Should you work on your own rentals or flips?
I remember telling my dad when I was a kid that I was going to work smarter not harder. As a contractor, perfectionist, and 16-hour a day laborer this must have sounded disrespectful to him.
In all honesty, I love my dad more than any man in the world. He kicked ass for his family and we never went hungry. I am who I am because of him. I think he’s an incredible role model. I’ve also learned from his mistakes.
Unfortunately, now he needs reconstructive surgery on both of his shoulders, has back problems, and he’s only in his early 50’s.
Sweat Equity Is A Lie
A lot of new investors (myself included) think that they can save some money by doing some of the work themselves. We are told that by trading some of our time, blood sweat, and tears that we can build up additional equity in our portfolio.
I remember watching Chip Gaines doing construction on HGTV and thinking that I should do a remodel myself in my spare time. The thought was that I would learn, understand the process more, and look cool doing it.
Fortunately, a friend talked me out of it.
This is a super powerful video if you haven’t seen it.
I’m a firm believer in leveraging other people’s effort and time with cash. The appeal to sweat equity lies in the myth you have time to trade. Tomorrow isn’t guaranteed for any of us.
If you knew that you only had 100 days left to live would you REALLY want to spend any of them painting a rental to save a few grand?
Get GREAT Deals
Here’s the thing, you wouldn’t even remotely have the urge to contribute your life to a project if you consistently got really good deals. This is the focal point of what I do. Folks who are trading weekends, time with their kids, and injuring their bodies often feel that they don’t have a choice. I’ve spoken with hundreds of investors and the root of the issue often comes to trying to turn a non-deal into a deal.
You absolutely have to set yourself up for success. If you buy right, you don’t have to get your hands dirty. I tease my staff that I’m allergic to hard work. I haven’t lifted a hammer or paintbrush on one unit out of the $9,000,000+/- worth of real estate we own.
We talk all the time about tripping over pennies when working in dollars.
Your time would be better spent learning how to negotiate better deals, meeting with sellers, haggling with vendors on pricing, building out your reno package, buying in bulk, etc than doing demo work yourself.
My Dad’s Issue
My dad’s issue wasn’t about saving money it was about perfection.
“No one can do the work like I can.”
^ Sound familiar?
I know that for some people they honestly enjoy the work.
I would urge you to count the cost:
Opportunity Cost: $
Toll on your body: $$
Time Away From Family: $$$
Are you really coming out ahead? I don’t think so.
Where would I be?
Imagine if instead of hiring, delegating, and outsourcing I’d decided to remodel my rentals myself. Even if I didn’t have a massive learning curve how many projects do you think I could do a year in my “free” time? One? Two? Three?
I’d rather be where I am.
It’s not just about sweat equity…
You need to audit your life and remove anything/everything that is a time suck. I would argue that your time is the #1 resource you have.
Do you have an employee who’s work you have to check and recheck because they aren’t up to snuff? Fire them.
Do you have a business partner that wastes your time? Fire them.
Do you have clients that constantly demand your attention above/beyond the agreed-upon scope of work? Fire them.
Do you have a friend or family member who sucks the life out of you anytime they are around? Fire them.
Are people picking your brain to death? Learn how to say no.
How much TV are you watching? Ouch!
You only get one life to live. How are you going to spend it?
How do I want to spend mine?
For me, I’m going to act as a visionary building companies that impact the world because it’s where I flourish.
My wife and I are going to start a family in the next few years. We are setting ourselves up to where we can raise our kids how the Bucket List Family raises theirs. I got started in real estate for freedom. I wanted financial freedom, time freedom, health freedom, and locational freedom.
Can I be super transparent with you?
I’m 100% focused on my why and going back to it. While I have at times had various elements of this goal, at other times I have worked just for the sake of making money. To be frank, I am bored and over it.