pockets meet up last night in St. Paul, MN. It was my pleasure to meet Brandon and a number of other local BPer's. Later I found myself thinking about something Brandon said when I should have been sleeping (thanks Brandon) so I figure it's worth a post. I've heard others say the same thing before around here (or maybe Brandon just repeats himself?) and I never liked the thought much possibly becuase it hits too close to home.

Basically, the thought was "I wish I didn't know how to swing a hammer as I'd be a much better RE investor".

The assumption this rests on is that swinging a hammer and actual physical labor is beneath an investor (at least that's the way it hits me). It seems to me that the ability to actually lay hands on a project and constructing, improving or even repairing someone's home is nothing to be ashamed of. I work with software and people pay high rates for my services. That's all well and good, but I enjoy helping out my renters with problems when I'm able and I simply sleep better at night when I can look back at even a small project and see that the place is somehow better. I've bought cheap run down homes in the city and spent way too much time and effort fixing them up. It may not pay as well by the hour, but when passing by I'll detour a bit to drive by and see how these homes are doing. I don't think I'd have nearly the pride in the improvements if had only been a passive investor. Certainly there's a time and a place for contractors and delegation, but I don't see any downside to being able to swing a hammer when needed and time allows. Thoughts?

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y

Yes some people get enjoyment out of other things people cannot stand to do. I pay people to mow my yard. I can't stand yard work.

Spending time with family and friends is high on my list.

If people want to rehab houses themselves to give a sense of accomplishment that is great.

Mine is running my commercial real estate business, martial arts, and my exercise. Everybody has a different thing they put currency in. If it isn't your thing then people sometimes discount it or do not understand it. Some people just enjoy deconstructing things and then rebuilding them into something better using workers or employing their own hands.

Having lost people in my life at an early age I grew to understand that money wasn't important but it was TIME that mattered. No matter how rich or poor we all have so much time on this planet. The freedom of having passive income working for you while going to bed every night versus being chained to a job that sucks more and more life and time out of you is a no brainer.

It's not money but the freedom it gives you to get the most out of your life doing what makes you happy.

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  • Investor · Nashville, TN · Member since 2013 · 187 posts · 23 votes
    13y
    Originally posted by J Scott:
    Originally posted by Ben R.:
    Originally posted by J Scott:
    Originally posted by Ben R.:
    ....but then again, some things really are more important than profit...

    Exactly. For me, it's spending time with my wife and kids. That's precisely why I DO hire out things like cutting the grass, washing the car, etc. If I'm going to be away from my family, it's going to be to do things that earn me more than what it costs to do these types of tasks.

    In fact, now that I think about it, I can't think of too many things in my life less important to me than cutting the grass and washing the car... :)

    Whatever floats your boat...

    Why the seeming animosity about my statements above?

    I've already said that if your goal isn't to maximize income, my statements don't apply. If you have goals more important than profit, that's great (I do too!!!)...but it's outside the scope of what I wrote...

    Working in the yard and washing cars may take you away from your family, but for us those are family activities...we are pretty simplistic up here..

  • Investor · Mission Viejo, CA · Member since 2012 · 627 posts · 204 votes
    13y

    It is good to step back and analyze how we spend our time. Investing out of town helps, as it requires focusing on finding the properties, since doing any work on them is impossible.

    Have you-all read the Millionaire Next Door follow-on The Millionaire Mind? I think Dr. Stanley makes the point that wealthy people spend their time "networking" and so forth. I'm not a golfer. Even though Dr. Stanley might not approve, I have a hobby, collecting and restoring old vacuum tube radios. Such hobbies can also provide networking opportunities. Some radio collectors are wealthy, with hundreds of apartment units.

    You have to live your own life, not one from an instruction manual on how to be rich. We mow our own lawn, and we clean our own house. No way do we want to have to work to pay the maids, dog washers, landscapers, and so forth I see going to other houses on our street.

    I know how to do wiring and plumbing correctly, but most of the time on those tasks is just grunt work. I'd much rather plan and check to see that such work is being done properly. I certainly know how to do everything my consulting company does, but watching crews remove asbestos is on of the tasks better delegated to people working for me. We did not even consider painting our own house with a 22' family room ceiling and so forth, even though I've done lots of painting since I was 12. However, I do know how to refinish wood (radios), so we will probably refinish all of the cabinetry in our house (also a good excuse to buy an HVLP spray rig...).

  • J ScottPro Member
    Moderator
    Investor · Sarasota, FL · Member since 2008 · 17k+ posts · 17k+ votes
    13y

    Understood. I have 2 and 3 year old boys and they "wash the car" several times per week. Unfortunately, the water rarely makes it all the way to the car...on the bright side, my boys are generally very clean... :-)

  • Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    13y

    I don't think being able to swing a hammer is bad at all as long as it's clear that it's not *required* to be an investor. Technically, lifting a hammer is 'work'. I personally am a totally hands-off investor and have zero desire to lift a hammer, but nothing wrong with doing it someone wants to.

    One can't have too many skills!

  • Franklin, TN · Member since 2013 · 39 posts · 15 votes
    13y

    I can come at this from both sides with a recent example. I am a craftsman, I like being a craftsman, I like doing the labor but it can get out of hand as well. Look if you don't like it don't do it. I will never enter a workout facility. I will load a dumpster, or build a privacy fence, and do something like that daily. I recently got multiple quotes from movers to move me. They weren't out of control but I still said forget that I'll do it for free. I have a truck. I think it was the third day I literally cussed myself out for wasting my time and effort to save a few hundred dollars. It was not worth my time.

    Like stated before, I can spread mulch, but can also get it spread very cheaply. I handle the more expensive things on my projects and farm out the stuff anyone can do.

    Lastly, to speak to the geography topic earlier, As a contractor, that has worked in multiple states, it is regional. I can get a ton done in TN for 10-15 dollars per hour. I worked in CA for a year and had people apply with very little experience and want 40-45 dollars an hour.

  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    13y

    I think the point is everyone might have the same, slightly different, or totally opposite ways of living their lives or investing. It doesn't make one person more valuable or less valuable or more or less valid then the next.

    It just all makes us different which keeps the world interesting and diverse.

    Even though I wouldn't invest and live the way some others do I still respect how they want to live and carry on their lives. I do not want to invalidate it because it Is not my way of doing things.

    It's all in your perspective. When I was younger (now 38) I would look at others and go ( I can't believe they are not living the way I am they are missing out! ). Those were my teenage years and now I understand later that the way some people live and invest are just different.

  • Dawn AnastasiPro Member
    Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
    13y
    Originally posted by Tony Reale:
    I will never enter a workout facility. I will load a dumpster, or build a privacy fence, and do something like that daily.

    When I was doing more of my own work, yes, I never went to a gym. Now that I do less, I'm considering going to one. But that's paying money to do something that I could do that would pay me.

  • Karen MargraveBusiness Member
    Moderator
    Realtor, General Contractor, and Developer · Redding, CA · Member since 2009 · 7k+ posts · 4k+ votes
    13y

    I'm a licensed general contractor and a real estate agent. You won't find me working on jobs, though I do go over to every job. However; our situation is a little different in that we are a family business, and each have our area. Our son does designs and rendering, he's also a licensed agent, and will work on the jobs if it's necessary.. My husband is a broker and handles all the finances, cost breakdowns, financial analysis, project management, etc. I find properties, do marketing, have input into design, etc. and our son in law is a licensed electrical contractor.

    Some parts of the job the guys can do better and cheaper than anyone else (layout, excavations, putting in utilities, etc.) and will do those on the jobs.

  • Investor · West Bloomfield, MI · Member since 2009 · 358 posts · 306 votes
    13y

    This has been a great discussion with a number of different yet totally valid viewpoints expressed. How we spend our time is clearly a personal decision that transcends ROI and IRR.

    When I started out I wasn't comfortable with hiring contractors to do things I didn't understand (yes, I was educated as an engineer). The potential for poor quality work, overcharges or other unforeseen events lead me to do a lot of things myself (along with the classic justification to buying power tools -- "if I do it myself it pays for the table saw/nail gun/laser level/impact driver" -- signs of a power tool addict.)

    While that self-education process has paid dividends when estimating rehab expenses, dealing with contractors and evaluating the quality of their work, it cost me a bunch of time (and therefore money) during my first few rehab projects.

    Personally, I get a lot of enjoyment out of manual projects such as framing, tiling, plumbing and even lawn mowing -- my garden tractor has a cup (beer) holder. Financially, I know that many of these activities are more profitably outsourced.

    While I may have learned more than @J Scott regarding construction activities by doing some of the initial ones myself, he probably did several more flips than I did while I was figuring out how to lay tiles on the diagonal. If my projects were a little more "perfect", his were a lot more profitable in aggregate.

    My advice to those wondering which path to pursue would be to outsource as much as you reasonably can. You may pay more or make more mistakes via bad contractor decisions, but your learning curve will be steeper and more profitable. DIY can be an expensive hobby.

  • Miami, FL · Member since 2013 · 98 posts · 27 votes
    13y

    I peaked into this thread just in case, and as it turned out - still learned something new. Who knows what a similar discussion will bring next week?

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