Finding my Rock Star Team..

[Liz Cole]

Hello! Can you suggest a Podcast or Webinar or give me your thoughts on setting up a team to do flips? The area I'm interested in is 3 hours from where I live. 1. Who do I need in my back pocket and as @David Greene would say:, How do I find the Rock Stars? ---- RE Agent ---- Contractors --- HML and PMLs, ETC. 2. How do I QUICKLY analyze a deal when the various BP calculators make Dumb ME enter the data on what things will cost? lol 3. Do I trust the listing agent on a property to tell me the truth? Or am I smarter to find my own person? Thanks for the advice!

[Jay Hinrichs]

Originally posted by @Johann Batista:

@Account Closed; @Jay Hinrichs; @Jeffrey Stasz

It is amazing to me to see so much negativity towards somebody’s plan. The post was about ways to find a team, not how a flip goes downhill.  In any project it is a risk, despite how far you are. A 6 Hour drive is by choice because it could simply be a 45 minute flight. The drive was by choice and for personal preference.  

I’m sure there are horror stories about how people are on site everyday and things go wrong. But to simply discourage people from doing What they want is just wrong! This is why long distance investors are making millions, because there are so many individuals scared to take a risk simply because of how many miles away a project may or may not be. 

You Men gave great advice in some ways things can go wrong, yet skipped the actual intention of the post which was for ways to find a great team. I’m pretty positive that @Liz Cole like myself has Thought this out for a while and has a plan for how to handle this investment. Liz, I planned on going to Home Depot and Loews while I was at my area, however due to weather conditions I opted out. But that is definitely a great idea!! 

Lastly when I visited with Jeffery on a few of his jobs last month.. He had is tool belt on and was ramrodding the job that's how you ensure your outcomes.. 

[Johann Batista]

@Jay Hinrichs 

Well that was a different way to put this into your real perspective which is pretty clear that because @Liz Cole and I are females we will not be putting on tool belts!

This post has gone way to the extreme from its original intent. Therefore, I’m going to simply end my thoughts on the matter but not by first clearing up the idea that is Woman can’t put on tool belts. While there are many woman who do, there are just as many who don’t. This is not about gender but about choice. Also as an investor I would hope to not be “ramrodding” over a project to ensure it’s timely completion. Everyone has a job to do and everyone chooses how they do it.  

But as I sign off, I don’t want this message to be misconstrued that I’m any way upset about our dialogue, we simply have different views and opinions as far as investments. 

Great Topic!! 

[Jay Hinrichs]

Originally posted by @Johann Batista:

@Jay Hinrichs 

Well that was a different way to put this into your real perspective which is pretty clear that because @Liz Cole and I are females we will not be putting on tool belts!

This post has gone way to the extreme from its original intent. Therefore, I’m going to simply end my thoughts on the matter but not by first clearing up the idea that is Woman can’t put on tool belts. While there are many woman who do, there are just as many who don’t. This is not about gender but about choice. Also as an investor I would hope to not be “ramrodding” over a project to ensure it’s timely completion. Everyone has a job to do and everyone chooses how they do it.  

But as I sign off, I don’t want this message to be misconstrued that I’m any way upset about our dialogue, we simply have different views and opinions as far as investments. 

Great Topic!! 

not sure how you think this is men against women thing plenty of women in the space I fund a many women owned flipping companys and women are on the job doing physical work.

one of my loggers back in the day his sister ran the log loader.. talk about a mans world you don't see very many female loggers.. but that did not keep us or them from being super high producing logging company they flat got the wood out..

man women does not matter the point is remote rehab is risky.. anyone who says that it just takes putting a team together and your all going to walk off into the sunset well I don't agree at all with that.. personally..

good luck  

[Andrew S.]

@Johann Batista:  I don't see where Jay was implying women can't do the job.  He merely pointed out that when working in the construction field, sometimes it is necessary to personally push (or, yes, in some cases ramrod) the project along.  Jay has decades of experience with this and knows how the "real world" works.  Yes, you can probably hire enough project managers and topnotch contractors so that you don't have to be quite as "hands on", but it will cost you dearly, and it is not the way to optimize profits.  Based on your posts, you have a pretty idealistic maybe even idyllic view of the whole construction field.  Those who have been in the field for some time know that active management/oversight/cajoling/improvising and yes, sometimes ramrodding, is a must if you want to get things done on budget and on time.  

[Eric James]

Originally posted by @Jay Hinrichs:

@Johann Batista Ok finding your contractors at the bar that is a new twist.. :)

If they dont show up at the job site....at least you know where to look for them.

[Liz Cole]

@Ola Dantis Thank you. And I think people have been assuming I plan on traveling (and I'm not sure why) my plan has always been to LIVE in the area while the rehab is being done. It is part of the reason I decided to focus on towns in my State of residence. So I wish we could move past that issue. I just decided that my area is too expensive. I'm probably looking at that issue wrong.

And it is not that I don't appreciate all the comments. I Do. I am giving heed to every comment for both veteran and newer investor. 

I would love to hook up with someone to do a deal. I have the time right now, and I have a little money.

[Liz Cole]

Originally posted by :@Jay Hinrichs

Lastly when I visited with Jeffery on a few of his jobs last month.. He had is tool belt on and was ramrodding the job that's how you ensure your outcomes.. 

Been in and out of DIY my whole life. So I'm no expert but feel comfortable with doing things and do understand more than a lot of people probably wouldn't. I also know that trying to do it myself would be way over my head. My original post was to start talking to contractors, etc. and build that relationship before I was actually ready for them AND if I did find a great deal and get it, I would have people I had a little confidence in. 

[Matthew Paul]

@Liz Cole Back to building your team . you want to find a Real Estate Agent , but your area is too expensive . So stop looking for an agent . The good deals dont hit the MLS, the listing agent already has a buyer in their pocket for the good deals .

You should find the wholesalers in your area , you have a much better chance of getting something close . And since you are in an expensive area , you have much better chances of selling the finished product fast . 

Finding quality contractors ?   As a contractor all I can say is  Go cheap , Get cheap . 

[Jay Hinrichs]

@Matthew Paul  I have pretty much quit doing major rehabs.. and only do new construction.

WHY .....   because the subs in new construction each tend to do a specific thing.. have companies up and running are professional SUCCESSFUL and can carry a tune  or I mean a Job so that they only get paid once a month.. invoice in by the 25th paid on the 10Th and lien release from last draw or no next draw.. we need lien release to get early issue title insurance..

I hire a GC to coordinate all the subs and pay them separately but I still pay all the bills and keep my GC on his toes.. I find this works and we can pretty much hit the budget.

Rehab contractors that we have worked with if they are doing a 15 to 25k job ( TYPICAL mid west turn key reno) there is just not enough gross revenue for the top contractors to want to fool with these so you get the ones GENERALLY speaking that are less capitalized need money to start Cant carry a job insurance is always a chore and keeping them on track you need to really have someone there watching them like a hawk.. and even then they simply don't show up... :)  its night and day in my experience dealing with what I call professional subs and mid to low level rehab contractor that you will find that will work on a 15 to 25k job.. Or the neighborhood is such the better contractors simply wont go there for fear of being stolen from.  You end up with a Morris invest mess.

So for all these folks thinking they are going to find this dream team for these kind of jobs.. I am afraid they are going to get schooled a little here.. and the guy who did the pod cast and wrote the book this is all good in theory and maybe he did it.. but he is also a very experienced broker..  Not someone on BP going to give this  a shot for the first time.. with little to no experience other than reading a book and listening to a pod cast.

J Scotts book is much more technical and I think is more germane..

[Matthew Paul]

@Jay Hinrichs what you just said is so true . For contracting companies there are 2 basic places to make money .  Production work for new construction .  Then doing the higher end work for the homeowner . These are the 2 places professional contractors want to go .  Investor work doesnt really pay .  The workers that investors generally get are those who cant run a business , the New Construction guys wont even deal with them . And they cant present themselves well enough to do the higher profit homeowner work . 

[Jay Hinrichs]

Originally posted by @Matthew Paul:

@Jay Hinrichs what you just said is so true . For contracting companies there are 2 basic places to make money .  Production work for new construction .  Then doing the higher end work for the homeowner . These are the 2 places professional contractors want to go .  Investor work doesnt really pay .  The workers that investors generally get are those who cant run a business , the New Construction guys wont even deal with them . And they cant present themselves well enough to do the higher profit homeowner work . 

The one who posted she met the contractors at the bar.. that about sums it up.. pay day is Friday so they can buy beer.. pay rent etc.

or they will find there workers in the parking lot of Home depot..

All these folks who read this dream team stuff are going to learn all this.. then you take a state like Texas were you don't even need licenses.. we got hammered in that state I would NEVER do business there again unless I had my GC on MY payroll and his pay was tied to the work..

I have been funding these folks in fix and flip and turn key for almost 20 years now..

and I guess this latest pod cast and dream team you too can do it from afare cut out the middleman just really struck a nerve with me.. I mean I don't have a personal stake in it in any manner I am not going to benefit personally I am just trying to take I guess a contrarian view point since BP lets us.. and explain to folks this is simply HIGH HIGH risk for someone who is just trying to cut our the local rehabber and get into their cash flow rental for 5 or 10k cheaper than what you have to pay on the open market be it MLS or turn key companies.. to me the risk and time involved the stress etc etc is just not worth.

a few years back there was this character on BP form Atlanta he really hammered Bp members with his pitch and he got me for 10k too... but I talked to a few BP members there were three of them all from Denver as I recall.. none of them in the business one was a CPA they lost 30 to 70k EACH ...

So your now going to get the not ready for prime time folks pitching the folks on BP who now think that remote rehab can be done if you simply build this nebulous team.. and off you go..  like I said can it happen sure you can get very lucky.. but you can also lose your life's savings is it worth 5 to 10k and a huge amount of drama and most likely marital discord.. ????   Don't get me wrong I love BP and all it does for us.. but there is also a VERY irrational exuberance and reliance on anything that comes on a Pod cast and or sponsored by BP.... Just look at the Morris invest Pod cast on BP.. that guy turned into a train wreck and right after the pod cast many of us with experience In that asset class said.. HEY wait a minute..  C and D class renters are easier to manage than  A and B  and doctors and nurses live there  ( maybe nurses no doctors though LOL) and a bunch of other hoey about how to reach your freedom number.. all tugging at the financial heartstrings of those who believe the way to financial freedom was to load up on a bunch of low end high risk C and D class rentals in the hood.. Nothing could be further from the truth.. But there it was front and center on BP pod cast.. how many people I wonder pulled the trigger because of that.

Now you have this Hey you too as an inexpierenced investor can be a rehabber on your own if you just build this dream team half way around the country.. How many will get sucked into this and lose their rear ends LOL.

Rehabbers in a market that bring you a rental home that is finished and can have 3rd party professional inspections for the buyer.. those folks deserve to make a profit for there efforts.. And those that want to cut them out to save some bucks they are welcome to it.. But they simply need to be told both sides of the story not the blue sky all is well you too can do it part.

[Matthew Paul]

Finding a  " Rock Star "  team .    Well I lived thru the 1970's and the "Rock Stars"  lived by the motto  Sex , Drugs and Rock n Roll . 

So finding a bunch of burnt out druggies who show up late and are hung over to make up a rehabbing  crew should be an easy task 

It was fun in the 1970"s   

[Dean Letfus]

I've seen more people lose money doing what you want to try without any experience than almost any other endeavour.

Why not get a thousand dollars and set fire to it on the back lawn.. If you enjoy that then get long distance rehabbing :-).

On a more serious note you would be better to start with learning the ropes on some easier deals first to reduce your risk of capital loss.

I hope you understand the reason nobody is just answering your question is because our collective experience says it's a really, really, stupid and dangerous idea.  The fact you ask the question says you shouldn't be doing it yet.

[Account Closed]

Originally posted by @Johann Batista:

@Account Closed; @Jay Hinrichs; @Jeffrey Stasz

It is amazing to me to see so much negativity towards somebody’s plan. The post was about ways to find a team, not how a flip goes downhill.  In any project it is a risk, despite how far you are. A 6 Hour drive is by choice because it could simply be a 45 minute flight. The drive was by choice and for personal preference.  

I’m sure there are horror stories about how people are on site everyday and things go wrong. But to simply discourage people from doing What they want is just wrong! This is why long distance investors are making millions, because there are so many individuals scared to take a risk simply because of how many miles away a project may or may not be. 

You Men gave great advice in some ways things can go wrong, yet skipped the actual intention of the post which was for ways to find a great team. I’m pretty positive that @Liz Cole like myself has Thought this out for a while and has a plan for how to handle this investment. Liz, I planned on going to Home Depot and Loews while I was at my area, however due to weather conditions I opted out. But that is definitely a great idea!! 

 @Johann Batista You Say: "however due to weather conditions I opted out" You've just given a great example why you need to re-think this. In the real world of Flipping, that isn't an option. A seasoned investor would never make that choice. ;-) I've flipped in pouring rain, snow, ice, 117 degree heat, sunshine, night time, when I wanted to be on the beach and when I was so tired and sore I had to have the little old lady next door plop me into my car so I could go home. Perhaps a nice glass of chablis in front of HGTV & "Flip This House" would provide the satisfaction you are looking for in house flipping. (just kidding) sorta

[Jay Hinrichs]

Originally posted by @Dean Letfus:

I've seen more people lose money doing what you want to try without any experience than almost any other endeavour.

Why not get a thousand dollars and set fire to it on the back lawn.. If you enjoy that then get long distance rehabbing :-).

On a more serious note you would be better to start with learning the ropes on some easier deals first to reduce your risk of capital loss.

I hope you understand the reason nobody is just answering your question is because our collective experience says it's a really, really, stupid and dangerous idea.  The fact you ask the question says you shouldn't be doing it yet.

 the issue is there was a BP pod cast and a book touting this as a workable thing for the average investor..

can you imagine someone rolling into Memphis and trying to hire folks to rehab houses.. Oh man..

[Dean Letfus]

@Jay Hinrichs, haha yeah.  It's the fastest way to turn a large fortune into a small one that's for sure.

[Andrew Johnson]

Liz Cole You’re getting quality advice on this thread. I’ll just add this to the equation: You won’t find/get/add “rock stars” to your team when you’re hours away, a first timer, etc. That’s not to say “don’t do it” but rather you need to risk adjust accordingly.

It sounds like a negative sentiment but I’ve yet to find a recommended contractor where I buy that isn’t booked up for 9 months. So that means (if I’m rehabbing or flipping) that I a.) take a chance on a non-referral or b.) wait 9 months to start whatever endeavor I’m undertaking.

In either on of those scenarios there’s a cost. Either time or risk so (for me) the opportunity has to be incrementally better to offset that risk.

[Jay Hinrichs]

Originally posted by @Dean Letfus:

@Jay Hinrichs, haha yeah.  It's the fastest way to turn a large fortune into a small one that's for sure.

On our aircraft owner and pilots forum... one of the repeated phrases is he or she just did not know what they did not know.. this is the same thing here .. ONLY experience will get you there..  IN flying sometimes it kills you or hurts you bad..

In rehab sometimes it cost you a ton of dough and a whole bunch of emotional turmoil.

When I first started lending in Detroit... ( turn key)  I asked the flipper contractor.. and he would be considered a dream team... He was a contractor owned the PM company very button down guy..

walked up to the first deal Not sure if we were north or south of 8 mile but it seemed OK to me.. there is a security guard checking ID's  I said why are you doing that.. he said they determined that the contractors or the workers for the contractors would put in new materials and such during the day then come right back at night and steal them.

Can you imagine out of area owner in Memphis :)  airconditioner goes in one day next day its gone... copper gone..

so on and so forth..

Even on my new builds..  

  this one I just finished in Charleston.. and my GC lives right there local of course.. but see the driveway and see next to it there is new concrete on the little single level to the left.. we did that for FREE.. in exchange basically for that neighbor keeping an eye on our house.. Troy my GC there does this at all houses. and we have had very little theft first thing he does is get with the neighbors.. Even here in Oregon were theft was not a thing two of my new builds got hit 30 days ago and we lost refer stove and ruined the hard woods taking them out..  and have had copper theft as well.

so again in these what I call small dollar or low value asset areas were the rentals are and they are basically 125k and under .. I personally think off of MLS or a turnkey or what have you let the other party do all this take all the risk carry the insurance and you as buyer do your home inspection..

Now if you want to start a business flipping that's different  you will fill your experience bucket up as you work in it.

[Matthew Olszak]

I get this question frequently from folks new to the biz - "I want to do buy/hold or flips, how do I build my team, who should I use, where do I find them?" People who are successful in real estate are such because they have built their teams and systems through experience, while minimizing their losses along the way by utilizing their knowledge of the processes. Other than a lucky few, nobody jumps in with all of the people in place. That doesn't happen overnight or on the 1st or 2nd or 3rd job. Not saying this is the case here, but in general folks think all it takes to invest in real estate is money. To invest successfully and actually make a return, it takes a ton of experience and knowledge of the processes. Anything else is on the same level with gambling. Would you open a restaurant without knowing anything about cooking, food costs, table space/counts, or even a decent chef? Or open a steel manufacturing plant if you had enough money?

Its somewhat a trial-and-error thing. You'll have to go through multiple contractors, subs, agents, lenders, etc, until you build that Dream Team and MAXIMIZE your profit on an almost automated basis. The key to not losing all of your money while "weathering the storm" and gaining experience is filtering your team members initially and cutting off the relationship at the right time when its not working. Learn construction law, contracts, lien waivers. Learn how jobs are bid in your area. Learn about insurance and how it affects you in case an electrical contractor cuts through most of a support beam to run their wires. And go into deals calculating your rehab numbers based on market rates, and not based on trying to squish your contractors into where you need them to be.

Then simply jump in. If your area is one where high-end contractors are used, start calling those who have nice offices for bids. If its $90k class C stuff, get on craigslist and be ready for what you get, and be ready to babysit. For most who are successful, their team is made of folks who jive with them and their organization's vibe, which may or may not work for you. Further, sharing a good team is like a salesperson sharing their book of business - it took a lot to build and isn't just something you send out there to anyone.

[Julie Marquez]

@Liz Cole I bet you can find deals right in your back yard!

[Liz Cole]

@Andrew Johnson I used that Rock Star term light-heartedly.  I have a rather jocular, upbeat personality. Unfortunately for me, EVERYONE got stuck on that. I've Never seen the podcast or read the book they keep talking about. I watched a podcast on "Goals" and it was hosted by Brandon and David Greene. He very briefly talked about finding a team you can trust and used that term. I thought it was "fun".  

My post was to get tips, feedback and info on how to find quality people to help me do the work. Another female investor mentioned how she went out networking and one of those was because she was in a bar for dinner and talked to some contractors that were there. And I mentioned someone else said go to Lowe's EARLY AM and talk to contractors because you know those guys are working .. 

I realize "newbies" are probably irritating to the "vets", but way too much assuming and it has been a little condescending. I can handle it and I'm sure Johann can too. I appreciate all the advice. 

Clearly, starting out I cannot wait 9 months after a purchase to have some A-1 contractor start a job ... I guess it's good that I can do a lot of it myself. lol

At this point, how does anyone do a flip if all the subs are lazy and unreliable?

[Julie Marquez]

@Johann Batista I would be right there with my tools! I know my work is better than some of those guys (a woman's attention to details and such). Just to be clear, a woman can, and should, try out a hammer now and then. I'm in the business of being the GC and leading the crew with my smarts and organization, but I know how to do the work if needed, and how to tell if it's done incorrectly, and because of my hands on experience, won't be taken advantage of.

[Jay Hinrichs]

Originally posted by @Matthew Olszak:

I get this question frequently from folks new to the biz - "I want to do buy/hold or flips, how do I build my team, who should I use, where do I find them?" People who are successful in real estate are such because they have built their teams and systems through experience, while minimizing their losses along the way by utilizing their knowledge of the processes. Other than a lucky few, nobody jumps in with all of the people in place. That doesn't happen overnight or on the 1st or 2nd or 3rd job. Not saying this is the case here, but in general folks think all it takes to invest in real estate is money. To invest successfully and actually make a return, it takes a ton of experience and knowledge of the processes. Anything else is on the same level with gambling. Would you open a restaurant without knowing anything about cooking, food costs, table space/counts, or even a decent chef? Or open a steel manufacturing plant if you had enough money?

Its somewhat a trial-and-error thing. You'll have to go through multiple contractors, subs, agents, lenders, etc, until you build that Dream Team and MAXIMIZE your profit on an almost automated basis. The key to not losing all of your money while "weathering the storm" and gaining experience is filtering your team members initially and cutting off the relationship at the right time when its not working. Learn construction law, contracts, lien waivers. Learn how jobs are bid in your area. Learn about insurance and how it affects you in case an electrical contractor cuts through most of a support beam to run their wires. And go into deals calculating your rehab numbers based on market rates, and not based on trying to squish your contractors into where you need them to be.

Then simply jump in. If your area is one where high-end contractors are used, start calling those who have nice offices for bids. If its $90k class C stuff, get on craigslist and be ready for what you get, and be ready to babysit. For most who are successful, their team is made of folks who jive with them and their organization's vibe, which may or may not work for you. Further, sharing a good team is like a salesperson sharing their book of business - it took a lot to build and isn't just something you send out there to anyone.

 first time I saw the dawgs system in Chicago land I was like what the heck..  can you imagine someone from CA not knowing about the dangers in many of the areas they want to own rentals.

and when you think about jumping in and just going for it without the right ground partners just look at the pathetic mess than Clayton Morris created for all those poor people.. selling and selling and selling and the ground partner just not at all there to make sure the rehabs worked... lots of those folks are never going to recoup their money.

[Jay Hinrichs]

Originally posted by @Julie Marquez:

@Johann Batista I would be right there with my tools! I know my work is better than some of those guys (a woman's attention to details and such). Just to be clear, a woman can, and should, try out a hammer now and then. I'm in the business of being the GC and leading the crew with my smarts and organization, but I know how to do the work if needed, and how to tell if it's done incorrectly, and because of my hands on experience, won't be taken advantage of.

 I am not hands on I know basic concepts.. but what I know how to do is build teams and I fly 100k miles a year spend 40 to 60 nights at the Hilton  :)  you have to be there..

And once you do get a good guy like the one I have in Charleston as you can see by the pictures and drone shots .. you stick with them and reward them not beat them down.. its why we got out of rehabs.. we first started rehabbing in Charleston but you talk about old very very tough to rehab houses.. Troy could not charge enough to make those work for any of us.. that's why we went new.

[Liz Cole]

Originally posted by @Dean Letfus:

I've seen more people lose money doing what you want to try without any experience than almost any other endeavour.

Why not get a thousand dollars and set fire to it on the back lawn.. If you enjoy that then get long distance rehabbing :-).

On a more serious note you would be better to start with learning the ropes on some easier deals first to reduce your risk of capital loss.

I hope you understand the reason nobody is just answering your question is because our collective experience says it's a really, really, stupid and dangerous idea.  The fact you ask the question says you shouldn't be doing it yet.

@Dean Letfus  So moving to an area that is basically 3 hours from my current residence and Flipping a house is a stupid and dangerous idea.. And if I don't ask a question Dean, how do I learn?  I was looking for tips and things to ask contractors and RE Agents to see if they "fit" with my goal. 

Please share what you think I should do instead? 

I'm smart, creative and a hard worker. I good with people. They like and trust me. I have some background that is useful. I have time (right now) and a little money. Nothing up to Jay's standards, but a little. And I've wanted to get in the business for years. 

I'm attentive..