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Episode 95: Managing your Rental Rehab

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Show Notes

Managing your Rental Rehab! In this episode of Discount Property Investor, our hosts, David Dodge and Michael Slane, continue their discussion on the BRRRR strategy and talk about Managing your Rental Rehab.

To learn more about Wholesaling visit: https://www.FreeWholesaleCourse.com

Check out our Tool Kit to see David & Mike’s Secret Weapons:
https://discountpropertyinvestor.com/toolkit/

David: Alright guys, welcome back to the Discount Property Investor podcast.

Mike: Got your host Mike Slane, and co-host–.

David: David Dodge. Guys welcome back.

Mike: Welcome guys welcome, this is Discount Property Investor. So what are we talking about on here? We are talking about investing.

David: Making money with real estate.

Mike: Investing in discount properties, that’s our goal.

David: That’s our goal guys. You get paid when you sell. However– I screwed that up.

Mike: You make your money–.

David: You make your money when you buy, but you get paid when you sell. So making the money it is all done at buying at a discount. If you haven’t checked out our free course, freewholesalecourse.com. Mike, I was just thinking we might want to go in and re-do some of the videos in there. We’ve had over four thousand people take our course at this time, which is a lot. I am really proud of that, man. Four thousand people we have been able to help teach how to wholesale properties.
Mike: That’s one of the things– we will get off topic real quick, because I am the same way. It’s one of those things where you think about what can you give back or whatever. This is probably one of the bigger things, or one of the more impactful things that we have done in real estate investing.
David: Absolutely, touched a lot of people.
Mike: Again, we buy houses and we fix them up, make them nice places for people to live, and that effects one or two families. No, the free wholesale course I know we have changed a lot of people’s lives, we have plenty of testimonials telling us that. They– again our info has helped them get started, encouraged them to get started. It is very cool.

David: It is very cool. What are we talking about today,

Mike?

Mike: Well we are talking about discount property investing.

David: Boom! That’s where it all starts, guys!

Mike: Today we are kind of doing a little BRRRR strategy summary–.

David: We are doing a mini series.

Mike: We are, we are doing a lot of rental acquisitions in our business, and we wanted to share that with you guys. So typically our podcast is all about wholesaling, how to get started investing in real estate, which is why we encourage you to check out that freewholesalecourse.com. But today we are in our BRRRR strategy. We are in the first R. So summary of BURR is Buy, Rehab, Refinance, Rent, Repeat.

David: Boom!

Mike: We are in the first R of Rehab, and the previous episode we were talking a little about just rehabbing in general. Today we are going to try and focus on managing your rental rehabs.

David: Managing the projects! Got to love it.

Mike: Managing your projects, what does that mean? It’s a big difference between either going in and doing the work yourself and hiring a couple of GS’s to help you with it, versus hiring a general contractor to just go in and do the rehab yourself. So that’s kind of what we are going to try and discuss today, and hopefully we cover a lot of the main points and issues that go along with that. Dave, what do you think? What’s your preference? What did you do when you started? Stuff like that. I would kind of like to hear–.

David: That’s a good idea, Mike. Let’s talk about our own stories. So when I first started full time real estate investing, I bought a house for $19,000 and I put $25,000 in it.

Mike: That sounds about right. Most $19,000 houses need about 20,000.

David: They need about 20,000, right. I spent 25 on the rehab.

Mike: Yep.

David: And that is kind of crazy because I didn’t have any– I shouldn’t say any, I had very low labor cost, because I was the main labor. This project took seven months. Seven month for one rental rehab. Mike, how quick are we doing our rental rehabs now?

Mike: Well I have actually got our numbers pulled up, and I can give you the average number of days. So this is another thing that’s very important is knowing your numbers.

David: Knowing your numbers. We keep stressing that.

Mike: Days to complete our rehabs averages 56 now.

David: We have about 40 rentals on there, right?

Mike: About 40.

David: About 40. So the average is two months. The first one I did was seven months. So it’s okay, you are going to get better at this as you do it more and more. So don’t stress out if the first rehab you do takes six month. Seriously, not a big deal.

Mike: Even if they all take six months. Even if you are doing one or two a year, keeping your [00:05:13.28- inaudible] job, it takes you six months to do it, who cares? If you are adding one or two rentals to your personal property portfolio every year, that’s huge.

David: That’s huge, it is absolutely.

Mike: So again very exciting. My first, I will be honest, I don’t even remember. The cost, the numbers, anything like that. I purchased a four family unit back in 2009, purchased if off the MLS, it was kind of run down, it was in a decent area. So I was going to move into it myself. So I did literally everything wrong. I rehabbed it like I was going to live there, because I was living there. So I got new cabinets in the kitchen. It was a three room rented, one was vacant. I was going to move in and make it nice and I did, and it was nice. That one still gets me a little bit more rent because it has that dishwasher and features that the other ones don’t. But I did most of the GC and stuff myself. I never had done any of that type of work. I painted it, I put the base boards up, got an air compressor, all that stuff. I hired a buddy who was an electrician by trade, he helped me with some of the other stuff. Yeah it was just– way over budget for sure, and a good learning experience. It was fun, so I think a lot of us start out doing a lot of the work ourselves, doing a lot of the GC’ing ourselves, and it just becomes a part of your journey, and there is no better way I think to learn how to do this than GC’ing your own projects and being hands on in the beginning. I do think it is worth while.

David: I agree, Mike.

Mike: Even though I have no desire to do it anymore.

David: A lot of things I have learned about this seven month rehab I did on my own was– I learned what needs to be done. In this particular house everything needed to be done. It was a curse because I spent seven months working on it, but it was a blessing at the exact same time, because I had to learn how to do plumbing. I had to learn how to do minor electrical work. I had never done dry wall work before, I had never laid tile before, I had never installed cabinets, I had never put a counter top on before, I had never swapped out a vanity or a toilet. I had never done any of the things I had to do on this project.

Mike: Let me get that silver spoon out of this guy’s mouth.

David: I know right. I have never put a roof on before. I had hired someone to do the roof, but I was there with them helping them. So I learned as we would go along.

Mike: I’m with you, Dave, same thing.

David: Everything we did we learned. So why does that matter? Why is that important? Because now when I walk through a property, I know immediately, okay this won’t fly, the inspector is going to flag it, or it needs to be changed in order to get high rent. It’s all about the process of getting good at knowing your numbers, that’s the point here, know your numbers.

Mike: I would say even a step forward though. When you actually do the work you recognize how much work each one of those jobs is. So when people come back give you different bits, you know, oh this entails this this and this to do it right. Or, it’s too simple, it’s two screws to pull the vanity out.

David: Speaking on that exact thing, Mike, I met a guy yesterday at this exact table, not going to say any names or anything, because I am not trying to be rude, but he was very new to investing. He didn’t know and it’s okay. I tried to help him, we sat down with him for about an hour, tried to help him out. But he was buying houses– tax auction houses that had been abandoned, and they had been vacant for five, six, seven, eight years in some cases. He is buying them anywhere from $10-25,000. These houses need 50 grand worth of work. But he didn’t know. He thought, oh I can get this done for 15 or 20. I was like, no it’s going to be $40-50 per foot, how many feet? Let’s do the math. This is just how it works. He was like, you’re crazy. I was like, you’re crazy. We weren’t arguing, but he just didn’t know. I was like, hey go do it, you are going to learn everything you’re going to need to know in this one project, that is going carry with you for every project beyond that. You don’t know until you know. So that is a really good point.

Mike: Yeah I love it. Again, it’s the coaching aspect that comes out too. It’s not trying– it’s difficult, because again, you don’t want to say you’re wrong, but it’s kind of like, you will see.

David: Can I give you some guidance is kind of what I was going with. I’m just like, don’t go into it with the impression that you are going to spend this, double it. If you beat that then you are doing great, fantastic. But if you are going with a low expectation, and you double it, then you are going to look at it like it’s a huge failure. When in reality, that whole process was learning. So you are paying for education too. You have to think that there are lot of things involved in that.

Mike: The cool thing is, he is out there doing it.

David: He’s out there doing it.

Mike: So good for him, and keep it up.

David: I told him I said, hey man I hope I wasn’t too abusive with you, but I am proud of you, man. Boom! 99% of the public is going to sit around and watch 15 more episodes of something on TV– and not do anything. The fact you are jumping in is giving you a leg up. I was like, you are probably not going to make money on this first deal just because we looked at the numbers and they didn’t look that great, but the fact he did it and he jumped in, he said screw it, I have to applaud him for that, absolutely, 100%.

Mike: Let’s talking about–.

David: Managing your rental rehab.

Mike: Get back on track here. We talked about our experience and we talked about where we started and we kind of did it ourselves. So let’s kind of talk from that perspective first, Dave. Let’s talk about pretending like you are going to be the GC yourself, and how do you deal with hiring subs, and when do you hire sub, sub contractors.

David: Got it, so I am the GC or you are the GC.
Mike: So you buy a rental, you come up with your plan, you walk through it, you look at each room, you say okay– oh shoot this tub looks really bad, there are holes in the tile, and it looks like it’s leaking. I don’t know how to do plumbing, I need to find somebody.

David: Right.

Mike: The kitchen, well the cabinets look okay, I could probably paint those, the counter tops are in good shape. So let’s talk about what we do in each one of those situations, and how we hire GC, or a sub contractor.

David: So if you’re new at this, you are going to want to get some subs, or some laborers that you can hire to help do those projects, unless you are wanting to do them yourself. At that point you are the sub, you are the worker. But if you are GC’ing the project yourself, you need to find people to hire to do these jobs. So depending on what is needed, it might just be laborers who at that rate can do a lot of things; they can lay flooring, they can paint, they can do minor carpentry work, okay? Or you want to find yourself a carpenter as well too, a good one for certain projects, right? Where do you find these people? The first place I would recommend going would just be to Facebook, go to the local group for real estate investors in your area. Don’t go to a nation wide group with 50,000 people. Find one that has anywhere from 500-5000 people in it, ish. That is localized to your group so The Indianapolis Real Estate Club, or The Toronto, or San Diego– you know, real estate investor club. Or, go to groups that people are promoting handyman work, okay? We work with a lot of our subs who are handymen. They don’t really specialize in anything in particular, but they do a lot of little different things. You want to find those people, interview those people, and you want to get a lot of bids and estimates.

Mike: That’s a really good place to start, Dave, I like that. The other thing I would say is just post it on your Facebook. Hey I bought a house, I need help with this. See if–.

David: Oh that’s a great idea.

Mike: Someone you know–.

David: You might have a friend, or a friend of a friend who is out of work, and they are willing to come and do it at a good price, and it’s a win win still.

Mike: Exactly.

David: No one is really losing there. That’s a great point.

Mike: Okay, how do you get a bid for a job? How do you pay this contractor? Let’s just talk about– okay the house needed– we talked about the kitchen needs cabinets, you think you’re going to repaint them, and probably needs flooring. So this general handyman that is in your network of people you know said, I’m looking for some work, I could come work for you. Well you have hopefully got your plan, and you have got your budget. So you have to work those things in. So you go out and purchase the materials, you say, I want this painted and I want this floor laid. That’s what I need done and I can’t do it myself because you are working a 9-5, or you just are not handy or whatever.

David: Or you have other projects you are managing. The goal here is to be the manager not the worker.

Mike: Exactly, the goal is to be the project manager, then one step up from that and to be the boss essentially.

David: Right.

Mike: So you can pay them one of two ways. One you could say okay could you do all this for–.

David: X.

Mike: Yeah exactly, $500, can you paint all the cabinets–.

David: Which we refer to as just getting a bid for the project.

Mike: A fixed bid.

David: A fixed bit, right?

Mike: A lot of times I think a fixed bid is probably the way to go.

David: Well iT depends if you are there managing the people properly, because if you are paying hourly– the other option is hourly. If you are paying hourly and they are working slow, that is going to cost you a lot more than if you do a fixed bid. If it’s a fixed bid, it incentives them to speed up, because then their hourly wage is increased if they are working less hours.

Mike: Exactly, so there are pros and cons to each though. So if they are fixed bids, they are going to work a little faster, but they may cut corners. You are going to have to go in and double check the work, triple check the work to make sure that it is done properly, and done well, before you write that final check. So with a fixed bid, a lot of times sub contractors– again this is probably not your friend, this is probably– a business relationship, they are probably going to ask for half the money down, then half of it on the back end. I would never pay anyone, never pay anyone, I will repeat that again, never pay anyone the full amount before the project is done. You absolutely cannot do that.

David: Every time I have heard of an investor getting burned by a contractor, that’s how it happened.

Mike: Always.

David: Always. They paid too much in the beginning, the contractor flaked out, and there is no recourse for that individual. So we typically try to avoid even paying half down. We say, okay here is materials, and here is a few days pay, or here is a small amount of money to get started. It depends who is buying materials, and we do it a lot of different ways. But again, it has a little bit to do with it.

Mike: On buying materials, the IRS is pretty strict on that. What’s the rule, Dave? If you are buying materials, and you are paying that person they are considered an employee? So you want to be careful with that, you want to talk to your accountant and plan ahead.

David: Talk to your accountant about that, because everybody will have a different strategy and that’s okay.

Mike: And different tax planning and the way they view things. So again, talk to your accountant on that stuff that is kind of a grey area on what you want to do. It’s pretty black and white, but get their opinion, and do it the right way. That is again what we recommend. So again, there are the fixed bids versus hourly, pros and cons to each. Let’s talk a little bit about that. We’ve got our friend, he did the flooring, he painted the kitchen cabinets, they are looking good, put some new hardware on it, we forgot about that. But then we have this bathroom to deal with. So the bathroom–.

David: I love the bathrooms.

Mike: There are some plumbing issues in there, and you probably want to replace the tub this time, because that is looking really bad, or the wall tiles. Maybe the tub is in good shape but it is those wall tiles that are coming off the wall and it looks like it’s leaking.

David: Okay.

Mike: So what do you do?

David: For one you are not going to gut the entire bathroom. Start there.

Mike: Very good. Let’s talk about the whole bathroom in general.

David: But you are not going to gut it because you are not rehabbing this to retail, remember that. You are rehabbing it for a tenant. You are rehabbing it to get your entrepreneurial credit, so  the whole BRRR strategy can even be possible.

Mike: I love it.

David: Start there.

Mike: You are not rehabbing it to move in like I did, don’t do that. You are rehabbing it to make it a rental.

David: This is great, Mike, I love it, a great episode.

Mike: Yeah let’s talk about the bathroom. Instead of your friend a handyman, again, same thing as Dave suggested earlier; post on Facebook, look on the local handyman group and say, I have a rental property I need someone to do this for. Again, you can find that person. It depends, are you going to get a permit? Does it require a permit the work that is being done? Or does it not?

David: A lot of the stuff is just going to be learned along the way. That’s okay.

Mike: Again, it really depends on what you do. If it’s simple like you said, there is a little leak and it was just replacing the knobs on the shower valves, just replacing those; that doesn’t require a permit, it’s easy, but again–.

David: That’s a good point, Mike.

Mike: A plumber would know that and be able to fix that for you.

David: Or if you buy a house that has got structural issues. You may need an engineer– and engineer to come out and give you a bit– a plan I should say that you may have to take to the county or the city to even get a permit. If that’s the case you know– hire the right people.

Mike: Dave and Mike, why would you even buy a house that has structural issues?

David: Because you can get a good deal on it! Discount! Okay so– one thing I do want to mention, if you are going to GC this project, which is what we are talking about–.

Mike: Trying to talk about.

David: Well we are. You have to be good at managing people and cost. So if you are not good at that, or you have no interest in that; GC’ing the project yourself might not be a good idea. You may want to hire one, which we are going to get to here in a couple of minutes. It’s one thing to keep in mind, are you a people person? Or are you good at managing people? Definitely keep that in mind. Also with that being said is, every time we hire a contractor, it doesn’t always work out in a beautiful situation where everybody wins. Dealing with contractors can be difficult. So the idea is to make it a win win for both you and them, and to build a relationship to where you can work with them in the future, to get better pricing and just build trust. However, that doesn’t always happen. We hire a lot of people that we may only hire one time. The only way to find and meet those good contractors is to work with a lot of them. So don’t be discouraged if you hire somebody and it doesn’t work out exactly the way you envisioned it. There is probably an issue with your communication there, or something. But again it happens. We hire people to this day that we have to fire. We hire people to this day that we say, hey nice working with you, we appreciate you doing work on this particular job, but we are going to move onto different people next time. By doing this over and over, you start to find people that are reliable, and that do good work. They want to keep working for you and you want to keep hiring them. So there is a lot of trial and error that goes into this process, but just know that it’s okay, it’s natural, that’s normal. Everybody is dealing with that same issue, okay? So with that being said, you are going to deal with subs, you have to determine whether you want to be managing people as well as cost. You need to determine who is going to be buying those materials. I think that basically kind of raps up the GC’ing it yourself. The other option would be to hire a GC. So when we are dealing with hiring a GC, you are not managing the people anymore, instead now you are managing you general contractor. The advantage here is that it is way more hands off for you. You are not having to interview people to do these particular jobs. Not having to manage those people to do those particular jobs, not having to necessarily buy the materials for those jobs. You are hiring somebody else to step in that– you would hope in most of the– time they will have their own people. They will have their own carpenters, they will have their own electricians, they will have their own plumbers. So it can really speed up the speed of the project. However when you hire a GC, most of the time unless you make a lot of mistakes doing it yourself, most of the time you are going to be paying a little bit more for that project. But, what are you getting in return? Just like when we go out and buy a property from a motivated seller off market. We are providing them convenience for a low cost. All we are doing is trading a low cost from them for us to provide them with convenience. It’s the exact same thing when you are dealing with a general contractor. They are stepping in to manage that project. They are going to be taking all those calls, they are going to be dealing with the inspectors, they are going to be dealing with, they are going to be dealing with the sub contractors, they going to be dealing with the materials; that’s their problem now. But you are going to have to pay them for that. Obviously you are going to have pros and cons both sides. There is really no right or wrong way to do it. It just depends if you want to be active in that part of the business or now, and how fast do you want to scale? It’s very difficult to scale and have eight projects going while you are also acquiring new ones if you are GC’ing all those projects.

Mike: Not only GC’ing but doing the work yourself.

David: Doing the work yourself, even more important.

Mike: You really need to–.

David: Going to slow you down even more.

Mike: Prep for that scaling. With that said though, even if you are not doing the work yourself, you still need eyes on the property at least I would say every other day, probably every day. You should be going out to the property and checking on either your sub contractors that are helping you–.

David: Yeah, you are still managing GC when you hire them, you are just no longer managing all the other things, you are just managing that, it simplifies the process.

Mike: Exactly, that’s one of the things I like to do, I like to go out– especially– I’m and early bird. So I will get out to the projects pretty early in the morning before most of the crew show up. I will take pictures, I will walk around. Then when the GC falls up and has a question for me I got, oh yeah– hey that tub looked really good that you had glazed or whatever. Again, you want to keep them on their toes.

David: Hell yeah you do.

Mike: That’s something that– again– not like spying or anything, it’s your project, you’re paying him.

David: You’re paying him, you can go any time you want.

Mike: It’s keeping them honest– and the other thing I would like to know is, how do they maintain their project site. So when I have a GC, if they have materials everywhere, they didn’t sweep up at the end of the day, to me it is just an indication how they operate. If it’s a messy work site, it gives off a bad impression.

David: It’s probably going to be a messy job if it’s a messy work site.

Mike: Exactly.

David: Probably messy in all aspects of their life if they are messy.

Mike: There is more room for errors, for losing things, for messing things up.

David: Slowing the project down.

Mike: Exactly, so somebody comes in with a big heavy tub, or a big heavy piece of whatever and they are walking around, there’s nails and staples on the ground, they are going to grind all the stuff into your flooring. So again, if they are not taking care of the property when they are there, it’s a big indication that maybe next time, consider somebody else.

David: Right.

Mike: Or ask them hey, what’s going on? How come the house is so dirty?

David: Why are you being so sloppy?

Mike: If they say, well because I am rehabbing the house. You can say, yeah but I noticed you didn’t clean up at the end of the day. What’s up with that

David: Right.

Mike: Again, you may not even want to have that conversation, you may just decide to work with someone else who does take pride in their project and takes pride in their work. There are these little things that make a big difference in my opinion. Again, sometimes it is worth a little bit extra.

David: Right, Mike, we did a great job I think talking about GC’ing the project on your on, versus hiring a GC, who is buying the materials? Are you good at managing those costs? When to hire? Do you need permits? Are you capable of doing it? I think we covered a lot of that already. I do want to talk a little bit about some of the pros and cons though. One thing I always say– or think about when I have a new project, I always think about this; time, quality and cost. Those are your three variables. How long is it going to take? The time, how much is it going to cost? And what is the quality of my rehab? In general, this goes for all rehabbing, time quality and cost are your variables, okay? Now when you are dealing with a general contractor, typically you can pick two of those three. You can a low time and a cheap cost, but you are going to sacrifice quality, okay? You can have low cost and high quality, but you are going to sacrifice your time. Last but not least, you can have high quality and a short time, but you are going to sacrifice paying a lot, your cost on those. I typically like to say pick two of those three, you can’t have all three. The reason is because time you want it to be short, cost you want it to be low. However your quality you want to be high. Trying to do all those cheap, quick but really good is difficult to do.

Mike: You are never going to find it.

David: You are never going to find that so pick two, okay? That is essentially what– the third one you are going to get at an advantage, okay? So the time the cost and the quality are your three variables. So keep that in mind when you are GC’ing the project, or whenever you are hiring a GC for that project. You are still going to have to deal with those things. Time, quality and cost, pick two, okay? Otherwise– if you want to pick all three, you are going to sacrifice either you cost your quality or your time. One of those will suffer.

Mike: Let me kind of circle back then we can keep going forward.

David: Sure.

Mike: One thing on hiring people that we didn’t really touch on was– yeah you can choose how to pay them, but you also– you’re interviewing these people, you’re hiring someone. If this is someone who says they have done this kind of work before–.

David: Show me.

Mike: One– go out and look at their projects.

David: If they have a Facebook page are they putting their project and their before and after photos out there? Do they have a website?

Mike: Exactly, and two, get multiple bids. This is important.

David: We mentioned it but we need to talk about this more.

Mike: Don’t just get one person to go out there and look at something and give you a bit. Listen, this is their job–.

David: Why is this important? Here’s why. I have got bids on kitchens before that have been a variance of cost of 10 grand. It’s insane. But one thing I will always ask is okay, here is the cost, now how long is this going to take and what quality are you giving me? Often times the bid doesn’t align with what I’m looking to do. Again, these rehabs that we are doing for rental properties do not need to have crystal chandeliers in the kitchen. They need to be nice, they need to be comforting and welcoming so I can get a tenant in there, but they don’t need to have marble countertops, okay?

Mike: They don’t even need granite tops.

David: Don’t even need granite probably, right. So you definitely want to be looking at those three variables; time, cost and quality. So get multiple bids and make sure your bids align with your goal and your plan.

Mike: Very nice.

David: I love that.

Mike: Very well said, Dave. So time, cost and quality I have stressed this a couple of times now. Those are your variables, keep them in mind, it circles back to know your numbers, alright? Some other pros and cons of both, to GC or to hire is– stress. How much are you wanting t spend on this project in terms of your time and your energy? If you have a lot of free time then maybe GC’ing it makes sense for you. If you work a full time job as Mike had mentioned earlier, a lot of people listening to this podcast have full time jobs, that’s okay. Maybe you don’t want to take on the stress. So you are willing to pay a little more to just hire one manager versus all the moving parts. So the amount of stress and or time you are willing to spend is a big factor, and it can be a pro and a con, okay?

David: Next, scaling the multiple deals at once, or just scaling. If you are wanting to maximize the BRRR strategy, and buy a bunch of them at once in order to scale your business, you can no longer be there doing plumbing work. You can no longer be the painter for this job. At that point you have to start hiring GC’s, because if you want to do multiple at once, you cannot be in the same place twice, right? So you have to be able to work with people you can count on and trust to manage your projects. So again, there is a pro and a con to scaling. If you are doing it all yourself, scaling may not even be an option or it is going to be very difficult.
Next, pros and con, liability. You may hire a GC who has liability insurance. So all of those subs are going to essentially be covered with workman’s comp, or just in case of an injury. If you are doing it yourself you may not have those same insurance policies. So you may or may not have a different liability. Again, it can be a pro and a con for both sides. Earlier we had kind of mentioned paying your people, right? If you are providing materials, you may have to pay that individual via a W2. If they are providing materials, you may have to pay them with a 1099, which may or may not help you with taxes. Again, pro and a con either way. I don’t want to tell you which way is right, because there is no right answer to that question. Talk to your local accountant or CPA and figure out what makes the most sense to you, okay? All of these things I think circle back into knowing your numbers. So you need to determine, is it right for me to GC this project? Or even be the worker in the project, or does it make sense to hire the GC? Lots of things to consider there. I think we covered a lot of it. Mike, anything I missed?

Mike: Not really–.

David: Don’t forget to get multiple bids, you said that as well.

Mike: Again, I really want to reiterate that when you are hiring out, you have to get multiple bids. I really like the way Dave describes that, you get to pick two of the three things–.

David: It’s just the way it works.

Mike: It really is in the world with almost anything. So again, you pick two and you have to kind of understand that’s what you’re doing.

David: So let’s talk about that just for one more second. Why do you only get to pick two? Well let’s think about it, guys. Time cost and quality. If you want high quality, you are going to sacrifice time. You can’t do a really great work on a project quickly. So it is just common sense. If you want high quality, you are going to sacrifice time. You are also going to pay more for high quality. These things are going in different directions. Quality you want to be up, you want it to be high. But time and cost you want to be low. So the lower you get on those scales the lower you are dropping your quality, and the higher your quality goes up, the ones you want to be low in let’s say time is going to be increased. You always have to pick two of those three. If you want all three, you better be really patient, and you better have a deep pocket, seriously. That’s the only way that will work.

Mike: Alright guys, well that’s it.

David: That’s it, that’s wrapping up managing your rental rehab. Lots of tips in this one guys, check it out. Don’t forget, we buy all our properties at a discount. It is how we make the BRRR strategy work. In order to rehab the property to get a [00:33:50.05 – inaudible], we have to spend at least 15k, again talk to your banker on what they require to get the entrepreneurial credit. But even before we get to the rehabbing stage, we are buying them at a discount. If you want to learn how to do that checkout freewholesalecourse.com.

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