So, you’re purchasing your first investment property… and there’s some work that needs to be done.
If you want to get your rent up to the comp’s in the area, you’re going to need to add some value to the property, or the units.
You can update the kitchen or bathroom. Maybe you need to replace the carpet? Or you might just need to fix that leaky faucet.
You might be thinking… “Hey, I’m pretty handy. I bet I could do all of this myself”. Well, that might be true, but is it worth it? When is it truly cheaper to DIY a value-add project? Or should you just hire out and get the project done fast?
Find out on this week’s episode of Multifamily Investing Made Simple, In Under 10 Minutes!
Tweetable Quotes:
“You’re gonna learn some valuable skills that can serve you in the future as you’re hiring out to vendors and whatnot. But you’re not going to be able to scale that way.”– Anthony Vicino
“There is an argument to be made that DIY is a really great way to get started, because it changes the risk profile. It’s less capital outta your pocket.” – Dan Krueger
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*Transcripts*
Value-Add: DIY or Hire Out
[00:00:00] Anthony: Hello and welcome to the podcast. Uh, let’s skip the fluff. Get straight to the chuff. Is that a thing? People say? Ugh, I I don’t want to get to the chuff. Honest. That sounds kind of gross. I didn’t know what to rhyme with fluff. Stick
[00:00:12] Dan: with meat and potatoes. I feel like you always
[00:00:14] Anthony: say like, meat. Cut the fluff.
Get to the meat. Yeah, that doesn’t, I’m hungry off. It doesn’t run off the, the tongue. Like, just
[00:00:21] Dan: kind of I’m interested. I’m, I’m trying to go where you’re going. Where’s the meat? ?
[00:00:26] Anthony: I got no meat. All right. Well, what do we have? Isn’t that at all? We have anything for the. Is the beef. Where’s the beef?
[00:00:33] Dan: weeds over here.
Bringing back late nineties, uh, commercial references. Where’s the
[00:00:37] Anthony: beef?
We should type, we should type this one over. . Oh, this one downhill. So quick. Hi, let’s try this again. Hello and welcome to the podcast. I am the Iron Man, and this is Dan the Dyer Man.
[00:00:58] Dan: Sure dire. [00:01:00] That’s, I mean, that doesn’t sound
[00:01:02] Anthony: good. He, that can be taken to him anyways. Like you’re the guy who always, you’re not in the right direction.
If
[00:01:06] Dan: you’re dire, well, there’s a chance you could,
[00:01:09] Anthony: what if you’re just back a man who goes around dying things? Oh, like tie
[00:01:13] Dan: dye? Yeah. Yeah. I, you just be the guy that
[00:01:16] Anthony: makes everything tie dye. You strike me as a guy that has some tie dye t-shirts in
[00:01:19] Dan: the closet. I went through a phase when I was six, when I learned how to.
Really, I think I made one or two. It was one of those things you did at like, those summer, like day camp things you’d go to, like you tie dye shirt and like I feel like I, I made a couple. I wasn’t,
[00:01:30] Anthony: they’re not good. I was never invited to those, those events. I guess I, I bite.
[00:01:34] Dan: Yeah. You’re not allowed. I’m a biter, literally on
[00:01:37] Anthony: a list.
Actually. I don’t think I ever bit, um, of all the, of all the things that you could lay at the feet of me, uh, of things that I, um, the, the horrible atrocities I’ve committed, I don’t think I’ve bitten very many people. I don’t think I have, probably less than five, but
[00:01:52] Dan: there was always like a kid who did in school always.
Like there was always at least one kid who, who had bitten and, and would bite. Dude. Once you
[00:01:58] Anthony: got the, once you got [00:02:00] that, that, uh, once people peg you as divider, yeah, you gotta lean into it.
[00:02:05] Dan: Same with eating boogers. I, when we were in Miami, oh man, I watched a guy completely hammered walking by the pool. Liz and I were just watching him.
He didn’t even try to hide it. Stumbling. I forgot that’s even a thing that people straight. In the mouth. Didn’t even try to be,
[00:02:20] Anthony: oh my God. The worst podcast I’ve ever been on. Cuz now you have brought back terrible memories. I forgot that. That’s a thing people do. Yeah,
[00:02:27] Dan: it was usually the biter. I forgot.
People put their
[00:02:29] Anthony: fingers in their mouth, period.
[00:02:30] Dan: I don’t know. I don’t know what. Well people, let’s
[00:02:32] Anthony: get to the point. Welcome to the podcast. Don’t Eat Your Boogers. Let’s talk about when you know that you should, when you’re doing a value, Should you go diy, which stands for do it yourself? Uh, just learned that myself.
Thanks. Um, or should you hire it out? How do you know when you should DIY versus hire it out? This is an interesting question because I, we were on, I was on an investor call a couple days ago with a guy. Who he bought this property, lake Shore property. Um, about a [00:03:00] decade ago. His in, his goal was he was going to build a beautiful lake house there and then rent it out.
And this was a decade ago. Sounds easy. This was a decade ago, and he’s just now was getting around to building a sea wall. When he first said, build a sea wall, I was like, what’s a sea wall? And I realized he meant like a wall to keep back the. and I was like, okay, so you’re still, that seems like an important part.
Very important part. But all I has to say is he was still very, very far away from having this house constructed. And Sounds like he’s on like probably step one or two. , right? Yeah. Pretty much like step one, hold back the sea. Yeah. Step two, lay foundation. So I to say is like, . One of the big things I see with people that go to the DIY route is they think, like Reid said, before we, we started recording, you’re gonna save some money mm-hmm.
and you’ll just do it yourself. But what I find is that is a good way to have a project that never reaches completion. Yeah.
[00:03:49] Dan: I mean, unless you’re like literally a, a really skilled, uh, tradesman. Totally. Uh, like, maybe not like professionally, but like, like, you know, your way around, like you’ve helped some guy build a [00:04:00] house or like if you’ve done some construction work, like if you’ve, you can figure that stuff out.
I mean, per, I usually, I mean, unless you’ve got like a really low paying job, it’s probably not the best use of your time if you actually do the math. But there is an argument to be made that that’s a really great way to get started because it changes the risk profile. It’s less capital outta your pocket.
Hundred percent. So, um, the, I know a ton of guys who have done really well doing it that way. You just, you’re, you’re not gonna scale it. Uh,
[00:04:25] Anthony: yeah, you’re definitely not gonna scale. You might, you’re gonna learn some valuable skills that maybe can serve you in the future as you’re hiring out to vendors and whatnot.
But in my experie. There’s only one demographic of people who should go the DIY route hardcore, like in the beginning, and like you said, it’s a tradesman or it’s the people who just enjoy these types of projects. Like you were the type of guy or gal who is on your free time on the weekend building a shed in the back, or you’re like, I’m gonna put up a retaining wall.
My, one of my best friends. He is a guy who, he’s like, Hey, do you wanna come out [00:05:00] to the cabin this weekend? I’m like, sure. We get out to the cabin, he’s up at 4:00 AM building a retaining wall, like, what are you doing? And he is like, I thought you thought you were relaxing. He’s like, no, this is my dirt therapy.
Yeah. Like he just enjoys
[00:05:10] Dan: it. Oh yeah. And that’s the other thing I was just thinking too, like, like maybe you don’t really care about the economic outcome. Yep. Like you are just the type of guy who wants to take an ugly thing and make it beautiful.
[00:05:20] Anthony: Have that, you know, Joe, the guy that we, you know, he’s on our board of directors, um, unofficially
Technically he’s on payroll. He’s on payroll. So Joe, who’s on our, you know, he’s been doing this for 30 plus years, we bought a bunch of buildings from him and he’s a good example of a guy who just takes, I think, a lot of personal pride in the process. He loves it. He loves picking out the marble and he loves.
going through the whole process, if that’s you, more power to you. Yeah, that’s,
[00:05:45] Dan: that’s different though. But I think there’s a lot of new investors who get into it with, you know, the intent of kind of like trying to get to where we’re at and think that that’s like a, a long-term solution and, or they just don’t know what the hell they’re doing.
And they think it’s gonna be easy.
[00:05:59] Anthony: I, I would a [00:06:00] lot of those, if you’re gonna do it, you need to be intentional about why you’re doing it. Mm-hmm. , if you’re, if you’re doing it because maybe you’re a little bit cash strapped in the beginning and you just need to make ends meet, then, so you’re gonna put in the elbow grease and the sweat equity, do the work yourself.
That’s fine. That’s, that’s totally fine. Mm-hmm. get to the point where you’re finally making the money and then you can justify outsourcing maybe. Great. But if the reason that you’re doing it is because you do have the capital, but you’re cheap and you’re, you have this idea of like, oh, I can just do it better myself.
I can do it for less, but then the projects are never getting fully completed. Yeah. Then you need to look hard in the mirror and be like, oh, okay, maybe this actually isn’t for me. Maybe I should be spending the money to get this job done. Yeah. Quick
[00:06:37] Dan: question, then we gotta wrap it up because this is gonna turn into long, but.
You kind of did it this way. Yeah. With that triplex, right? Like I know you, you, you did a lot of repairs yourself. Yep. And do you regret that or do you like the fact that you took that approach?
[00:06:50] Anthony: I hated every minute of it. It was, and honestly, if it wasn’t for my partner, Jamie, she. . She did a lot of the hard, heavy things and was the emotional support.
Yeah.
[00:06:59] Dan: She would be [00:07:00] the one bringing all the skillset
[00:07:01] Anthony: sets Totally. To these projects. And so I think it was good. It sounds like you just threw nails. I threw nails and they hit the ground and they’d ricochet. Sometimes they’d ricochet towards her, so then she thinks I’m wrong on at her, but not, I’m definitely, there was no ricochet.
I heard it. They ricochet so. I would not do it again. Yeah. And, and if Jamie wasn’t there and I didn’t have the confidence that like somebody on the team could, could figure it out, then definitely no. I, I just am aware of my weaknesses. I’m not good with my hands. So you
[00:07:27] Dan: would never do it again. I never did it and I have zero skills, so I know I should never do it.
So
[00:07:33] Anthony: the other thing I’ve learned is I always thought it would be cheaper. But in the end it’s, it’s almost never cheaper. Just even something like putting on a door took me like three weeks and you add up how much time I took to go back and keep like Jimmy rigging it. I was like, I could have just paid somebody and it would’ve been way faster in and they would’ve had it done in one hour,
[00:07:49] Dan: one trip.
Yep. Yep. Just pay, pay him, pay, pay the pay bill.
[00:07:53] Anthony: So that’s when you shouldn’t, that’s when you know should you DIY versus uh, should you outsource it? Honestly, if you love working [00:08:00] with your hands, do it. It’s great. It’s a lot of fun. But also don’t let that be the thing that holds you back from scaling, cuz.
You’ll never scale that way for sure. There’s a glass ceiling there. So, sorry, this episode was very weird, um, at the beginning, but thanks for sticking with it. I think we delivered a, a, the smidge, the tiniest fraction of value possible felt like a smidge to me. A smidge. Yeah. Smidge is just a bigger, like, slightly bigger than a a, a nano.
Meter
[00:08:31] Dan: Right? It’s like a pinch. Like so if you’re gonna add some
[00:08:34] Anthony: salt is a smidge bigger than a pinch?
[00:08:36] Dan: A little bit.
[00:08:37] Anthony: Okay. But not much. Okay, . Well, hopefully you got a smidge of value. Um, maybe even a pinch. And if not then we are gonna try again in the next episode. I guarantee we will show up. Yes.[00:09:00]
