House Flipping 101: How to Find Deals, Vet Contractors, & Manage a Rehab

Ashley:
My name is Ashley Care and I’m here with Tony j Robinson.

Tony :
And welcome to the Real Estate Rookie Podcast, where every week, three times a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And we are having back on the show Sean and Anne Wink. He episode 63. That’s right. Episode 63, which was recorded over three years ago now, Sean and Ann decided to ditch their corporate jobs and dive into flipping properties full time. So today we’re going to learn, do you need a design proposal for your flip? How to select the absolute best contractors and the dos and don’ts of working with contractors that nobody talks about. So Sean, and welcome back to the Real Estate Rookie Podcast.

Sean:
Hi, thanks.

Ann:
Thanks for having us guys.

Ashley:
So it’s been three years since we last talked to you guys. You had done 12 deals at the time. What has happened since then? What does your portfolio look like now?

Ann:
Yeah, so since then we’ve probably done 18 or 20 more flips. I was actually looking back at where we were episode 64 in our investing journey. We didn’t have any rental properties yet. So since then we’ve added four long-term rentals. This past year we just added our first pretty mega Airbnb. And then other than that, I think just contracting, I’m a licensed general contractor and I’m sure we’ll get into all the details and everything on that. But oh, and I did want to add, since then we’ve added about 13 to 15 chickens. We’ve added another dog. We have added two cats

Sean:
And a baby,

Ann:
And my hair is about two feet longer than it was three years ago.

Ashley:
So lots has changed.

Tony :
Yes, I love that Sean mentioned everything except the baby, right? It just like where’s everyone’s head at, right. I

Sean:
Was like, most importantly, most,

Ann:
We still have three live children.

Sean:
I think I was pregnant with our youngest when we did the podcast last time.

Tony :
That’s awesome. Well, so Sean, you talked a little bit about you getting your license. I guess maybe Anne, how are you guys separating the responsibilities within the flipping business right now?

Sean:
I think that’s definitely something that we have clarified during this time the most is really my job and his job. So his being obviously the contractor, he’s definitely the budget side, looking more at the spread and finding the properties. And I’m a hundred percent the design side and I’ve since added just a little bit more clarity to that side of the project, most specifically in using design proposals and spreadsheets, which is something that I wasn’t good at before, but now I’m pretty good at

Ashley:
It. And then what about when you’re purchasing these, going through the acquisition process maybe whose role is more that acquiring the properties and what advice would you give a rookie when they’re making their first purchase?

Ann:
I do all of the deal. So finding our flips, finding our investment properties, and obviously you can kind of look at when you’re a rookie deals from a, Hey, I going to, or anyone actually, I’m sorry, backing up. You can look at your deals from, I’m going to flip this house and make my money. Or you can look at it as I’m going to hold this as a long-term investment. I think as a rookie, the philosophy that I used was, I’m going to flip this property, but with the exit strategy B of being able to bur this property, being able to refinance out of it, and are we in a situation to do that so that if issues arise, we’re in a good spot? And I think that’s a safe way for rookies to enter those kind of projects so that they have some options. And we’ve had some of ’em where we’ve literally had to use that backup plan. So that’s I guess advice I would give to a rookie.

Ashley:
Yeah, that’s definitely great advice. Having some kind of exit strategy in place so that if it doesn’t go the way that you want, you have some kind of plan to handle that. Can you maybe tell us about one of those examples where you did have to use your backup strategy?

Ann:
We were still learning Hampton Roads as a whole. We got seven different cities that you kind of operated down here in Southern Virginia. So we get to the end of the project, I put it up for sale, we got it under contract. I was like, sweet, wipe the sweat off your brow. You’re like, all right, that was nerve wracking. Let’s get on or get on from this project. And then about a week before closing, there was an issue with the lot lines in this area of the city, and I did not get a survey before I bought the property. So not getting a survey came back to bite us. And essentially we couldn’t sell the property to someone with a normal loan, so no one with a VA loan, an FHA loan, even conventional, the underwriters wouldn’t take it because of the lot line issues and some encroachment issues. So that led me to having to go into Burr the property, which actually was our only perfect burr where we got all of our money out. It actually is a good rental. Our tenant has been there for three years. She’s super sweet. It’s great. But yeah, that situation, literally that’s exactly what happened. So we get surveys to clarify, I get surveys on every deal now, lesson learned lesson, big lesson learned.

Tony :
We’ve talked about surveys before and Nash, I think you mentioned that, especially when you’re looking at some of these properties with more acreage. But where I’m at in California, I have, my agents never mentioned getting a survey done for the lot lines, and it’s just not something that I think is normal down here. But it’s a good reminder that just because it hasn’t happened to me yet doesn’t mean it can’t happen to me in the future

Ann:
For sure. And at least get on your city website and do a lot of ’em have an error. We have it here. It’s like an error shot and they’ll give you what the city thinks is accurate. And for example, that entire block of that city, they’re all off. They’re all messed up.

Tony :
Well, that’s good to know, right? Yeah,

Ann:
I won’t mention the specific city.

Tony :
Well, I’m glad you guys were able to come to a resolution on that property. You birded, it worked out well for you guys, but you said you bought that one three years ago and real estate has changed a lot since that time three years ago. And I know that the focus of this episode is going to be on how you’re actually managing the rehabs. Before we get into the kind of nitty gritty of that, just one question is what are you guys doing today to actually source these properties? Because I think that’s a big challenge for Ricky’s who are looking to get started is that where do I go? Are you guys going to the mls? Are you guys going direct to seller? Are you working with wholesalers? What strategies are you finding that work today to find these deals? Yeah,

Ann:
For sure. I think what, there’s so many strategies as you guys know that you can use to kind of source deals. What’s manageable for me is using really effective real estate investing realtors that kind of help us out. So I use them, we do have some connections over the last several years with local wholesalers. Those are hit and miss sometimes. Sometimes they’re great. And just networking for us. Now, maybe it doesn’t apply to rookies, but people will come to us with deals now. One that we just got on our contract, someone mentioned our name at a coffee shop and we ended up getting, it’s a great property. But getting back to rookies specifically, I think if you can just research and find a good realtor or another investor to hold your hand, that’s your best bet, especially when you’re at perceived top of markets, you really want to make sure you’re dialed in and something’s a good deal. For example, that one that I found in that bad neighborhood, I didn’t have any realtor, got it from a wholesaler wasn’t a hundred percent and that was three years in and I still goofed up a little bit there. So I think having a trusted person to kind of hold your hand through the first couple of deals is like, I mean it’s essential.

Sean:
I think the answer to that question is all the above. I think you should use as many different resources as possible from wholesaling to real estate agent. And Sean just went to auction for the first time and learned a lot too. So that’s another great way to get houses too. So all the above, I don’t think just sticking to one. Do you use all the different resources?

Ann:
Yeah, I forgot about that. We’re starting to do a lot more of the auctions, which is super competitive too actually. But yeah.

Ashley:
What is something that rookies get wrong when they’re purchasing their first rental or their first flip that they should be doing once they get the property under contract?

Ann:
Yeah, I think a lot of times people will fall into just, they stop planning for the project and analyzing it as soon as they get under contract. So excited about having a deal and then you have this length of time till you’re closing and you just make sure you want to make sure you’re utilizing that time. And I think in residential real estate, people miss on that a lot.

Sean:
And what’ll happen is they’ll stop after they’ve gotten the deal and they’re so excited the numbers work. And then instead of putting in the time and energy to really sit down and create a beautiful plan for design and how they’re actually going to move forward with the finishes in the home, I’m having the buyer and buyer in mind, they just kind of run to the clearance section or just don’t even put a lot of thought into what’s actually going to go into the house. If it’s new, then that’s sufficient, but it’s really not the fact that it’s a brand new light, I really think you have to either have a design person on your team or really put in that mental energy into really creating an actually beautiful home with the buyer in mind.

Ann:
Yeah, I think front loading your projects with a lot of thought and planning makes for a better product for the end buyer and for your contractors who are working on the project.

Ashley:
Well, it’s great to hear how far you guys have come, how you’ve been able to pivot and change your strategy and to do so many flips within the past couple years. I want to continue to have you share your knowledge with the rookie community, but first we’re going to take a short break. Okay, we’re back from our short break. I want to say thank you to everyone who takes the time to check out our show sponsors because just like they make this podcast happen. So Sean, I’m curious about learning to work with the city. So as you mentioned, you had the survey issues, were there other issues? And I think there was seven different neighborhoods and cities you said that you have worked with. So give us some advice for a rookie that’s listening as to what’s the best way to be prepared and to approach working with a city.

Ann:
Yeah, absolutely. I think that there’s a lot of misnomers when you’re working with the city or city inspectors. I mean, you feel like if you’re doing a project that if they catch you, you’re going to go to jail, you’re not going to go to jail. Or I remember the first time I got a stop work order from a city inspector, I was beyond stressed out kind of thing. And what I learned in what kind of advice I would give is think about your project upfront and is it really going to need permits and are you willing to risk or run the risk of not pulling permits and getting stopped? Because what happens when you get stopped by a municipality is you’re going to have a huge backlog chunk of time down on your project that can run in the one month to two month period of time getting plan reviews.
Again, backing up to the survey issue. If you want to just blitz through and think you’re going to fly under the radar and do a flip and they catch you doing that, now all of a sudden if you haven’t gotten a survey, you got to go get a survey. Surveys take two to three weeks to come back. Then you’ve got to do plan and architectural designings, all that stuff. So you lose a huge chunk of time. And I think as rookies, you don’t realize how bad that can really hurt you and how much that can tie you up. So I would say think through your project truly from the beginning so that you can make appropriate plans. So I get a survey, just not so I don’t buy a bad property so that I’m also ahead of the game when I’m submitting permits, so I can already be rolling that.
So that’s one aspect of it. I would say that’s huge. Second thing is if you are nice to them, generally they’ll be nice to you and if you are a jerk, they will ruin your life. And I’ve seen contractors get into it and they want to just shine their contractor’s license in front of the inspector, and the inspector wants to show them whose boss. But what I’ve also seen is if you are humble and are willing to learn from them and ask them their advice, and a lot of ’em have been contractors before and they’re not trying to be jerks and they’re not trying to be stuck up, they will go out of their way to help you. I have the cell phone numbers of several different municipalities, head guys from the framing guys to the plumber inspectors, and I will call them and be like, Hey, I’m about to do this.
What do you think about this? To get ahead of it? Or they’ll even stop by on their own time sometimes and help and just, Hey, before you call for inspection, check this out. That makes your life so much better. So I think those two things is being prepared for the project at hand and then two, deciding how you’re going to interact with ’em. Because if your ego is too big, it’s going to clap back at you in a bad way financially, everything and your contractors will be upset. There’s so much I could go into there, I’ll stop rambling. But those two points I think are a big deal.

Tony :
And John, it makes me, it just brings to mind for me that each city is really like its own personality. There are some cities I’ve been to where it’s an absolute pain to get anything done, and there are other cities I go to where they’re like, Hey, we just want to make sure that your house doesn’t fall down. Outside of that you can kind of go do whatever you want to do, but you won’t know what the personality of that city is until you start building some of those relationships. But I agree with you kind of going with the approach of maybe working together and friendship is a better take because I’ve only been red tagged once, and luckily this city was a super laid back city where they’re like, look guys, you’re almost done with the rehab, so we’re not going to make you undo everything, but just do this, give us this and you’ll be good to go. And it was a really easy process. So there is something to be said there, but Sean, I guess one follow-up question for you. At what point are you engaging with the city in terms of submitting plans and giving all of that information? Is it while you’re under contract or are you waiting until you actually closing the property to kind of kick that process off?

Ann:
Yeah, so again, with the different municipalities, a lot of the times they will not allow you to apply for a permit until you own the property. So that can hold you up. But what you can do is make sure that you have everything in hand to click the button. On day one, we have a project right now, for instance, we’re doing the survey. Our architect is already kind of doing our drawings in the background, and then we’ll have everything ready. So the day we close, I’m going to click send and start that two week plan review so that I’m not losing. We did a big renovation last year. I took almost a month and a half getting through plans and reviews after closing just on straight downtime. And it’s a really big popular nice beach area that we live in, so you’re not going to get away with doing anything until you do that stuff.
So I tried to do that. One caveat to that for rookies is the survey kind of helps you from a contractual standpoint. If there’s something wrong with the survey, you can back out of the deal. So it’s a little more expensive. You might spend that 700, $1,200 expense, but it could save you for two reasons. If you go ahead and work with your architect, that’s money loss. You have to really be confident that you’re marching forward with this deal or that you’re willing to risk, Hey, I might throw away a couple grand here, jumping the gun a little bit by getting an architect involved or something else with plan review. Some deals we’ll do that. I feel very confident in which way we’re going, et cetera. And other times I won’t and you’ll wait. So I just wanted to add that there for people to consider.

Tony :
And what about for you? We talked a lot about the permitting and the construction side of things, but I know you mentioned earlier the idea of the design proposal. So I guess first if you can maybe just define what that design proposal is and what is the importance of creating that upfront for the project?

Sean:
Sure. It’s basically a document that lays out very clearly every single element of interior design for the house, from the kitchen knobs to all the doorknobs in the house, to the color of the front door, to the roof color, to even the plants that are going to go in the front yard. So every little detail is decided first before it’s bought. It’s put into this design proposal. So it’s in a Word doc I guess we use. And my very organized husband and our new project manager are excellent with the organization part. They actually have set up a beautiful template, and so it’s really easy for me to go in and I put the links to things that we’re going to buy from the lighting to bathroom vanities to tile in the bathroom floor or a kitchen floor. And all I have to do is input it and I put a picture in there as well.
And it’s great for two reasons. It’s great because it helps to have a plan and sticking to that plan moving forward. But it’s especially useful for when we’re working with contractors. We do share with our subs, so we do share with them the exact plan for our bathroom, the exact plan for the kitchen, and sometimes we print them out, we’ll laminate it for them so they have it very clearly for a bathroom project or a kitchen project or whatever their job is. But that’s definitely a huge area that we’ve grown in our business, and I think that that’s changed so much for us.

Ann:
And it all came from pain points, I would say being on projects, especially in the beginning when I was physically working on the projects, like calling in and be like, what about this? What about that? And we just didn’t know how all the dominoes would fall. And on the contracting side, having that for all of the guys and Kelly, our project managers, helped us kind of even push this further here just in the last couple months. But we started doing it for those reasons because it brought so much more continuity from the paint guy to the tile guy shows you what pattern goes where and what grout color goes where. And it’s hugely helpful on the contracting side as well.

Ashley:
When you guys are hiring out subs. So maybe if you hire a tile guy and it’s Sean, not you doing the work directly, how are you handling the materials? Are you asking them just for a labor quote? Are you asking them to quote the materials and telling them which materials they need to use from the design spec?

Ann:
We typically buy all the materials ourselves, I would say because we’ve got all of our vendor relations that this point, or even just your own point systems and stuff that we want to kind of push our dollars into. So we do all that. We handle all the materials and just do labor quotes from the guys.

Sean:
So right now I’m ordering bathroom tiles, I’m ordering laminate flooring, I’m ordering the knobs from Amazon or wherever they’re coming from. I’m doing all of the ordering so that it’s already there for the subs. And then materials plus design proposal equals hopefully smooth renovation.

Ann:
Yeah, smoother renovations,

Tony :
Yeah. Are you guys also doing the rough material ordering? Are you guys getting the drywall and all of those things that the contractors use or are you just doing the finishes?

Ann:
Yeah, all. No, we do all the rough materials as well. So I’ll usually hand handle and our project manager will handle all of the building materials from the framing lumber to the drywall to the installation, all that stuff. Because one, we can work our relationships and usually get discounts. And two, it gives us the ability to get multiple quotes for the jobs, which is just a time consuming thing, which is its own rabbit hole. But I think it doesn’t get talked about enough where it’s like, yeah, get three quotes, get multiple quotes. It’s like most people don’t take the time to do that because it takes a lot of time and once you have trust or relationships, you don’t have to do that anymore. But as a rookie, I do think it’s a priority and it kind of helps get you educated very fast to what materials cost, et cetera. But yeah, so we do both

Sean:
Sides. I think it helps gain a little bit more control on our end in a good way in this area too, because a lot of times a sub will quote a project and then by the end of it, oh, you know what? I actually needed more. And so it’s more money on your end that you didn’t budget for, that you weren’t expecting. But when we pay for it upfront and when we have those exact numbers to the taxes, it helps us to stay really on budget and to make sure that you’re going to go over just part of the project or hopefully you don’t, but at least in that area, we know exactly how much the materials were

Ann:
And returns. If I can talk about returns, which is one of my favorite, I have a few favorite days on the project. One of them is return day. I’m sure you guys are familiar with that yourself, but just getting, when you buy the materials yourself, you’re just a lot more tied to that financially, and you know what that cost is. So when I walk by and I see some composite decking just laying around on the project that needs to be returned, I’m like, dude, that’s $500 worth of materials. We’re going to go return that. So I load up my truck and happily march in on the last week of the job and just, you get thousands of dollars back and you feel like you want, but when it’s another, yeah, yeah.

Tony :
Or you’re like me and Sarah, I can’t tell you how much random material we have in our garage right now from different projects that we’ve done that we just forgot to return, and it’s past that window. So I’ve got a random box of flooring. I have a five foot roller shade that doesn’t fit any homes or any windows inside of my home that we forgot to return.

Ann:
Oh, yeah. Yeah. That’s my garage. That’s my garage.

Tony :
No, I was going to say I do like the idea though of kind of controlling all the costs because when we do a rehab, typically we will order all the finishes, so we’ll do the flooring, the windows, all the hardware, but we typically let our crews be the one to buy the drywall, the plumbing, the toilet, all that stuff. But I do like that idea. Ash, how are you doing it for your rehabs? Are you more like Sean and Anne where you’re kind of buying everything or are you more like me or you’re just kind of controlling the finishes? Well,

Ashley:
For any apartment rehabs, I guess they’re kind of the same, similar for an apartment rehab or for a flip is we’re giving the contractor my credit card. So most of the time for the apartments, that’s just Daryl that does them, but we have a GC that we use for the flips, and so we give him my credit card. So I get the reward points, but also because I know exactly what the costs are of everything that’s coming in, and it gives me a little bit more knowledge of what things cost. But also we know that there’s no markup on materials that that’s what we’re getting. One thing that we do do for apartments that we don’t do for flips yet, but for the apartments is using the Home Depot or Lowe’s bid it out with them is sending them our whole shopping list of what we want, and then they go in and say, actually instead of 5,000 it will be $3,000 or whatever, because they go and take the time, the customer service rep goes and bids it out other places and gives you the best price on it. So we have taken advantage of that with doing pricing ourself for materials. But for the flips, we are just picking out our finishes. And then any other materials like the drywall things, the party backer board, things like that, the contractor is in charge of picking those materials out of what they want to use.

Ann:
Big thing we do too is because picking up and delivery materials is something that I used to do and it’s a huge time suck. So to Ashley’s point, everything we do is either a delivery or contractor pickup, and I name the person, so I have some guys that work for me that have authorized credit cards as well. And then we always are doing the Lowe’s, if you hit $1,500, they’ll give you a discount or you hit Home Depot and it’s 2,500 or two grand. We’re always looking at those. And if you give that to the contractor, unless you have a very good relationship with them, they are just moving. They’re fast, they’ve got projects and you’re like, Hey, we could have saved 150 $500 here if we’d taken a little more thought into these bulk materials and ran it through a Lowe’s QSP or a pro account to get those discounts. And I think for me, that’s one of those reasons why I keep that on our side of the street so we can have a little more foresight. It’s like, well, hey, we bought 10 toilets. We could have got a bunch of money off, but we bought ’em one at a time, so we lost that chance there.

Ashley:
Just like Tony, you were saying you have the garage of materials that is Gerald where he will buy in bulk because you’re saving a dollar and then they’ll sit in the garage.

Tony :
Yeah,

Ann:
I’ve got so much stuff in our garage. I literally just put out the garage a whole truckload in my truck of stuff that I got fed up with that’s been in there for three years. I’m like, look, this tile is not going to be used and this is not going to be used as much

Sean:
As you say, or as much as we say, oh, we’ll use it on another project,

Ann:
Rarely does it happen. So what I have pivoted to is I try to do weekly returns every Friday. Either the project manager onsite guy or myself, someone is doing a roundup, keeps your job site clean and gets your money back and you don’t miss return windows. There’s nothing worse than going back to the UPS store with a $300 light fixture and Amazon’s like the return window has closed and you’re like,

Tony :
Yeah.

Ashley:
Yeah. And to that point, so for the apartment remodels, we try to keep the same materials that we use for each of them. We’ve actually started doing inventory and keeping inventory of them. A lot of the properties are owned by different llc, so okay, if LLCA bought materials for this rehab and there’s a flooring leftover, we were good to go to use it for LLCB. That’s not really fair. I have different partners in different ones. So we’ve been doing keeping inventory, so that way we just go and it’s actually integrated with our property management software and we can go and just log out how much of the flooring was used by LLCA, how much was LLCB and charge them separately for it. And then the property management company is reimbursed for those expenses too. So if you have multiple entities where you don’t want to co-mingle, that’s always an option too, is actually take inventory into separate the cost out between them.

Ann:
That’s awesome. We’ll, that property management tool, we’ll have to get that tool from you. Yeah.

Tony :
So Anne, I guess how do you decide what to actually put into these design proposals?

Sean:
That’s a good question. I just decide, honestly, I love design. I’m personally very passionate about it and I do a lot of homework on the weekends and when I have free time, and by homework I mean scrolling on Pinterest or going on Instagram and following other design inspiration. And I have folders of so many different interior design things I want to use from arches in a shower to different tile patterns and different ways to use subway or that kind of a thing. So it’s one of my favorite things about not copy and pasting from house to house is that I’m a creative and I didn’t know that my whole life, but I know it now. And I really enjoy having the opportunity to design another house and to do it differently. And I love to just try out different design techniques and obviously keeping the buyer in mind, keeping a bit more of a neutral interior design because I do know it is still a flip, but neutral doesn’t have to be boring. So I try my best to be neutral and take, we talked about in the first podcast with y’all, three different design kind risks, and that’s usually a really safe place for being able to try out new things, but also keeping it fairly neutral for almost anybody to love our houses.

Ashley:
I would say that I’m probably the opposite of you. I want to be creative, but I’m not creative. I look at, oh, this will be so fun to design. And then when it’s time to actually put the design together, I don’t even know where to start. So are you using any kind of software? Are you starting with one room of the house or one element just you’re going to start with flooring and then kind of build from there? What advice do you have for me?

Sean:
Yeah, absolutely. So because we are flipping houses and we’re not talking about new construction, we do have to work a lot with what the house already does have. For example, if we get a flip house and it already has exposed beams, then I’m going to use that as kind of a grounding place for where to start with design. I know that it’s going to have a little bit more of maybe farmhouse kind of feels maybe a little bit more rustic if there wood exposed beams. So I go in and I look at the house and see, okay, what are we keeping and what’s not going to change here? And then that’s what the house naturally kind of tells me where it wants to go. Maybe there’s exposed brick in one of our houses and I’m just going to run with that, okay, we’re not going to tile over this brick, we’re going to keep this brick and we’re going to go with a barn rustic kind of feel.
Or is the house near water? Is it on the water? Is it a beach house? Okay, we’re going to go with coastal themes. So I let the house kind of tell me basically what it wants to be. I don’t try to force it to be something else, and I really do try to find one or two elements of the house that we’re not going to change. Maybe it has good flooring in it, we’re not going to take it out, but the flooring is gray. Then I’m going to run with that kind of gray flooring and use cool tones to go with the cool gray flooring that we’re not going to take out,

Ann:
I think and does a really good job of pulling on the thread of what the house is and kind of weaving it all together. It’s very magical what she does. Same as you, Ashley. I’m like, I don’t understand what kind of voodoo magic you just did, but now we have this beautiful house and it all makes sense. But I think she does a good job of pulling on that string of what’s there, but you also do this really good job of all of our houses, you can see us, if that makes sense. Our brand is always throughout the house. I just wanted to touch on that. I was like, even if we do a beach house or we do one in the city, Anne has a great way of tying it into our vibe, which I think is really cool. Yeah, so just to your credit.

Sean:
Oh, thank you.

Tony :
There you go. Hype interrupt. I love to hear it guys. Well look, we touched on a lot. We got a few more things that I want to go over, but I think one of the most important things for Ricky to hear is just the mistakes that you guys have made along the way and what some of those lessons that you’ve learned that have turned you into a better investor. Because I would assume who you are today at 20 plus flips in is different than who you are when we chatted back on episode 63. So we’re going to get into that after a quick word from today’s show sponsors. Alright guys, we’re back from that break now, Sean Ann, I guess I want to know what are some of the dos and don’ts when it comes to working with your subcontractors, your plumbers, your electricians, your demo team, your drywallers that no one really talks about? What are some of those unwritten rules that help you find success in dealing with those subs?

Ann:
I’ve got a bunch of ’em, but I know one that Anne has that maybe you want to touch on for contractors in general is there’s a lot of contractors telling you how things are supposed to be or how it is, and Anne is really grown in herself of being able to push back there. I think that’s something that I love that when you talk about that, it makes a lot of sense and it is real. I even do it to Anne as a contractor. I push back on her and be like, you can’t do this. We don’t want to do that. And then she was like, no, and then she’ll push back and then we’re all sitting there. All that was absolutely the best choice, but they can try and push you sometimes.

Sean:
I mean, this is going to speak to rookies that do the design side of flipping. So you’re not really going to have this problem if you, it’s okay if you feel that your path is to copy and paste. It’s very efficient, especially if a design works, stick with it. But if you’re a little bit more like me and you want to kind of create more of a brand, more of be creative, you’re going to have this issue with contractors where I will give them a new design, maybe something they’ve never seen before. Maybe it’s, I’ll give you an example with our Airbnb house that we have in San Bridge Beach now. I did a mosaic tile where I took three different penny tile colors and I wrote the word pool with the penny tile in a different color than the backdrop because the bathroom was servicing the pool, so it’s supposed to be a pool house type bathroom,

Ann:
And you could see the guy’s brain just breaking. It was exploding in front of us. He

Sean:
Was like, you want to write a word with tile? And I was like, yes, hear me out. It’s all over Pinterest. He’s like, what’s Pinterest? But I remember that day we had to sit down, Sean took the kids and I stayed at the house with the tile.

Ann:
You’re there for two hours and you laid out the whole thing.

Sean:
Him and I sat down and laid out every individual piece of penny tile outside of the bathroom. So then he would have to transfer it into the bathroom when I was gone. So sometimes I have to help, sometimes I have to give pictures. Actually, most of the time I have to give pictures, but I do get a lot of pushback because it’s either one new to them, so they’ve never done it before, and that can be scary or two, to be honest, can be maybe a little lazy. They’re just like, oh, I don’t want to have to think. Don’t make me think about those cuts in the tile. I would rather

Ann:
Just give me the 12 by 24 tiles and let me stack. That’s just what

Sean:
I want to do. That’s the bread and butter. I always get cheers when I’m like, this one’s going to be stacked somewhere. Yes, thank you. No more words in your tile, but the product just, it comes out just unique and beautiful and it’s fun. And again, I’m not the one laying the tile so many, many, many thanks to our subs where the magic actually comes to life. But thank you to all of the ones that listen to me and trust me. Because a lot of the times too, like Sean said, they’ll either say, that’s not going to work. And I’m like, okay, well can we try and see? And if it doesn’t work, we’ll pivot. I’m a big advocate in trying and failing. That’s how you learn. You never know. Maybe on the other side you actually succeed and then you have something incredible and I’m good with things not working. I’m okay with us pivoting and learning. And that’s exactly your question. Of all the different lessons we’ve learned, failing is part of it for sure.

Ann:
And to caveat or to add onto that, the number one contractor that probably pushes back on her about that is definitely me. As she’s talking to, I’m like, who is really pushing back? And I was just like, no, that guy, he actually likes it. And they’re like, oh, this is cool. Definitely me.

Tony :
I’m glad you have that self-awareness, Sean. That’s good, man. Yeah,

Ann:
Well, it doesn’t,

Sean:
He keeps me in check too. I mean sometimes I’m like, Hey, can we try this new tile? And he’s like, how much is it? And I’m like, don’t ask him. So sometimes he is like, we can’t afford that tile on this project, but maybe in the next one. And he really does allow me that opportunity in the next one to do it.

Tony :
I was going to say something you said, Ann, that stuck out to me. You said sometimes the contractors are just lazy and they don’t want to take that or do that extra work to get that design that really pops. So what are you guys doing to find those subs who you can trust in, who you believe will work hard? And maybe let me even frame the question a different way. Say I picked the two of you up and I dropped you in a city that you’ve never been to before. You have no connections, you have no experience in that market and you’re looking to find subs for the first time. What are you doing and where are you going to find those people?

Sean:
First things first, a new TV show. How fun. Right

Ann:
Card already did this.

Sean:
Oh yes. That’s how fun

Ann:
I think. So trying to get into that frame of mind for that question. I’d say the number one thing that I look for in contractors, I guess you’re talking about how to find them and then how do you vet them I guess, if you don’t mind me going backwards with that, how I usually vet them. Number one thing for us is your communication and your organization. We do not have time for contractors that don’t show up when they say they’re going to show up, that do not take care of their own stuff, don’t clean up their own messes and are also taking shortcuts. So those get evident. Most of those come up after you’ve already hired them, right? You’re like, wait a minute, we had a deal. You didn’t show up. You’re not actually a very cleanly person, you’re not very organized. But what are the telltales upfront?
For me, it is 100% their communication style. It’s like how do they handle themselves? Because some contractors are running a business and some contractors are just making enough money for that weekend and they’re going to go out fishing and they don’t really care what’s happening. So how people conduct themselves upfront, it is no different from any other business or relationship that you value. It is the exact same thing when you’re judging contractors and I have been burned many times by trying to work with cheaper options to the detriment of not only our timeline on the project, but to the frustration of myself and the frustration of other contractors like my good contractors. We don’t want ’em around. We don’t want people like that. So people that communicate and are organized, I think if you only have that, you’ll be on a straight path to getting a good team together.

Sean:
Well, and I had a couple thoughts too. The first one is I definitely think word of mouth is huge talking and networking with other investors and maybe they have different subs or different people they’ve heard of or just talking around to different people, oh, who did you have? Do work on your bathroom? Oh, I loved this person. And just networking in your area, in your neighborhood, in your field. And then I also think that we’ve done a really good job too of networking within our own subs as well. So we’ve had really good subs who have just come to us and say, Hey, I have a friend and I’ve been talking about you guys and I’ve been loving working for you. He’s now interested. Would you guys mind giving him a shot? So really networking within your own subs is another really great way. And if we know we love A, then he’s recommending his friend, well then we probably are going to like B sub because they’re friends or they work together.
The one recommends the other one. So that’s another I think really good way. And my last point too that got me thinking when Sean was talking was I think the way that Sean and I conduct business and the way that we run our business is also attracting high quality workers and subs. Exactly the way that it kind of explained through our own subs. We recently started to kind of see this influx of people almost finding us because people are saying people, they’re sick of contractors that aren’t showing up. They’re sick of low quality work or low quality flips, and they’re like, Hey, have you heard of Sean Wayne? He has X, Y, and Z over here going on high quality, good work environment. The community is strong and uplifting and powerful. And I think that that’s starting to catch. And so I think in a lot of ways they’re really starting to find us. And I think our work ethic and the quality in the community we’re building is starting to speak for itself, which is a huge blessing.

Ashley:
So to wrap it up here, what would be your last piece of advice that you would give to rookies just starting out on their investing journey?

Sean:
I would say don’t make decisions based on fear. If you’re afraid to start, if you’re afraid that’s not necessarily a good enough reason to begin. I think you obviously have to be smart. You have to do your homework. I would say talk to other investors, people that have been in this line of work for a while, and ask them personally about their beginnings, because a lot of us have such humble beginnings. And I think that it’s so important to remember where everybody started and we want to share that we want to share where we were sleeping on a mattress with two little kids in a house that we bought sight unseen. We were so afraid, but we acted anyway. So I think just not being afraid and making decisions based on fear and also just knowing that everybody starts small and somewhere.

Ann:
Yeah, for sure. I think for me, on building on the limiting beliefs too, I think I’ve dealt more with dealing with imposter syndrome in general, particularly as Ben successful and grown and just allowing yourself to be like, no, you actually do. You are. And you should act like a boss in the professional sense, or you are, and you should act like an executive, and you are. And you should have the right and the responsibility to lead your team because a lot of times I think we get going to real estate and it’s just about us. And I think one thing I would say for rookies too, maybe I’ll circle back to this, but with those limiting beliefs, is allowing yourself to grow into those roles and say, I haven’t earned the right to act like this type of person yet. For me, I had to be like, look, I am the boss. I need to act like a boss, treat my people well and conduct business in that way. That’s actually something can build around and a culture can build around. So I think that’s something as I’ve grown, I’ve had to step into belief wise and just all that.

Sean:
I think the little victories help to break those limiting beliefs as well. When you overcome a fear and you jump and then you have a little victory here, then that’s just going to snowball into the next time you’re a little bit afraid of something, you’re going to think to yourself, wait a second, X. Many months ago when I was afraid of that, I overcame that. So I now have some courage to overcome this hurdle that I have right here. And little by little, you can kind of look back on the past and see how many little victories you had so that when you get to a new roadblock that you’ve never hit before, you can look back into your stash and think, okay, I have this stash full of all these times where I hit something for the first time, or I was afraid and I overcame it with bravery and courage. So it can really grow and grow and snowball into giving you confidence in all those areas.

Ashley:
Well, Ann and Sean, thank you so much for taking the time to come back to the Real Estate Rookie podcast and to join us and fill us in your journey in the past couple of years. Congratulations on all your success, and we can’t wait to have you back on again in a couple more years and to see where you guys are at. So thank you so much. Yeah,

Ann:
Thanks for having us. We appreciate it guys.

Ashley:
I’m Ashley, and he’s Tony. Thank you so much for listening to today’s Real Estate Rookie podcast, and we’ll see you on the next one.

Tony :
This BiggerPockets podcast is produced by Daniel Otti, edited by Exodus Media Copywriting by Calico content.

Ashley:
I’m Ashley. He’s Tony, and you have been listening to Real Estate Rookie.

Tony :
And if you want to be a guest on a BiggerPockets show, apply biggerpockets.com/guest.