My first week

I closed on the triplex on Monday September 14.  My first property, I was excited.  I made a plan to take the following weekend and start to work.  Believe me, this place needs a ton of work.  

I arrived to the property early in the morning and got to work taking stock and making a plan.  I went through every room detailing everything that needed fixing, taking detailed notes along the way.  Did I mention this was going to need a ton of work?  Feeling a bit overwhelmed by my rather large list, I decided to grab lunch and start to plug all this information into a spreadsheet so that I could start to get organized.  My original back of the envelope budget was $20K and, to be honest, I had a pipe dream that I could get the work done for about $10K-$15K and show the Bigger Pockets community what rockstar I was at this real estate thing.  Boy, was I stupid.  The sum total in the bottom cell of my spreadsheet was $30K.  DOH!

I went back to the property after lunch, eager to get back to work.  As I pulled up I noticed the neighbor across the street walking out of his house.  He has the nicest house in the neighborhood and wanting to be seen as a positive in the community, I went over to introduce myself.  He's a nice guy, been on the street for 30+ years, retired, filled me in on all the neighborhood gossip, showed me the gun he carries in his back pocket and offered me a beer. We spent the next couple hours drinking beer, trading information about the city and neighborhood and meeting more neighbors.  After 1 day I know more about the neighborhood and neighbors of my triplex than I do my own neighbors.  I've lived in my house for 8 years.  Maybe I should get out more.

Day 2 was my day to meet contractors and property managers.  I had planned ahead and made as many appointments as I could.  Good thing because those guys are a flakey bunch.  I had originally planned to meet with 2 roofers, 2 electricians, 2 plumbers and 3 property managers.  I got 1 electrician, 1 roofer, and 1 property manager to show up.  Knowing I had limited time and had to make something happen, I asked each guy that came to give me references of other tradesmen and property managers.  This lead me to a great plumber and electrician that I really like.  Hopefully it works out.  The good news is that the roofer's bid came back.  $7K!  I had originally budgeted $10-$12K.

Before leaving for the day I was working on tearing up the crappy linoleum floor in the kitchen when I had an epiphany.  Why am I doing this?  I could probably get someone to do this same job for $12-$15 an hour.  Then I started doing the math.  Since I have a full time job, I can only devote 1 1/2 days per week to working on the triplex.  The building is 2 hours away from my home, so I have to book a hotel room if I'm going to spend the weekend there.  Here's what I figured out when I add up my weekly costs:

$100 for hotel

$100 for food, gas, etc.

$550 per week in lost rent

$750 per week is what it cost me to own the triplex in both actual and opportunity cost.

5 days (normal work week) of my labor (40 hours) will take me about 1 months worth of weekends to complete. That 40 hours of labor I produce will cost me about $3K ($750 per week X 4 weeks). If I pay someone $15 an hour, I can buy 200 hours of labor with that same $3K. So, why am I tearing up linoleum?

I closed up the triplex, told my new neighbor friends I'd see them next weekend, packed my tools into the truck and drove home.  On the way home I listened to podcast 139 and heard Fat Tony say something that's been on my mind for a few days; "I'm a business man, not a handyman."  My goal this week is to figure out how to be more of a businessman and not a handyman.