Buy, Rehab, Rent, Refinance, Repeat: The BRRRR Rental Property Investment Strategy Made Simple by David M Greene

Author:David M Greene [Greene, David M]
Language: eng
Format: epub
Publisher: BiggerPockets Publishing
Published: 2019-05-15T22:00:00+00:00

Brandon Turner’s Story

As host of the BiggerPockets Podcast, Brandon has often told the story of the time he was ripped off by a contractor in Washington State. Brandon was looking for a contractor to do some work on a property for him and he found a contractor via Craigslist. He didn’t vet him through any channels he trusted, and he didn’t find him via a referral. In essence, Brandon was trusting this person to be a man of his word. Once they agreed on the work, Brandon sent the $5,000 to the contractor to buy the materials and do the work. When he called to check in on him, he stopped answering his phone. Later, it was confirmed that the contractor was gone and the work was not done.

So, Brandon had a lien placed against this individual he had paid who didn’t do the work. This was a court judgment issued by a judge who heard the case and determined that Brandon was damaged in the relationship. The cool news is, a few years later this shady contractor sold his home. Because there was a lien issued against him, the title company withheld the money for the amount of the lien and Brandon got paid back! In the end, Brandon got his money and ended up with a cool story to share for all of us to learn from.

Stories like this are why I like to use people who have been referred to me by others I trust. I can’t guarantee nothing will ever go wrong, but the odds are much, much higher in my favor when someone else has already vetted this Core Four member and has good experience with them.

Another way we can learn from this story is to consider buying the materials ourselves the first time we work with a contractor. This is a really simple tweak to put into the system and can save you money in the end. When you have the contractor write up the itemized bid, ask them to separate the materials from the labor. This way you see what you’ll be paying for labor only. Then, ask the contractor to call the store where they’ll be buying things from and put in their order.

Once the order has been placed, you will call and pay for the order over the phone. Then, either have the materials shipped to the property where the contractor will receive them, or have the contractor go pick up the items themselves. This way, you solve two potential problems.

You don’t have to worry about the contractor overcharging you for materials.

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