Reader mail: Doing the work yourself when flipping houses

by Sebastian
(Atlanta)

I’ve been following your website for quite a while, especially the house flipping part. I'm very interested in house flipping myself and am trying to start my own house flipping business while I am at home. I work overseas for 3 month at a time and spend another 3 month off at home after that. Because of my trade I am very handy and am planning on doing most of the work myself to save money on contractors and also saving money on mortgages because I can, most likely, pay for the houses in cash.


Would you prefer using a contractor to do the work or doing this yourself if you would be able to? I live in Atlanta myself so I am familiar with the area and would like to meet you if possible. Otherwise i will keep enjoying reading the updates on your flips.


LM says: Sebastian, doing the work yourself is a possibility. However it is not always going to save you money. I would not consider doing the work myself, first, because I don’t enjoy doing that type of work ;-), second, I am not any good at it so the final product would not be good and finally because it is not an efficient use of my time.


There are several things you should consider before deciding to invest in a rehab property and planning on doing the work yourself.


First, determine the complexity of the rehab. You know your skills and what you can do, however an investment property is not the place to learn how to roof a house or to do drywall. If you know something well then go for it but if the house needs a lot of repairs and they are complex repairs consider calling the professionals.


Second, consider how much time it will take you. If doing it yourself will cause the rehab to take 3, 4, 5+ weeks while if you hire it out it can be done in 2 weeks then reconsider…In this market prices are changing quickly. So if you hold the house a long time the price you thought you could sell it for can change in the time you are rehabbing it.


Third and most importantly, how much is your time worth? Do a quick calculation of the time it’s going to take you to do the work. Then give yourself an hourly rate…how much is an hour of your time worth?


If your time was worth, say $50 or more an hour, then I can assure you, you can hire contractors for less than this. If your time is worth less then you might be able to find better ways of earning this much or higher.


Also consider that you might save some money doing it yourself but if it takes you longer to get the work completed then time is also money so in the end you might not be saving enough. You mentioned you are at home for 3 months at a time. If you factor in the time to find the deal, negotiate, purchase, rehab and put on the market, that could easily take up your 3 months.


Finally remember that you can hire out repairs but you cannot hire out finding a deal. I learned that early on…I am the only one that can find me a good deal while on the other hand there are 500 different people I can hire for drywall…


If I was tied up for weeks or months doing rehab work when am I going to find the next deal?


This is just my opinion, hope it helps.





Click here to post comments

Join in and write your own page! It's easy to do. How? Simply click here to return to Flip this house.

wealth steps rss feed wealth steps facebook wealth steps twitter wealth steps google plus

Get on The Road to Wealth!


Subscribe and get access to my FREE ebook and tools for investing and managing your money.

Your Email:

Your Name:

Then

E-mail will not be shared with anyone. See our privacy policy.


wealth steps blogWealth Steps Blog Newest Content:

wealth insights newsletterNew Posts by Email


Lets Connect!





Best of Wealth Steps


Most Popular:
My Current Project: Flip That House
Importance of Financial Planning Signs That You Need Credit Counseling Debt Relief
The 6 Steps to Basic Financial Planning
My First Flip: Flip This House
Simple Net Worth Calculation
My Favorites:
Going From Debt to Wealth by Focusing on Wealth
Solutions To Credit Card Debt: The Debt Snowball Plan
Dealing With Problems When Flipping A House
Buying Foreclosures – Creating Wealth with Foreclosure Investing
Building Wealth Through Dynamic Planning