Bakersfield Investors Field Trip - May 13-14-15

Why Bakersfield? Under 5 months of inventory, bite-sized prices ($50-$60k) ARV's at $100k-$120k, 44 DOM for retail sales.  I'll have a HML, gap funding investors, my favorite contractor, 2 RE agents.  Get the invitation above.

Interview with MY BEST REAL ESTATE Buying Agent

Lisa Hoeflich is a California Real Estate Agent that likes to work with investors. Here in this interview she speaks about what to look for when choosing a Real Estate Agent for acquiring deals, and how to achieve the real win/win relationship with them.



To listen, just click on the Title above. OR



To subscribe to the podcast(s) via iTunes:

• Start iTunes


• Pull down the Advanced Menu and select "Subscribe to Podcast",


• Enter http://lowtech-ventures.blogspot.com/feeds/posts/default

Note - Correction for the phone numbers mentioned in the recording: Tim Conners at La Costa Loans is 760-803-4354 and the number for Mark Epstein with Athas Capital is 818-803-4354.

I welcome your comments!

Interview with MY BEST REAL ESTATE Buying Agent

Lisa Hoeflich is a California Real Estate Agent that likes to work with investors. Here in this interview she speaks about what to look for when choosing a Real Estate Agent for acquiring deals, and how to achieve the real win/win relationship with them.



To listen, just click on the Title above. OR



To subscribe to the podcast(s) via iTunes:

• Start iTunes


• Pull down the Advanced Menu and select "Subscribe to Podcast",


• Enter http://lowtech-ventures.blogspot.com/feeds/posts/default

Note - Correction for the phone numbers mentioned in the recording: Tim Conners at La Costa Loans is 760-803-4354 and the number for Mark Epstein with Athas Capital is 818-803-4354.

I welcome your comments!

Interview with MY BEST REAL ESTATE Buying Agent

Lisa Hoeflich is a California Real Estate Agent that likes to work with investors. Here in this interview she speaks about what to look for when choosing a Real Estate Agent for acquiring deals, and how to achieve the real win/win relationship with them.



To listen, just click on the Title above. OR



To subscribe to the podcast(s) via iTunes:

• Start iTunes


• Pull down the Advanced Menu and select "Subscribe to Podcast",


• Enter http://lowtech-ventures.blogspot.com/feeds/posts/default

Note - Correction for the phone numbers mentioned in the recording: Tim Conners at La Costa Loans is 760-803-4354 and the number for Mark Epstein with Athas Capital is 818-803-4354.

I welcome your comments!

The 5 Different Rehab Contractor Styles - The Investor/Rehabber

This is the third in a series of "The 5 Rehab Contractor Styles" I've catagorized, how to identify them, what to watch for, and how to manage them. The 5 categories are  The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B. This is the third part where we discuss "The Investor/Rehabber"



"The Investor/Rehabber"



I've had 2 encounters with The Investor/Rehabber and I wasn't smart enough in my first encounter to use them. I look back on that experience and kick myself each and every time I think about the bid I got from them and didn't recognize what a sweet deal, and what a sweet relationship I could have had with these guys. It was my second encounter where I learned what a gem you can have with this category.



"The Investor/Rehabber" does this for a living, and acts as his own contractor. He buys his own properties and knows his market very well. He totally understands what is the least amount of investment necessary to turn a profit. He understands the amount of investment needed that will result in a return. He also knows where too much investment will not give you the return you desire.







This category of contractor is competent in rehabbing for investors and offers the best prices. He will have all of his insurance and legal entities in place and has a routine for billing - and won't be afraid to place a lien on your property either. He is efficient in the project, and he's efficient in making sure he is paid. He's also a good resource for teaching you a thing or two about rehabbing.



This is my favorite category of contractor, but I will admit that even this category of contractor has their issues.



This kind of contractor has a system in place. He has his paint colors, plant choices, landscaping styles, roofing styles, and will fix up your property just as he would his own properties. If you have you're own preferences, then you must make that clear in the beginning.



He has a crew and they work fast. He will get a house finished within 2 weeks and it will be done well. However, he will trust what his workers tell him about the property and when the workers say they are done, he believes them. The only thing I've had to adjust with working with the one investor/rehabber I've experienced is to have him, or a trusted 3rd party go through and make a list of outstanding details he needs to go back and do over.



You have to realize, when engaging with this contractor, that you won't get the highest price for your property in a specific neighborhood. For example, if someone spent $10,000 on a WOW level kitchen with granite, etc. that house may sell for $105,000. But if you spent $2,000 cleaning/repainting existing cabinets, maybe a new formica or tile countertops, your house will sell for $100,000. He knows what investments will get you the returns, but when you estimate the after repair value going into a project, eliminate the highest comps, as they may have the pricier granite kitchens.



This contractor is a professional and you must treat him as a professional. If you are wishy/washy about your decisions, too picky and make him redo things he's already done, or need and hour-by-hour account of the project, then this guy isn't for you. You are both professionals and you must respect each other as such.



"The Investor/Rehabber" is perfect if:



- You are not local to the project

- You feel you can trust his decisions when faced with minor issues

- You are flexible with project scheduling



"The Investor/Rehabber" is not a good fit if:



- You need to watch the project daily

- You change your mind often about colors, fixtures, etc.

- You are a perfectionist

- You want to have some level of involvement in the project



Overall, this category is my favorite and works best for me, as I rehab wherever it makes sense, not just in my back yard. I'm pretty easy going and I don't like working with other two we've discussed, The Salesman and The Perfectionist, for reasons discussed in the blog.



Tell me about your experiences - which category has worked best for you?

The 5 Different Rehab Contractor Styles - The Investor/Rehabber

This is the third in a series of "The 5 Rehab Contractor Styles" I've catagorized, how to identify them, what to watch for, and how to manage them. The 5 categories are  The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B. This is the third part where we discuss "The Investor/Rehabber"



"The Investor/Rehabber"



I've had 2 encounters with The Investor/Rehabber and I wasn't smart enough in my first encounter to use them. I look back on that experience and kick myself each and every time I think about the bid I got from them and didn't recognize what a sweet deal, and what a sweet relationship I could have had with these guys. It was my second encounter where I learned what a gem you can have with this category.



"The Investor/Rehabber" does this for a living, and acts as his own contractor. He buys his own properties and knows his market very well. He totally understands what is the least amount of investment necessary to turn a profit. He understands the amount of investment needed that will result in a return. He also knows where too much investment will not give you the return you desire.







This category of contractor is competent in rehabbing for investors and offers the best prices. He will have all of his insurance and legal entities in place and has a routine for billing - and won't be afraid to place a lien on your property either. He is efficient in the project, and he's efficient in making sure he is paid. He's also a good resource for teaching you a thing or two about rehabbing.



This is my favorite category of contractor, but I will admit that even this category of contractor has their issues.



This kind of contractor has a system in place. He has his paint colors, plant choices, landscaping styles, roofing styles, and will fix up your property just as he would his own properties. If you have you're own preferences, then you must make that clear in the beginning.



He has a crew and they work fast. He will get a house finished within 2 weeks and it will be done well. However, he will trust what his workers tell him about the property and when the workers say they are done, he believes them. The only thing I've had to adjust with working with the one investor/rehabber I've experienced is to have him, or a trusted 3rd party go through and make a list of outstanding details he needs to go back and do over.



You have to realize, when engaging with this contractor, that you won't get the highest price for your property in a specific neighborhood. For example, if someone spent $10,000 on a WOW level kitchen with granite, etc. that house may sell for $105,000. But if you spent $2,000 cleaning/repainting existing cabinets, maybe a new formica or tile countertops, your house will sell for $100,000. He knows what investments will get you the returns, but when you estimate the after repair value going into a project, eliminate the highest comps, as they may have the pricier granite kitchens.



This contractor is a professional and you must treat him as a professional. If you are wishy/washy about your decisions, too picky and make him redo things he's already done, or need and hour-by-hour account of the project, then this guy isn't for you. You are both professionals and you must respect each other as such.



"The Investor/Rehabber" is perfect if:



- You are not local to the project

- You feel you can trust his decisions when faced with minor issues

- You are flexible with project scheduling



"The Investor/Rehabber" is not a good fit if:



- You need to watch the project daily

- You change your mind often about colors, fixtures, etc.

- You are a perfectionist

- You want to have some level of involvement in the project



Overall, this category is my favorite and works best for me, as I rehab wherever it makes sense, not just in my back yard. I'm pretty easy going and I don't like working with other two we've discussed, The Salesman and The Perfectionist, for reasons discussed in the blog.



Tell me about your experiences - which category has worked best for you?

The 5 Different Rehab Contractor Styles - The Investor/Rehabber

This is the third in a series of "The 5 Rehab Contractor Styles" I've catagorized, how to identify them, what to watch for, and how to manage them. The 5 categories are  The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B. This is the third part where we discuss "The Investor/Rehabber"



"The Investor/Rehabber"



I've had 2 encounters with The Investor/Rehabber and I wasn't smart enough in my first encounter to use them. I look back on that experience and kick myself each and every time I think about the bid I got from them and didn't recognize what a sweet deal, and what a sweet relationship I could have had with these guys. It was my second encounter where I learned what a gem you can have with this category.



"The Investor/Rehabber" does this for a living, and acts as his own contractor. He buys his own properties and knows his market very well. He totally understands what is the least amount of investment necessary to turn a profit. He understands the amount of investment needed that will result in a return. He also knows where too much investment will not give you the return you desire.







This category of contractor is competent in rehabbing for investors and offers the best prices. He will have all of his insurance and legal entities in place and has a routine for billing - and won't be afraid to place a lien on your property either. He is efficient in the project, and he's efficient in making sure he is paid. He's also a good resource for teaching you a thing or two about rehabbing.



This is my favorite category of contractor, but I will admit that even this category of contractor has their issues.



This kind of contractor has a system in place. He has his paint colors, plant choices, landscaping styles, roofing styles, and will fix up your property just as he would his own properties. If you have you're own preferences, then you must make that clear in the beginning.



He has a crew and they work fast. He will get a house finished within 2 weeks and it will be done well. However, he will trust what his workers tell him about the property and when the workers say they are done, he believes them. The only thing I've had to adjust with working with the one investor/rehabber I've experienced is to have him, or a trusted 3rd party go through and make a list of outstanding details he needs to go back and do over.



You have to realize, when engaging with this contractor, that you won't get the highest price for your property in a specific neighborhood. For example, if someone spent $10,000 on a WOW level kitchen with granite, etc. that house may sell for $105,000. But if you spent $2,000 cleaning/repainting existing cabinets, maybe a new formica or tile countertops, your house will sell for $100,000. He knows what investments will get you the returns, but when you estimate the after repair value going into a project, eliminate the highest comps, as they may have the pricier granite kitchens.



This contractor is a professional and you must treat him as a professional. If you are wishy/washy about your decisions, too picky and make him redo things he's already done, or need and hour-by-hour account of the project, then this guy isn't for you. You are both professionals and you must respect each other as such.



"The Investor/Rehabber" is perfect if:



- You are not local to the project

- You feel you can trust his decisions when faced with minor issues

- You are flexible with project scheduling



"The Investor/Rehabber" is not a good fit if:



- You need to watch the project daily

- You change your mind often about colors, fixtures, etc.

- You are a perfectionist

- You want to have some level of involvement in the project



Overall, this category is my favorite and works best for me, as I rehab wherever it makes sense, not just in my back yard. I'm pretty easy going and I don't like working with other two we've discussed, The Salesman and The Perfectionist, for reasons discussed in the blog.



Tell me about your experiences - which category has worked best for you?

The 5 Different Rehab Contractor Styles - The Perfectionist

This is the second in a series of the 5 Rehab Contractor styles I've catagorized, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  This is the second part where we discuss "The Perfectionist"

"The Perfectionist"

The Perfectionist is extremely competent, friendly, fair and honest.  You may not tell you have a perfectionist during the first meeting like you can with "The Salesman".  The perfectionist has a calm and competent approach, is agreeable with what you want in your rehab and even endorses your ideas as good ideas.  He has a Rolodex of subcontractors and vendors he trusts and will remain loyal to those to a fault.

The first sign you know you have a perfectionist is when he takes 2 weeks to get you his bid.  You might even have to ask him once or twice when to expect the bid.  When you finally get it it will be complete and the estimates will be accurate.  As you work together, he will be competent and he will do a good job.

The Perfectionist will work for the rehab investor IF:

• You have a small project


• You have plenty of time in which to finish the project


• Quality in workmanship is very important to your end buyer


• You are rehabbing a house for yourself


• You want good detail in both the project and in the invoicing

The Perfectionist won't work for the rehab investor IF:

• You are using hard money on your project.  I had a Perfectionist contractor and it didn't matter how many times I told him the cost of time.  He seemed to sympathize with me, as he is a gentle person, but he still never "got it".  It didn't occur to him that Home Depot cabinets, where may be more expensive, would save me $2,000 by having the project done that much sooner.


• You aren't local to the project.  The Perfectionist likes to do a lot of the work themselves and if not perfect, will spend extra time getting it "just right".  You will need to check in on a daily basis to keep the project running on time.  Asking for an expected end date with him is not enough, because he will be wrong.  You may even have to go over a project plan with timelines and milestones.


• Expect the Perfectionist to handle any change order in great detail.

Should you chose to hire the Perfectionist Contractor, plan to set aside some time to educate him on the philosophies of rehabbing houses for profits.  You will have to explain how "good enough" is "good enough" and that the outcome doesn't need to be perfect.  You pull him away from his comfort zone by insisting on finding better prices elsewhere.  You will make him very uncomfortable checking in on him every day, and when you ask him to put more workers on the project he will claim everyone will fall over each other with more workers.

Do you have any Perfectionist Contractors in your experiences?

The 5 Different Rehab Contractor Styles - The Perfectionist

This is the second in a series of the 5 Rehab Contractor styles I've catagorized, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  This is the second part where we discuss "The Perfectionist"

"The Perfectionist"

The Perfectionist is extremely competent, friendly, fair and honest.  You may not tell you have a perfectionist during the first meeting like you can with "The Salesman".  The perfectionist has a calm and competent approach, is agreeable with what you want in your rehab and even endorses your ideas as good ideas.  He has a Rolodex of subcontractors and vendors he trusts and will remain loyal to those to a fault.

The first sign you know you have a perfectionist is when he takes 2 weeks to get you his bid.  You might even have to ask him once or twice when to expect the bid.  When you finally get it it will be complete and the estimates will be accurate.  As you work together, he will be competent and he will do a good job.

The Perfectionist will work for the rehab investor IF:

• You have a small project


• You have plenty of time in which to finish the project


• Quality in workmanship is very important to your end buyer


• You are rehabbing a house for yourself


• You want good detail in both the project and in the invoicing

The Perfectionist won't work for the rehab investor IF:

• You are using hard money on your project.  I had a Perfectionist contractor and it didn't matter how many times I told him the cost of time.  He seemed to sympathize with me, as he is a gentle person, but he still never "got it".  It didn't occur to him that Home Depot cabinets, where may be more expensive, would save me $2,000 by having the project done that much sooner.


• You aren't local to the project.  The Perfectionist likes to do a lot of the work themselves and if not perfect, will spend extra time getting it "just right".  You will need to check in on a daily basis to keep the project running on time.  Asking for an expected end date with him is not enough, because he will be wrong.  You may even have to go over a project plan with timelines and milestones.


• Expect the Perfectionist to handle any change order in great detail.

Should you chose to hire the Perfectionist Contractor, plan to set aside some time to educate him on the philosophies of rehabbing houses for profits.  You will have to explain how "good enough" is "good enough" and that the outcome doesn't need to be perfect.  You pull him away from his comfort zone by insisting on finding better prices elsewhere.  You will make him very uncomfortable checking in on him every day, and when you ask him to put more workers on the project he will claim everyone will fall over each other with more workers.

Do you have any Perfectionist Contractors in your experiences?

The 5 Different Rehab Contractor Styles - The Perfectionist

This is the second in a series of the 5 Rehab Contractor styles I've catagorized, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  This is the second part where we discuss "The Perfectionist"

"The Perfectionist"

The Perfectionist is extremely competent, friendly, fair and honest.  You may not tell you have a perfectionist during the first meeting like you can with "The Salesman".  The perfectionist has a calm and competent approach, is agreeable with what you want in your rehab and even endorses your ideas as good ideas.  He has a Rolodex of subcontractors and vendors he trusts and will remain loyal to those to a fault.

The first sign you know you have a perfectionist is when he takes 2 weeks to get you his bid.  You might even have to ask him once or twice when to expect the bid.  When you finally get it it will be complete and the estimates will be accurate.  As you work together, he will be competent and he will do a good job.

The Perfectionist will work for the rehab investor IF:

• You have a small project


• You have plenty of time in which to finish the project


• Quality in workmanship is very important to your end buyer


• You are rehabbing a house for yourself


• You want good detail in both the project and in the invoicing

The Perfectionist won't work for the rehab investor IF:

• You are using hard money on your project.  I had a Perfectionist contractor and it didn't matter how many times I told him the cost of time.  He seemed to sympathize with me, as he is a gentle person, but he still never "got it".  It didn't occur to him that Home Depot cabinets, where may be more expensive, would save me $2,000 by having the project done that much sooner.


• You aren't local to the project.  The Perfectionist likes to do a lot of the work themselves and if not perfect, will spend extra time getting it "just right".  You will need to check in on a daily basis to keep the project running on time.  Asking for an expected end date with him is not enough, because he will be wrong.  You may even have to go over a project plan with timelines and milestones.


• Expect the Perfectionist to handle any change order in great detail.

Should you chose to hire the Perfectionist Contractor, plan to set aside some time to educate him on the philosophies of rehabbing houses for profits.  You will have to explain how "good enough" is "good enough" and that the outcome doesn't need to be perfect.  You pull him away from his comfort zone by insisting on finding better prices elsewhere.  You will make him very uncomfortable checking in on him every day, and when you ask him to put more workers on the project he will claim everyone will fall over each other with more workers.

Do you have any Perfectionist Contractors in your experiences?

The 5 Different Rehab Contractor Styles - The Salesman

I’ve dealt with enough contractors now to know their different styles, their values, how they view their potential customer (you), and I share with you the most painful and expensive lesson of all; how to identify and manage each style.

This is the first in a series of the 5 Rehab Contractor styles, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  The first style I bring in the series is The Salesman:

1. The Salesman:

The salesman is excellent at helping you visualize the end product.  He’ll use his arms and be flamboyant about what he will move and what he will keep.  He’ll suggest really cool changes that will improve the marketability of your house.  He’ll show enthusiasm and also tell you the cost will be minimal.  You will recognize the salesman because you’ll feel yourself start to get excited.  He’ll convince you that minor upgrades will really make your house POP.  He’ll tell you he’s got a team and they will get it done in a matter of days.  In addition, he;s most likely come to you through a trusted business associate, establishing mutual trust in this person. The salesman is a dreamer and he LOVES to create.  He lives for the beauty of the end product.

The Salesman contractor will be to your benefit IF:

-          He has a production oriented business partner.  My first contractor was a salesman.  I attribute our success to 2 things: 1. he had a production oriented business partner, and 2. we made him stick within a budget.  But we still went over our initial budget AND we got sold on upgrades that didn’t make a bit of difference to the selling price of the house.

-         You can keep him within YOUR budget and check on him daily – Many salesmen are dreamers and just don’t have the mental capacity to stay on track.  They are easily distracted with more exciting opportunities or other issues – most often unfulfilled commitments to previous clients.

-          It’s not enough just to see his work (believe me I learned this the hard way).  You need to find references (besides the one that referred you) and you must ask those references open-ended questions that encourage them to tell the story on how the project progressed.

The Salesman won’t work IF:

-          There are no contracts.  This guy is a dreamer and to him, anything is possible.  His enthusiasm is contagious and it’s easy to feel that he is as trusting as if he is your own brother.  You both agree on the image and you pull the trigger.

-          Don’t let his financial arrangement fool you.  I was impressed my salesman didn’t ask for money up front.  By about the 3^rd draw and 3 months later I had to fire him because he was so busy trying to live up to his previous commitments.  Even then I was taken by his sales ability – he asked for one more week to prove himself.  Like a fool, I allowed it, but he blew it again and this was the biggest and most expensive lesson of my rehabbing career.

If you feel yourself getting excited, then you are getting emotional about your project. Step back, keep it in check, speak to your mentors, and manage the project on a daily basis. 

The 5 Different Rehab Contractor Styles - The Salesman

I’ve dealt with enough contractors now to know their different styles, their values, how they view their potential customer (you), and I share with you the most painful and expensive lesson of all; how to identify and manage each style.

This is the first in a series of the 5 Rehab Contractor styles, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  The first style I bring in the series is The Salesman:

1. The Salesman:

The salesman is excellent at helping you visualize the end product.  He’ll use his arms and be flamboyant about what he will move and what he will keep.  He’ll suggest really cool changes that will improve the marketability of your house.  He’ll show enthusiasm and also tell you the cost will be minimal.  You will recognize the salesman because you’ll feel yourself start to get excited.  He’ll convince you that minor upgrades will really make your house POP.  He’ll tell you he’s got a team and they will get it done in a matter of days.  In addition, he;s most likely come to you through a trusted business associate, establishing mutual trust in this person. The salesman is a dreamer and he LOVES to create.  He lives for the beauty of the end product.

The Salesman contractor will be to your benefit IF:

-          He has a production oriented business partner.  My first contractor was a salesman.  I attribute our success to 2 things: 1. he had a production oriented business partner, and 2. we made him stick within a budget.  But we still went over our initial budget AND we got sold on upgrades that didn’t make a bit of difference to the selling price of the house.

-         You can keep him within YOUR budget and check on him daily – Many salesmen are dreamers and just don’t have the mental capacity to stay on track.  They are easily distracted with more exciting opportunities or other issues – most often unfulfilled commitments to previous clients.

-          It’s not enough just to see his work (believe me I learned this the hard way).  You need to find references (besides the one that referred you) and you must ask those references open-ended questions that encourage them to tell the story on how the project progressed.

The Salesman won’t work IF:

-          There are no contracts.  This guy is a dreamer and to him, anything is possible.  His enthusiasm is contagious and it’s easy to feel that he is as trusting as if he is your own brother.  You both agree on the image and you pull the trigger.

-          Don’t let his financial arrangement fool you.  I was impressed my salesman didn’t ask for money up front.  By about the 3^rd draw and 3 months later I had to fire him because he was so busy trying to live up to his previous commitments.  Even then I was taken by his sales ability – he asked for one more week to prove himself.  Like a fool, I allowed it, but he blew it again and this was the biggest and most expensive lesson of my rehabbing career.

If you feel yourself getting excited, then you are getting emotional about your project. Step back, keep it in check, speak to your mentors, and manage the project on a daily basis. 

The 5 Different Rehab Contractor Styles - The Salesman

I’ve dealt with enough contractors now to know their different styles, their values, how they view their potential customer (you), and I share with you the most painful and expensive lesson of all; how to identify and manage each style.

This is the first in a series of the 5 Rehab Contractor styles, how to identify them, what to watch for, and how to manage them.  The 5 categories are The Salesman, The Perfectionist, The Investor/Rehabber, The Snob, and Hose A & Hose B.  The first style I bring in the series is The Salesman:

1. The Salesman:

The salesman is excellent at helping you visualize the end product.  He’ll use his arms and be flamboyant about what he will move and what he will keep.  He’ll suggest really cool changes that will improve the marketability of your house.  He’ll show enthusiasm and also tell you the cost will be minimal.  You will recognize the salesman because you’ll feel yourself start to get excited.  He’ll convince you that minor upgrades will really make your house POP.  He’ll tell you he’s got a team and they will get it done in a matter of days.  In addition, he;s most likely come to you through a trusted business associate, establishing mutual trust in this person. The salesman is a dreamer and he LOVES to create.  He lives for the beauty of the end product.

The Salesman contractor will be to your benefit IF:

-          He has a production oriented business partner.  My first contractor was a salesman.  I attribute our success to 2 things: 1. he had a production oriented business partner, and 2. we made him stick within a budget.  But we still went over our initial budget AND we got sold on upgrades that didn’t make a bit of difference to the selling price of the house.

-         You can keep him within YOUR budget and check on him daily – Many salesmen are dreamers and just don’t have the mental capacity to stay on track.  They are easily distracted with more exciting opportunities or other issues – most often unfulfilled commitments to previous clients.

-          It’s not enough just to see his work (believe me I learned this the hard way).  You need to find references (besides the one that referred you) and you must ask those references open-ended questions that encourage them to tell the story on how the project progressed.

The Salesman won’t work IF:

-          There are no contracts.  This guy is a dreamer and to him, anything is possible.  His enthusiasm is contagious and it’s easy to feel that he is as trusting as if he is your own brother.  You both agree on the image and you pull the trigger.

-          Don’t let his financial arrangement fool you.  I was impressed my salesman didn’t ask for money up front.  By about the 3^rd draw and 3 months later I had to fire him because he was so busy trying to live up to his previous commitments.  Even then I was taken by his sales ability – he asked for one more week to prove himself.  Like a fool, I allowed it, but he blew it again and this was the biggest and most expensive lesson of my rehabbing career.

If you feel yourself getting excited, then you are getting emotional about your project. Step back, keep it in check, speak to your mentors, and manage the project on a daily basis.