I’m about 2/3 done with my first rehab. My wife & I are doing all the work ourselves (except for furnace, windows & patio door replacement). I am absolutely thrilled doing this type of work and look forward to my next one as well.
My problem is that for the past month I’ve put in some long hours at work and the rehab. I feel guilty sometimes that I’m not spending enough time with the kids (3 and 5).
How do you other rehabbers with full time jobs balance it all out? I know hiring contractors would require less of my time but it would also eat significantly into my profit.
Oh Matt, I can’t wait to hear the responses to your question as I’ll be in a similar boat. Full Time Job, Rehab, Family with wife and 2 teens, Bass Guitar for a band that travels all over the state, head instructor at local Remote Controlled Airplane club, Ski Boat in the garage with under 60 hours on it… Oh, I HAVE to downsize my hobbies
I don’t have a deal right now, but I am spending an average of 10 hours a week looking at / for properties, studying, networking with investors, and everything else dealing with REI. Fortunately, my fam wants to be part of my work force, so that’s good, but it all needs balanced…
What is your time worth? You have to figure on paying yourself and your wife. Your profit is only what you make on top of that. If you are doing the work yourself, you are only making as much as the person you could be paying. Also, time. You can do it in 6 months for a 30k profit or pay someone else who can do it in 2 months for a 20k profit. Then you move on to the next deal. Would you rather make 30k in 6 months or 20k in just 2? You have a faster turnover paying a full time handyman.
Just a thought ;)Good Luck!
That sounds great in theory, but it is NOT true in the real world. Hiring a contractor is no panacea. In fact, a bad contractor can take that $30,000 profit and turn in into a loss; get you in trouble with the building department; cause a 6 month job to become a year-long job; and drive a newbie out of business.
If you can’t be on the job frequently, you have lost control of your job. Contractors frequently do shoddy work that isn’t up to code; leave the job to work on another job; miss deadlines; demand more money; leave the job before finishing; and even conduct illegal activities on your property. In addition, many workers will drink unless properly supervised (by you) and when they get hurt, they will sue you.
So, my advice is to do as much of the work as you can and carefully supervise the rest.
Mike, your completely right. I guess I forget that I am lucky because my contractor is family (my brother). And about the “in theory” thing, I have not used him in an investment deal, just home projects, so my “theory” of hiring someone else to do the job may not happen. He is the only one that I trust, so if he does not work out then I’m back to swinging a hammer until I can find someone else. The key is to find a good reliable contractor, which is easier said than done. And your right about the supervision. I wasn’t saying to completely give the project to your contractor and then show up the day it is suppose to be finished. It is important to be on the jobsite as much as possible, that doesn’t mean that you have to stay all day long. Let them know that you could pop in at any minute. And when they are wrapping things up, take a “walk thru” with them and make a list of all the small details that need to be finish. The small things is where they can get you. If your not careful, you could end up finishing the job yourself. I have not had a bad experience with a contractor, myself, but I’ve heard horror stories from other people. It all depends on your situation and your comfort level. Of course, You must budget in the costs of hiring someone when buying the house to start with, or you could end up like mike said, with an ate up profit. I’m just try to give another option to take. I am in the same boat as mattman. I work full time and I have a 5 year old with Cerebral Palsey, so he takes alot of extra care and love. My whole goal of REI is to some day be able to give him the time he deserves. Yes at first I may have to do most of the work my self, but I will make relationships with contactors and suppliers and learn how to find the perfect deals, so that I can afford to hire a contractor. I know that REI is just like any other business, you have to build into it. Well, sorry to go on and on. I guess I am just passionate about real estate and my family. Good luck to you and your wife, mattman.
like others have said, it about keeping some sense of balance. To put it another way, I think “pacing” oneself is important too. At this point, I have plenty of deals flowing across my desk depnding on the ebb and flow other other things in my life I spend more or less time looking at them. For example, I have really busy doing two large 1031 exchanges with many properties involved. Hopefully I get that wrapped up here in the next 4 weeks and then take it easy going into the summer.
with the wife, kids, day-job, etc, there are times that its seems like too much of a burden, but its long-term perspective that keeps me going.
Yea, sometimes you just need a little reassurance from other investors. Thats what this forum is for. I am new to this myself. I have not done a deal yet. I’m just waiting on my finances to fall into place. It seems that the longer I wait, the more I doubt myself. It can be overwelming sometimes. Most of my family are contractors and I am pretty handy myself, so I don’t have to worry about that part of the equation. Its finding the right deal that keeps me awake at night. Reading the threads on this forum and talking to local REI’s keep me in check. And believe me, if you’re off on your advice or opinion, the more experienced investors will let you know, like with property manager. And I wasn’t trying to give bad advice, just sharing my own thoughts and experiences. Not all contractors are out to take you. It is good to hear from other new investors that is trying to do the balancing act. I hope your rehabb is a success. let us know how it goes when your done.
I found that balancing everything must include sacrafice from everyone effected.We are in a unique position here in south florida.Our rental property went from turning a decent cashflow to barely cashflowing at all as my monthly expenses went up over 3 thousand dollars a month due to tax and insurance increases this past year.My day job was not supporting us as it was so as opposed to taking on a third job I did the opposite.I quit my day job and went into rei full time. Its a slow start so far but the wife works right next to me and the kids are grown teens that have their own ideas of what fun is so they kinda do their own thing.As I said balance is all aout sacrafice.I want to go golfing everyday. But I havent gone in about 6 months. I know the harder we work today the harder we will play in 5 years.
Great topic folks. I can lend an insight as to how I’m balancing my family and rehabs. If you have been following my progress you will know that I’m almost to the end of my first rehab. I usually have a subject line of “Could be my first rehab” Well…
My first open house is next Sunday. This property is 45 minutes away so trying to get time to get out there has been a struggle. I have a wife, 4 kids, full time job, and an ankle bitter. The rehab has gone really good and I’m almost on budget. I think I will be over about 400.00. This is a small victory in itself.
The biggest thing that I have going for me is that I have my wife’s support. If I wouldn’t have this then this whole thing would have been a disaster. From juggling a 16 yr old to a 2 yr old with a couple of kids in the middle we have all been strung out by this. She has put up with me in bad moods, good moods, etc. She knows how important this is to not only me but my family.
As a newbie I get alot of people telling me (including my Dad) that I hope I know what I’m doing, I hope I’m not putting my family in harms way, etc. This gives me fuel to keep going and to really concentrate even more on my deals. I’m sure many people have heard this before but there is NO doubt that I will be doing REI full time. When…don’t know. I have bought and sold 5 mobile homes, closing on my first rental, finishing up on this rehab, and have multiple offers on other REO’s. It is up to YOU to decide whether to get out in the field and get “dirty” The experience that I have gotten from on the job training is invaluable.
All of this comes back to your/my family. If you have thier support then you can rest easy and get after it. Good luck to all and I will be posting my link in a week for all to see pics and a description.
You may want to stick with light rehab at first. Paint and carpet type of deals where you may make less money, but it won’t take months of your time to get one property rehabbed.
I just got a property that only needs paint and carpet for $101k, the property is worth $135k. I plan on contracting the painting and carpet work and will be able to check on it during lunch and within couple of weeks, it should be ready.
WOW! Great thread. I love this one. I have trouble / or had trouble balancing. I have two rentals, (rehabbed by me), One flip, (rehabbed by me), and several offers in the works I am on my third house in three months. I turn houses and have them filled in 30-45 days. I have a grandson that is 2 and lives in california. I live in NC. that hurts but I am building an empire for myself to be easy to live with and for him to be comfortable for life. He is my world. I quit my job, started doing REI full time, opened my own investment company, then opened a management & maintainence company, then if that wasn’t enough I became a consultant, helping other investors with their projects and also helping them get their financing for their buyers. wow all in six months and 10,000 dollars and a drive name ROBBIE. so it can be done, want to hear more from others. Kris
I agree this is a great topic and great comments! We are getting ready to start our fourth rehab, one rental, one flip one moved into. When you start getting into it you will have other deals come to you.
I know in my area you can not contract out all of the work and make money. You have to do some of the work yourself. One bad contractor can cost you a lot of money. On my last project I kept hearing from the electricians ‘we can start in two week’ two weeks later the same story. Dump them right away, you want someone who sets a day and they are there. I wasted 3 months in intest payments waiting for an electrician. Now I have the right one.
Like Nate said earlier you need to have the support of your wife to be succesfull in this business. We are working harder now so we don’t have to latter. I am now working full time at this and my wife wants to be working along side me. We expect that to happen in about 6 months to a year. My wife was literaly crying this morning because she had to go to a job that she hates. You know the one that gives you a 3% raise and your BCBS goes up more than your raise. Working for someone else in this day where corporate profits take all precidence and what do you get for your hard work?
Pick the right property for your first project, but make sure you know your market and trends. I know that we are getting smarter about our projects. Our next one should only be about a two week job max and after the cash out refinance we should net about $15K. I am advertising the house and hope to have a renter even before I actually own it. All of this for $500 down. The property should have a small positive cash flow. In a year it should have a great cash flow because a major project in the community.
The goal is to have a future and to have the means to injoy it.
Just out of curiosity whats your age? Im 40 and wondering if the age makes much difference in decisions.A 21 year old PROBABLY doesnt have a family and a child to feed so he may be more likely to jump where a 40 year old working at a job for some 10-15 years may have a harder time letting the safety net go.
Me, I am 44 and I have already gone the ‘reduction in work force’ layoffs once. When you start over it takes it’s toll and trust in the traditional organization. I wish I knew as much about real estate then as I do now. I do miss the consistant paycheck of the traditional job.
Fair question. I’m 31 yrs old, spent 6 yrs in the service, and working for a corporation which is run much like the govt. It sucks. I’m moving forward, being ultra agressive in my real estate adventures, and building wealth.
My wife and I are two peas in a pods when it comes to working deals and figuring out rehabs. I have to say its been a great for our marriage. We’re both engineers in our mid/late 30’s (one child-9 mn old) and been thru the downsizing game, 2% raise eaten by insurance and tiny/no raises while the CEO of the company hauls in a 500k cash bonus for his “hard work”. With that said, I was self empolyed for a couple of years as a technical consultant and its was great experience, but a tough way to make a living. I have a steady (but not exciting job) that pays the daily bills while build assets at my “hobby”/part-time job (REI). As someone mentioned, you need to have a shared vision and that’s what can really drive success in REI as well as other endeavors. As I told my wife during one big very time consuming rehab, this is an alternative retirement. One day’s labor is couple of hundred dollars in the retirment acct. Sure, the money is good, but with many things in life, if you don’t like it, you will only do it for so long and probably not reach your true potential. I’ve met a couple of folks that have huge holding of properties that generate crazy income, but yet they are still out looking for deals. They do it becuase they like it!
As for contractors, I use them sparing. Like someone stated, contractors can eat up a lot of profit , but more importantly TIME. I have several occasions of week after week get eaten up waiting for contractors to get out there only to have a long list of excuses and when they do, watch them do medicore work at a snail’ss pace. I almost exclusively use people by referral now and when i make the first phone call, I state up front " I was referred to you by Joe Smith" so to let them know if they give runaround, bad service, I will put the word out to other past customers.
Amen, on the contractors…I use only ones that I trust and have a relationship with. If I give them a job and with the job comes a time frame and they miss with no good reason…then they no longer work for me. I am 36 yr. and I love this. I try to share both my good and bad experiences with fellow investors. I think we should always help one another, there is plenty to go around.