All Forum Posts by: Mike Mendoza

@J Scott re: the human resource infrastructure and other costs associated, we are fortunate to have economies of scale as the company I am partnered with manages a very large mobile home park and apartment building portfolio so we are spreading out the overhead cost more so than a starting house flipper. We are analyzing the overhead costs in all our flips and add that to our expenses for each property.  Its working for now but time will tell if we keep this model or mix in more contractors if this doesn't make sense cost wise in the future.  

@J Scott great points you bring up.  We have an in house GC/project manager that does alot of the work.  This keeps deadlines on schedule and ensures good quality for the work done.  As far as the numbers, it is a balance and we have found in our last two flips it saves us a little money.  So we if can become more efficient I believe we can save more. Its an experiment and investment in time and effort to see if we can make this work.  and as we ramp up I'm going to hire a GC and other contractors then continue to analyze the numbers and results to prove this out more and use a combination of both or eliminate one or the other depending on what system is working better. 

@Marcela Correa I guess we are creating our own general contracting company by doing this.  when we advertise and interview we emphasize that they will have learning opportunities on fixing houses and possibly learning real estate investing.  We will only do this for those who stay loyal and prove themselves to us.  I think that's why we are attracting the stay at home mom and others  who watch "flip this house" type shows and want to learn how to do this.  All of our crew is part time and we have a bigger pool of people where I put out a schedule first to those who have worked longer for us then if they can't work I offer the hours to others.  if someone calls in sick we will call others on the list to see if they can come in if we really need the help.  

I have stopped using craigslist for finding labor.  We advertise on various job websites ie. indeed.com, monster.com, etc.  We interview all candidates and don't hire anyone with felonies or those we can't trust.  there is always a supervisor on site until the laborer is with the company for a certain period of time and earns our trust to be in the house by themselves.  So its an investment in time, effort and training to get this going but as we scale up the number of flips we do then I think we'll be in a good position.  

@Ryan Dossey we offer anywhere between 10-15 per hour.  they are hired on as employees with the title of repair tech.  We are fortunate to have an human resource infrastructure to be able to do this efficiently.  So you will need to get legal and HR advice on how to set this up for your particular business.  

@j scott we have liability and workers comp through our management company we have for our other rentals and property portfolio.    So I guess this wouldn't apply to new investors starting out unless they take the risk and protect themselves by hiring their own labor.   

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.  

I've used pex in my flip projects in Cleveland.  I love it. My non skilled workers can learn to install after one demonstration on how to do it.  I haven't tested it for freezing but most reviews I read say it will not crack when water freezes in them.  I don't use copper any more unless I have to.  Also I can put a sign on the doors of my houses so crack heads know we use pex and no copper in the house to steal.  We use an alarm system on the house also so we haven't had any issues with theft. 

nothing replaces the due diligence of comparing the same types of materials or appliances in your local market.  Unfortunately there is no right answer to this.  some stores will give you discounts for volume purchasing or you can find closeout deals at an off name store or supply house.  You'll have to do your homework...it took me several trips and searching pricing from different stores and building supply stores to really know what things cost and their value at different levels of quality.  There are also many podcasts that say what they use in their rehabs.  For me in my market, Home Depot has given me the best pricing, quality, and consistency when it comes to the materials I use for my house flips while keeping me in line with my budget.