I have a property with a 11 double wide rental units. One of the tenants is a foreman for a construction company and does very good handyman work on the side. He is willing to be the onsite maintenance man and do rehab work on some of the units as they become vacant so they can be placed on the market for resale. I am wondering on what I should pay him, I am thinking of giving him a discount on rent for all maintenance issues that occur in the park a percent of every month? What should be the percent of rent that will be deducted? Do I pay him a lump some for the rehab work? Should he get a higher discount for the months that he does rehab work up to a certain amount for a certain amount of months? Not really sure what to do here to make this a situation a win win for everyone involved. Also I get all the supplies for the Job and in the past if he had to get any smaller items he would keep the receipt and get remebersed for the amount of supplies. Any and all thoughts would be greatly appreciated.
We don’t swap rent for work. We track it all - all revenues, all expenses. That way we can see what we are putting into each mobile home and also into the land. Of course your bottom line is the same either way, it’s just more visible to you when you track it all. We also do this because most repairmen (and managers, and sheet rockers, and grass cutters, and… and… and…) go bad, and we want them to be in the habit of paying their rent. We don’t (usually) pay our repairmen until the middle of the month. Their rent is due on the 1st of the month. That way if/when they go bad, (hopefully) they’ve already paid their rent and we just go our separate ways at the middle of the month.
As to how much to pay, depending on where you are in the country, most unskilled repair work (painting, sheetrock, roofing, etc.) goes for $12/hour - $18/hour. We get a fixed bid up front. Don’t pay by the hour, or you’ll find even the simplest job takes 100 hours to complete. We never expect our contractors to come out of pocket for materials. These folks are perennially short on cash, plus it is not right to ask them to fund our business, so we always pay for everything up front. (Yes, they will often buy incidental materials for $10 and $50, and we of course reimburse for this promptly.) But don’t pay for labor until the work is 100% complete. Don’t fall for the “Oh, it’s my kid’s birthday today and I need to buy gifts. I’m 90% done with this job, can I get paid 90% right now…” excuse. If you pay the 90% now, you’ll never see that person again, and it’ll double the amount of time you have in the deal to re-bid the last 10% to a new vendor (plus the work was probably only 60% done, not 90%…). Also, never pay for tools. It’s not that tools are that expensive, it’s just that anyone without their own tools is not the right person for the job. Plus, if you buy the tools, you should keep the tools, and I guarantee that you’ll never take possession of any tool you purchase…
So just focus on hiring the right person (with their own tools) and pay for all materials up front, and pay for their labor only upon completion and inspection.
Frank & Dave have a materials budget that shows what to expect to pay for most every repair a mobile home could need (this list is available to those who attend Bootcamp - and perhaps others who ask Todd Bruget nicely (:P)).
Thanks so much for the post with all the info. What you have said makes a lot of sense. Also I was wondering were I can find the material list, we attended the Boot Camp that was in Santa Anna, CA. Is it on the blue drive that they gave us during the boot camp or is there a place to log in some where.
Thanks again for the info it makes a lot of sense.