New RE Investor questions <> Buffalo

[Mohammed Rahman]

Hi all! 

I'm a fairly new investor looking to make my first purchase in ~ 2 months. I've already found a reliable agent who is also a part of the BP forums and has a few units under his belt. My question is regarding GC's and specialists. 

Because I'm located quite a distant away from my properties, I want to emphasize the quality of work of the contractors I onboard as part of my team - and thus am doing a ton of research up front. 

If anyone has any experience working with contractors - whether it's great referrals, or HORROR stories on who I should stay away from - please share them via commenting or messaging me. 

Really appreciate the help and looking to pay it forward as I get minted. 

[Dave Charron]

When you do hire contractors you need to check up on the work they are doing.  If you cant be there, you need to hire someone to go there UNANNOUNCED and take pictures and notes of what is getting done, then send them to you.  You can post to hire someone like this on craigslist in the city of your property and pay them by paypal each time they send you a report.  If the contractor asks him who he is, he will just tell him he works for you and is sending reports to you.

Send him over once a week  or at a frequency you choose.  This way you have an independent party verifying exactly what is going on at your investment property.

[Mohammed Rahman]

Thank you for the response Dave! I've given it some thought and the projects I'm taking on aren't over the top rehabs that would require constant vigilance from afar, but more likely $3-$5k tops in rehab (painting, maybe subway tiling the bathrooms etc.) .

What's your process for finding reliable contractors? Even with having someone provide weekly reports, if the quality of work is sub par it's not worth it. 

Not disagreeing with you - just hoping to sponge from your experience. 

[Kyle A.]

I have had a REALLY hard time finding good reliable contractors/handymen in Buffalo that won't rip you off or disappear for weeks on end. If you find someone please post your results.

I don't have any horror stories per se but any time I find someone reasonable they end up not being reliable or perhaps a bigger job comes along and they leave you stranded. When you have renters complaining about issues and you have contractors that leave you hanging then you get stuck in the middle trying to pick up the pieces.

Good luck to you!

[Adam Wigdorski]

@Kyle A.

I pretty much have a guy for everything in buffalo. Pm me what you are looking for

[Chris Courteau]

I just wanted to follow because I agree. I have a small duplex and it's tough when I'm getting pushed back to larger jobs for contractors. I understand they are taking the larger jobs so it's steady work and income. 

[Jacob Lea-Kelly]

Hello, managing these types of small to medium size projects or really any repair is incredibly difficult when trying to self manage remotely. First you have to find a contractor who is willing to take on the project or the repair. This is hard for small to medium size projects because like you said, there could be a larger more profitable project that comes up. Second, you are not onsite to verify the quality of the work so even them sending pictures to you cannot be really reliable because they can cherry pick angles and a lot can be hidden with pictures. Third, if the work is a repair for an existing tenant, lining up times and giving access can be a nightmare. Even the best handyman are independent contractors so they are not going to wait around or confirm with the tenant a multiple times. You will also not trust a handyman with tenant keys because that raises all types of liabilities. 

This situation is really where a property management company can shine and make sure your investment is being cared for. Our company has direct maintenance employees and office staff to make sure the work is scheduled and the tenant is notified with proper legal notification. We have keys so we can arrange access and the liability is limited because we use our staff for maintenance. 

In terms of renovations for small projects, we have a crew for these types of projects because we have the volume where it makes business sense (every house needs these small projects from time to time). We also have contacts for contractors and subcontractors that we work with constantly and can bring in and ensure the work is done and done to the proper standard. 

Property management is an added expense but I believe it is a value add situation where the investment performs better over the long term because of our services. 

[Matthew Irish-Jones]

Originally posted by @Mohammed Rahman:

Hi all! 

I'm a fairly new investor looking to make my first purchase in ~ 2 months. I've already found a reliable agent who is also a part of the BP forums and has a few units under his belt. My question is regarding GC's and specialists. 

Because I'm located quite a distant away from my properties, I want to emphasize the quality of work of the contractors I onboard as part of my team - and thus am doing a ton of research up front. 

If anyone has any experience working with contractors - whether it's great referrals, or HORROR stories on who I should stay away from - please share them via commenting or messaging me. 

Really appreciate the help and looking to pay it forward as I get minted. 

If you live out of town are you going to use a property management company?  IF so, your property management company should be able to quote the work, and monitor it.  Find out whether they use subs or do the work themselves.  If they sub everything out they have less control over the projects.  

[Mohammed Rahman]

Thank you for your replies @Matthew Irish-Jones and @Jacob Lea-Kelly - my overall concern with property management companies is the immediate sink in cash flow. Although I recognize this is short sighted as there is always a tradeoff: do I want to be stressed out on a workday about a leak my tenant just told me about, or do I just let the property management company handle it? 

Looking forward to staying in touch! 

[Matthew Irish-Jones]

@Mohammed Rahman how are you going to fix a Leaky sink if you are located quite a distance away? 

You can call a plumber, they are easy find find and will cost $500.

Finding a reliable handyman is extremely difficult.  I am sure most investors on here can attest to that.  

[Mohammed Rahman]

@Matthew Irish-Jones I'm not disagreeing with you, your example is perfect. It's a matter of the investor deciding how much responsibility they're willing to take vs. cost tradeoff. 

[Jacob Lea-Kelly]

@Mohammed Rahman there is always a trade off for everything. I’d say it’s a question of leveraging someone’s knowledge and contacts to work for you but if you are willing to do the legwork, you can save the money. The majors issue is do you trust the person who you are relying on and is there a recourse if they don’t live up to that trust. A property manager answers to you every month on a host of items. A handyman, contractor, or repairman does not unless you have a long standing good relationship with them.

As an aside, what is the immediate sink in cash flow? You mean the property management fees? For sure there is a cost but again, a good property manager is a value add and allows you to have a job and treat your investment as an investment rather than a part time job.

[Mohammed Rahman]

@Jacob Lea-Kelly Well said! 

[Jim Peckey]

If I were going to invest in real estate outside of my local area, I would first line up all the help I would need to support that endeavor.  

I'm talking identifying & vetting reputable property management companies as well as reputable general contractors.  Without this help in place beforehand, it's going to be very difficult to purchase & self-manage real estate from long distance.  

Good property management companies typically have contacts with reputable general contractors as well, so solving the property management problem could solve the contractor problem at the same time.

All the best and have a great day!