any people start a fix and did I mention that he is
and flip project because generally a pretty handy guy?
they have a certain skill
or simply go into the project Now, this does not mean Jon was
thinking, "How hard can it be, an expert electrician, or plumber
right? I'll just learn how to do or even carpenter for that
install cabinets, or do basic matter, but we figured he could
electrical or plumbing, or ____," learn as he goes and that the
you fill in the blank. The savvy contractor would be happy to give
investor must ask him or herself Jon a little on-the-job-training
this question, "Is this the as they go along. Are you
highest and best use of my time?" laughing yet? Great idea, right?
Our fairy tale contractor would
When my husband and I decided to just be thrilled to have the work
start a real estate investment and would not mind at all to give
business we focused primarily on some pointers along the way. I
fix and flip projects. One of the think we must have been on
largest expenses in a real estate something that night because
investing fix and flip project is people looked at us like we were
of course, the labor. We decided more than a little loopy.
immediately that we would not be The contractors who were open to
"suckered" into paying outrageous our handy idea didn't mind and
rates for labor and opted instead gave a lower quote than the
to do much of the work ourselves. others because of the extra help,
My husband, Jon, is a pretty but the quality of work that we
handy guy and is not afraid to would get was marginal at best.
learn something new. In fact,
flipping houses seemed like a Actually, I even got into the
perfect fit because of his game and tried my hand at
background in project management painting, landscaping and other
odd jobs. Paint is a breeze, relationship as a subcontractor
right? Let me just say that I and that they are not an
never want to paint another wall employee. There are forms online
in my life. Between the paint and or go to your RE lawyer for the
landscaping my hands felt like, appropriate wording so that you
well, a construction worker's are in compliance with your
hands, because they were. The state's laws.
daily activities became a full
time job and then some. Between Jon working side by side with the
shopping, painting and contractor was a weakness in our
landscaping, it all seemed overall plan. Our little
never-ending. experiment didn't work out very
well as you might have imagined.
Other considerations when There was no accountability for
planning your project as it completion of a project and our
relates to contractors are the project was invariably behind
city requirements. In fact, when schedule without very much
you hire a contractor many cities recourse at all. I mean, really,
want to know who you are working who's fault was it anyway?
with, that they are licensed, and Another concern was the increased
require that they register and liability issues since we were
obtain a business license with all working on the same projects.
that particular city. Check with If something had gone terribly
your local offices because each wrong fingers would be pointing
city has their own guidelines. It in every direction. In hindsight
is just something to be aware of. it was a bad plan but we learned
from our mistakes and quickly
In addition, one must be careful made sure, on future projects, to
to have a subcontractor get quotes by job from each
agreement, establishing your contractor. Whether it's getting
the whole project quoted or a minute that any money you pay
singular projects quoted by them is wasted or that you are
subcontractors, it is critical to being "suckered." They perform a
get your information and quotes service and if they know that you
in writing. This will save from are a real estate investor who
misunderstandings on the back end plans on doing this regularly,
and give you stronger recourse if their ears perk up and their
something were to go wrong. quotes go down.
I say sub all the way and keep Stay busy at the business of
your fingers out of their putting together great real
projects. Let the subcontractors estate investment deals and leave
do what they are great at doing the contracting work to the
and keep the accountability and contractors. This may not make
liability clean. There are many sense for everybody but the most
reasonably priced contractors and important question remains this,
subcontractors out there that are "What is the highest and best use
willing to work with investors of my time."
which to them translates into
repeat customers. Don't think for
About the Author:
Michelle Rene Garcia is the Founder of http://www.AvoidRealEstateNightmares.com, an investment training company that provides monthly resources for real estate investors looking to protect their wealth and make wise investment decisions to build their fortune. Please visit Michelle at http://avoidrealestatenightmares.com/visit
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Michelle Garcia
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