Charles NoonanPresident, Landbank University · Real Estate Developer & Instructor

THE MOST EXPENSIVE MISTAKE YOU CAN MAKE IN REAL ESTATE 😳#realestate #contractor #realestatetips

3 Jan 2025 · 1 min

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1:06

This short YouTube transcript (from Charles Noonan) captures a conversational exchange warning about a common costly mistake in fix-and-flip real estate: hiring contractors who take deposits and fail to finish. Speakers recommend constant oversight or hiring a project manager, withholding payment until completion, and assess contractor financial risk (contractors who need deposits may be high-risk). Colorful analogies include the "substitute teacher" and a pizza-making metaphor to illustrate why paying upfront is risky.

Chapters

This is what's crazy. I could give a contractor a deposit. I could stay and work with them for two days. They do amazing, killer work. As soon as I leave, they take the deposit and they out. How are y' all so talented but won't finish the work?
And that's why I do stay away from the fix and flip side of things, because it's kind of like the substitute teacher syndrome, right? When the teacher is there, they got control of the class, they're overseeing things. But as soon as a substitute teacher in there, everybody's out of control. Number one key that I feel like to being a successful flipper and, and getting well with the contractors, unfortunately, is you gotta babysit and oversee the project or you have to have some form of a project manager there that's going to make sure that they're there every single day getting the work done, and you just can't pay until the job is complete. If it's not a contractor who is already in the financial position to fund the job, they're already kind of high risk, right? Because if you're running a business, right, you can't come tell a customer before you serve me my pizza to pay me first so I can go get the dough so I can go get the sauce and make your pizza.