I wanted to come back to this topic because I just have so much experience from all sides of the spectrum. I've project managed and developed for large contractors and small, I've built brand new homes from the ground up, rehabbed projects from small low-income housing to upscale luxury homes in a very tough competitive market with high labor and material cost.
You're going to have to develop your "creative" rehabbing skills just the same way people talk and speak about "creative" financing and real estate.
Wholesalers:
Not all are created equally. That does mean they all bad. Think of it like this. If you were looking for a cannabis dealer in your area, some may sell you crappy cannabis for crazy prices, then you find someone who has great potent stuff, knows his product, sells you a variety of different strains, edibles, and oils for fraction of the cost. So how do you find this guy? You ask around. You have to be in the party scenes or the college scene. Maybe you know a guy who smokes a lot and you ask him, and through networking, you finally get to a guy who is trustworthy, non-threatening and cool.
Another way to think of this, going to the store. Maybe at my local Best buy sell a TV wall mount for $50.00 bucks but I can go online and find this or a better mount for $15.00 if I can stand to wait for it to be delivered to me. Some people only think of the local store and don't think of the online option so they lose a few bucks in upcharge because its more convenient and they see the product in front of them. In the same way the wholesaler is like another store. Some stores are more expensive than others. Think of wholesalers as local flea market vendors in a foreign trip when you go on vacation. You may go out to a Garage sale or outdoor flea market and pick up a couple of great steals or you may run into a vendor who is trying to sell you crap for top dollar because you're the American tourist coming to town looking to spend some money. they think you are rich! lol.
so be patient, also don't be afraid to negotiate and push back a little and don't be afraid to walk away from a deal if its not right for you.
Contractors:
so same thing here, not all contractors are made equally. They may not all apply to your situation also. Typically speaking most major contractors don't self perform the work. Therefor there will be a lot of fluff in their pricing. Meaning, he will go out and find other companies to bid this job out and he will act as an "overseeing" supervisor in this regard.
you have to really research and ask around to find someone you can trust. Read reviews if you can but also go to local properties that you may see in the area and get recommendations.
most importantly, recognize that not all projects require a "licensed contractor". I see people throw away money all the time hiring these huge firms when all they needed to do is get a couple of great handymen. I mean the GC is probably going to hire that handyman to do the job anyway, so why dont you go about finding a few local tradesmen to complete the work for you.
if the project is a major project involving structural and roofing and things of that nature than yes you may need a GC. If you are building a new house, you need a GC. But theres way to be creative with this also. You can find GCs who will charge you to manage and oversee the project for you, and sign off on any required permits, if you want to find and source your own crews and labor.
Talk to property managers in the area. They ALWAYS have list of GCs and trades people you can use and they will recommend because they use them on their properties. If i need to redo a roof, why am i calling a GC? why not call a roof and get a price from them directly? If i need electrical work, why am i calling a GC who will add 10% on top or more, let me call an electrician and get a price directly
you need new floors? okay go to flooring supply house and find out about product and also talk to them about who they know does good work.
Heres another tip for newbies, find all the local supply houses, you can get ALL your recommendations you need for local vendors from them. They know the little guys and the big guys. These contractors shop at their stores all the time so the sales people inside can give you a list of people to call.
You need a new roof? find the local roofing supply house like Eagle supply or ABC roofing. NOT HOMEDEPOT!!!! go to specialty supply house for that specific trade. You need an electrian, find the local supply store and as them. Same as HVAC and everything else, painting. You can build a team in one week.
Another thing I like to do is find guys who can do more than one trade. Ive been doing this so long that i can meet a guy and in 2-3days ill know if he is highly skilled or just average. I use to hire guys worth $25.00-30.00/hr for as low as $16.00/hr when i was the senior project manager for my GC. These guys knew, trim carpentry, flooring, electrical work, plumbing work, roofing. I was really good at finding people who can do more than one task and as long as i kept them busy and always had work for them they would stay with me because i treated them fairly, paid them ontime, weekly and didnt harrase them with BS. Sure they may find another job paying more, but it wasnt steady work and the boss would be atotal DICK to them.
So another tip...once you find good people...KEEP THEM. Honest, good skilled guys is HARD to find. Take them EVERYWHERE with you. But dont get too friendly. Because one day you might have to cut them off. They can become lazy and start taking advantage, and their prices start going up and the work quality down.
I have a rule that I ALWAYS tell investors: you cant get FAST,CHEAP & EXCELLENT QUALITY all in one.
it just doesnt exist. Find out what is most important to you and go from there. If you want a job done quickly, the price will increase, and the quality may suffer to a degree. Because that job should normally take 2weeks, but you want it done tomorrow and completed in 3days. Well I'm going to have to bring in 10guys to do it and work overtime, meaning more labor cost, extra hours...budget higher.
If you like things done cheap, well expect to have the time and quality suffer. That job normally cost 5k to do right. But you want him to charge you $1500. Well he is going to take his sweet time and focus on other jobs instead of your job because he has bills to pay, and there is no profit for him in your job.
think about fast food. Sure McDonald's is cheap but it ain't fine dining. Its crappy food, not good for your health but you can get in and out quickly and spend about 10bucks. But you go to the local steak house and you have to reserve your spot ahead of time, you get there and still have to wait, then you have to wait for the food to be served, but the place is all nice and fancy and your wife is all happy and you got great views and nice people around and the waiter has fancy white apron on and the chef comes and presents the different meats to you. You buy your favorite wine that came from somewhere in France and was hand-squeezed by some monks and prayed on. The Cheesecake was made from some special cheese that only can be found on mars every two years. and your bill at the end of the night equally your car payment.
So you have to have a balanced approach to all of this. Figure out the end goal. Sometimes you need the contractor, alot of times you dont, you just need a few guys. Sometimes you need to pour alot of money into the rehab and sometimes you just need to throw up some lipstick.
Remember these investments aren't your personal house you plan to live in so don't go crazy. Maybe 50k could get it done nice enough to sell, that extra 40k you will put in can be done by the end buyer you will flip it too. Just do the basics. You don't have to be Ritz-Carlton. Being Just Carlton without the Ritz, is also fine. I see alot of investors pour money into a house and it sits on the market because the end buyers arent paying that for houses around there. Learn your sweet spots. Learn where you should buy and rehab or just be and prehab. (they have apps for that i think)
Quality is always important. Figure out whats an acceptable quality and whats not. To me I rather have great quality work, and he works slow than to have fast worker and he gives me ****** quality. Because no matter what you pay if its expensive or cheap, you are always going to remember the quality or complain about the turnout.
Think about it like this.... let's say you fix cars for a living. Your friend ask you to rebuild his transmission for him. You tell him it normally costs 1500 but he is broke and he wants a discount. So you say fine and charge him $600. He is STILL going to complain if you take too long and if the transmission isnt PERFECT!!!! he won't even REMEMBER that you gave him a discount and did this as a favor and had to put aside a paying customers car just to get his done. He will bad mouth you like you weren't even friends to begin with if you don't fix the mistake quickly enough or decide to charge him more money to take the car back and look things over.
So remember as an investor...if the quality will be better, pay a little more if you can get good quality.
Newbie:
So your first time at anything is going to be little scray and a trail. You are going to probably spend more money than you anticipate and you are going to get burnt along the way. The goal really should be to learn as much as possible in this situation, about investing and about yourself as an investor.
It gets easier with time. It's like riding a bike, you don't just go from training wills to popping wheelies with no hands on the handlebars riding backward down a cliff.
Those training wheels? What are they? well to me contractors can be training wheels...maybe you need them sometimes you dont...realtors...sometimes you need that realtor to sell it but sometimes you can sell yourself too. I've done houses and before its even finish, 10 people are stopping by asking when and how much. Without a sign in the yard. maybe those training wheels are the wholesalers...you can find deals yourself sometimes. Some of the biggest training wheels is the lenders. It hard to get those off you. But eventually you make engh money and your credit and track history get so good that you get smaller and smaller training wheels. Then you get so good you become the wheel. Then you get to the next level after that and begin to levitate. You don't even use wheels no more, you just hoover over the investing world looking down upon the mere weaklings.
Anyway...I think ive blabbed long enough. Dont stress out!!
