Why shouldn't I do all the work myself?
Investor · Falmouth, KY · Member since 2016 · 37 posts · 13 votes
Why shouldn't I do all the work myself?
Most Popular Reply
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
9y@Sonya Antrobus I see it from both sides. In his mind he enjoys the work, and doesn't have to pay contractor pricing. He sees it as win win. However from the other side of the coin, him taking 6 months to do, verse paying for it and having it rent ready in 2 months, obviously makes a lot of sense.
Truthfully, there is no exact equation to say what is better. If he can complete the renovation for $30,000 in 6 months, and a contractor can complete the renovation for $50,000 in 2 months... you have to look at the rent loss, holding costs, and where your husbands time could have been spent in those extra months.
Do you have the funds/ability to do multiple projects at once? Maybe pay contractors for the rental properties, and have your husband work on a flip? Maybe have him take on some of the scope of work in the rental while paying subs to do the tedious tasks (Painting, tiling, flooring, etc.).
27 Replies
- Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes9y
@Sonya Antrobus I see it from both sides. In his mind he enjoys the work, and doesn't have to pay contractor pricing. He sees it as win win. However from the other side of the coin, him taking 6 months to do, verse paying for it and having it rent ready in 2 months, obviously makes a lot of sense.
Truthfully, there is no exact equation to say what is better. If he can complete the renovation for $30,000 in 6 months, and a contractor can complete the renovation for $50,000 in 2 months... you have to look at the rent loss, holding costs, and where your husbands time could have been spent in those extra months.
Do you have the funds/ability to do multiple projects at once? Maybe pay contractors for the rental properties, and have your husband work on a flip? Maybe have him take on some of the scope of work in the rental while paying subs to do the tedious tasks (Painting, tiling, flooring, etc.).
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes9y
Hiring to get the work done will probably cost $30-$75 an hour.
I have 22 properties. The only things I call to have done is the plumber when it involves a sewer snake (roto-rooter), or if the plumber has to certify a gas system is free of leaks (I don't have a plumbers license), or if something electrical has to be done by a licensed electrician (I don't have a plumbers license). Everything else I do. Painting, carpentry, flooring, installing and repairing appliances, running gas/water/electric lines, roofing, etc I and my wife do myself. If we hired this stuff out, that would be about $36,500 less in our pockets at the end of the year.
- 9yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
You have to understand what your time value is. Literally. How much is your time worth to you? My first property I did as much as I could. 3 years later and I barely do a thing. I just do not have time to do work all day so I can save $100-$200, not worth it to me.
- Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes9y
Hi @Sonya Antrobus, the resources you need are simply every successful company...ever. The goal is to spend your time ON your business, not IN your business. Every time your husband drives a nail instead of finding the next deal you're losing money. He's being penny wise and pound foolish. If you're only doing half as many deals as you could be you're losing HUNDREDS OF THOUSANDS of dollars in the long run
If your husband loves doing the work, great. Give him a honey-do list for home and get him the hell out of your way in the business.
- 9yColleen F.Pro MemberInvestor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votesWhat are you looking to get out of him not doing the work? Quicker turnaround? less weekend work for both of You? better price? what is he looking to get out of doing the work? Align those priorities. That is the start. Maybe there is somewhere you can meet on this. try contracting some things out and letting him do others. Agree on reasonable timelines if he is doing the work. Sometimes you can't convince them...
- Investor · Falmouth, KY · Member since 2016 · 37 posts · 13 votes9y
@Jaysen Medhurst, that response made me laugh out loud. Thanks, I needed that! You are right but he is old school and a farmer (you know they do everything for themselves) and really good at what he does. He quit his job of 30 years last year after they moved the office 1.5 hours away from our home. So the flip & buy/hold is his new job along with the farm. I am still working full-time and working with him. More of a problem for me than it is him!
@Colleen F., I'm looking for a retirement plan for us along with a quicker turnaround to increase cash flow. Now that he no longer has a W2 job, we need this to supplement his income and build cash flow for retirement.
I know real estate investing is a great way to build for retirement, I just wish I could find a magic wand to make him understand that he can still do some things himself but we are better off in the long run to hire the bulk of the work done so we can acquire more properties.
BTW, the first 2 flips allowed us to pay cash for the duplex and the most recent rental unit (SFR 3 beds, 1 bath) so it is working, just not working quickly enough to keep me from having to put in 80 hours a week. I would love for him to become more of a project manager than a worker but cannot seem to get him going in that direction. @Brian
@Brian Pulaski we do have the funds to do multiples and I might be able to pull him in that direction as soon as I find our next flip. The market near me is a bit tight right now and we did very well on our first two flips, 40K each on a ARV of 125 and 85K homes so now I think he's a bit spoiled and doesn't want me to buy unless he thinks we can turn 40+ on a property. In our area, I just don't see that happening very often. I'd be happy with 20K.
@Paul Sandhu, I'm curious, do you or your wife have a full-time W2 job in addition to taking care of your properties? My husband's skills sound similar, not much he cannot do.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes9y
@Sonya Antrobus My wife quit her 40 hour/week job so that she can help me run the rentals. There is more money, and work hours can be adjusted to schedule. As long as things get done at the rentals, that is our main priority.
Myself, I have a contracting job at a medical clinic. Doing pre-employment drug screens. That's how I get over half of my renters. They are contractors working temporary jobs. I have furnished short term rentals. 22 of them.
- Investor · Falmouth, KY · Member since 2016 · 37 posts · 13 votes9y
@Paul Sandhu that sounds like a great take on an Air BNB-like rental. Plus you have the advantage of a longer-term renter vs what you would get with AirBNB. Like that idea. Thanks for sharing Paul.
- Real Estate Investor · Macedon, NY · Member since 2016 · 251 posts · 290 votes9y
Seems like a simple math problem to me. If you flip one in 6 months and make $40K how many can you flip in the same period of time and how much would the labor cost? If you drop to $20K per unit but can do 3 units you win. If you drop to $15K per and can only do two, keep going the way you are.
- Fort Collins, CO · Member since 2017 · 20 posts · 4 votes9y
I agree with @Paul Bowers. Just do the math and show him the financials. If it costs way more to be sitting on the rental for months, waiting for him to finish the work, he really can't disagree with you. If it costs more to hire the work, even if it's done in half the time, let him do it. My boyfriend and my father are both the type of people who will grumble and say they'd rather do it themselves (as a matter of pride? because they like doing the work? because they believe it saves money? who knows), but if they have the numbers staring them in the face, it's hard to disagree. If it comes out about even, however, if it makes him happy and keeps him from grumbling about stuff, I say let him do it!
- Investor · The Creek, WV · Member since 2014 · 890 posts · 1k+ votes9y
I'm like your husband. I do most of the work myself. But here is how I get things done quicker.
I found a handyman on Craigslist last year, hit it off and it's been great. I hire him out per job (that way I can decide what things I want to pay him to do and what things I want to do myself. If the job will take multiple days I even give him a key to the house.
I stay out of his way and do other things that need to be done around the house.
I save money, pay someone else to either do the jobs I don't want to do or the jobs that make the most economical sense. I also go get all of the supplies and bring them to the job site for him. It has saved a ton of time with him still working while I make another trip to Lowes or something.
To me, it's the best of both worlds, and I'm a farmer from WV and right on the eastern KY border.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes9y
@Sonya Antrobus he is an employee in a job that doesn't pay. What I mean is the Federal Government does not recognize his time as having any value. In other words, you cannot expense his time - only the materials. If you hired work done it would be deductible which gives you tax benefit.
Wait until you to sell the properties and all his sweat equity will be taxed as pure profit.
Not to mention the lost opportunity cost of the house sitting 6 months which is probably thousands of dollars.
Until he sees himself as more than a blue collar employee, nothing will change. It sounds like you are the brains behind the operation.
Good luck.
- Investor · Los Altos, CA · Member since 2014 · 942 posts · 1k+ votes9y
@Sonya Antrobus there are may variables that actually play into this topic then meet the eye. First, you and your husband value time and money differently. That is something the two of you will have to negotiate between the two of you. On a REI cost basis, it is a little more complicated.
I WAS like your husband and I am slowly transitioning away. In my market, GOOD "licensed contractors" are extremely difficult to get for small jobs... so to find somebody there is along search and vetting period. I don't think there is any real benefit in getting somebody who is not licensed because you are still liable for their work.
I purchased 2 buildings for a total of eight 1 bed 1 bath units. After buying the buildings I was strapped for cash, so I had to do the work myself. My first unit took 3 months of working at night and weekends. I have a W2 job, so part time was all I could manage. By the 7th unit, I could do the same amount of work in 3 weeks: flooring, tile, kitchen cabinets, granite counters, plumbing fixtures, lighting fixtures, painting, etc. Total cost of materials, including new SS appliances was less then $10k per unit. If I had hired somebody to do the work it would have cost between $30k to $50k per unit. In my case the numbers clearly told me it was better to do the work myself.
After those units I went after 3 more small studio units. Same basic work as above, but the commute to get to the buildings was farther. Through those units I started to transition to using a day labor "handyman". I knew how to do the work, and I knew the level of finish I could complete in a given amount of time. I would start the work next to the guy so he could see I knew what I was doing, and then transitioned out and just managed the job. It cost me a little more in dollars because I was paying somebody to work for me. However, I pulled my own permits as the owner so still no need to pay a contractor to be the middle man. My cost increase was about 15% compared to the 1/1's I did myself.
My point being, maybe you just need to ween your husband off of swinging the hammer. I had to consciously do that for myself, because I enjoyed the sense of accomplishment of doing the work, but I knew my time was better spent doing other things. I am sure that once your husband realizes that it is much easier to supervise people doing manual labor he will still get the feeling of accomplishment at the end of the project and you will have gotten the unit done faster ;-)
- Stillwater, MN · Member since 2014 · 44 posts · 8 votes9y
When you are doing all the work, you are trading your hours for dollars, just like a job.
When you start to hire more people who work for you, you are trading other people's hours for your dollars.
- Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes9y
@sony
@Sonya Antrobus Please send your husband to live with with me. My wife will be happy that repairs get done around our house, your husband will be happily busy, you will be happy he is out of your business and I will be happy spending my time on deals and PM.
- Investor · The worst town to live in, KS · Member since 2016 · 4k+ posts · 4k+ votes9y
I have phrase that I tell people:
People with a lot of money don't have a lot of time
People without a lot of money have a lot of time
The people with a lot of money hire people with a lot of time to do the work that they don't have time to do.
- Investor · Falmouth, KY · Member since 2016 · 37 posts · 13 votes9y
@Terrell Garren, I think you read a little more into the situation. My house is like the mechanics wife's car, never gets fixed. It's everyone else's stuff that gets fixed first! Funny, I enjoyed your comment.
@Arlen Chou you are right on point. He and I do value time differently and I think most of that is because I still have a full-time W2 job and he does not. I appreciate you input as you have given me a few things to reference.
All these comments are great. Thank you all your input. It helps to keep me thinking about things outside of my own sometimes narrow mind.
- Investor · Oak Park, IL · Member since 2014 · 307 posts · 150 votes9y
@Sonya Antrobus you have a good thing going, you just need to find balance. Hopefully, your husbands knowledge would serve you well in finding and managing contractors and laborers.
- Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes9y
Hahaha. I always love the wife/husband posts....where one wants one thing and the other isn't having it.
What about if instead of trying to convince him to give it up completely right away, you offer a "trial/experiment/see what happens" idea. Let him keep rehabbing one property on his own, and hire the work out on another property. Then at the end of both of them, you guys can look at the results and make a decision from there. That way he isn't completely giving up what he is comfortable with and prefers to do, but it's opening up the potential for change at the same time. So it ends up being a compromise to start, but then you can weigh out the options after the data comes in.
It can certainly help other folks get on board with a change, but I even use the "set it up as an experiment" trick to trick my own mind into trying something new when it doesn't want to. If my mind knows something is a one-off attempt and we'll weigh the results later, knowing it can go back to it's old ways if it doesn't work out....things tend to go over a lot more smoothly.
- Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes9y
Did you guys make 40k per flip farming out the labor? I love it when I hear people say, "What?! You're driving nails?! Why, you could be hiring unicorns that always do things correct and on time, and understand you're on a budget!"
On a serious note, use screws.
- Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes9y
Some good comments in here. Some of my thoughts:
1. Every business starts off with the CEO taking out the trash and mopping floors.
2. The CEO must know when it is time to hire someone to take out the trash and mop the floors. Hint: that time is *usually* not when capital is scarce.
3. Most people vastly overvalue how much they *think* they are worth per hour. This is where you get the disconnects of "Hey, my time is worth way more than $30 an hour, I could be making infinity per hour doing deals" except that there's a reasonably good chance that time spent not working on the business is instead spent watching "Dancing with the Starts", to use a @Brandon Turner favorite. In that scenario, working on the business is more profitable.
4. Start with turning over the low value fruit. For example, I don't cut any grass, because I have mowers (including the guys that cut my own grass) that will do a yard for $20. If I do it, I have to load the mower, buy the gas, spend 40 minutes doing the job, and 25 minutes in transit. Plus spend my gas and wear on my vehicle, which means I'm probably effectively mowing the lawn for $10/hr. I'd rather spend that hour watching Dancing with the Stars!
5. If you don't know anything about doing it yourself, how will you know if it's being done right or if you are getting ripped off? One of the reasons the CEO is so valuable in his/her company is that he/she can/has done all the jobs. They know when someone is giving them awesome production.
Skyline Properties - Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes9y
The main way I would pitch it to him is that it's not free to work on a house yourself. Time = Money. Ask him to set his own wage and then track how many hours (or just estimate) you spend on the house. That has to be viewed as an expense because your time could have been spent on something else. Maybe pitching it that way will help a lightbulb turn on.
- Investor · Burbank, IL · Member since 2017 · 49 posts · 21 votes9y
Eventually he will get tiered and want help if not outsource the whole project. I understand doing things initially to save money for the next property but in the long run one person will not be able to maintain and complete capital expenditures on 30+ units.
- Augusta, GA · Member since 2014 · 1k+ posts · 1k+ votes9y
Sonya, like your husband when we first started out we did most of the work ourselves (except for HVAC). We still (well, mainly me since I am the one retired) do much of it between tenants.
My partner is an roof and truss engineer and very detailed. Drives me crazy sometimes at how slow he can be! I learned NEVER EVER to let the guy paint (honestly; I've been able to paint a room, the windows, the baseboards AND French doors while he's still working on one window).
You mention you've been able to purchase your units with cash. Us too. So, believe it or not, there comes a point in time where for tax purposes you find yourself focusing more on deductions for repairs you can take off your taxes. Also I have come to hate plumbing in my old age and I'd rather call the plumber to deal with a leak rather than to have to crawl under another house one more time. Your husband should reach that level sometime in the future too.
Gail
- 9yNed J.Pro MemberInvestor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes
Another factor............ sometimes if you want it done right, you need to do it yourself..... for me, sometimes the frustration of hiring someone to do it and then have them F** it up or just do crap work, makes me want to just do it myself. But it depends on the job....and the quality of the people you can hire and trust.
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