All Forum Posts by: Randy F.

"Never under estimate the power of stupid people in high places"

Set over a pic of the US Capital Building

Just my two cents on Transformations.

There is nothing magical about it. Everything in it is available on the shelf seperately and at less cost, although the instructional video provides DIY valuable info. Refinishing or painting cabinets is very labor intensive, and results are dependent upon the skill level of the user. The kits are convenient for the DIY who has the time to spend, but it may make more sense to ensure a quality end product by hiring it professionally done.

What I dont like about it is how misleading the marketing is. DIY has turned into a HUGE market and this product plays to it. Rustoleum claims that with the kit you eliminate the need for stripping, sanding, and priming. Stripping would seldom be necessary before painting, deglossing with scotchbrite pads is basically wet sanding, and the "base coat" is.... thats right... a tinted primer coat! But if they didnt make it sound easy, noone would buy it!

For the right DIYers Im sure its great. I would just caution those considering it to expect it to eat up a great deal of time, require a great deal of space, and may not look as sassy as the pics on the box and website.

As far as fizz cans... I hope DIY Network wasnt talking about using them on cabinets. But who knows... How many shows have you seen where they start rolling out paint with a 4" roller in the middle of the wall! Spray paint in the can is way too thin bodied and would take forever and ten days to do a kitchen with, and you'd be chasing runs and sags and if you did get enough build for a decent finish, you would cloud adjacent surface finish as you go with the overspray.

Cabinets are best sprayed with a HVLP(high volume low pressure)sprayer which allows greater control and finer finish than most airless, with a manageable level of overspray. A good option might be to work with your painter and you do the prep and pay him to come in and shoot them for a couple hundred bucks.

Dev, I would settle for a bottle of generic ibuprophen!

Just to be clear... And honest... I do recognize I was part of the problem, not the solution in this thread!!

I must have missed something,Terry. I didnt see where anyone claimed to have "expertise in a place they have never been a contracing company". Feel free to use the "quote" feature.

LOL! I will just agree. Im wrong. Youre right. Donuts ARE much cheaper at the Police Academy coffee shop!

Hey! I dont throw back skinny salmon. Theyre still tasty... Just takes more of them to fill the freezer! I get it!! :c)

I cant help it. I just have a problem with the word "retail" with regard to labor rates. Its really just semantics and perspective. And my only motivation in engaging on the subject is to gain a better understanding of your perspective as a successful investor dealing with contractors. One of the things that makes me good at what I do is being an effective problem solver. And I get WAY frustrated when I dont have clarity on a subject I should be an expert on!

My intent was not to dispute what your contactors are or arent. The incentives you
listed for contractors to work within your budget are legitimate. My question is... Is it reasonable to assume that the system you have put in place is easily duplicatable by the average investor starting out? I know that there are contractors out there that are reliable, do decent work, and are hungry enough to take on work for less than "retail". I also know that for every one of those, there are thirty who will take the work for yhe same money but who are far from reliable and wouldnt know quality if it bit them in the butt!

There are trade-offs in life. My concern is for the newbie risking his hard earned, and limited resources by going into deals counting on cut-rate labor, without a clear understanding of the associated risks. And in any type of investing, risk management is key.

I have as good a handle on the mentality of tradesmen as one could have, and I know that I only know when I know!! Ya know? If I dont have the ability to identify whether a contractor is worth using before Ive used him... Repeatedly... How can I expect anyone else can. Theres a great deal of luck involved. It takes years in a market to hire with confidence. Knowing all I know of the Milwaukee market, im surprised and impressed you seem to have put together a team so successfully. Not sure Id want to play poker with you!!

Exactly! Inexperienced fishermen should not take an ultralight rod to a King Salmon Derby!!

From a sound investing standpoint, "Better, Faster" doesnt mean putting more into a property than a property itself and the comps dictate, or than what the buyers in the market want. The appraisal factor doesnt apply as it would have been considered and taken into account. When I look at "Better" in reference to the thread topic, I'm talking about paying the price for a better contractor... Not to play roulette with the ARV, but to attain the highest standard of quality within budget and by managing risk upfront rather than damage control thru the process.

In my experience, the cheaper the labor, the more costly the mistakes. It is one thing if an investor without extensive experience himself has a GC or project manager who does. And its hard to argue with success, J Scott! I appears that you have found a great balance thru good management and cheap labor. I believe this is the exception rather than the rule. Why? Because Ive been in the business for over thirty years and I know that In the long term there is no combination which includes "Cheaper" that can be sustained. for a miriad of reasons, "Cheaper" will require the headache of the revolving door... finding and keeping good help.

Even if you give your guys stability, regular work, and better money than they were making, eventually they will flake out on you. Thats an entire subject of its own... The mentality of tradesmen. Ill just say that when I consider these issues here, Im thinking about the average investor and the newbies looking for guidance and for them, my best advice is to evaluate a rehab based on paying well established contractors what they charge to remain well established contractors. For every sub used who either doesnt have the experience or the business acumen to be a part of the foundation of the given markets trades pool, you increase your risk. IMO, an investor either looks to hit a home run on every investment and is willing to accept greater risk to do so, or he is willing to accept lower margins with lower risk and steady returns over the long haul.

That said, balance IS at the heart of success in most things. Paying top dollar for all your trades or hiring the cheapest labor you can find are the extremes, which leads me to...

What many dont understand is that "Better" and "Faster" can coexis. But seldom do they come in the same package for "Cheaper". If you look at "Better" simply in terms of quality, while one contractor may have the capacity to produce high quality craftsmanship at lower rates, but requiring a great deal of time, there are experienced high end contractors who can produce high quality much faster, but at a greater cost. If your holding costs are high, which would you choose? If the high end contractor is "Better" by virtue of the fact that he delivers high quality "Faster", allows you to plan for most of the unseen problems that could present, AND can effectively manage the job to meet both budget and schedule, could he not also end up being "Cheaper" in the long run?

This makes a lot of sense. For a less experienced investor however, not so much. He must rely upon professionals in the early stages to ensure that he doesnt walk into things like foundation issue, code problems, etc. that will blow "Cheaper" out of the water.
Once they know what they are looking at and what to look for and can anticipate the types of problems inherent in their market, yes... A project manager and hungry subs can getter done. Of course, Im not saying anything you dont already know!

I pay the going rates for the type of labor I want or need. For me, it has nothing to do with retail/wholesale/investor rates. It has to do with what they are worth.

It isnt about me. Its about them. Whether an individual or a crew, they are worth what they deliver. No less, no more. Unlike the OP, I couldnt care less about production contractors who chase insurance work. I have no interest in the work, profits that for the most part are unrelated to performance/quality, or in the money motivated mentality in that sector. I'm a perfectionist, an idealist, and a big picture guy. My interest is in what I personally create and leave behind. And, I try to live by the Golden Rule. I expect to be paid what Im worth, therefore I pay people what they are worth. I understand that if for whatever reason I choose to pay less, I will get less.

I dont believe there are any right or wrong, black and white answers. The remodeling/renovation/restoration business is one of the grayest, most complicated businesses in existence. No two people measure things like quality and worth the same. No two contractors work at the same task at the same speed. And with as many variables as there are, no two people will have the same definition of what "Better" means to them. More often than not, its the intangible that makes the difference... Things like work ethic, honesty, trustworthiness, modesty & humility, and being able to play well with others, none of which there is a standard rate for! Its seems you have to be a freaking psychologist to even hire a laborer these days, let alone a GC.

Speaking of ole sayings, how bout this one...

"Pigs get fat, hogs get slaughtered"

If the numbers work and youre looking at a decent ROI, whats wrong with "Better, Faster"? Many a homeowner or investor shooting for "Cheaper" has gotten themselves "slaughtered"!

The problem with peel and stick is that to prep a floor to the point it will stay down, would be more trouble than its worth. And wood expands and contracts at a different rate that vinyl and the adhesive isnt a strong enough bond to hold up. Either sheet goods or real tile is your best bet.

Hey Terry,

I was unable to get back to the thread i started about retail vs invester pricing, so I'lll offer my thoughts here.

I completely get what youre saying here. Im a professional remodeler and know all the trades and do high end work. I dont market and I dont bid. My work is in demand so I offer my price and do the job. The only incentive I would have for working exclusively for investors would be if I controlled the jobs and got a peice of the action. It never made sense to me why A good contractor should discount their work untill J Scott explained what his contractors receive from him. In his markets and at the level his investments fit into that market, there is considerable competition for the available work. For these contractors to have steady work that pays without all the headaches, REIs are a great customer to service.

The key is in finding those who havent yet built a name and rep for themselves, while they do have enough of the right stuff(dependable, honest, good work ethic, acceptable workmanship, etc) to be an asset to an investor.

I have had thoughts like yours for many years. I would not do an Angies list type thing for the reasons already given. I would do more of a central booking type agency. You find the good ones and train up some good ones on both the work AND business side and you are the referer for your contractor list. When investors or homeowners in your market need a plumber, roofer, tile setter,etc you become the go to guy. You then have the option to bid a rehab yourself or send out contractors to do it and you get referral fee. As you grow your website hosts the contractor pages and you gather the feedback from the customers to build their rep while controlling the content. They pay for the service or you get it in the referral fee.

Many options on how this would run. But it would be local. It could be duplicated and even franchised, but you would be building a solid local service desireable to both contractors of this type and to investors who cant afford to risk their spread on hacks.

I have other ideas targeted more toward investors only, but thats in my pocket till several of the rehabbers here get my phone call! ;c)