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BREAKING NEWS: Fleming Expands!
Read about it HERE

Real Estate Investors Are Our Only Clients

AND THAT’S THE WAY WE WANT IT

We decided to work exclusively with real estate investors because we speak their language. There is also a huge divide between high end, expensive, retail contractors, and fly by night, cheap, handyman type contractors, with very little in between, which is what good RE investors need to maximize their investments. The retail guys charge too much for investors to make any money, while the handyman doesn’t charge enough to do quality work.

THE GOOD CONTRACTOR LIFE CYCLE

  • Contractor leaves job with a big company to start his own business. He has some friends who are investors and picks up some work with them.
  • Pretty soon he has more work than he can handle since he delivers so much value. He hires a helper. He starts to increase his prices to cover his extra costs. He also starts doing some work for his friends friends homes.
  • Before long, our value delivering contractor realizes that he can get much better prices from his retail clients, with less headache than his investor clients. He finally prices himself out of working for investors to move to greener pastures.

THE BAD CONTRACTOR LIFE CYCLE

  • Contractor has a normal hourly wage job, but is good with his hands. So he starts advertising his handyman service. He wisely thinks that investors are good clients because they always have work to be done.
  • He starts doing bigger and bigger jobs, figuring it out as he goes (and making plenty of mistakes). His clients are dissatisfied with the quality of work they are getting, but they keep using him anyway because “the price is right”.
  • At some point, our contractor ends up with too much work and a decent amount of deposit money in hand. Stressed by the thought of all of the pressure to get it all done, he disappears never to be heard from again.

This is the core challenge we face as investors. We need to get the best quality for the lowest price, and contractors generally gravitate to one extreme or the other.

One way we combat this problem is by constantly recruiting to our contractor “bench”. Competition is a wonderful motivator, and we want our trades to always be the best.

We also treat our trades with respect, and offer them business coaching to ensure they continue to grow and offer a reliable service.

When it goes south with a trade, we are quick to cut loses. We structure our contracts with trades to minimize our risk due to their poor performance, and allow for the possibility to bring in a new sub to complete the work. It is the unfortunate reality of the business, but we are prepared to handle it.