What to Do Yourself and What to Pay to Have Done Right

Question

So, I was having an interesting discussion recently with someone and we have differing opinions. It got me thinking and I thought I'd pose the overall question to the collective brain-trust here on BP. So...

When you're doing a flip, what do you try to do yourself to save money and what do you hire out to a General Contractors to do for you. I'm of the opinion that unless you have a solid background in the renovation or construction and you have the tools to support the job; you should pay for a quality contractor to do the job right the first time. The opposite side of the conversation was, there's allot of smaller things that can be done by the investor to save money instead of paying a contractor to do the work. That side of the conversation tends to lean into the “I can have my kids help and it’ll teach them the value of a dollar, etc”. An honorable pursuit no doubt, but my counter argument was that the place to teach kids about hard work and money management is not on a rehab site while you’re trying to run your business. Time is money so paying to get the job done right and done efficiently trumps teaching life lessons or trying to pinch every penny out of a rehab buying doing work yourself.

Thoughts?

Lisa Bryant · Answer

Hi, Walter!

It is good to teach kids how to take care of things. I believe the best teacher is using wisdom to let someone else do it when you are not experienced or licensed to do so. That's good teaching for your children and your bottom-line.

Learn, Apply, Produce!

Lisa

Walter Key · Answer

Great feedback everyone. Really appreciate it. I've done small projects (replaced old carpet with wood laminate flooring and new carpet, replace fixtures, painted, landscaped, etc) in the past on my primary residences before turning them into rentals but I had all the time in the world and no deadline to meet.

As to the point on demo; I could totally see that being a do it yourself and let the kiddos help a little kind of job. But, in the grand scheme of a rehab, what's the $/sqft cost of demo?

Looking forward to seeing everyone else's opinions on this subject.

Thomas S. · Answer

When I started flipping I did 100% of the work myself, no contractors, but I did not value my time and in the end was not financially rewarded for my time.

When I do flips now my decisions are base on the "time is money" mentality. Getting a job done faster reduces the profits but primarily reduces the time line that effect costs for holding a property.

You can do more flips in the same time using contractors than you can doing the work yourself. Over the long term contractors more than pay for themselves if you are in the business of flipping as opposed to flipping a single home.

The kids can be on the site in the evening, when the contractors have gone home, doing small jobs to learn with dad or mom but this is not actually part of the business end of flipping homes.

Sean Tracey · Answer

This is a great question. I'd love to see a list of all the things someone without experience could do (like rip up a carpet as mentioned above) and even a breakdown of how much it could save you.

Matt Holmer · Answer

The time value of money was the biggest mistake I made on my first rehab and rental.  Things like trim, painting and tile are relatively easy for anyone that is somewhat handy.  However, due to time limitations due to my day job, a 2 week project ended up taking several months.  When I finally realized that I was losing more money letting it sit empty then I would paying somebody, I hired it out and it was rented 2 weeks later.

Plumbing and electrical (aside from very minor stuff) I will always hire out.  But now, unless I'm going to take 2 weeks off work to make time for the property, I am going to hire out most things.

Daria B. · Answer

@Walter Key I agree with the statement about getting the "kids" to help to teach them the value of money in addition to the experience they get by working. For a major rehab I would not want that to be the platform for children to be involved. The smallest work in the rehab could lead to injuries and then what. Would they be covered by the insurance of the rehab? I would rather be the one to do the "small" things like pulling up carpet to save the demo per sq ft cost. I am currently looking at properties with the eye of "what can I do and not be injured myself" to "this is a contractor experienced in this work that needs to be hired.