Hi all, i have a quick about rehabbing properties… I want to hear from people whats the best way to go when it comes down to repairing your investment property?..

Should i use one contractor to do all my repairs or use different individuals that specializes in different areas such as painting, pluming, etc…??


Howdy Focusonmoney:

I use subcontractors. A general contractor has overhead and profit of at least 10 to 15% of the total project and probably more like 20 to 25%. If you are too busy making multi million dollar deals and do not have the time hire a GC.


Yah, I agree with Tedjr about subcontractors. They save you money and overhead, but take a little bit longer to finish the rehab. It also takes more energy on your part to organize all of the repairs. I work with a GC that cuts me discounts because he’s the only one I use. We have a partnership. Hope this helped.

I agree in using subs if you have the time to keep on top of them. Finding a GC who will partner with you saves time & headaches.

Rehabbing can be done by property contractors as it is one of their duties as property managers. At different light homeowners always have the ultimate responsibility for the maintenance and repair of the property, even with a property manager.

I think it’s different for everyone.

I enjoy rehabbing properties. I pick a few items I want to do and sub all the rest out myself. I’m there anyway doing what I consider the fun stuff (usually painting and electrical) and can easily sub out the work because I’m there. There are a lot of piddly small things that fall to me though and can get intimidating, like hanging fixtures and mirrors, installing sinks and countertops, etc. In my case I can contract that stuff out but it’s hard to get a plumber to show up to install a faucet. It’s actually faster for me to just do it. If you hire a general this is the stuff he does, but if you do it yourself the piddly stuff comes back at you.

On the last one I hired an electrician that screwed up the three way switches. He was an idiot and I had to go back and check all his work myself and fix the three way switches. I won’t hire him again but had already paid him and didn’t want to see him again. It added two evenings to the job.

If you’re OK with this type of thing by all means hire subs. If you’re not, that’s what contractors are for.

A buddy of mine found this out recently. He built a house himself and subbed all the work out. He didn’t think he’d be doing much, but got cheap and tried to do some of it himself. He ended up screwing up the schedule and his budget to some extent. He told me recently that he broke even after the messed up schedule and extra interest, that he could have just hired it out and not spent his time doing the work. He worked for free.

I also like to do the paint and electrical, and I have developed relationship with an AC guy, a plumber, a sheetrock/texturing guy, etc etc,the more rehabs you do the better you know who will do the job right without any oversight,and the rest, you replace (or try to)

Money is tight and profit margins thin when it comes to rehabbing…

I’ve learned to do most everything myself mostly through trial, error and great advise from a contractor buddy of mine.

Performing most rehabs myself would definitely be too much for just me so I almost always have a few laborers working along side me ($10 - $12 an hr). As long as I show them how to do what I need them to do, work along side them and monitor progress, we can accomplish quite a bit for much less that a contractor or sub. A few laborers now work for me consistently and I can trust them and know what there skill level is.

I work with a GC who I trust. He is even an authorized user on my Home Depot card so he can get materials when he needs them.

Here’s the way I am doing it now with my rentals (as they are getting rehabbed), and plan on doing it in the future with my rehabs and rentals:

  • I function as the main contractor, checking in on the property maybe once a day maximium. I am responsible for scheduling the repairs and contractors
  • I have a supervisor (my maintenance guy) who works for me, that not only does a lot of the unlicensed work…ie sheetrock, plumbing, flooring, painting, etc but is my eyes and ears on the work site. He is the only one besides me, in most cases, that has keys to the place
  • I have specific sub contractors come & fix more complicated or specialized jobs - such as A/C installations/repairs, electrical problems, etc. These guys can all pull required permits for these jobs, and they also give me the best damn deal around price wise.

CEO brings up a point we missed, pulling permits,I have most of my rentals in a city that requires an inspection before a tenant can move in, one of the first thing they check for is a new hot water heater, HVAC unit, etc etc, that require a permit, to make sure we got a permit.

If there is a new hot water heater and no permit you will have a big hassle going back and getting one,have a licensed plumber or electrician do things that require a permit, and make sure they get one

The biggest question I got was how to estimate the cost of repairs so you can figure out what to sell the property for. When I do a walk through, I look at four things: roof, structure, plumbing and electrical. These are the biggest expenses AND all require permits.

Roof: Look at the fascia and sofit for signs of wood root or termite damage. Look at the top of the roof for loose shingles. Look at the ceilings for water stains or discolorations or holes.

Structure: I walk around the property looking for cracks in the foundation. If you've got a structural problem, it's expensive ($7,500 - $30,000) to repair and could kill your deal.

Plumbing: Look under the sinks in the kitchen and bathrooms. Look at the floor to see if there are any uneven spots and shower stalls for leaks. Most of all--look outside the property for any large trees with roots that are growing under the house. That could cause major plumbing headaches.

Electrical: Fuse box or breakers? How long since the electrical was updated? Check the air conditioning unit. I always get an electrician to check out the house if I am not sure.

I preferred more hiring contractors which have a better outlook on repairing cost and estimates over the property. It matters most when your just doing it by yourself.

I thinkas an investor you have to make a decision. Are you gonna be an investor or a contractor? If you go about yo9ur rehabs in the manner descoribed by many here which is to hire out subs and take care of the scheduling, you make yourself into a contractor which is fine…however, the next question is are you really improving your bottom line in this way? If you spend 40-80 hours on being the GC over one deal would you or could you have used that same time to find, and secure another property? Do you end up saving when being your own GC robs you of the time to create more deals?