Top Real Estate Investors

How Top Real Estate Investors Manage Subcontractors

What would you do if you hired a mechanic to fix your vehicle’s starter and they called you up to explain that the head of one of the bolts holding it in place was stripped — and then asked you how it should be fixed? You’d probably be aghast at why they were calling YOU to get such advice, and rightly so. After all, that’s what you’re paying THEM for, right? Top real estate investors know you can’t manage multiple problems without competent workers.

Nevertheless, as a real estate investor I’ve come across this very delimma — only it’s with rehabbing houses. Let me tell you how I used to handle it, and then I’ll tell you how I deal with it today.

The construction industry is known for a high turnover rate. Workers come and go. You try to maintain connections with the good ones, and try to remember which ones you don’t want back. Over the years I’ve had some incredible craftsmen working for me — both laborers and supervisors. Of course, I’ve also had a few of the less-than-competent variety as well. But one thing above all else frustrates me and that is when they ask me how to do their work. Let me give you an example.

Top Real Estate Investors — When Problems Arise

It’s entirely likely that project has unforeseen difficulties arise from time to time. It might mean additional time, materials, and/or other resources are required. When that happens, a good supervisor or skilled laborer will present the issue — along with the necessary resources and strategy to resolve it. If you’re working with a contractor or subcontractor that offers the problem without a solution, you need to find another worker.

Top real estate investors know that for a long-term, successful relationship, you need problemsolvers on your payroll. You can’t build a huge project like The Gathering, with mindless drones. When a worker calls me and asks, “How do you want us to fix this?”, I immediately place them on my short list! In my mind, there are three reasons why a professional construction worker might ask an owner how to do something:

  • They are unsure or unconfident about their decision-making abilities…
  • The worker lacks the experience to know how to deal with the issue…
  • They simply don’t want to accept responsibility for failure…

Most of the time, I find it’s that last one — responsibility. Now folks, we’re not talking about what color of paint to use, or what pattern of tile — we’re talking about fixing a leak or a hole in the wall. As a project manager, I need to be informed when something unexpected comes up, but you better be presenting me some options as well.

Now, if the reason is because of the first two options, then maybe they aren’t the right person for the job.

What I Used To Say

When this first started happening a few years ago, I was frustrated. “Why are you asking me? You’re the professional construction worker,” I’d say. That would usually invite a sarcastic retort of, “Well, it’s your house,” at which point I’d get angry and fire them.

So I tried a more direct response like, “I’m paying you to fix these problems for me, not to ask me how to do your job,” — which would again invite a similar retort, at which point I’d get angry and fire them.

This may seem a bit crass but understand this, as one of the top real estate investors in Albuquerque, I prefer to work with individuals that are willing to accept the responsibilities of their role. I’m not an HVAC guy, so I don’t need one who calls me to ask how he should repair a pinhole in condenser coil, because he doesn’t know, “…the best way to do it.” I need an HVAC guy that calls me and says, “There’s a pinhole in the condenser coil, we can spotweld it for $50 or replace the line for $150 — the warranty on the spotweld would be 30 days.”

Here’s What I Do Now

It’s a classic transfer of risk — the worker doesn’t want to assume responsibility. That way, if it goes bad, it’s on me, right? Well, by now you know how I handle that (hint: I get angry and fire them!)

These days, my response is a little more persuassive because I throw it right back in their face. “You’ve got until noon to text me a recommended solution or I’ll call someone who knows how to do it and have them come over and teach you.” And guess what? That seems to do the trick! I’ve never had to make that call because it forces them to either think of a viable solution or look incompetent.

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