Welcome to “Tarl's Weekly Insights," my take on real estate today.
In these newsletters, we'll dive deep into the real estate world, share valuable investment strategies, and explore the craziness that life has thrown my way. Whether it’s my struggle and journey of overcoming flipping, deciphering the insanity of the market, successful strategies being used in REI, or just me making fun of social media real estate investors...
I can't wait to share it all with you.
Contractor prices are starting to change...
We all want the highest quality, completed in the fastest time, for the cheapest cost possible. Yet we will never get that, and yet we still beat our heads against the wall looking for it, demanding it. As value-added real estate investors, we cannot do this business without contractors (unless you are the contractor, then...wow...my hats off to you) and we still constantly look at them as our nemesis. A necessary evil, with their change orders and fancy construction knowledge about stuff...No one that I know of, started flipping houses or investing in real estate because they couldn't wait to do construction! Most if not all of us, seemed to skip over the part about construction being a massive part of real estate investing...
Over the last few years though, construction costs have risen dramatically, creating lots of headaches for many of us. The pain of this was dulled though by the exponentially rising values of our projects, in fact sometimes the longer we took to finish a project, the more money we made because the value went up even more a few months later! However, when the values stop rising, and the contractor costs stay high, what do you do?
Contractors raised their prices in the last few years due to a variety of factors, mainly due to supply and demand. Here is how supply and demand have affected contractor prices in the last few years, simplified for sure:
- Refinance boom created massive surplus in homeowner capital, which created huge demand for remodels since many people decided to 'stay put' in 2020-2021 instead of selling and upgrade
Shortage (low supply) of skilled labor, while there is high demand for skilled labor due to high demand of projects/remodels/builds/investors - Material shortages due to supply chain issues and factory closings caused by irresponsible economic decisions over the last few years...for whatever reason...raised prices dramatically.
The customer paid the bill...so the new price was set. Contractors and customers got 'used' to charging and paying higher costs, so a new bar was set on what normal pricing is. - And soooo many other reasons.
Today however, after the massive drop in demand for remodels and new projects the second half of 2022 and all of 2023, contractors are being forced to adjust to the new market even if it hurts. This doesn't mean we as investors should demand lower prices and take advantage of contractors, this is a no in my book. Contractors are key team members, they make life easier for us and the right ones make us more money. I have always believed in making sure our contractors run a successful business for themselves and their families, and I have also believed that I can help them do that with my business.
However, there is always a balance with this and there still is today. Never overpay for a job but always pay a fair price, pay on time ALWAYS, and do what you say you are going to do...believe it or not, from my experience, great contractors find you when you are willing to do these things, and the right ones stay with you for the long run.
Are You Struggling with a House Flipping Addiction? Flippers Anonymous Can Help.
The world of house flipping can be an exciting and rewarding one, filled with the potential for creativity and profit. However, for some, the allure of the next project, the next bid, and the next big turnaround can become an obsession. If you find that your dedication to flipping houses is impacting your finances, health, personal relationships, and overall well-being, you are not alone. There is a place where you can find support and guidance: Flippers Anonymous.
Recognizing the Signs of Addiction:
- Your phone is full of Before-and-After Photos
- Your friends come to you for renovation advice
- You've tried to flip your friend's house during a party
- Neglecting personal relationships in pursuit of the next deal
- Ignoring health and well-being due to project demands
- Your idea of small talk is discussing Load-Bearing Walls
- Experiencing constant stress and anxiety over flipping ventures
- Compulsively seeking out new properties to flip
- Feeling lost or restless without an ongoing project
- Inability to Enjoy Completed Projects
Recognizing that you need help and seeking it out is a courageous first step. Flippers Anonymous is here to support you on your journey towards a healthier, more balanced approach to house flipping. You don't have to navigate this path alone.
Flippers Anonymous: Rebuilding Lives, One Home at a Time...
Limitless Expo pre-sale tickets are now available! Save $700 if you purchase before the end of the year.
Let's stay connected! Find me on social media at @tarlyarber and stay updated with additional videos and content.
That's it for this edition of Tarl's Weekly Insights! Stay tuned for more each week!
Talk Soon,
Tarl Yarber
P.S. Happy Thanksgiving!
