Construction Worker or Real Estate Investor?

What do you want to be when you (and your business) grow up? Many real estate gurus will tell you that the only tool you should ever handle is a pen. The investor's job is to write checks not drive nails.

The question then is what are your goals for your business and what should you be doing? I don't follow the guru's advice very well because I like to build things and drive nails. Nothing beats the satisfaction of going home after a hard day of physical labor knowing that you have improved the quality of some small piece of the world -- well, ok, the neighborhood anyway.

Personally, my greatest struggle is to keep from spending too much time playing construction worker and not spending enough time making sure that my business is running well. Last week I tiled a tub and shower after the contractor had installed a new bathtub. Was this a wise use of my time? I made (saved) $350 that I would have spent for a tile guy to do the job and it required 1 ½ days of my labor. As a result, I also acquired a new skill for my arsenal.

I work on the actual construction of a house probably 3-4 days a week and spend two days plus evenings doing other work in the business. Here's my philosophy on the construction work. I enjoy working with my hands and I like to learn new things. By doing a lot of different construction tasks, I have an idea of what goes into doing the job and consequently how difficult it is to do. If I've done the task it's a lot easier to tell if I'm being charged a fair price for the work that's being done.

I also find fixing, repairing and renovating things to be very satisfying. I believe that the investor should never be afraid to get his hands dirty. If you follow my advice and hire one-man, one-truck contractors, you can gain some knowledge and keep them motivated to finish the job if you are working with them.

A quick caution - not everyone wants a novice on the job site. Get to know the contractor before working with them and make sure you are doing jobs that they may not want to do. I spend a lot of time laying flooring and doing minor plumbing repair -- sink traps, etc. I'm not overly fond of these jobs but they aren't seen as taking work away from my contractor. They also allow me to spend time on the job without being a distraction.

My handyman does 90% of all painting and drywall work and the carpentry. I have learned to be a pretty fair drywall finisher over the years and I help out if we get behind. I have also done a fair amount of carpentry and roofing, but these are his specialties, so I stay away from them for the most part.

One advantage of being on the work site is having the contractor close at hand. If we get a call about a house for sale, we can make an appointment and go look right away. Frequently we take separate vehicles so that I can stay and talk to the seller while the contractor does his walk through and estimates then goes back to work.

My goal is to be a successful real estate investor with a serious net worth. I do not now or ever wish to be a self-employed construction worker. I would submit that it's OK to do some of both as long as you are clear on your goals. Early in your investing career, I would even say it's beneficial to learn how a lot of these tasks are done. It can keep you from being taken advantage of by unscrupulous contractors.

Take a hands on approach to every aspect of your business! There really is no right or wrong answer to this question - it's more a matter of preference. Spend as much or as little time driving nails as you like but remember there are a lot of benefits to being hands on. Just make sure your goals are clear and that you are running a business not just buying yourself a job.