Mastering the Art of Subcontractor Recruitment for Rehab Projects
Thursday, February 29, 2024
Mastering the Art of Subcontractor Recruitment for Rehab Projects
Strategies for identifying and engaging the right construction talent.
Recruiting subs for a rehab project calls for a different approach than if you wanted to build a new patio in your backyard.
There’s no Angie’s List for the types of contractors willing to take on these projects: guys who are ready to do lots of problem solving and work in rough environments. Because of this, it’s on you to find the right kind of contractors for your projects. If you don’t know what you’re looking for, however, you will keep running through “bad contractors” - for more info, check out the post linked here.
But consider this question, do you know what you’re looking for other than “the right contractor?”
Do you know how to identify the types of contractors who excel on rehab projects?
Do you know how to recruit them?
These are the questions we address in this article.
There are three types of rehab contractors we like to look for:
- Specialists in specific jobs, like drywall, roof, cabinets, paint, mechanical, electrical, plumbing, etc. They are especially useful for jobs when a full replacement is needed.
- All-Arounders: guys with a wide range of skills. They are your main crew, and can sometimes create cost efficiencies when used as specialists.
- Handymen: guys who are problem solvers. They keep things moving, and can be worth having as part of an internal crew if your operation can support them.
Each has their own pros and cons, but they all play an essential role in your contractor depth chart.
PROS AND CONS OF EACH TYPE
#1: Specialists
- Pros
- They are easy to find because they advertise well.
- They are skilled and efficient at their specialty.
- In general, their prices are lower for their specific specialty (unless they are a bigger company).
- Cons
- They likely have a waiting list.
- They are only focused on one aspect of your project, so you have to spend more time setting expectations and holding accountability - they aren’t concerned with who is coming in after them.
- If they are a bigger company, you will be priced out.
#2: All-Arounders
- Pros
- Once you find them and treat them right, they will likely be interested in working on many of your projects, even back to back.
- They can create price efficiencies by doing multiple jobs on one project.
- They typically act more like employees, but without the monthly payroll tap.
- Cons
- It’s hard to find good ones. It’ll take time to find ones that really align with you.
- Because their payment checkpoints are typically longer, things can go really wrong before you catch their mistakes. Then, you’ll have an awkward conversation to look forward to.
- As you get more comfortable with them, their prices will start to creep upward. Minor things can start to fall through the cracks.
#3: Handymen
- Pros
- They are key for breaking through obstacles with problem solving to keep projects moving.
- You can have them do anything. This makes things easier on you.
- You’ll learn from them. They will be able to teach you other ways of achieving your vision on projects.
- Cons
- They are the most expensive.
- It can be hard to work with their schedules (unless they are internal).
- It’s hard to find great ones, especially ones that will work on our crappy investor-grade rehabs.
From now on, start to pay attention as you drive around town, especially during your morning and evening commutes. Like I said before, there’s no Angie’s List for these guys, including the Specialists, who do advertise more than all-arounders or handymen.
WHAT YOU NEED TO LOOK FOR
- A crew of 4 or less with the company owner leading them from the ground
- You’re going to see these guys already at work on a job site or at a restaurant together on lunch break.
- I like this number of guys because it helps lower costs. Anything bigger and you start to pay for the inefficiencies of the owner's business management skills.
- A truck or van that is made for work. Used, but well maintained. It’s not a rust bucket, and it’s not a big, expensive vehicle either.
- A well maintained vehicle signals that they are serious about work. A rust bucket signals that they may be operating on a shoe-string budget. You may pay when it comes untied.
- A big, expensive vehicle is expensive. Somebody has to pay for it. Do you want it to be you?
- A vehicle that is marked, but not wrapped.
- A marked vehicle signals that they are legit in business. They aren’t just “playing contractor.”
- A wrapped vehicle is overly marketed and falls into the same category as “big, expensive truck.”
Once you think you’ve found someone who fits this description, it’s time to approach him. It’s time to make a sale.
It’s important to understand that recruiting subs is no different from any other sales pipeline. You’ve got to have the right attitude, sell yourself, and earn respect from these guys.
Remember, they don’t owe you anything, and you’re not special. Just be who you are, be genuine, and you’ll have success.
THE APPROACH
- Make the first move. Stop what you’re doing and introduce yourself.
- Tell the contractor a bit about your business and projects and get his information.
- Follow up with him until you get him out to bid a job. This is the most important part of the pipeline. Keep a list and check in regularly so you’re fresh in his mind.
- Once you’ve got him out for a bid, follow the steps in the post linked here.
OTHER METHODS
- Referrals from others - Be cautious with this; most people aren’t giving you the good ones.
- Home Depot Fishing - This one can actually work well if you follow the guidelines above. A lot of these guys are going to be buying material throughout the day. Keep your eyes peeled for these guys as they shop.
- Supply House Gift Giving - Similar to Home Depot Fishing, you’ll find contractors at supply houses buying materials. If they don’t like your first pitch, maybe try again, but with a gift in your hand!
CONCLUSION
Identifying and recruiting subcontractors for rehab projects takes intentional effort if you want to be successful in this business. Ultimately, it comes down to the approach you take with this process. Are you going to go the route of conventional “wisdom” that tells you that contractors are a dime a dozen? Or are you going to look for the “right contractors” for your projects - ones who excel at rehabs in particular, who can specialize if needed, have a wide range of skills overall, and can problem solve? If so, you’re going to have to systematize your process and treat it like any other sales pipeline.
Use what you’ve learned here to build a checklist (or download this one), and get to selling. And when you do, make sure your mindset is right so you can start building relationship capital right away and set yourself up for hands-off management in the future. Be sure to check out my other content to learn more about that.
Good luck out there investors.
Hi, I'm Ross Paller
CEO Of Larossa
After flipping over 300 houses, holding a portfolio of 150 properties, and creating a successful construction company for over a decade, I felt compelled to pay it forward by sharing the wealth of knowledge and experience I’ve accumulated on my journey.
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