Use quality workers for your property rehabs

When I started flipping houses for profit, I tried to do the investment property rehabs myself. I wanted to be the repairman. Well that plan just did not work. I guess I just thought that was the way I was going to get wealthy in real estate. But I only turned myself into $8.00 an hour employee.

I remember the first bank repo house Bob, my first business partner, helped me buy back during the Clinton years in 1995. It was a hot July day. The property had a leak in the bathroom under the sink. I was wearing blue jeans and I was sweating heavily. I had sweat running down and dripping under my glasses and into my eyes. I just bought a new wrench for $24.00. I’m there trying to tighten this thing with sweat in my eyes and it was still leaking! I’m sad to say it was leaking worse when I was done!

That was the end of my very short rehabbing career. I realized it was a lot cheaper and easier for me for me just to point to the problem and write the check to a real handyman. I shifted then to overseeing the rehabs. I would also hire the cheapest workers I could find.

They have no company name, no references, and no verification that they can get the job done. Often they’re a DBA, doing business as “Fred’s Plumbing” or “Roscoe’s Repairs”. You bite the bullet and go with them. You just trust that they will make the repairs happen.

This setup brought a whole slew of other problems along with shoddy work. I had to wait too long to get things done. I had stolen material. I bought a nice mailbox for a home. One guy who had been doing some of the work on the project told me that someone had come along and stole the new mailbox. I was unhappy about that. I was driving down the street and, lo and behold, the same mailbox is on his son-in-law’s house. That’s where my mailbox was.
I give them money. They didn’t have the money for the materials they needed. So it made sense to me to pay them up front. Lo and behold, the time I paid them up front was the last time I saw them.

When they say that they are good at everything it’s a big red flag. These workers are a roofer, an electrician, licensed electrician, licensed plumber, carpenter etc. They are not good at everything. When they say they are good at everything, I instantly think they’re good at nothing! A wise man once told me “A Jack of all trades is a master of none”

I was working with a contractor who would say, “I can do it all. You want me to drywall? I can dry wall. You want me to paint? I can paint. “Truth is, I saw this guy in action and suspected he was learning on the job. Some of these guys are learning on the job.

I thought this hiring of guys who can “do everything” isn’t working for me. I lost enough money, time and effort with these guys. It’s not fun to see a recently acquired bank repo house just sitting there draining your pocketbook and not getting fixed.

I wasn’t fixing them myself and I couldn’t get these guys to do it. They were only taking my money and my material. They were slow and it drove me crazy to deal with them. I went another way and opened the Yellow Pages. That seemed more legitimate. I knew that I could get a licensed plumber or licensed electrician out of the Yellow Pages. They were good. But the problem is they have to pay for the Yellow Pages ad. It cost a lot of money to run that ad. These are the guys who ride the big trucks. They do have a company name and fancy custom logo painted on them. This costs money and it was why they came at a much higher price than I ever wanted to pay.

What I found was that there was a level in the middle. There was something between the Yellow Pages companies with new custom painted trucks and the crazies in the rusty trucks.

There are reasonable, high quality contractors. You find them typically through referrals. My contractors like Larry didn’t have a Yellow Pages ad or a custom painted logo on a new truck. He isn’t good at everything and he doesn’t claim to be. He says here’s what I can do and here is what I can’t do: plumbing or electrician work. He says he does the other stuff. He does the demo work, the paint, the carpentry work, the drywall work and he does it right.

If I want a licensed electrician, licensed plumber, roofer, landscaper, maid, there are people that I hire on a repetitive basis. I use them over and over. I take them from rehab to rehab to rehab.