Alan Cowgill

Are you an expert in the mechanics of fixing up a house? I can’t tell if being an expert in the mechanics of a house help or hinder your chances to be successful. I am not an expert. I would call myself unqualified to comment on any aspect of how to fix up houses; however, I think this may serve as a benefit. Because I am so unqualified, I don’t feel the urge to step in and help. I’ve never been tempted to save money by doing the work myself. I never tell the contractor how to do the job, and I never take time away from finding good deals because I’m busy rehabbing the house.

On the flip side of this, if I were an expert in the mechanicals of fixing up the house, I could save a significant amount of money on each house by being my own general contractor. I could show my own team of employees how I want things done, and not be at as great a risk of being taken advantage of. I might have ideas for my own houses that my current contractors might overlook.

I’ve seen both types of people be successful at this business. I am not convinced that one method is better than the other. I think that those who fix the properties themselves make more money per house than those who hire out all the work. They seem to be quicker at managing bids and other contractors. At the same time, however, they tend to miss a lot of the good deals that come by because they were busy at their houses doing the work. Their focus becomes more associated with the job as opposed to the big picture of buying, fixing, and selling.

For me, I know that I am better off knowing nothing rather than being the general contractor. While I may overspend for the rehab according to other’s standards, I feel that I underpay for the house. I.E. I spend so much more time looking for good deals that I am able to buy them for cheaper than others. Additionally, I don’t have to spend much time with the rehab. Sometimes, I only see the property once or twice during the entire rehab process. From a financial perspective, I must consider what I make per hour in the business and weigh that against what I would save per hour by learning to rehab properties. I would save significantly less than I could earn despite having smaller margins on each deal.

This question must also be addressed by asking you what aspect of the business you enjoy the most and are most gifted at. If your greatest abilities lie in being the general contractor, you may put yourself at a huge disadvantage by trying to turn that aspect of the business over to somebody else. First, nobody else will satisfy you because that is your area of expertise. Secondly, you will be taking yourself away from the things you enjoy the most to focus on the things that you think will earn you the most money. Doing this may cause you to lose your passion for the business you may find yourself giving up.

Many will tell you to stay away from the rehab because that will take you away from finding good deals; and others will tell you to avoid overpaying for the rehab. My assessment is that you should focus your attentions to your strengths and try to find others to help you with the parts of the business where you are weaker. My strengths are finding good deals, and finding cheap financing. These two aspects are where I focus the majority of my energy, and others help me with the rest.

Do you have contractors that you know and trust? Part of the reason I am free to focus on finding good deals and finding cheap financing is that I have a number of contractors that I trust. I trust the opinions of the contractors, their assessment of how to proceed, and I trust that their prices are fair. I have this trust because I have a history of dealing with them over time. They come recommended by others, and they have extensive experience. These contractors have done hundreds of rehab projects, and their experience works to my advantage. I pay the contractors very well, and I tend not to talk them down in their prices. As a result, the contractors are very independent, and free me up to focus on what I am good at.

If you do not have good contractors that you know and trust; and if you do not want to do the rehab yourself, you must consider doing extensive interviewing before deciding that you will not be involved with the rehab process. Finding contractors that you trust is one of the most important aspects of the business and you probably cannot be as effective and efficient as you want until you feel mentally free to trust others with the details of the rehab. Don’t be afraid of paying what others consider to be too much money. You can afford to pay too much if you are able to buy properties at great discounts. If you don’t find them at great discounts, then you cannot afford to pay too much money for the rehab.

Brad Zitzner is a real estate investor, coach, and realtor. Brad has bought or sold over 150 properties. His web based Property Management System “ZZZ Real Estate” helps real estate investors remove the chaos and paperwork from their real estate business. To get Brad’s FREE real Estate ebook go to www.zzzinvestors.com

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