The psychology of "Do it yourself"

15 Replies

I'm interested to see what some other, more experienced REI say about this concept.

I have always been a DIY guy. I built my own house - literally, built my own house, contracting out just a few parts of the job - and have always done all repairs/upgrades on others I have lived in. I do my own rental rehabs too, naturally. Aside from the fact that I enjoy working with my hands and taking something that looks ratty and making it look nice (I used to restore old Mustangs, too), I have always felt as though I was translating real skills that I have into real dollars by turning a $10,000 rehab done by contractors into a $2500 rehab done by me, and pocketing the difference. 

Recently I have been listening to the follow-up to Thomas Stanley's "Millionaire Next Door", which is called "the Millionaire's Mind". Without going into specifics, the millionaire class he studies, by and large ground-up rather than inherited, almost to a person eschews the idea of DIY anything, on the basis that their time doing X, whatever X is (lawyering, doctoring, etc) pays far more than what it would cost to pay someone else to do X job (repair, rehab, whatever), and thus it is a financial waste of time to DIY.

Now, not saying I want to be a millionaire (OK, I want to :D ), but I grew up dirt poor and made my way from that point. If I hadn't done it myself, I don't see how I would have likely accumulated capital to get to the point I am now - and, yes, I make a good living at my day job now, but that was really only the past decade or so, and I'm not far from retiring. FWIW, I hold a doctorate and work in my field utilizing my education. I still do all my own work, from changing the clutch in my car to tearing out bathrooms. Last weekend I canned 15 quarts of tomatoes I grew in my garden. I figure it saved me about 40 bucks in canned tomatoes, all told, though the canning took maybe 2 hours in time. The millionaire mind would say that 2 hours would have been better spent buying the tomatoes and being more economically productive.

So what do you all think? 

If you enjoy it then that's great because it should also save you a considerable amount of money.  The amount that many repair people charge would certainly not make many repairs possible to the majority of people.  However It is nice to have a guy or 3 that can wrap things up for you when you are busy on other projects or with your full time job especially as you acquire more rentals than you are able to service yourself in a timely manner.

I understand what you are saying here. I came from a very poor area, and my husband and I had our oldest son when we were college students, so we were broke for awhile. That's when we bought our first property, and have steadily built up over the last 11 years. We used to do everything on the properties, my husband and I learned any skill we needed to as we went and we did all of the work ourselves. Now, we hire the majority of it out. The truth is that we have grown our business more in the past 3 years (when we started to hire things out) then we did in all of the time before that. I'm not saying it's "wrong" for you to do everything, it's just not probably the best use of your time. I know it's hard, but maybe just start hiring a few things, build relationships with good people. I know that once we had established some good relationships with some quality people (construction, plumbing, accountant, etc.) that's when things started to move fast. We were able to put people we trust in and we are freed up to do other things. 

I think it's great that you like to DIY - I think it is part what got you where you are today by having that mindset. As you have read, it can indeed pay to have someone else performing chores while you could be doing something else that is far more valuable - but I also think it comes down to personal choice and also depends a lot on where you are in real estate business. For example, if you are just starting out and aren't really making much an hour AND you enjoy doing the work - then I think it makes a lot of sense to tackle some things on your own.   The personal joy you get out of making things shiny and new again is a difficult to quantify in terms of money - many times when I'm in the yard doing my own yard work for my tri-plex - I often think that I could be paying someone to do it while I do something else - but the truth is - I really enjoy working in the yard - so much so that sometimes I almost feel guilty for spending time there and not doing something else.  But then I think about the joy I get out of it and realize , that I do what I do so that I CAN enjoy small moments like that. Now if your real estate empire is growing, and your time becomes more valuable and scarce - the benefits of outsourcing will start making sense to you and you will pick and choose the things you prefer to keep your hands on. One thing I always keep in mind is knowing where to draw the line and understanding my own limitations - there are many chores that I do with out a second thought -however, every now and then a task come up that I know I need to bring in a professional - I don't do roof repairs or anything that has to do with the outside electrical - even though I have no problem replacing lights, sockets, ceiling fans , etc. Sometimes I look at a project and know that I need some outside help - it helps a lot when you have the equipment and know what your doing - but there is a lot to be said about learning new skills too. I think in the end , it is something that you will have to decide for yourself and determine - when you find yourself face to face with a  gaping toilet hole drain - you really start to rethink your DIY strategies - but afterwards - its hard to not take personal satisfaction in the fact that you just saved $200 by handling the problem on your own.  

Originally posted by @Jay Orlauski :

I think it's great that you like to DIY - I think it is part what got you where you are today by having that mindset. As you have read, it can indeed pay to have someone else performing chores while you could be doing something else that is far more valuable - but I also think it comes down to personal choice and also depends a lot on where you are in real estate business. For example, if you are just starting out and aren't really making much an hour AND you enjoy doing the work - then I think it makes a lot of sense to tackle some things on your own.   The personal joy you get out of making things shiny and new again is a difficult to quantify in terms of money - many times when I'm in the yard doing my own yard work for my tri-plex - I often think that I could be paying someone to do it while I do something else - but the truth is - I really enjoy working in the yard - so much so that sometimes I almost feel guilty for spending time there and not doing something else.  But then I think about the joy I get out of it and realize , that I do what I do so that I CAN enjoy small moments like that. Now if your real estate empire is growing, and your time becomes more valuable and scarce - the benefits of outsourcing will start making sense to you and you will pick and choose the things you prefer to keep your hands on. One thing I always keep in mind is knowing where to draw the line and understanding my own limitations - there are many chores that I do with out a second thought -however, every now and then a task come up that I know I need to bring in a professional - I don't do roof repairs or anything that has to do with the outside electrical - even though I have no problem replacing lights, sockets, ceiling fans , etc. Sometimes I look at a project and know that I need some outside help - it helps a lot when you have the equipment and know what your doing - but there is a lot to be said about learning new skills too. I think in the end , it is something that you will have to decide for yourself and determine - when you find yourself face to face with a  gaping toilet hole drain - you really start to rethink your DIY strategies - but afterwards - its hard to not take personal satisfaction in the fact that you just saved $200 by handling the problem on your own.  

 Great post. I agree wholeheartedly; there are some things that I can do that the last few years I started farming out - your roof example is a good one. I can replace my own roof, but I'm not as limber and have a real fear that I may come tumbling off, which will severely limit my ability to make money or do any other repairs - so I farm that out. I also don't like working in nasty basements or crawl spaces anymore, so I farm that out too. 

You are right in the satisfaction part. Also, I spent 20 years accumulating all the tools under the sun, and doing jobs myself not only saves the labor but also repays the tools many times over. And I enjoy it. 

One thing I didn't mention that I disagree with in the book is the idea that every hour is, or can be, a profitable one at the same financial level. They mention how few millionaires do anything themselves, as they see it as a financial waste of their time - but what if that time was going to otherwise be spent watching movies, searching for sliced golf balls, or generally doing other activities that are money-negative? I think it unrealistic to believe that every waking hour can be equally financially productive, and I like to think of the time I spend doing some of this stuff as my "hobby", rather than something I'm doing because I absolutely have to do it. 

I'm a DIY'er too. We recently bought a fixer-upper SFH and initially decided to do all the work ourselves. We took great pride in our work but eventually we ran out of enough hours in the day. It came to the point where it made more sense to hire out certain parts of the rehab. The ones we really loved, we kept. I love gardening and landscaping so I did that myself. I love planting the flowers and tending to them. I too, just canned some tomatoes and made some pickles. It's a tough lesson but I've finally accepted I can't do it all if I want any degree of success. Time is money right! So I have to make good decisons with my time just like I do with money. I say pick and choose what you love the most and contract the rest out so you can focus on making your millions.

@JD Martin

One huge benefit of DIY is that, if you do decide to hire out work, you'll know exactly how long it should take, what should be done, what's quality work and what's not. I started DIY and knowing how to do the jobs is a huge benefit since you can vet contractors and their services much more effectively. You can learn some of that by having someone show you good work, explain why it's good, etc, but that's not the same as having the know-how.

On the business side it will make sense to switch to hiring more out eventually, but I'm not sure there's a better foundation to come from.

@JD Martin Great topic! Personally, I have a price of my time ($20) an hour. Although, that is a small amount that is my threshold when deciding to "figure it out myself," or simply buying or having another person do it.

The issue with DIY is there's only one of you and that cannot be scaled.  How many houses can you rehab yourself in a year?  If you like doing the work there's nothing wrong with doing it yourself but if you want to scale it up or spend your time on other things that are important to you then you'll need to start evaluating other options.  When I bought my first rental I did all of the work myself, on the 2nd I did about 25% and since then the only work I've done is demo when I need some stress relief.  I have 4 full time guys and variety of subs that handle my rehabs now and I'm able to run multiple projects at the same time.   I wouldn't be able to own the number of properties I own today if I had tried to do it all myself.

I don't think the canned tomatoes are the best example. I'm guessing that tomatoes grown in your garden and canned by hand are going to be higher quality than the mass produced ones from the store.  That's like saying you shouldn't cook yourself dinner because you can pick it up at the McDonald's drive thru.   On a rehab project it's easy to argue that a skilled carpenter, electrician, or plumber that has done that trade every day for most of their life can do higher quality work than a DIYer.

Originally posted by @JD Martin :

I'm interested to see what some other, more experienced REI say about this concept.

I have always been a DIY guy. I built my own house - literally, built my own house, contracting out just a few parts of the job - and have always done all repairs/upgrades on others I have lived in. I do my own rental rehabs too, naturally. Aside from the fact that I enjoy working with my hands and taking something that looks ratty and making it look nice (I used to restore old Mustangs, too), I have always felt as though I was translating real skills that I have into real dollars by turning a $10,000 rehab done by contractors into a $2500 rehab done by me, and pocketing the difference. 

Recently I have been listening to the follow-up to Thomas Stanley's "Millionaire Next Door", which is called "the Millionaire's Mind". Without going into specifics, the millionaire class he studies, by and large ground-up rather than inherited, almost to a person eschews the idea of DIY anything, on the basis that their time doing X, whatever X is (lawyering, doctoring, etc) pays far more than what it would cost to pay someone else to do X job (repair, rehab, whatever), and thus it is a financial waste of time to DIY.

Now, not saying I want to be a millionaire (OK, I want to :D ), but I grew up dirt poor and made my way from that point. If I hadn't done it myself, I don't see how I would have likely accumulated capital to get to the point I am now - and, yes, I make a good living at my day job now, but that was really only the past decade or so, and I'm not far from retiring. FWIW, I hold a doctorate and work in my field utilizing my education. I still do all my own work, from changing the clutch in my car to tearing out bathrooms. Last weekend I canned 15 quarts of tomatoes I grew in my garden. I figure it saved me about 40 bucks in canned tomatoes, all told, though the canning took maybe 2 hours in time. The millionaire mind would say that 2 hours would have been better spent buying the tomatoes and being more economically productive.

So what do you all think? 

 Resently we had a party at our house.  My wife and daughter had a 51st b-day for me and it was very fun.  My wife works as an agent she sells all my flips and joint ventures I get invalved with.  She is on track to make over 150,000 this year, and makes well over $500 per hour.  Yes that's the sound of me being proud of my wife...... 

Back to the party, she catered the meal, had a bartender, had the gardener completely clean and trim the whole yard.  Hired the kids to clean the patio furnature and wash the windows.  She paid others to do as much as she could, this is a relitivly a new thing for us. Just do the math, 20 hours of preparation and I bet there was 40 man hours at $500 per equils  $20,000.

I would never do construction on my own flips, rehabs, toilet installs, swimming pool leaks, you name it.  It's more a function of my own sanity, I can't do it all.  By the way last week we both worked on buying a condo in our city and earned our $500 per hour and had a very fun party.

I love to garden and love the vegetables, I have even canned a few things.  You have to enjoy life not be a slave to it.

Good luck

The thing that keeps me in DIY, besides the enjoyment of making something look awesome, is the shortage of qualified contractors. Look at the forums for any length of time, and you will see posts looking for quality contractors. It is so difficult to find someone to do a good job the first time.

Sure, I make mistakes on my DIY. I now know how NOT to do lots of things. But absolutely no one on this planet is more invested in my property than I am, and I want it done right. So I do it - at least most things. I've had to fire too many contractors. 

There are quality contractors out there, but finding them is like the needle in the haystack.

@Peter MacKercher has a great point, to know how something is done will help you when you are negotiating with contractors. 

All this said, there are jobs I always hire out. Drywall, gutters, roofing, foundation work, insulation. 

Drywall pros are fairly easy to find, and do a far better job and faster than I could do it myself. 

Gutters look better when they are seamless. Home Depot only sells 10' sections of gutter, so every piece has a seam. They look terrible when you do it yourself, at least that was my experience. Add in the sliced hands and I ended up spending more on bandaids than I saved. 

I hate roofing. 

I know nothing about foundation work and don't care to learn. If your foundation fails... 

Insulation companies actually buy in such quantities that their price for material and installation is less than what you would pay to do it yourself from a big box store. 

It is never black and white. You need to find youir sweet spot in the grey zone. Your own hourly rate might be low when you declutter an acquisition but very high when you know how to do smaller plumbing jobs. DIY can be a matter of survival if you own a handful of SFHs. On the other hand, it is a waste when you are in RE development. As someone said before, you are not scalable.

Good topic. I have much to say about this, as I'm having this conversation regularly in my house. 

My spouse (who also grew up quite poor) bills a certain amount per hour, and he has enough work to be billing 24/7 if he wanted/could. The way he sees time is: if I can outsource doing ____ for less than I charge per hour, it doesn't make sense for me to do it, as I will be losing money.

I can understand how hiring a gardener at 100$/hr makes sense to do if you get paid 500$/hr and gardening would take many hours from your week to accomplish and you hate gardening. Totally get that. 

However, watching him live this concept out has made me realize that there is a huge flaw in this reasoning.  In a vacuum it makes sense, but in real life it's insane. Basically because it means every minute has a price tag on it.  Does that mean we never spend time on anything that makes less than us/is free/costs us money?  Do we hire a dog walker and skip our daily walks with Fido because that walk is costing us jointly over a thousand dollars for that hour? Where does it end? 

I chose fixing up ugly proerties as my job because I truly enjoy many aspects of the process. So I don't think I'd be happiest just finding deals and not having any part of the transformation of the home. Would I be wealthier? Perhaps. Happier? Probably not. 

If you manage to do okay in this business or any business, you will find yourself faced with these very questions. And the answers aren't very clear. You might gain or lose money outsourcing, but how does shouldering the burden of something you dislike so much or letting go of something you really love cost you- not just financially, but personally? 

I know my response is way more philosophical than your question. But my advice is to not forget the prize - freedom to live a full life. Do what you love. If you can outsource stuff you dread, do it and don't feel guilty about it.  Make time for friends and family. Indulge in a hobby. Tile the bathroom if that's what you really like to do! For some it's a tedious task. For me, it's time to just listen to music, clear my head, and create something nice. 

Because the sky is the limit in this business, it's easy to get carried away. You will hear a lot of people who are never happy and just want more and more and more. Reality? Money is a lot of fun. Getting that first big paycheck is exhilarating.  And when you buy that thing you've always wanted and can't believe you can afford it finally, it's really an awesome feeling. Then you know what happens? You get used to that lifestyle. It's your new norm. You move to a place where your Mercedes Benz is now parked in a row of Rolls Royces. The toys lose their charm. The game never ends.  

Hi JD,  So glad to raised this.  It is something that I have struggled with.  I love learning and I am notoriously cheap so my first thought it always DIY.  Although I have various contractors I work with regularly, my first thought was always "is this something I can handle?"  I finally realized that my saving money was, in some cases, costing me money, time, etc.  I suggest that you find contractors, professionals, etc. for every aspect of your business -- this doesn't mean that you will always use them.  But create a situation where you can cherry pick the items that you do.  If building custom cabinets for your very high end rehab brings you joy, then hop to it!  But don't do something to "save money". 

Like you, I didn't have much money growing up and I think that's the reason why this lesson was no hard for me to learn.  It feels a lot better when a tenant calls about a problem and I can text my handyman to handle it, send him his fee through PayPal and resume my vacation minutes later.  

Best, Teresa

Thanks for all the thoughts and posts so far - very insightful! 

The original post was so "me" I could have written it. Nearly every part of it seemed it was a biography of my life including the canning and fixing Mustangs.

That said, I am a do it your selfer down to my bones. I was just working on a house today to get ready for a renter and was working on replacing damaged sections of sub-floor, installing GFCI outlets, fixing a closet light fixture, caulking a countertop and sink, etc.

I not only enjoy fixing things but also don't like other people working on my stuff. ie, my one car has 171,000 miles on it. It has never been serviced by anyone but me (except warranty issue). I know it probably isn't financially beneficial to change my own oil but I know I will do it right. The fixer up homes we buy/hold are all done 100% by my wife and I. Does that limit the rate we can acquire and prep them? Yup. Are we gonna change our ways? Probably not. It's just who we are. That reminds me, I've got to slice up some peppers to freeze so we have some this winter for our pizza...

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