Episode 27: [Team Building] Finding and Working with the “Right” Contractors w/Erik Saengerhausen

Danny Johnson / 6 comments

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Show Notes

Erik Saengerhausen has been developing his owner financing real estate investment company for over 6 years. He and his business partner, Mike Arch, run Alamo Home Source. They buy houses, fix them up and sell them with owner financing. Then, they sell the notes to investors for incredible returns.

They currently flip more than 75 houses a year and are working up to 100 houses. That’s a lot of fixing up of houses! They know a thing or two about finding and working with the right contractors to be able to do that kind of volume consistently.

In this episode, we cover the definition of the “right” contractor for the typical real estate investor. We also talk about what negative aspects to look for when trying to find the “right” contractor.

Erik has a different model for paying contractors than I do. He has guys that he pays on a weekly basis rather than per job. I hire on a per job basis so that the contractor is paid per job rather than for the amount of hours worked.

That’s an important thing to keep in mind — there isn’t simply one correct way to work with contractors. There are lots of strategies for how to work with contractors and you should find the one that works best for you and your contractors.

Many times these discussions will focus on the point of view of the investor and not on what it means for the contractors. We discuss how important it is to make sure you see things from the contractor’s point of view as finding and keeping the right contractors working for you can mean the difference between success and failure in this business.

Download The Gifts

Recommended Books

stop flipping, stop renting book coming soon
Coming soon: Stop Flipping, Stop Renting by Erik Saengerhausen and Mike Arch


Alamo Home Source
The Note Factory
Stop Flipping Book Website

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6 awesome responses to “Episode 27: [Team Building] Finding and Working with the “Right” Contractors w/Erik Saengerhausen”

  1. Garth on

    Danny, awesome podcast, great information!! I enjoy your sincere, non-hype delivery. I do have a question regarding the estimate guide. It indicates $1/sq ft for paint, is that labor + paint or just labor and home owner provided the paint?


  2. George (Gilbert) on

    I been listing in in your broadcast from episode 1, till now.
    I reed your book. These Podcast are very helpful. I am going to flip my first house.

    FyI, in Rhode Island now, to be a house flipper
    You need to take a 1/2 day course with the state, have a $1mm liability insurance policy,
    then you get a Gen. contractors license. Even if you use licensed contractors.

  3. Stormie on

    Regardless of what the project is going to cost, or maybe that matters, what do you start off paying them up front? is it a flat fee or percentage? What is reasonable? I understand the installments based on completion after that. Your podcasts are awesome btw! researching to begin flipping 2017!