Getting Started is Rarely Pretty

When I started as a real estate investor, I had only been in Spokane for about 4 months and I did not know anyone.  On top of that, I am a woman, which somewhere else may not be a big deal, but still is a bit of an issue in Spokane.  My first project was a major remodel of a severely distressed duplex (meaning you could barely stand inside for more than ten minutes without gagging because of the smell of cat pee, not to mention the pile of dirt, garbage, and hypodermic needles in the basement).  I was in a relationship at the time and made the classic mistake of hiring my significant other as my handy person.  It made perfect sense, right.  He had the tools and the time and the experience doing the type of work I needed.  Wrong.  We nearly killed each other and it was an uphill battle every step of the way.  We had very different expectations—I saw him as another contractor and he approached it as more of a partnership.  He was also not used to working for someone who had as much or more experience and knowledge then he did and my clarity caused a great deal of friction.  I wanted him to show up, do the work, and go home.  He wanted us to work on things together (but from my perspective, he had no financial investment in the property or any ownership interest so all the risk and responsibility fell on me).  Fortunately, he was only doing a portion of the work and we managed to muddle through with everyone’s body parts still intact.  If anything, it was the contrast between working with him and managing my other contractors that help me start to get clear about how I wanted things to go in the future.

Project number two, I wish I could say it went great and I implemented all of my new awareness and here is my “Six Point System for Working with Contractors” that you can purchase for $23.95 and implement tomorrow to build wealth beyond your dreams. No, I hired a meth addict to be the general contractor on my second house.  Of course I did not know that at the time, I’m not that dumb!!  In fact, this general contractor was recommended to me by the drywall contractor I had worked with on the duplex.  They had done a great job for me and managed to complete the work between Christmas and New Year’s at a fair price and high level of quality.  Licensed, bonded, the works.  So, as I started the second house and the company owner recommended this guy to me, I thought “Great, maybe this will be someone I can build a long term professional relationship with.”  Let’s call this guy Chad.

I am a cautious person by nature, so I originally met with Chad just to get his perspective on the house and what I was planning to do with it. Supposedly, he had been rehabing houses for a while and I was looking for some experienced input on my construction budget.  I met Chad in person at the house and we got along great.

I was exhausted and still finishing up on the duplex, so I decided to have Chad and another contractor bid on the second project as general contractors rather than just sub out certain portions of the work.  I put together an excruciatingly detailed bid packet and checked their licenses, insurance, bonds, and worker’s comp complaints.  So when Chad’s bid came back in budget, I breathed a huge sigh of relief and gave him the job.  He warned me that he couldn’t start right away because he had other work lined up, but even with a start time in early summer, it would still be done in time to get it on the market for sale before the winter.

So I kept plugging away at the duplex and started to look for other projects.  As the time came for Chad to start in June, I would drive over to the house in great spirits, glad to know the project was in good hands and I had hired someone else to do the dirty work (just like all the books say you should do it).  I wasn’t going to have to pick up a hammer or a paint brush, or . . . well, I started to have to pick up the phone. “Chad, where are you?  I thought you were going to start last week?”  “Chad, I am concerned that nothing has been done at the house.  Please call me and let me know when you plan to start.”  And so forth.  And nothing was happening.  And then Chad would call and I would say “Are you still able to do this project?  If not, I still have time to find someone else.”  And he would reassure me, yes, he could do it, he was just getting tied up in a big job for one of the real estate brokers in town.  Finally, I said “If you don’t get started by this date, you are fired.”  And guess what, he started.  Hugh sigh of relief, now we are on our way, back on track.  Except he never showed up again.

Then his wife got involved. How could she help, how we can make this work?  She was a landscaper and would do the yard work at a reasonable cost.  She was so sorry, they really liked me and wanted to make this work.   Could she meet me next week and look at the yard with me?  And when Monday came around and she didn’t show up—I officially instituted the “one strike and you are out rule”.  Fortunately, I had only paid Chad a small amount of money for the demolition work and was only out a few hundred dollars.  After a few attempts to contact him about the money, I realized that my sanity was more important and I just walked away.

It was a few years down the line, when I signed up as a real estate agent with the above mentioned broker, that I learned the truth.  To be honest, I had a bit of a grudge against the broker for tying up “my contractor’s” time with all of her change requests.  So when I met her, I casually said “I think we have a contractor in common.  Do you know Chad so-and so?”  She nearly hit the floor and so did I when she quickly exclaimed that he was a meth addict and had cost her thousands of dollars and months of lost time.  All of the sudden, his erratic behavior made sense.

But back to the house.  By now, it was September.  I had owned the house since the end of January, very little had been done, and winter was coming.  In the meantime I had purchased and completed a cosmetic rehab on a four-plex and was even more exhausted.  I was overwhelmed with this house and didn’t know what to do.

Anyone who tells you that there are no emotions in business has never been in business. The emotions are always there, it is just what you do with them that matters.  Without them, we wouldn’t have gut instinct or intuition or creativity, which would make business very dull and less profitable.  When, however, you are exhausted and disheartened you should never listen to your emotions.  It is time to Go Back to the Numbers. Fortunately, that’s what I did and then I generated a short List of Options:  I could cut my losses and sell the house as a fixer, I could jump in and manage it myself, or I could try to find another contractor.

Emotionally, I just wanted to cut my losses and move on.  More than anything, I wanted to sweep this whole mess under the rug and pretend it never happened.  But when I looked at the numbers, I saw that it was really in my best interest to finish what I had started.  I was completely gun shy about general contractors, so I decided to jump in and take over the project myself.

More happened on that house in six weeks than in all of the previous six months.  I started using the Rule of Three in earnest.  When in doubt, call and meet with three contractors.  And when meeting them, trust your instincts.  If after talking with three contractors, no one stands out as the obvious choice, keep calling.  Do not settle for what is in front of you.

Because I was trying to accomplish so much in a short period of time, I ended up having a lot of people in the house which gave me a great deal of hands on experience with different contractors. I emerged from this mess with two of my favorite contractors–a handyman/carpenter and a plumber.  In both of them, I recognized exceptionally skilled people who took pride in their work, had good communication skills, and were extremely reliable.   Now that I have worked with them both for a number of years, the only reason I would use another contractor would be because of schedule conflicts.

Advertisements

About Learn to Be a Landlord
I currently am a real estate investor in Spokane, WA. I own and manage 79 rental units. My background is not in business, but in social services and community organizing. I also had way too much liberal arts education. Somehow that all fits together to make me a landlord!

2 Responses to Getting Started is Rarely Pretty

  1. quickpatch says:

    Hi Jessica. I can see that working with good contractors is very important. How do I weed out the meth addicts and find the talented jewels?

    • Learn to Be a Landlord says:

      Quickpatch-

      Thanks for your comment. You might want to check out my latest post “Working with Contractors.” It is true that it can be hard to find a good contractor, but there are some true gems out there in every location. I have been fortunate to find a number of them. I have come a long way since this disaster. It is too bad I couldn’t have followed my own future advice! Check out the post and let me know what you think. Thanks for reading!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: