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Invest in a Person
Old 12-24-2014, 06:15 AM   #1
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Invest in a Person

We have been using a contractor for the last two years. He had done a large addition on my sister's home and she recommended him. For us he has redone two bathrooms, siding and new windows, door, light fixtures, indoor and outdoor faucets, kitchen/dining/entry flooring, even a new mailbox. He has been in business for 12 years and is about 40. No FT employees. He is honest and does things the right way and quality work. He has laughingly suggested a couple times if we like his work, we could invest in his company. To my knowledge he has no other backers. I don't know that I would consider this, but just curious on others thoughts, and if anyone has done something like this. Have not discussed with him at all so have no idea of the terms or structure.

Happy holidays to all!
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Old 12-24-2014, 06:21 AM   #2
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Does he have a written business plan for your review?

If he does not have this ready to go, then obviously he is not serious about this.

-gauss
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Old 12-24-2014, 06:32 AM   #3
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Originally Posted by Idnar7 View Post
We have been using a contractor for the last two years. He had done a large addition on my sister's home and she recommended him. For us he has redone two bathrooms, siding and new windows, door, light fixtures, indoor and outdoor faucets, kitchen/dining/entry flooring, even a new mailbox. He has been in business for 12 years and is about 40. No FT employees. He is honest and does things the right way and quality work. He has laughingly suggested a couple times if we like his work, we could invest in his company. To my knowledge he has no other backers. I don't know that I would consider this, but just curious on others thoughts, and if anyone has done something like this. Have not discussed with him at all so have no idea of the terms or structure.

Happy holidays to all!

I am not sure what "Investing in his company" would even mean. Does he have a plan to grow, and then eventually sell?

He is the main asset of the company. Without him, there is no company. If he had a franchise to sell, or could sell his book of business, there may be a play.

There is no shortage of one-man shows out there. They are worth mostly nothing.
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Old 12-24-2014, 07:17 AM   #4
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You would need to know much more. A great "handyman" is just that....he is worth his labor and great to have.....we have one and treat him well at Christmas time and when he finishes jobs. But he makes what he makes based on his labor and that's it. Senator hit the nail on the head......what would you be investing in? YOU could buy rentals and have him do the work on them.....still, he would be payed for his labor. I'd ask for more details and a business plan......What you have told us doesn't give us the ability to really help you make a decision.
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Old 12-24-2014, 04:29 PM   #5
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Thanks for the feedback. I hadn't really thought this thru. One thing I hadn't really considered was: would be this the kind of investment I would want to leave to my spouse/heirs? That answer is no. Also don't go into any investment you don't/can't understand. He was working here today and said he had a brother that used to run a crew for him prior to housing crisis. His brother always wanted more pay but was not interested in investing. The contractor owned all the equipment and was taking all the risk. At almost 65 that is not something I want to get into. Thanks for showing me the reality.
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Old 12-24-2014, 06:15 PM   #6
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We lend to flippers - mostly people we know. Sure, we could find and buy the places and fix them and rent or sell them - but we've done that and it is all kinds of w*rk. We are happy to invest the cost of the property or thereabouts, hold a first mortgage, collect a healthy interest, and let the flippers do all the w*rk. Sometimes things go bad, but we are secured by a property that is hopefully worth what we loaned. If things go bad we do have to invest more work and money to do ok.

I wouldn't reject a known good workman's offer out of hand. You do need to know what he is suggesting though. Real estate is about relationships, much as life is.
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Old 12-24-2014, 07:09 PM   #7
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He does great work, but can he sell too. He needs to be able to do both those things to be a business, and needs motivated to manage and train others for growth. I'd invest in that, but not just a good craftsman.


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