More money is lost in the fix up of properties than any other way, including overpaying when you buy. You can recover from overpaying by saving during the rehab but every dollar spent on the fix up comes straight out of your profit. That’s why a big part of my training programs covers the tools as well as the general contractor hires out lower costing labor to do the work and therefore pockets the difference in the cost of what he or she has charged compared to what they pay the lower cost workers. Usually this amount is around 40 to 50% of the bid.
Save Money On Lower Cost Labor
Here is how I direct my clients and members how to get lower costing labor. One way is to hire college students. I put up flyers in the common areas stating what the job is ( pressure washing for example ) and how much per hour I will pay. I also say that I require 3 references and that he or she must sign a waiver of liability for our protection in case they get hurt. I supply all these forms to my students. Now you are covered as they know what the job is, you check the references and they already have agreed to signing your protection forms as well as how much they will be paid. This in itself saves $300 to $400 by not using high dollar help.
Try Hiring Retirees
I also love to use older retired people for my jobs instead of general contractors to save literally thousands of dollars over higher cost labor. Here’s why I do this. Most retired people did the job you are hiring for maybe 30 years before retiring. Now they are bored and would love to take on some simple jobs just for something to do. Or maybe they would love to earn a little extra cash. I hire them for an average of $20 per hour and I know the job will be done right as the older generation always too pride in what they did and never just did the job half-way. I put up flyers looking for things like this. “Looking for retired plumber to install 2 toilets in rental. I will pay $20 per hour. Call if interested. I use the same for Electricians, brick masons, drywallers, painters etc. I put the flyers in bingo parlors, Veterans of foreign wars, moose lodges, elks lodges and so on.
If you like these ideas you can learn more at PeteYoungs.com