Archive for the ‘learn repair skills’ Category

Cutting Repair Costs When Contracting Out

Sunday, October 7th, 2007

As fixer upper rental house business owners,  its good to know how to do as many repair jobs as possible, however, when a job is too technical and beyond your abilities, or too tedious, like a large painting job, it’s time to contract the job out.

The secret in dealing with contractors is that it’s better to pay by the job instead of by the hour. If you pay by the hour, whoever you contract with can bleed you dry by working many more hours than anticipated. If you can get the contractor to set a fee before beginning the job, he absorbs the cost of working the extra hours instead of you.

This technique works well if you are hiring a non-professional, like high school students to paint outside trim work for you. However, it doesn’t always work so well if you are hiring a highly skilled electrician or plumber. Sometimes they’ll give you a set price, but mostly you pay them by the hour.

I have a highly skilled handy man I call in for jobs over my head, and I always pay him by the hour. He often will make repairs at my rental properties at odd hours and respond quickly to emergency situations. Without him, I’d almost have to quit may day job to keep up with repairs. When you have someone like that, you do whatever you have to, to hang on to them.

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How to Learn the Skills to Repair Houses, part 2

Wednesday, September 26th, 2007

This of Part 2 of my reponse to a question asking, “My background is not in the building trades. How do I learn the required skills to start a business in repairing houses and renting them out?”

How to learn the appropriate skills:

3. Draw on the Past

After I got more involved in the repair work of our houses, I thought back about how my father had taught me a lot by example. I recall seeing him construct screened-in porches on various houses that we had lived in. I was too young to help out much at the time, or to appreciate what he was doing, but looking back I realize that it required a strong desire to learn the basic principals, and a sense of self-confidence to build it. He had no formal training in construction, and didn’t have reference books like I do, but he learned by observing other porches that had been built in the neighborhood.

I also have a friend who has made a career out of living frugally. He does virtually all of his own house repair and car repair work. If he gets stuck, he goes to the library and finds books to help him. It helps that he has a background in teaching vocational eduction. We have helped each other with house repair projects over the years, and he is a source of practical advice when I need help.
You too may have family members, or friends, that you can draw insight and inspiration from when it comes to making repairs.

4.Create a House Repair Library

I like to scour the fix-up book areas at used book stores for good buys. I buy a book as soon as I see it if I know that it has valuable information. In the past, I have waited to purchase the book only to return later and find that the book I had wanted was gone. The price you pay will literally be a drop in the bucket compared to the money you will save. I have books on almost every possible repair topic, including electrical wiring, plumbing, flooring, you name it. Some books that offer information on a wide variety of repairs, such as Reader’ Digest “Fix-it Yourself Manual” and Better Home and Gardens Complete Guide to Home Repair,” are also good to have. See my earlier blog for more infomation on recommended repair books.

When a book is not enough, I can usually get good advice on specific jobs at hardware stores, like Ace Hardware. And, you can sometimes get advice on difficult repairs by doing a Google search.

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How to Learn the Skills to Repair Houses, part 1

Tuesday, September 25th, 2007

I recently received a question asking, “My background is not in the building trades. How do I learn the required skills to start a business in repairing houses and renting them out?”

In terms of how to learn to repair houses, I will answer that question in two parts. The first part today, and the second half of my answer will be in a subsequent blog article.

How to learn the appropriate skills:

1. Learn by doing. When Orson Wells directed his first movie, “Citizen Kane,” he said that he felt “like a kid with a giant train set.” One nice thing about buying a fix-up house is that it’s like having giant practice house, where you can practice learning to do repairs. Since the house is already pretty well beat up, its OK if you make a few mistakes along the way. You can always go back and correct them later.

My philosophy is that the best way to learn is by doing. Granted, you have to gradually work your way up, if your are beginning near the bottom. At first you will have to hire out for most of the moderate or difficult repairs. Make sure you watch, or assist in doing, the repair when you pay someone to do it. That way you can do it, or at least do part of it, the next time you encounter the same situation.

Just last week, I had to hire someone to repair my air conditioner in a house that I am living in and fixing up at the same time. I took time off my 9-5:00 job to be on the roof with the repairman and observe what he was doing. I saw all of the tests that he performed with the multi-tester to identify what was wrong. The problem turned out to be two capacitors that were blown. If a similar problem arises in the future, I will know how to check and replace the capacitors myself.

If you have to pay someone to make a repair for you, make sure that you get your money’s worth by watching the repairman, and learning how to do it yourself.

2. Take community college classes. Most community colleges offer courses in the building trades – plumbing, electrical wiring, air conditioning and furnace repair, and woodworking. For a fairly low price, you can learn how to make repairs like a pro by taking these classes. I have taken several classes and they have been well worth the investment of time and money. Besides leaning the skills in a supervised environment, you also learn how to use the correct tools in the proper manner. As part of the program, students are required to take an 8-hour OSHA course in how to be aware of work site dangers, to do work in a safe way, and to avoid accidents. I highly recommend that anyone who does repair work take the OSHA class.

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Maximize Rental House Profits — Buy Ahead of Time and Install Yourself

Saturday, September 22nd, 2007

When operating a fixer-upper rental house business we must constantly be on the look out for short cuts to reduce our costs.

For example, a good way to buy a home furnace is to keep your eyes open for good-looking used one at yard sales. I came across one for $30 at a yard sale. There were actually two for sale, and I bought the newer, better-looking one. I offered $25 dollars, and when the lady wouldn’t take it I drove off thinking she was too inflexible. But, as I drove away, I came my senses as I asked myself, “where else am I going to get a good-looking furnace for $30?” I immediately turned my truck around and bought the furnace.

I knew I would need one soon for one of my rental houses. Looking back, I probably should have bought them both and kept one for the next time I needed one.

A friend of mine and I installed the furnace ourselves. Its a pretty simple matter to hook up the gas pipe and thermostat wiring. The major cost was about $40 for a guy to make a tin hood that connected the furnace to the duct work in the ceiling. Other parts, connectors, screws, etc., were about $30-40. I had a professional check out the work when we finished and viola! I had a working furnace for a fraction of what it could have cost though normal channels.

Of course, in buying used, you always take the chance of getting a furnace that doesn’t work But, in my experience, it’s worth taking a chance, and many times you hit the jackpot and can save hundreds, if not thousands, of dollars. Keep your eyes open at those yard sales!

The lessons are, in order to maximize profits with your rental properties, to buy things as cheaply as possible, and to install them yourself. You can save a lot of money by buying ahead of time, when things are on sale. Don’t wait until the day the furnace breaks or the toilet kicks the bucket. You can usually see signs of these things sputtering before they finally go out. Take advantage of that knowledge to make a preemptive strike, and to purchase ahead.

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How to Make Money in Real Estate – Stick to the Basics

Friday, September 14th, 2007

One of the surest ways to make money in any endeavor is to follow in the footsteps of other successful people. Astronaut Neil Armstrong followed in the steps of John Glenn. Comic actor Ben Stiller followed in the steps of his show biz parents Stiller & Meara. The same is true in real estate. Plenty of people have gone before us.

Buying lower-priced fixer-upper houses, using your own time & effort to fix them up, and renting them out has been a tested and true path to generate wealth & security.

The four chief benefits of purchasing fix-up houses are:

1) if you buy a house in need of repair, a fixer upper house, you pay less for it than for a house in good shape. Since you paid less, you can take out a smaller loan and have lower monthly payments.

2) By doing repairs yourself (as much as you are able to), you save the money you would have paid others, and you learn new repair skills.

3) By renting it out, you get a house that is constantly increasing in value (by an average 5% per year) the same time the rents are going up.

4) When you get older, your loans will be paid off (or close to it) and the rental income you receive are like a pension for your retirement.

Granted, it is hard work to find a house, make repairs and learn how to deal with tenants. But you also learn valuable technical and people management skills that you can use in other parts of your life, and pass along to others. Mostly, there is a great sense of satisfaction in your accomplishments, a stronger sense of security, and more income, which means more freedom.

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