DIY or Not? Help Me Out Here.

Help me out here: what do you think an honest investor should do? DIY or not?

The way I see it, there are good arguments on both sides, and most of the advice I hear conveniently ignores one of them.

You buy a property that needs some work. The painter wants $4,000. Four thousand dollars? For painting?

You can paint. So you buy the paint, rollers, brushes, tape and drop cloths. You give up a weekend, maybe a couple of evenings, and eventually it's done.

You tell yourself: “I just saved $4,000.” And maybe you did. There's a popular business argument that says you should never do a $25-an-hour job if your time is worth $200 an hour.

I don't completely buy that. Is your time actually worth $200 an hour at 4:30 on Sunday afternoon? Is somebody standing outside the property offering to buy those four hours from you for $800?

If the alternative is sitting on the couch watching football, painting the apartment may be a perfectly good use of your time. Especially when you're starting out. You may not have cheap money, employees, a big network or twenty deals in the pipeline. What you have is Saturday. Why not use it?

But here's where my argument starts falling apart. We tend to overestimate our ability to do work that doesn't require a university degree. Painting doesn't require one. Neither does plumbing. Neither does drywall, flooring, tiling or most of the other things we look at and think: "How hard can it be?"

Quite hard, apparently. Not necessarily because they're intellectually complicated. They're skills. The painter sees preparation you don't see. The plumber notices something that is obvious to a plumber and completely invisible to you. The flooring guy knows that the tiny mistake you're making on row two is going to become a major problem by row twelve.

You will botch things. You will overlook the obvious. You will spend three hours figuring out something an experienced tradesman would recognize in thirty seconds.

And this is where our DIY accounting gets suspicious. We say: "It's only a four-hour job." Is it? What if you don't know how to do it yet? First you watch a tutorial. Then another because the second guy says the first guy is doing it wrong. Then six more. Then you go to the store. Then you discover you bought the wrong fitting. Back to the store. Then you realize you need a tool you don't own. Then you do the job. Then you discover why the second YouTube guy warned you not to do exactly what you just did. So you take it apart and start again.

If you have to watch a thousand tutorials before doing your four-hour job, is it really a four-hour job? That's the amateur tax. We calculate DIY as though our first attempt will take the same amount of time and produce the same result as somebody else's thousandth attempt. It won't.

But I still don't think that settles the argument. Because the opposite side cheats with the numbers too. We assign ourselves imaginary hourly rates. "My time is worth $200 an hour."

Maybe it is. But unless you can actually sell every available hour of your life for $200, that doesn't mean Saturday afternoon costs you $200 an hour.

So what's the honest calculation? The contractor's price matters. Your materials matter. The tools you have to buy matter. Your time matters. The time you spend learning matters. The chance you'll screw it up matters. The cost of having somebody repair your screw-up definitely matters.

And then there's something much harder to price: What weren't you doing while you were doing this? Maybe you weren't looking for the next property. Maybe you didn't return a broker's call. Maybe you didn't follow up with somebody who mentioned an off-market deal. Or maybe you weren't missing anything at all. Maybe you really were just giving up a Saturday afternoon.

That's why I'm not convinced by either extreme. "Always outsource" sounds like advice from somebody who has forgotten what it's like to start with very little money. "Do everything yourself" sounds like advice from somebody who doesn't put a price on his own time - or his mistakes.

And I suspect the answer changes as the business changes. In the beginning, sweat equity may be one of the few advantages you have. You don't have much money. But you have time. Later, hopefully, you have more money and less time. The danger is continuing to do everything yourself simply because that's what made sense when you were broke. At some point, the habit that helped build your business may start preventing it from growing.

So help me out here. Where do you draw the line? What do you always do yourself? What do you always pay a professional to do? And most importantly: how do you honestly calculate whether DIY actually saved you money?