North Royalton, OH · Member since 2014 · 21 posts · 6 votes
I've been using college kids, just out of college, stay at home mom's, etc to work on our crew to help fix our flips. We subcontract concrete, roofing, and exterior painting, siding, windows if we are doing the whole house or bigger jobs. I've found its been a balancing act of choosing cost over quality, speed of completion, etc when choosing between a using GC's, contractors, and hired labor. its been working ok for me as long as I don't have alot of turnover on my crew. As my in house crew gets better and faster with each house it becomes better to use them vs. GC's and contractors. please reply to this post about your thoughts or experiences using hired workers to fix up your flips or other properties.
Flipper/Rehabber · Washington, DC · Member since 2015 · 62 posts · 21 votes
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Thanks, @J Scott . I like all of my risk to be well-informed risk! I'll take this opportunity to thank you as well for all the knowledge sharing. I am pouring through your books right now. Look forward to meeting one day. We're in DC.
Rental Property Investor · Norwalk, CT · Member since 2013 · 276 posts · 147 votes
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I will start by saying I have my own construction company that we are in the process of transitioning from a GC working for others, to a GC just working for me. It sounds to me like you are putting a lot of time, management, and risk into having a large base of unskilled labor that you can draw upon as you need them for either growth or eventually training.
I agree with @J Scott that you are likely at risk if one of them were to get hurt on one of your jobs, just like you would be for any of your other employees, and you are probably getting a lower quality result by using unskilled labor.
I think the safer and more flexible way to grow and maintain quality is by using subs with their own licenses, insurance, etc. that you can manage as you slowly bring in new employees that you can train and build a relationship with. But hey, that's just my 2 cents.
North Royalton, OH · Member since 2014 · 21 posts · 6 votes
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@ mike f, the original post was to ask about investor or others experience in building an in house crew and how it related to their success incorporating a similar model to flipping houses. The current model is hire a GC and let them take care of it. the discussion thread has a lot of good points to ponder for me and others who are trying to figure this business out. We were just experimenting doing the construction management piece ourselves. It seems for most using a GC is the best and most efficient way to go. Our hope is to develop an alternative model to use if it works and makes sense.
Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
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It sounds like you are essentially taking on all of the cost and liability of running a contracting company, only hiring people without actual skills.
Honestly you need that consult with an attorney ASAP. These people are either W2 employees or they are not. If they are, you absolutely need worker's comp coverage.
I've been using college kids, just out of college, stay at home mom's, etc to work on our crew to help fix our flips. We subcontract concrete, roofing, and exterior painting, siding, windows if we are doing the whole house or bigger jobs. I've found its been a balancing act of choosing cost over quality, speed of completion, etc when choosing between a using GC's, contractors, and hired labor. its been working ok for me as long as I don't have alot of turnover on my crew. As my in house crew gets better and faster with each house it becomes better to use them vs. GC's and contractors. please reply to this post about your thoughts or experiences using hired workers to fix up your flips or other properties.
That is a good way to begin, especially if you have the knowledge and skills to supervise labor. Fist issue is safety, I have used idiots to rip out old carpet, scrape the floor of old padding, clean the floor, walls....I may not let them on a ladder. What's the chance or possibility of someone getting hurt, because if they do get hurt it's on me.
I've used college kids, some very good labor and some with decent skills, but the issue is always safety.
If you can teach skills, all the better. I had a non-profit for housing, I had future clients establish sweat equity for their homes working on other homes. I had one "training house" that was never leased, simply a property used for instruction, techniques of painting, caulking, cleaning, HVAC maintenance, plumbing maintenance, electric checks that homeowners could do, some didn't know how to mow a yard, throwing the grass to the center of a yard before it gets mowed (going the wrong way).
We also had skilled contractors who volunteered, one was the retired city building inspector.
Working under a non-profit eliminates the workman's comp issues as they are volunteers, doesn't mean you hang them with a medical bill if they do get hurt, but there are releases signed. In your operation, you won't have that luxury.
Some contractors hate to be watched, some like to show younger kids what they are doing and how to do something, those can benefit you but don't make it like "teach them so I won't need you again" obviously! As long as they know they are secure in working for you, they can teach those that will be working with them, so incorporate the contractor types into you total crew.
Turnover is a problem, especially with students, they graduate and move on. Got a few from labor pools that were day labor, not the best but you can find people that can be trained and motivated for a better job.
@ mike f, the original post was to ask about investor or others experience in building an in house crew and how it related to their success incorporating a similar model to flipping houses. The current model is hire a GC and let them take care of it. the discussion thread has a lot of good points to ponder for me and others who are trying to figure this business out. We were just experimenting doing the construction management piece ourselves. It seems for most using a GC is the best and most efficient way to go. Our hope is to develop an alternative model to use if it works and makes sense.
You confused me because your title of this thread says "Using non-skilled labor to fix up your houses", instead of "Hiring a GC or creating your own in house construction company".
If you're doing enough volume to pay a crew full time wages to keep them busy and you're saving enough to offset the increased accounting and paperwork, the costs of GL insurance, WC and all the rest of the expenses then why not?
Investor · Wichita, KS · Member since 2013 · 62 posts · 28 votes
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The comments in this post is exactly what is wrong with this country. There are plenty of college age kids and veterans that are struggling to find work. I have plenty of low skilled work that i would be more than happy to pay a person $10-$12/hr to accomplish. However, I have to live in fear of the IRS and WC in order to so. Just seems crazy to me.
The comments in this post is exactly what is wrong with this country. There are plenty of college age kids and veterans that are struggling to find work. I have plenty of low skilled work that i would be more than happy to pay a person $10-$12/hr to accomplish. However, I have to live in fear of the IRS and WC in order to so. Just seems crazy to me.
You don't understand Worker's Comp.
Worker's Comp insurance isn't really for the protection of the worker, it is for the protection of the employer. The alternative is that if someone gets hurt working for you in an environment you can control and they cannot, you will be liable in tort.
The comments in this post is exactly what is wrong with this country. There are plenty of college age kids and veterans that are struggling to find work. I have plenty of low skilled work that i would be more than happy to pay a person $10-$12/hr to accomplish. However, I have to live in fear of the IRS and WC in order to so. Just seems crazy to me.
North Royalton, OH · Member since 2014 · 21 posts · 6 votes
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@Mike F. good points, I can see where the confusion was. If I could change it would read "what is your experience hiring unskilled labor, and developing them with your current professionals to eventually work as your in-house construction company to grow your house flipping business"
Rental Property Investor · Ithaca, NY · Member since 2014 · 180 posts · 80 votes
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I'm not going to weigh in on the logistics side - need for WC etc, but I've often thought that if I wanted to go the in-house GC route - I would consider recruiting from the local vo-tech high school. Plenty of specifically minded kids looking for opportunities and you'd be able to train them how you want things done from the get go.
North Royalton, OH · Member since 2014 · 21 posts · 6 votes
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@Ceril S. that's a great idea I have not thought about. Hopefully someone in the forum can share their experience with this if they have worked with vocational schools to hire some of their labor to complement their current staffing. I'm going to call the local vocational schools in Cleveland to see if this is a possibility.
Specialist · Portland, OR · Member since 2010 · 3k+ posts · 1k+ votes
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@Mike Mendoza think what you are doing is a great idea. There is a big article in a local paper where a highly successful body shop is doing just that. Since they have been unable to find good workers they decided to bring them in from scratch and train them the way they want them to do things. Of course there are formalities but the concept is the same. You won't be having them do any electrical but they can do a lot of grunt work.
North Royalton, OH · Member since 2014 · 21 posts · 6 votes
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@Kelly R. we have evening hours, so they come to work when their husbands get home to take care of the kids. or one only works after she drops off the kids for school then gets them off the bus in the afternoon. its part time work and make it flexible enough for them.
Residential Real Estate Broker · Manchester, NJ · Member since 2014 · 16 posts · 7 votes
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@Mike Mendoza If it's not broke don't fix it. I come from a family of hard working professional tradesman. We all start somewhere and one chief / professional can lead many lesser skilled individuals to accomplish a task. Sure a handful of 10's will get he job done faster and give you a quality job. The lesser tasks always can then be done as your doing working it with hands on guidance. Continued success to you.
Houston, TX · Member since 2015 · 2 posts · 1 vote
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It's something that I have not considered. I reckon hiring them would entail more supervision than usual, at least in the beginning. The only downside I could think of is the inconsistency in the quality of work. Could be great one day, could be shoddy the next.
I think it's wonderful if it works, but could set you back if it doesn't. It's medium to high risk.
Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
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I actually started off with a laborer type guy who I trained a bit. He also worked for a plumbing/electrical company for a few years. He quit there and began a handyman company. Now he has been with me either as a laborer or now a contractor. He is not a true skilled tradesman, but he has hired a true professional contractor on several jobs and made him teach him how to do jobs, and he is getting pretty good. Truly skilled contractors around here charge $60 to $80 per hours. Some will only do bid jobs where they make even more money. There are probably only 1 or 2 who had proper tradeskill or apprentice training. The rest were cowboys or roughnecks 10 years ago and just opened shop because they were handy. You can see the difference from year to year on the stuff they work on. The oilfield around here would hire unskilled people for $30 an hour and go up so no one really wanted to learn a skill. We struggle with wannabe contractors here.
I still use the one skilled guy with 1 or 2 unskilled helpers.
Real Estate Investor · Harvey, LA · Member since 2015 · 119 posts · 80 votes
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i use unskilled labor. Absolutely. Why do i need to pay a licensed contractor for cleaning? Why do i need an engineer to knock down a wall? I don't.
bottom line is you pay for the skills where you need it. I'll pay the engine to design a new structure, a carpenter to build out the frame, a specialist contractor to hang windows and siding, maybe drywall, and day labor to clean and paint. Yes, day labor to paint. It's not that hard people. You need to teach some how to paint, but it really isn't that risky or difficult.
things not to hire unskilled workers to do: HVAC, electrical, plumbing, structural, granite, basically anything that requires power tools.
Real Estate Investor · chandler, AZ · Member since 2014 · 72 posts · 23 votes
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My neighbor just had their pool tile replaced and two workers that couldnt speak english did the work and it was horrible. They never checked with the BBB or did a Google search on the company. I would subscribe to Angie's List to find the best contractors. I have used labor from Home Depot to dig holes or move heavy stuff. That is about it.
i use unskilled labor. Absolutely. Why do i need to pay a licensed contractor for cleaning? Why do i need an engineer to knock down a wall? I don't.
bottom line is you pay for the skills where you need it. I'll pay the engine to design a new structure, a carpenter to build out the frame, a specialist contractor to hang windows and siding, maybe drywall, and day labor to clean and paint. Yes, day labor to paint. It's not that hard people. You need to teach some how to paint, but it really isn't that risky or difficult.
things not to hire unskilled workers to do: HVAC, electrical, plumbing, structural, granite, basically anything that requires power tools.
I wouldn't want to spend the time to train a person to paint. How much is your time worth?
Real Estate Investor · Harvey, LA · Member since 2015 · 119 posts · 80 votes
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it takes about an hour to train them, and it saves about $100 per room. Break even after one room. If they do five rooms, I saved $500. Times four houses, $2000. Not bad.