There are typically two types of people who want to flip houses – those who have (or believe they have) a lot of money lying around but don’t know much about construction or repair-work and those who are handy and can make a lot of repairs themselves but don’t have a ton of money. And occasionally, you run into a person who has the money and is also handy.
We know that having the money to purchase real estate is important (I covered that in this post), but how important is it for a house-flipper to be handy?
Without a doubt, being handy is a huge asset when flipping a house. Electricians, plumbers, painters, sheet rock hangers, roofers, etc. cost exorbitant amounts of money. A simple task like changing out some outlets will cost you hundreds and possibly thousands of dollars if you hire an electrician to do it. Those thousands of dollars can be the difference between making and not making a profit.
But if you aren’t handy, that’s not necessarily a death sentence on your flipping plans. Let me tell you a story. Despite the fact that I graduated summa cum laude in college, at the age of 22, I had no clue what to do with power tools (or really, any tools). I remember a moment during my college years when I was a camp counselor, and several of us were putting some wooden signs together. I was operating the power drill, and I kept stripping the screws and messing up the project. Finally, one of the female counselors came over and took over the drill for me and screwed in the hardware like a pro. She just looked at me and said, “Sorry, Stan.”
When I got married, I didn’t even know what a drywall anchor was. I hung up shelves in our kitchen, and screwed them into the drywall without any anchors! I hung drawers and other items in our closet without a leveler, because I thought you were supposed to just eyeball it! I didn’t know anything, and let’s just say that these projects didn’t turn out so well.
But I still flipped a house.
You see, a lot of house-flippers are “outsourcers,” who sub out most or all of the work themselves. This was me in my early years of house-flipping. I could at least identify what I wanted to get done, get quotes from a few contractors, and then oversee the project to make sure everything went according to plan.
In reality, those who are able to outsource the work usually end up better off in the long run than those who do all the work themselves. This is simply because the outsourcer has more time to focus on other things, like looking for his next flip or maybe even working on multiple flips simultaneously.
But outsourcing all the work isn’t a perfect solution. The biggest concern that an outsourcer should have is that s/he has to factor many more expenses into their bottom line calculation. What a handyman can do for $10,000 is likely going to cost an outsourcer close to $20,000 to get done. That $10,000 is a big deal! And if you don’t account for those extra costs when you buy the property, you’re going to be very disappointed when you sell it.
Over the years, I’ve become much more handy, and now I feel comfortable doing a lot of the tasks on my own that I used to have to outsource. That doesn’t mean that I don’t still outsource things. In fact, I still outsource the vast majority of my projects. But being handy gives me options. I can choose to outsource some things and to insource others. I can look at a simple project, like changing out two-prong outlets to GFCI outlets, and decide if I want to spend $2,000 on an electrician or just take a few hours to knock out the project myself.
I said earlier that “those who are able to outsource the work usually end up better off in the long run.” The key words there are “are able.” If you are an outsourcer who must outsource because you don’t know how to use a power drill or a leveler, then you are going to struggle (and I did early on in this business). Similarly, if you are a handy person who must do the entire house-flip rehab yourself because the home you own doesn’t have enough equity to outsource the project, you are likely to run into problems and frustrations. But if you are able to outsource but are also able to do the work yourself, you are in a great position. You have options. Insource the parts of the project that you enjoy or are disproportionately expensive to hire a professional for; outsource the difficult, time-consuming, or frustrating parts of the project; and spend the rest of your time finding your next flip, spending time with your family, or doing whatever else it is you enjoy doing in your spare time.