Brad,
Yes, your situation sounds very similar to mine. Glad it worked out for you.
I think I am saving around $3,000. So it seems like a reasonable risk to take.
Thanks for your story. It gives me hope that what I am doing may not be too far out. Actually, I did the same thing with a different guy about two years ago and it worked out okay too.
Have you checked to see if your liability insurance would cover you if an unlicensed guy is injured working on your property? I have not checked mine.
Posted by Bob inCA on August 29, 2003 at 22:55:31:
Hello all,
I bit off more than I want to chew.
A renter called me on a rehab I haven’t even begun. It’s not close to ready, and I’m too busy to get to it so it’s eating my lunch.
The renter said that he needs a place for his mother and sister soon, and for himself. He said he’s a concrete laborer. We agreed he’d do enough work on the place so that he could move his family in, then start paying me rent.
We agreed that he’d put down a deposit of course, but I’m not sure what else I should be considering.
Can anyone advise me? Are there any pitfalls in this strategy? If at all possible, could someone provide me with a contract they’ve used in a situation like this?
Bob, I would not enter into such an agreement. Call me selfish, but I would not trust another person to fix your rental property as well as yourself or your paid contractor. Unless you are very specific, there are no standards by which to approve the work performed. He says the wall looks great. You say the wall looks horrible. He’s in your rental. Now what?
My policy is to fix up the interior of the home to A+ condition, or whatever the normal move-in condition happens to be. This permits the tenant to move into a clean home, with no future work needed. Then, I proceed, on my own timetable, with repairs on the exterior of the home.
Just take this one on the chin. I would rather leave a rental empty than encourage a nightmare situation to grow.
Posted by DaveD(WI) on August 31, 2003 at 07:01:39:
If your interested in trying out someones labor have him do it on somewere other then where he will be living. My experiance has been if you try this then you tend to get neither work nor rent money.
The majority of renters who have gotten behind with me have been tradesmen. Good guys, but bad money management and frankly suspect craftsmenship. Did you know a drywaller never saw a problem he couldn’t fix with drywall screws. Including hanging mirrors and pictures off my hardwood crown mouldings! Gaaaa!
-Dave
I’d recommend you pass on this person. Let him find someplace to live or for his relatives to live.
If you can’t get to the work on the place do something different. Possibilities:
Take in a partner who has the skills and time to do the work.
Resell the property as is and get it off your back.
Hire people to do the work instead of you doing it. This is much more expensive. However, the work will be done much sooner and you will be able to sooner start collecting rent to at least partially compensate for the higher cost.
This comes from experience. You are making one of the two biggest mistakes of beginners, which I warn about in my “beginners success” post in the archive for beginners. That is to take on too much too soon.
I know to warn about this one because guess who did it before you?
Consider this. You agree to let him do some work in exchange for whatever (rent, some kind of credit, etc). He has then done work in exchange for something of value. The IRS calls this bartering. He provides labor and you get something of value (the fix-up).
So you might then get into the employee/employer situation. You might need to take a look at tax witholdings, and workers comp insurance.
To avoid this pitfall he needs to be a contractor. That is to have a contract with you. He needs to provide his own insurance, and he needs to be paid with money. He then will have the money to pay the rent.
Consider this. You agree to let him do some work in exchange for whatever (rent, some kind of credit, etc). He has then done work in exchange for something of value. The IRS calls this bartering. He provides labor and you get something of value (the fix-up).
So you might then get into the employee/employer situation. You might need to take a look at tax witholdings, and workers comp insurance.
To avoid this pitfall he needs to be a contractor. That is to have a contract with you. He needs to provide his own insurance, and he needs to be paid with money. He then will have the money to pay the rent.
Posted by SteveG_PA on August 30, 2003 at 09:18:49:
Ive heard mostly bad things about doing this kind of thing, the only thing I can say I remember hearing was about getting them to actually do the work BEFORE they move in, once they are in, they tend to forget. Get some other advise though is my suggestion.
I haven’t had much experience with the concrete folks. But the worst I have run up against are the roofers. This includes the contractors and companies, not just the workers.
Can you compare concrete folk to roofers?
Good Investing*************Ron Starr**************
I have only contracted out one roof job. I have a guy that I have known for 3 years that does roofing work for me in his free time at $15/hour. He used to do iron work on high rises, so I am not worried about him falling off. I know all the roofing codes and procedures so I can monitor his work. There a lot of concrete guys that used to be roofers, but fell off.
Do you have any kind of insurance for this? About what would an average roof cost you, tearing off the old shingles? Kind of sounds like what I am doing, but I am just getting started with my guy. If he works out on this job, I will use him like you are doing. Got my fingers crossed.
Re: Care to share a few stories? - Posted by Brad (CA)
Posted by Brad (CA) on August 31, 2003 at 02:55:50:
I did that also Randy. I got quotes for $4,200 to $6,000 for a one story 1,160sf house with 2 car garage. I don’t remember how many square it was. It also had 3 layers of comp shingle to remove (3 layers = very heavy)
So, through a client/friend of mine, I called this guy she knew who did roofs. I don’t think he was licensed but he had done this type of work for a while and knew what he was doing. He did it for $3,000 total. I directly paid a company he uses, to come remove the old layers (included in the $3,000). He said he would do it for $3,000 only if I did not get a permit and he did on the weekend.
He fixed some of the existing plywood, installed the 20 year dimensional comp shingle roof, and a couple of whirlybirds (attic vents) all for a little over $3,000. It came out nice, helped to sell teh house quickly and all was well. Although, afterwards he said that he underbid the job and would not do it for that price again. I guess I got lucky that time.
No insurance. If the roofer falls, I take his carcus to the landfill. 20 square= $1000 materials, $500 for tear off(including hauling), $700 for installation labor.