Cody outlines Rule #32 for real-estate investors: give collaborators only one chance to prove themselves. A contractor's botched roofing job on his six-plex in Grant County, Washington cost five figures, showing why tolerating repeated mistakes tanks your portfolio.
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Hey, YouTube. This is Cody. And welcome back to the channel. And if you're new to the channel, we appreciate you checking this out. Today we're talking about real estate rules, specifically speaking, number 32. Now, rule number 32 is you get one chance. Now, if you're working with people, you give them one chance, and if they blow it, they blow it. And then that relationship is done. Now, this has come out of some hardship of old deals that have come to fruition or not gone to fruition. On some of our real estate portfolio, and I'll share some stories on that. But I want to give you some backstory of why this is actually a principle, because it may sound a little harsh in the beginning. In the past, we've talked about people lie, everybody lies. The severity of that lie may differ from person to person, but people tend to lie to others. I've also shared that it's okay to make a mistake. Just don't make it twice. When it comes to building relationships, you want to build a team. You have to work with people that you can count on, rely on, and trust at the highest level. If you want to scale quickly and scale to something worth writing home about, you know, you got to keep it really simple, but you got to be able to scale it and go quickly. And if you want to do that, you have to work with A-players. If you're not working with A-players, it's going to be very difficult to scale quickly and have a foundation that you can rely on. And so when we go out and we work with people today, they get one chance and we understand mistakes happen. There's lapses of communication, things get dropped. However, if they blow that chance, we're done. We will not work with them again. And that stems out of something that happened over in Moses Lake. For those who don't know, we buy primarily in Grant County. We love Quincy, Moses Lake, Ephratah, great areas for rental market and just a very stable economy. Love that area. We started working with the contractor and this was prior to Christian and my relationship. But as far as the business partnership goes, and he was doing a renovation on my sixplex at the same time he was doing a renovation on Christian's duplex across the street. There's a lot of little things that weren't quite right. And our thought was, huh, well, maybe it'll be better next time. It was decent, but there was a lot of things that had to be redone, which— well, maybe they made a mistake. I had him do my roof on the 12-plex and basically layered it upside down to where the torch down, instead of going from the bottom up, it went from the top down. So water would just go underneath the seams and it wasn't even sealed correctly. Cost me multiple 5 figures when it shouldn't have had to because I violated a rule that we didn't even have in place yet. And so as you're building your A-team out, if you want to really scale again, that would have been fine if that's all I was doing.. But since I want to scale, we had to move on to new people because if I kept trusting that it would get fixed over and over, it would have ended up costing me a lot more than 5 figures. It would have been probably 6 or 7 figures on the current portfolio. That's expensive and some people can afford that. We can't afford that. And so we have this principle in place to make sure that we give people space to rise to their level of competency. But if that level isn't where we need it to be for the projects, it's not emotional. It's not that we're sorry, but it's just, hey, this is— we have to part ways. We can't do this. And that is where that ends. It's super important if you want to build your business that you establish where your line is. Not saying your line has to be where ours is, you know, the line in the sand. You cross this, you're done. Maybe it's 2 chances for you, maybe it's 3. For us, you get one. And that's just been from multiple scenarios like the one I just described. But it's super important to identify, at least if you have this as a principle that you operate off of, where the line in the sand is for you. Because whether it's one, whether it's two, whether it's three— oopsies— you know, whatever it is for you, make sure you have that established so that when you go through difficult times and something isn't quite square or it doesn't quite fit the mold of what you need, it didn't quite work out, that you don't end up wasting money because money does run out of personal bank accounts. It'll happen. There's an infinite amount of money, but you don't have it. Probably if you're watching this video, you probably don't have unlimited money. So just keep that in mind that if you don't identify this, it could be a pretty significant issue for you down the road. It was for us before we had this identified and moving forward. As we build out the Robinhood, we build out the apartments over in Central Washington, and eventually if we venture out of state onto some other cool projects. We'll give everybody one shot, and if they violate that, then we'll respectfully part ways. We've identified the, the line in the sand, and we never forget that. So that's it for today's video. Again, these rules are not supposed to be super long and drawn out, but keep this in mind as you're building your business. If you want to scale to something worth noting and worth writing about and you really want to build it rather quickly instead of the 30 or 40-year route that a lot of people take in the corporate path, map out the principles and wherever the line is in the sand for you, identify that and then don't violate it. These are not things that you just have to follow as, you know, the top thing. It just, it's not like it's say-all be-all or end-all be-all, whatever the saying is. However, this does help us. And so if you want to really keep your principles in check, use this when you're building out your team. So if you haven't already, like, comment, subscribe to the channel. And if you want to see something else, we do post multiple times a week. We appreciate your comments and your feedback down below. Thanks for tuning in.
