Self-perform across 24 months, or hire it out in four and just live there clean?

Question

Running the two versions of this against each other and they don't converge, so I'll put it to the room.

Version A is the standard picture. You buy the ugly house, move in, and do the work yourself over most of two years. Labor cost is your weekends, materials get bought in chunks as cash allows, and no lender or hard money clock is pushing you. You live in the mess. The counted spend is low, the uncounted spend is your life.

Version B: you buy the same house, hire the whole scope out, finish it in four or five months, then live in a finished house for nineteen more months until the residency clock lets you sell. Same tax treatment either way, assuming the residency test is satisfied, which is a CPA question and not one I'd guess at. You pay retail labor, so cash out is much higher. But you get a finished house for most of the hold, you can get firm written quotes instead of eating two years of price drift on deferred items, and the trades show up in one coordinated run rather than in gaps.

The case against B is obvious: you need the capital up front, and you've spent 60k on labor you could've supplied. The case against A that I keep coming back to is that deferred work is exposed to price escalation, and I've read enough posts here about a 9k roof becoming a 16k roof. Also nineteen months of clean house has a value I can't put a number on but isn't zero.

There's a hybrid where you hire the mechanical and structural work in one push and self-perform finishes at your own pace.

What I can't price is the escalation risk on version A. If materials drift five percent a year, the deferral penalty is real money and it partly offsets the labor you saved.

joe_delgado5 · Answer

I've done fast hired-out work on regular flips and the thing your model is missing is that hiring the whole scope in one four-month push isn't actually available at the price you'd quote it. Good subs schedule around their bigger clients, and a one-off owner-occupant gut gets the gaps in their calendar whether you wanted a compressed schedule or not. So version B often turns into version A anyway, just with you paying for it.

Where B genuinely wins is anything wet or load-bearing. I'd never self-perform a re-pipe over eighteen months while living in the house, because every partial step means a shutoff and a wall open.

On escalation, five percent a year on 60k of deferred materials is 3k a year, so call it 4 to 6k across the hold. That's real and it's smaller than the labor you'd hand over. What isn't smaller is a roof you deferred failing, and then you're buying the roof plus the ceiling plus somebody's drywall on their schedule at their number. Escalation is the polite version of that risk.

tashaford30 · Answer

I'm voting hybrid, and the reason is nothing to do with money. Nineteen months in a finished house versus nineteen months in a half-house is the difference between my partner agreeing to a second one of these and not. @flint's point about subs giving a one-off owner the gaps in their calendar is the thing I'd want a straight answer on before I priced version B at all, because if a four-month scope really runs seven, I've paid retail and still lived in the dust.

Self-perform across 24 months, or hire it out in four and just live there clean?

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