Running the business not working in it

[Donte S.]

BP what's going on ?Attention all fix and flippers/ rehabbers. How many people run the business without being in the business. Basically outsource the whole project.Any help in this matter will be greatly appreciated ...... Thanksp

[J Scott]

Originally posted by Aaron Montague:

Easiest way to run a flip business without doing any dirty work is to partner with a contractor. You run the money and they do all the dusty jobs. Split everything down the middle and see where it takes you.

I actually disagree with this approach...

Part of running a business is having as much control over each aspect of the business as possible (even if you delegate the actual work and don't do it yourself). I can't imagine that a contractor would bring more to the table as a partner than as an employee/contractor, so bringing him in as a partner is just diluting your control and your profits.

What happens when you realize that the contractor isn't very skilled? Or isn't very cost efficient? Or isn't very reliable? Or isn't very ethical? If he's an employee/contractor, you fire him and find someone else. If he's a partner, you're stuck with him and you now have a business that's running sub-optimally -- and you have NO recourse to make it run better.

I see no more reason to make your contractor a partner than I see making your real estate agent, your closing attorney, your mortgage broker or the guy who picks up your trash a partner -- you can hire out these tasks just as (more?) effectively than bringing in a partner.

The only reason to bring on a partner is if he can provide a skill that you can't hire out more cost effectively -- that's very rarely the case. And almost never the case with a contractor.

Just my $.02...