Has anyone tried this?

6 Replies

Hi,

While looking for a sub contractor for one of my flips I got an offer from a contractor that he can perform bulk of the rehab work while living as a tenant. We didn't go into much details as I wanted to come here first and check if this is even a feasible idea. To see if someone has already tried it and if so what what will the setup?

$X in rent discount for y man hours? e.g Tenant spend 10 hrs and they get $200 off from rent?

What is the liability aspect of this, lets say if he gets injured etc?

What's that? A homeless guy wants to live in a house and work on the house at the same time?

I predict that the rehab will go very, very slowly... and you'll have a tenant that will use every opportunity to not leave.

Conflicting tenancy law with contractor law, liability out the yin-yang (if he gets injured working on the house... in Georgia he could sue the living daylights out of you for making him work on the house he was living in and leasing from you)

This is a bad idea on so, so many levels.

Generally speaking these arrangements end up poorly for the the landlord.  There are ways to deal with this (including the injury liability issues) but they are not foolproof.  It's far easier to avoid this than deal with it.

I would question the value of the "contractor" that needs not only a job but a place to live. Can't be very successful so I agree this proposal is rife with problems. I don't see the upside for you. It is always better to have a job with clearly defined parameters rather than muddy waters

Well said...I don't see the upside for you. It is always better to have a job with clearly defined parameters rather than muddy waters

This seems like one of those bad jokes about the car mechanic who's personal cars never run well!

I mean, a flip should take a few months at most, how does double tenant turnover benefit you? Wouldn't it be better to just rehab then get one tenant in there once it's done. What if this guy feels like taking a day off? you wouldn't even know, he's just going to be chilling on his couch and now your property is tied up and you can't fire him or kick him out. Also, you're in the same boat as before where you have to find a new tenant once it's  finished. 

Also, this guy wants a discount on rent. That doesn't even make sense. You bought a property to make money, now you're paying a guy to live there while he does "the bulk of the work"? 

This sounds like the same guy who prefers to be paid in beer for small handyman type jobs LOL My advice: don't use him as a contractor, and don't keep him as a tenant. Keep it professional.

Originally posted by @Aaron McGinnis :

What's that? A homeless guy wants to live in a house and work on the house at the same time?

Just make sure you sign him up for FOOD STAMPS first so you don't have to lend him money for food!!