Show Summary

This is episode #341, and today’s guest is Mark Ferguson. Mark is Greely Colorado based, and is on track to do about 30 Rehabs this year. Mark is also a Broker with a team of agents under him, has his own podcast, has authored 4 books…and much more.

Today our show is all about rehabbing, something near and dear to my heart, as I’ve rehabbed over 200 houses. In this episode, we talk about rehabbing vs. wholesaling, finding contractors, as well as how to manage and pay contractors. If you’re new or newer to the business, Mark shares some tips on how to get started with rehabbing houses.

There are a ton of great nuggets in this episode….so please help me welcome Mark Ferguson.

Highlights of this show

  • Meet Mark Ferguson, Colorado real estate investor, Broker, podcaster and author.
  • Learn why Mark rehabs everything, and doesn’t wholesale at all.
  • Join the conversation on how to find contractors for your rehab projects.
  • Learn how to manage and pay contractors to make sure your job gets done on time and on budget.

Resources and Links from this show:

Listen to the Audio Version of this Episode

FlipNerd Show Transcript:

Mike: This is the Flipnerd.com Expert Real Estate Investing Show, the show for real estate investors, whether you’re a veteran or brand new. I’m your host, Mike Hambright, and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility and taking control of your life and financial destiny, you’re in the right place.
This is Episode #341, and today’s guest is Mark Ferguson. Mark is a Greeley, Colorado-based real estate investor, and is on track to do about 30 rehabs this year. Mark is also a broker with a team of agents under him and has his own podcast, he’s authored four books, and much more. He really has a lot of experience to share with you today.
Today, our show is all about rehabbing, something near and dear to my heart, as I’ve rehabbed over 200 houses. I understand the pains that he’s gone through, and some of the lessons we’re going to share with you today are ones that you just don’t want to miss.
In this episode, we talk about rehabbing versus wholesaling, finding contractors, as well as how to manage and pay contractors, all very important issues if you’re going to rehab houses. So if you’re new or you’re newer to the business, Mark also shares some tips on how to get started with rehabbing houses. There’s a ton of great nuggets in this episode, so please don’t miss it. Please help me welcome Mark Ferguson to the show. So Mark, thanks for joining me on the show today.
Mark: Yeah. No Problem. Glad to be here. Thanks for having me on.
Mike: Yeah. I’m excited to talk about a topic near and dear to my heart, which is rehabbing. I’ve primarily been a rehabber for all this time, and I always love talking to people about it. Because even if you’ve done a ton of deals, every one, in many ways, you’re kind of starting over, especially if you’re using different contractors, and certainly dealing with different sellers and buyers every time. Right?
Mark: Oh, yeah. I’ve done a lot of flips, a lot of rehabs, and you’d think it would get easier and it doesn’t. For some reason, there’s always a challenge.
Mike: Yeah. Well, hey, before we get started on the show here, maybe you can tell us a little bit about you, your background and how you got started in real estate investing.
Mark: Yeah. So I grew up in a real estate family. My dad was an agent since 1978, which was right before I was born. So as I grew up, I didn’t want anything to do with real estate. I was immersed in it. I got a degree in finance, here in University of Colorado at Boulder. I could not find a decent job in finance, so I’m like, “Oh, I’ll just work part-time with my dad until I find something.” That kind of went full-time to becoming an agent, and he flipped houses once in a while too. So that’s what I really liked doing, was the investing side, the flipping.
Along the way, I became a better agent, actually, and I’m listing HUD homes, REO properties for banks, and my career took off. After that, I really ramped up, buying rentals, flipping. I bought my dad out of the business, took over everything. So right now, I’m really focused on the flipping. We’ve got 16 going right now. I bought quite a few rentals in the last few years, but I stopped because our market is so crazy in Colorado. I have my real estate team with six licensed agents, as well, who really help my business and make money as well, so that’s nice.
Mike: Yeah. Hey, before we start talking about rehabbing, let’s talk a little bit about the benefits of being an agent. Of course, some of the obvious ones are, well, you can list your own properties when you sell them and get access to comps, and some of the obvious things. But how many deals do you find through your team that you end up buying, that are investor-type deals?
Mark: I would say 80% of the flips and rentals I buy are from the MLS.
Mike: Oh, wow.
Mark: Yeah. I mean, that’s a big percentage.
Mike: Yeah.
Mark: I probably couldn’t buy half of those if I wasn’t an agent, just because I can act so fast. I can see them so quickly. I can write offers a couple hours after a home is listed. Plus, since they’re from the MLS, I get a commission as the buyer’s agent as well.
Mike: Sure.
Mark: So if that’s 3% or whatever it is, that means I get paid 3% more than another investor and make the same amount of money on that deal.
Mike: Right.
Mark: So there’s a lot of perks to being an agent and finding those deals on MLS.
Mike: Yeah. How about some pocket-type listings, or you know that something is coming? I mean, do you feel like you get first shot at some stuff that hasn’t even hit the market yet?
Mark: I do, and part of that is kind of, I’ve been doing this for 15 years or so, and I’ve worked on having just a rock-solid reputation. I always do what I’m going to say to do. I’m not nickel and diming people. So I will have agents bring me deals sometimes like, “Hey, this seller wants to sell quick. The house is a mess. They don’t want a bunch of showings. Are you interested?”
Mike: Right.
Mark: I’ve done, I think, two in the last year that way, where they weren’t even listed. I got them under contract just from another agent who brought me the deal.
Mike: Yeah. Do your agents have . . . I guess, when you have a team of agents, you probably have some incentive in place to bring the deal to you first.
Mark: Those agents who brought me deals were actually from other offices.
Mike: Okay.
Mark: They weren’t even my own agents. I try and keep my investing separate from my agents as much as I can.
Mike: Okay.
Mark: Just because it can kind of be a conflict of interest, where I don’t want to be competing with other investors that we work with. I want it to be separate. I don’t want to be, “Hey, don’t show your investor that house. I want to buy it,” kind of thing.
Mike: Right.
Mark: If they’ve got a listing, I want them to do the best they can for that seller.
Mike: Sure.
Mark: I don’t want them to try and convince them to sell it to me for cheaper than they could get. Now, if they don’t want to list it, if there’s some other weird thing going on, that’s fine. I’ll buy it. But I want to be careful that I’m not trying to take advantage of people.
Mike: Yeah. There’s a gray area there.
Mark: Right. For sure.
Mike: But of course, some people, if they say, “Hey, if you kind of think of the net,” well, if you list it, first off as an agent, you might recommend, “Well, I think you need to do some repairs here if you want to get more money.” They’ll be like, “I just want to sell it right away,” and it’s like, “Well, okay. Well, if you don’t do the repairs and you don’t have to hold onto it anymore, then I know somebody that can basically make you a cash offer, and you could just walk away from it.” But you know that.
Mark: Yep. There are definitely those situations too. Yes.
Mike: Right. Awesome. Well, let’s talk about rehabbing. We were talking before we started the show here today. So I guess, you really don’t wholesale anything. Right? You just rehab pretty much everything, or keep some rentals?
Mark: Yep. I plan to rehab everything. There’s a few properties, I think I’m closing on one at the end of this month, that is sort of like a wholesale. We bought it in the country. It was a huge project. It probably needed $100,000 in work.
Mike: Oh, wow.
Mark: So we were kind of putting it off. Other ones were going on. When we have these properties, we kind of put them in Zillow as coming soon and put a For Sale sign up on them. Once in a while, people come along and want to buy them. So this one, a buyer did come along. He wanted to buy it. He was willing to pay $30,000 more than I bought it for, and we’d spent maybe $2,000 or $3,000 cleaning it up, and that was it. So not really a true wholesale deal, but there are a couple of them I sell before we rehab them. But yeah, I’d say 90% of them we do a full rehab on before we sell them.
Mike: Yeah. That’s good. Does that make you stay away from . . . Because there’s some houses . . . I pretty much take ownership of everything now, and I do more of what we are kind of calling “wholetailing” now. So I might clean it up and just list it on the MLS as-is or something like that. But if you’re rehabbing everything, do you stay away . . . I mean, do you have a certain sweet spot, where you don’t want to go too high-end and you don’t want to go too low-end? Or is everything an option for you?
Mark: Everything is an option, but we really found our sweet spot kind of in the low end in our area.
Mike: Okay.
Mark: So our median price in my town, in Greeley, is $260,000 right now. It was $110,000 four years ago, which shows you what our market did.
Mike: Right. Yeah.
Mark: So most of the properties we’re rehabbing and selling, they’re selling in the $200,000 to $270,000 range. So they’re kind of median to below median.
Mike: Sure.
Mark: But I do have a flip that I’m selling for over $800,000 right now, as well. But that was kind of a one-off, weird deal that was too good to pass up. But I find more profit margin in the lower end, and it’s worked out really well for us.
Mike: Yeah. Well, you have a much larger population to sell to. Right?
Mark: For sure. We found that with that high-end flip, that’s the first one I’ve ever done like that, it was a lot harder to sell than I thought it would be and we had to do a lot more repairs. I mean, that had to be perfect to get that one sold.
Mike: Right. Yeah. Well, let’s talk about contractors, like finding contractors, how you work with contractors, and kind of maybe some stories that you have from, some horror stories probably out there, that . . .
Are you looking to change your life through real estate investing? If you’re interested in either getting started or taking your business to the next level, please check out FlipNerd’s private program at theinvestormachine.com. This is the most robust real estate investor coaching, networking, and mastermind on the planet, and designed for your success.
If you’re ready to roll up your sleeves, ready to take personal responsibility for your own success, and ready to dive into a world-class instructional coaching program that provides you step-by-step instruction to help you achieve financial freedom, then you should apply today. Spaces are limited and candidates are only considered after an application and interview process. Our 12-month investor program is unparalleled. Think you might be a fit? Learn more today at theinvestormachine.com.
. . . maybe some stories that you have from, some horror stories probably out there, that . . .
Mark: Oh, yeah. I still have horror stories from this year. We work with a lot of different contractors. I have probably four or five main contractors we work with who are sort of like general contractors. But we still try to sub out as much work as we can.
Mike: Okay.
Mark: So I have a project manager, Nikki, who manages the contractors, keeps track of them, keeps track of invoicing and all that. But for a typical property, we’ll hire our own HVAC company. We’ll hire our own electrician, hire our own plumber, hire our own roofer, own flooring guy, usually, have them go in and do their thing. Then, we’ll bring in the contractor who will fix drywall, do kitchens, baths, painting, that type of thing, all the little stuff. That way, the job seems to go faster. Whenever [inaudible 00:10:35] . . .
Mike: Yeah. Your project manager is kind of managing all those individual subs, I guess.
Mark: Exactly.
Mike: Of course, the most important part is, manage the timing of them. Right?
Mark: Yes.
Mike: So they’re not stepping on top of each other.
Mark: Yep. No. That’s one nice thing about subs is we can kind of get them in early. If our contractors are busy on other jobs, we can get the subs in there first to get the things started. It seems like when we use a general contractor who handles everything, it takes longer because they want their own guys to do more work. They’re not as good at scheduling because they’re busy doing other things. So it’s worked much better doing the sub thing. But we still have problems.
I have a contractor who did a few rehabs for us in the last year, and on one he’s doing now, he kind of convinced me to do an addition. It turns out, after he built the addition, the city came in with inspections and they didn’t like the foundation. They didn’t like a bunch of the work he did. So he’s coming back to do more stuff. He’s like $20,000 over budget already.
Mike: Oh, wow.
Mark: It’s just a mess. We’ve gotten to the point now, where I’m not allowed to talk to that contractor anymore. Only Nikki is. Because I just yell at him and get mad, so I have to stay away from that little project. But he’s definitely doing his last job for us now.
Mike: Okay.
Mark: But we’re constantly looking for new contractors, trying to make sure they’re meeting timelines, budgets. Time is the biggest thing. They’re almost always over their time budget, and we’ve really got to keep track of them on [inaudible 00:12:03].
Mike: Yeah. Is that why you’ve kind of gone the route of subcontractors? Is it more of a timing thing, or do you feel like you save money, or both? Or what’s your [inaudible 00:12:12]?
Mark: I think it’s both. I think it’s definitely both. Because it seems like, the more you have a general contractor do, of course, the more money they’re going to want for managing the process or hiring all those people.
Mike: Right.
Mark: So it saves us money and it saves us time, because we can get those subs in right away, usually. The contractors might be busy on other houses, doing other things, so the more we can get done before they’re ready to go, the faster it’ll go.
Mike: Yeah. General contractor is a broad term. So a lot of times it’s meant to be the person that’s kind of managing the whole project and managing everything, and sometimes it’s just the generalist that’s doing paint, texture, like a lot of the general stuff. So you’re kind of moving in the direction more of having a generalist that does everything that’s not a special trade. Right?
Mark: Exactly. Yep.
Mike: Yeah. Like there’s a couple different kinds of flavors of those too. It’s the people that are just managing people under them. Or it’s the guy with the truck that’s actually managing a couple people, but he’s actually doing work as well. I mean, in your experience, you’ve probably dealt with all flavors of that, I guess. But what do you think is the best type of person?
Mark: I’ve had the most problems with the managers. You would think they would be on top of things. But really, lately, we’ve had the best luck with the guys who are working on the job and kind of have their own crew with them, and the managers . . . One of the biggest problems with this contractor we’ve had, I don’t think he knew what he was doing for part of it. Some of these smaller jobs, he did great on, did great for the first ones. But he got into this bigger one and tells us he knows how to do all this stuff, but it’s coming out that he just did not know what he was doing on some of these bigger projects.
Mike: Yeah. I mean, that’s common with contractors. It’s like feast or famine for them. Most of them are living paycheck to paycheck, or hand to mouth, for the most part. So they never say “no.” Like they’re always like, “Can you do this?” “Yes, yes, yes. I can take it on.” Then, of course, if they take on too much, then you kind of realize where the limits are.
Mark: Yep. Exactly. We find contractors, we hire them for a job, all of a sudden it slows down. It’s like, “Oh, I took another job.” I’m like, “Oh, come on.”
Mike: Yeah. Exactly.
Mark: Finish our job, then do your other job. We can give them as much work as they can handle, but it’s a struggle to keep them focused and working fast.
Mike: Yeah. So is that what you do in your model? Kind of what I’ve seen is, if you find somebody and you start to talk to them, and kind of promise them more work, that . . . What I’ve found, just like you said, is contractors always, generally, they’re spending half their time working and half their time looking for work. So if you can take away that time they spend looking for work and say, “No. You can just do the next house for me.” Like basically, “If you treat me right, I’ll keep you busy enough to where you won’t have to find any other work.” Or do you prefer to just not be tied down to too few of people, I guess?
Mark: I am happy to tell them we’ve got other jobs for them, and line them up. Some of our contractors work great that way. They’re like, “The more you can give us, the faster we can work. We can dedicate more time to you in the future.” Then, some others kind of almost get complacent like, “Oh, I’ve got another job coming up. So I don’t have to work too hard on this one. I can kind of . . . ” Actually, I wrote out a sheet yesterday on what I expect from all my contractors, as far as repairs, timeliness, money.
I’m probably going to implement some kind of bonus system, where if they get things done on time, they will get bonuses. If they don’t, definitely, no bonuses. We’ll see how that works.
Mike: Yeah. Maybe even a penalty if you don’t get done by a certain amount of time.
Mark: Right.
Mike: Yep. So how would you say . . . I guess, you’re using your project manager to manage the contractors. When you start doing a lot of projects, it starts to get difficult because . . . Is your project manager like running around town all day every day talking to them, or is that done through any sort of systems, or phone calls, or what’s the kind of process of managing your contractors?
Mark: It’s both, and we actually just signed up for a system that gives us tasks to do every week, and to up limit all the bids and everything, so we have it in one place. Because we were kind of running around like crazy before, both of us. Me and her would be driving out looking at properties. She’d be talking to them on the phone all the time, texting them all the time. I mean, I don’t think you can rely on phone calls or texts. You have to be on the job site at least once every two weeks, probably once a week, to make sure they’re doing what they’re saying, they’re on track, they’re there.
Mike: Right.
Mark: I’ve made that mistake in the past, where I was running it all myself and I hired guys, and I wouldn’t check up on them for a month. Surprise, surprise, not much work was done and they’re doing other jobs, because they know I’m not around.
Mike: Right. Yeah. I know some people that have a process where their contractors have to take pictures of certain things by certain days, and they have to send it in. They try to do it virtually, but it’s hard. I mean, taking pictures is easy from a cellphone.
But for any sort of systems, I just haven’t had much luck with . . . We use a lot of systems in my business, a lot of project management systems, for FlipNerd. Even internally, like administratively managing a project from the time we buy it to the time we sell it. But actually getting our contractors to say, “Well, I want you to get an account for this tool and manage your tasks in there,” they’re like . . . I don’t even ask anymore.
Mark: I know.
Mike: It’s like, “That’s not going to work.
Mark: Yeah. You run into the problem too where some contractors will be, “Great. We’ll do all that stuff for you,” but they’re also going to charge you twice as much as the contractors who will get it done and . . .
Mike: Yeah. The more professional they are, it’s once it starts getting to like wrapped vehicles and stuff like that, then you’re probably paying, in my experience, too much.
Mark: Yep. Exactly.
Mike: Yeah. So let’s talk about paying. How do you pay your contractors? How do you kind of start off? Because every contractor wants money up front, and every investor doesn’t want to pay anything up front. Then, at the end, you don’t want to pay everything off before it’s 100% done. So what’s kind of your policy, or how do you track payments for contractors?
Mark: We’re trying to really tone that in and dial it down, as well. But one nice thing that we can offer our contractors, we have a managed Pro account with Home Depot, so we buy all the materials for them. We’ll buy all the materials, and that kind of takes away one of their excuses for why they need a lot of money up front, to pay for materials. So we’re already doing it.
But a lot of times, we may give them a quarter of the job up front if we know them well. If it’s a big job, then we might give them a few draws as it goes along, maybe two more draws. But I try not to pay more than half of the job until it’s all the way done. The contractor will say it’s done, and you show up and it’s never done.
Mike: Right.
Mark: There’s touchups that are needed. They haven’t finished everything. They’ve still got guys, “Oh, it’s going to be done today.” No. You don’t get paid. It’s not done until everything is done. All the touchups are fixed. We’ve got our blue tape we go through the house with and mark everything that needs done.
Mike: Right.
Mark: Some contractors we’ve worked with have wanted to be paid weekly, like an employee. That does not work. That just prolongs the project, gives them no motivation.
Mike: Sure.
Mark: So the least we can pay them until it’s done, the better. But like you said, it’s not . . . It used to be, when I first started, it seemed like we’d get a job done, pay them everything at the end when they’re done. That doesn’t tend to work out very well [inaudible 00:19:41].
Mike: Yeah. I’m just thinking of issues that I’ve had or that I’ve learned over time. So the project is done. From their standpoint, there’s nothing left to do. But when you’re selling it, you have an inspection and the inspector finds some stuff. Now, in my experience, some of the stuff they find was outside of the scope of that contractor, so I’m not going to penalize them for that. But some of the stuff they find was in the scope, and they either did it wrong or could’ve done it better, or whatever.
The challenge is, when you’re a small investor and if you’ve already paid them off, what incentive do they have to come back and do additional work? But how have you dealt with that?
Mark: Yeah. I mean, it’s tough. Like you said, if it’s not something they were supposed to fix, it’s something new, we’ll gladly pay them to have that fixed, add it on to the work job.
Mike: Sure. Yeah.
Mark: But if it’s something they fixed or overlooked, didn’t do, I mean, we expect them to go back and fix it for free.
Mike: Right.
Mark: Like you said, it’s tougher for the small investor. For us, it’s like, “Hey, if you want to work with us again, you’d better fix it.”
Mike: Right. [inaudible 00:20:43] come out.
Mark: [inaudible 00:20:43] Yeah. It can be tougher. But they can kind of use that same idea of, “If you want to work again.” You can always threaten to leave them bad reviews on Yelp. There’s some stuff you can do, but a lot of it boils down to how good the contractor is and how ethical they are in their business.
Mike: Yeah. For sure. There’s always stuff that you just can’t see, like a GFCI is not working or the garbage disposal that’s brand new isn’t working for some reason, and little things that an inspector is going to find, but you as the investor probably have a hard time seeing all that. In fact, I think inspectors, they need to find something. Right?
Mark: They need to earn their money.
Mike: Even though it’s perfect, they’re going to find something.
Mark: [inaudible 00:21:28].
Mike: We’ve sold hundreds of houses. I’ve never had an inspector come back and say, “We didn’t find a single thing. It doesn’t need anything.” It doesn’t happen.
Mark: Never.
Mike: So talk about how you’re set up internally. It sounds like you have, on your team, a project manager, and then most of the other stuff sounds like it’s outsourced. But can you maybe elaborate on that a little bit?
Mark: Yeah. So I have a team manager, Justin, who kind of manages our agents. I’ve got six licensed agents who are on our team, so he manages them, trains them. I do very little on the agent side anymore. He also helps with my blog and some other stuff, our advertising, marketing for some of the flips as well, and then Nikki is my project manager. So she used to do a bunch of BPOs, expenses, things for my REO and HUD accounts. But those have dried up to nothing with our market being so strong.
So I moved her into this project management role, and she’s kind of doing the same thing. She does values for me. I still do values myself, but it’s nice to have a second opinion. She’ll look at the houses with me, go over repair budgets, really is the main contact for contractors and checking up on them, and timelines. I’ve got another assistant, John, who kind of is the backbone for our team. He writes contracts. He talks to title companies, talks to lenders, keeps track of the dates and timeframes for everything that we’re doing.
Then, I’ve got a cousin who does some accounting work. My mom helps out a little bit on some inspections and different things. So there’s all kinds of people out there. But primarily for the flips, it’s me and my project manager doing most of the work.
Mike: Yeah. Let’s talk a little bit about maybe some kind of tips you have for those that are listening or watching, and they either are about to get started in rehabbing, or they’ve done a few and they’re kind of struggling. Because most of what you’ve learned has been kind of on the job training. Right? Like you learn as you’re doing like, “Oh, we’re not going to do that again,” or, “Don’t hire that person again.” You can’t really teach this stuff. I mean, you can, but you’re going to experience it yourself one way or the other.

But for those folks, one of the challenges is that when you get to the point to where you have several projects going at a time, then people are . . . Like contractors are, they tend to start to get a little more reliable, because they can work with you again and again. You just move them from to job. Right? But when you’re new and let’s just say you’re even doing two deals a year, no contractor, even the general contractor is making their full living off of just working for you. Right? So any kind of tips you can share with, let’s just say the little guy that’s just doing a couple deals here and there?
Mark: Yeah. For sure. I mean, I think one thing to remember from starting out is, I’ve talked to a lot of flippers and don’t be ashamed not to make a lot of money or lose money in your first deal, because it happens to a lot of us. A lot of the best flippers in the business lost money when they first did it. It’s kind of like an educational cost. But one that’s cheaper than college still. But when you’re finding those contractors, this is probably one of the toughest things when you’re first starting out, you have to get a lot of bids. I mean, it kind of sucks that you’re asking a bunch of contractors to get you bids and you may only use one of them.
Sometimes you may even have to pay for some of those bids. I’ve seen that before, where if you’re asking the same guy to bid a bunch of jobs for you, maybe you give him $50 or $100 to give you those bids, so he doesn’t get frustrated and just leave. Because as a new investor, I think one of the most important things is knowing what a rehab should cost. There are contractors who will charge you $100 an hour or $40 an hour, and you don’t want to pay $100 an hour as an investor. That’s not going to leave you much money.
Mike: Right.
Mark: So the more bids you can get . . . I mean, they might not even be houses you’re buying, but just looking at, getting an idea of what the repairs will cost, you’ll gain more knowledge. Then, when you start getting these bids, you’ll start to see, “Okay. Who’s cheaper? Where should my price ranges be? How much does painting cost? How much does a kitchen cost?” You can narrow down some of the better contractors. When you’re looking at new bids, new contractors, you’ll get an idea of like, “Okay. This one is just crazy. I’m not even going to look at it,” or, “All right. This one is in the right price range.”
Mike: Right.
Mark: Like I said, though, if you’re asking one contractor to give you five bids, they’re going to get frustrated. They’re going to leave. So make sure you treat him right and at least take him to lunch, do something to keep him on your good side.
Mike: Yeah. Is price the only thing you look at, or you’re kind of evaluating the person and they’re style, probably even how good of a communicator they are, things like that too? Right?
Mark: For sure. If you’re looking to bids to get an idea of what things should cost, that’s definitely not the only thing you want to look at about a contractor. When I first screen a contractor, we’ll reach out to them. Is it Craigslist or Thumbtack, or Angie’s List? We look at all types of sources, Facebook even. We’ll email and call them. One, do they respond quickly? If it takes them three days to respond, that’s a bad sign. If it takes them that long just to talk to us, maybe they’re super-busy, but that’s probably a bad sign too, because you want things done fast.
Mike: Sure.
Mark: Do they show up if you get an appointment with them? Half the contractors, it seems like, don’t even show up. If you do ask for a bid from them, will they get you a bid? It seems like half the contractors won’t even give you a bid after they say they’re going to get you one. Then, just their demeanor, talking to them, can you get along with them?
Ask them questions if you’re getting a bid, if you’re going through a house, about different things, like you said, the GFCI, or foundation, or plumbing. Look up some stuff about houses if you know nothing, so you can ask them at least some questions and see what their answers are to make sure they’re knowledgeable. At least, knowledgeable enough to have some answer. You kind of fake your way through it to begin with, but you’ll start to learn as you go.
Mike: Yeah. What do you think about, you’re in a little bit smaller of a market, but using contractors and vendors that other real estate investors have used? Like they might be a vendor at a REIA club. I’ve found there, at least, they’re more concerned about their reputation. So they’re probably more likely to treat you right because word will get around quickly if they don’t. But any experience there that you can share?
Mark: We’ve used some of them, and I’ve talked to a lot of investors who’ve kind of gone that route, as well. I think if you’re first starting out, that might be a route to go. One thing I’ve found is they seem to be more expensive than a lot of other contractors. So that’s kind of the catch 22 as a new investor. Sometimes you’ve got to pay a little more for that person who’s got the reputation, the experience, to get into the game so you don’t run into a horrible situation with a bad contractor. But it’s always kind of surprising. Like, “How do you work with so many other investors and charge so much for these jobs? How are they making money?”
But you’re probably going to have to pay more when you’re first starting out, and then as you start getting experience, then maybe start to sub out some more work. Then, maybe start to look for those contractors who don’t have the shiny wrapped truck, but are a little tougher to manage and need more hand-holding.
Mike: Yep. Well, Mark, what other tips would you give to kind of newer or aspiring rehabbers, or even those that are already doing some deals, but are looking to up their game?
Mark: I’d say, one of the biggest mistakes I ever made in my career was rehabbing a house myself. So I thought I would save so much money on labor and make all this money, because I was doing windows, I was doing doors, I did a kitchen, bath, flooring, painting, and it was a nightmare. It was the most stressful time in my life. So really be wary of your time and how you’re using it. It’s almost always better to hire people who are professionals, who know what they’re doing. They’ll get the job done faster, they’ll do better work, and a lot of times it ends up being cheaper, because you’re not using so much of your own time on the project.
But make sure you’re using your time on what makes your business the most money, which is usually finding deals, finding financing.
Mike: Absolutely.
Mark: Focus on the core parts of your business. Don’t get stuck on busy work that you can hire out.
Mike: Yeah. Absolutely. Well, God forbid doing something to enjoy your life. Right? I mean, most of us became investors, because we wanted to get some of that freedom and have control over our time. If you’re the one that’s doing all the work on your own project, you’re probably not the best person for it, anyway, like you said, and your time is a lot more valuable than that, generally.
Mark: For sure, and it can be so stressful. Oh, man. Every time, you think, “Oh, this will take me a month,” and six months later you’re just pulling your hair out like, “Why won’t this house get done?”
Mike: Yeah. Awesome. Well, hey, Mark, I really appreciate your time today. If folks wanted to learn more about you, I know you’ve got a lot of great things going on, I know you’ve got a really popular blog, and you have some books and stuff too, why don’t you share with us how folks can get some more of this information?
Mark: Yeah. Investfourmore.com is the blog I started a few years ago, just to talk about my investing, being an agent, flipping rentals, and that’s investfourmore.com. I’ve got four paperback books on Amazon, a couple best-sellers there. I’ve got a weekly podcast as well, InvestFourMore Real Estate Podcast, and I think I have like 450 free articles on the site. So lots of information there. I just try to provide as much as I can from kind of one source. It’s me writing everything, and I really enjoy it.
Mike: Yeah. Awesome. Well, hey, thanks for spending some time with us today.
Mark: Well, thank you. Glad to be on the show, and hope it worked out well.
Mike: Awesome, man. Great to see you. Take care.

Mark: You too.
Mike: Thanks for joining us for this episode of the Flipnerd.com Investing Show. If you’re not yet an elite member of FlipNerd, you’re missing out. We have tons of great training, including a new detailed masterclass published each month and live training webinars with experts twice a month. Plus, you’ll get access to all of our archives, where we already have a growing library of masterclasses and other training videos. Elite members also get membership in our incredible online mastermind group, where many of the top real estate investors from across the country, including many of the hundreds of guests I’ve had on this show in the past, are already members.
Whether you’re brand new, looking to get started, or a veteran, you simply must join today. I promise, you won’t be disappointed. To learn more or join today, please visit flipnerd.com/lab. That’s flipnerd.com/lab. See you on the next show.





 

I'm the content manager here at FlipNerd.com and have a passion for real estate investing and have a background in writing and business. I focus on providing content that is aimed for newer real estate investors and those who have the drive to become a full-time real estate investor. With so many strategies to utilize within the real estate investing industry, I aim to break down any barriers and showcase that real estate investing is obtainable and can truly bring financial freedom.