I remember before I got into real estate I called someone who had retired from the 9 -5 life, and was doing real estate full time. I had already read the Rich Dad series of books and I was well aware of the pitfalls of the do-it-yourself mentality. I still remember the conversation: “If you hire a handyman, or god-forbid a plumber, you’ll waste all your cash flow for the month! If you want something done right you gotta do it yourself.” The word “myself” was always uttered emphatically–It had a powerful meaning. “You give an employee or contractor a simple task, and they always screw it up–I’d rather do it myself.”
Soon after that conversation we were driving around the neighborhood where my friend had most of his rental properties. We happened to pass by another landlord who was loading his truck. My friend said, “See that guy over there, he manages his properties himself. He’s been doing it for 25 years.” I saw something quite different than what my friend had seen. I saw an old man with snowy white hair, and a stubbly beard reaching into a beatup old pickup truck that had a rusty ladder on it. He looked more tired than his truck. There was my friend’s hero: the do-it-yourself man!
I also remember the stark reality that was painfully obvious to everyone except the do-it-yourself-man. The tool sheds, and garages were such a mess you needed a search engine to find a screw-driver. The income and expenses that should have been accurately accounted for were non-existent. Just a: “Yeah, it works out to 15% of the gross rent–it’s all the same.” The bottom line was that nothing got done. The details, and tasks that fell through the proverbial cracks, added up to a literal ton!
The Beginning of The End
I fell into this trap myself. Doing the little handy work to save money and build an empire. I did the little repairs, marketing, selling, negotiating, screening, property search, and accounting. I had big visions for the real estate portfolio that I would build and call my own. My mind’s eye had no more accurate vision than a pair of beer goggles. My set up was just like the old man and the truck.
I was in business with several others, and most of them blamed the economy for the impending collapse. I was more agile then the rest. I was onsite and was able to put out fires more quickly. I was more flexible and I was able to drop prices when necessary to boost occupancy. I remember reading that the purpose of a recession is to eliminate the less efficient firms and that’s exactly what we were. The business model was a do-it-all-yourself one. That model died long before I had even gotten started.
Today, I have my own realty company in Raleigh NC. I buy many single family properties per year from sellers who need to sell their home fast so I delegate whenever possible. I have a thorough screening process for all tenants, and contractors. Once contractors are hired I empower them to make decisions on my behalf within their sphere of expertise. I use time management software to plan every part of my day down to 5 minute increments. Achieve Planner is a time management application created by Effexis Software. It has been instrumental in my personal growth and productivity. It is, by far, the most valuable $100 investment I have ever made! I have moderate attention deficit disorder I need all the help I can get to stay on track.
Another phenomenal resource is Odesk. An internet based company that allows you to hire contractors to perform all sorts of tasks from a virtual office. They are independent Contractors of all price ranges that perform a variety of tasks
including very affordable SEO services. They also allow you to pay the contractor through their website, which provides credit card safety and a work diary so you can supervise the work. I use virtual assistants for marketing and web design. I do my own accounting with the help of quicken. I have far more energy and time to dedicate to reports and the allocation of resources. Today I own a business not a job!