How big is too big for DIY (bitting off more than you can chew).

Question

What kind of rehab job would you consider too much for a DIY'er?  Would an astronomical low purchase price tempt you into taking on a LARGE rehab job?  By large let's say.......10 unit apartment building for less than 5k....but it needs a total rehab (gutted, electrical, plumbing, roof, bath & kitchen, flooring, etc).

Chris Bounds · Answer

That is the wrong question. The real question is: Why would you consider DIY? The answer for an investor / entrepreneur is: You wouldn't, ever!

Follow up questions:

• Are you a GC?
• Do you have knowledge & experience managing crews of various trades?
• Do you the appropriate insurance & licenses/permits as a GC?
• What is the opportunity cost for your time?

As an investor / entrepreneur, you're running a business. An apartment complex is a business. Taking time out of your day to DIY technical trades oftentimes will cost you more in the end. If you have little to no experience as a GC, the project will likely take longer (increased holding costs), be a lower quality (decreased value), and keep you away from running your business (lost opportunity). Businesses that are operated that way are small and stay small. Those business owners really just own their own job.

Unless you have good experience as a GC and don't mind staying small, the only real reason to consider DIY is if you overpaid for it and want to save on labor costs. But again, don't even do that if you don't know what you're doing.

Matt M. · Answer

Stick to your day job. It took me 1 project to realize that my time is better spent finding deals than doing manual labor. Plus what's your liability if things are not done properly. It's just not worth it.

Jacob Pereira · Answer

@Chris Bounds hit the nail on the head. DIY is almost always more expensive than hiring others to do the work on projects that aren't live-in situations. The holding and opportunity costs on a 10-unit apartment while you gradually get it ready to rent or sell are very high. You just don't see those costs until the back end, unfortunately. Also, I know it was just an example, but an apartment complex selling for $5k is a guaranteed tear-down, so you're really just buying land to build on that needs a little extra prep work in that scenario.

Robert Rayford · Answer

@Anastasia Jordan,  I have built many homes from the ground up and well over a hundred major remodels/additions. A 10-plex is a major money pit for a DIY'er. With that being said, there are other avenues you can take on a project like this one. The best one is to cut a JV deal with a trusted G.C. Work out the deal so that the deal is equally beneficial to both parties. You purchase the property and invest in materials for the project and the G.C provides the rehab work.  If the plan is to keep it then BRRR the property to cash out the G.C. But if the plan is to flip it then that's even better for a G.C to agree to a deal.

David Zheng · Answer

I just bought a large apartment building with 0 DIY knowledge 2 months ago. I went in thinking I'd do 50% of the work myself cause I trust my skills with youtube and I'm a quick learner. the other 50% would go to an electrician, plumber, subcontractors for large scale work.  Well im about 3 weeks from finishing and I think I've done like 10% of the work cause of how complicated things became haha.

If it's a first project, spend more time researching cost to do things online and then getting lots of quotes from contractors.

JD Martin · Answer

I'd say you should have a lot of cash reserves or access to a steady cash stream if you're going to take on a project of that magnitude. Most of that work is not going to be DIY so the best you're going to do is be the GC on the project. If you have enough people and licenses to DIY a 10 unit that needs all trades and finishes, you have your own rehab company.

I generally never take anything completely off the table but I usually back off homes that have foundation issues. Most everything else can be corrected. Nearly anything can be fixed for the right amount of money.

Chuy Gonzalez · Answer

It costs me a lot in lost rent to do my own rehab because it takes me so much longer than a pro. I wouldn't do a 10 unit unless i was a contractor with a crew.

Andrew Meyers · Answer

Gut jobs are not for DIY. If you want to get your hands dirty, start small something that will cost around 100$ and take around an hour anything that takes days, weeks, months is a job for pros. Plant flowers, cut the grass, maybe try some demo after the electric has been shut off.

Justin Fox · Answer

I would make sure I had the money and contractor in place to take on that big of a project.  Painting a SFH?  Sure.  Doing the floors/counter tops in one unit?  Sure.  Complete gut, and rehab of a 10 unit multi-family?  Nope, ain't gotst no time for that.

How big is too big for DIY (bitting off more than you can chew).

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