Being the contractor on your own deals looks like free margin. In practice it costs you the two things an investor can’t replace: billable hours and working capital. The contractor turned real estate investor usually discovers this the same way — stalled on their own rehab with the account running low, walking off site to go bill a homeowner’s bathroom so they can finish their own house.
Shawn Durkovic has run both sides since 2019 in Northeast Ohio: a roughly $250K/year remodeling company and a rental portfolio of 19 buildings. He named the failure mode plainly, and he’s built a few rules that genuinely transfer from the trades to investing.
Below: what the hybrid model actually looks like on paper, where it breaks, why subcontractors — not skill — are the real constraint, and how to structure your way out of the field.
Key takeaways
- The hybrid contractor-investor model fails on cash timing, not skill — when a self-funded rehab runs long and funds run low, you leave it to go bill client work, which extends the hold and compounds the problem.
- Never promise a completion date based on a vendor’s promised delivery date. Wait until the product is physically on site before you schedule or commit.
- Your bottleneck is sub capacity, not sub quality. Durkovic rates his existing crew 8.5-9 out of 10 and still has to be on his own investment properties himself because he doesn’t have enough of them.
- Leaving a rental empty six months to get the right tenant beats filling it with the first applicant who has the money. Durkovic calls property management his most expensive lesson and says it took a couple of rounds to learn.
- If you can’t read a building, pay someone who can to walk it before you buy — pricing a heavy rehab off the asking price and a walkthrough is how structural and layout problems become your problem.
From the Real Estate Pros Show
This article draws on an interview with Shawn Durkovic of Durks Real Property Solutions on the Real Estate Pros Show, hosted by Scott Bursey.
What the Hybrid Contractor-Investor Model Actually Looks Like
Durkovic runs two LLCs, both as sole proprietor, both out of Ashtabula and Lake counties in Northeast Ohio. Durkovic Dunnit Construction does about $250,000 a year in kitchen, bath and basement remodels for homeowners. Durks Real Property Solutions holds the investment side: 19 buildings purchased since 2019, around 15 to 16 doors, netting roughly $50,000 a year from rentals.
The flip side is thinner and lumpier. One or two flips a year, with results ranging from $12,000 to $70,000 a deal. He’s deliberate that the rentals are the point — a flip pays once, rent pays every month.
The labor structure is the part worth copying or avoiding depending on your situation. He has one helper. He does all the carpentry and carpentry-related work himself — 30-plus years, starting as a residential frame carpenter. Everything else goes to subs: roofing, plumbing, electrical. Private lenders fund deals one-off, with no formal partnership.
So the hybrid looks like this on paper: a service business with a known revenue line and a portfolio being built with the service business’s cash and the owner’s own hands. Both are profitable. Neither runs without him. He rates his operational efficiency a four or five out of ten and says the construction business would break completely if he disappeared for 30 days.
That’s the honest picture of doing your own rehabs at scale. The margin advantage is real on any single project. The structural cost is that you’ve built two full-time jobs that both require the same person on site.
The Failure Mode: Two Businesses Competing for the Same Cash and Hours
Here is the exact sequence, in Durkovic’s own description. He gets onto a large investment property. It runs longer than planned. Funds start running low. He leaves the rehab incomplete, goes and does a couple of bathrooms or kitchens for retail clients to put money back in his pocket, then comes back to the investment property.
Read that as a cash flow problem, not a discipline problem. Rehab capital is consumed on a schedule you set; client remodels generate cash on a schedule the client sets. When the rehab outruns the capital, the only liquid asset you have is your own labor — and that labor is worth more billed to a homeowner than spent on your own drywall.
The compounding cost is holding time. Every week you’re off your own property running client work is a week of interest to a private lender, utilities, taxes and insurance, and a week of rent you aren’t collecting. The money you earned on the client kitchen is partly refunding itself in carry.
Durkovic’s own line is the cleanest summary of the structure: on paper he owns a couple of businesses, but in reality he has a couple of businesses that own him. Two full-time jobs.
If you’re running this model, the diagnostic question isn’t whether your rehab budget is right. It’s whether you have enough reserve, separate from the rehab budget, to finish the project without needing a client invoice mid-stream. If you don’t, you aren’t self-performing to save money. You’re self-performing because you’re undercapitalized, and those are very different businesses.
On paper I own a couple of businesses, but in reality I have a couple of businesses that own me. I have two full-time jobs.
— Shawn Durkovic, Durks Real Property Solutions / Durkovic Dunnit Construction
Why Subs Are the Bottleneck, Not Skill
The reason Durkovic ends up on his own investment properties isn’t that nobody else can do the work. It’s that he can’t always put the right subs on them. He needs more contractors he can trust who want to do quality work — so he’s there himself by default.
He rates the team he does have at 8.5 to 9 out of 10, built on years of working together: they show up, they perform, they perform with quality. The problem is that there aren’t enough of them. That’s an important distinction for anyone hiring. Your constraint is usually capacity, not standards.
What finding reliable subcontractors for rehabs actually looks like in practice, from his experience:
- He recently lost his best plumber and has been trying new guys without finding the right replacement.
- He’s been interviewing and trying people out on an ongoing basis and still hasn’t landed the right person.
- He’s gone in behind other contractors and had to fix their work.
- Some subs have walked off because they couldn’t do what they were supposed to do.
- He’s let people go for workmanship or for not doing what they said they’d do.
Durkovic admits he used to bristle when people bad-mouthed contractors, because he takes pride in his own work. Now he says there’s truth in it — he’s seen enough from the inside.
The practical read for an investor general contractor: treat sub recruitment as a permanent marketing function, not something you do when someone quits. Keep interviewing while your bench is full. Checking in with good subs periodically — not only when you need them — is what keeps room on their calendar for you.
The Rules From the Trades That Do Transfer to Investors
Three rules Durkovic runs that are worth stealing regardless of whether you swing a hammer.
Never schedule off a promised delivery date
He won’t promise a client a deadline in an area where he doesn’t control every piece. He doesn’t schedule based on a vendor’s promise of delivery — he waits until product is physically delivered before making a commitment. For an investor, that means not setting a listing date, a tenant move-in date, or a lender draw schedule around a cabinet ETA.
On your own rehab, substitute rather than wait
Different rule for your own property, because you’re carrying the cost. If he can’t get what he wants, he goes to a second vendor to find a similar product, or changes course entirely and goes with something different. The constraint he holds is quality: whatever you substitute has to be the same quality you intended at the start. Multiple vendor relationships are what make this possible, so build them before you need them.
Get a builder into the property before you buy it
His single piece of advice for investors on rehabs: if you’re not familiar with the build space, get somebody in there who is, before you buy. Have them assess whether the project is sound and flag layout issues. His framing — you can’t just go by “here’s this house and here’s this price.” You have to know what you’re getting into in the meat and the bones.
He pairs that with a checklist discipline: build steps for a reason, follow all of them, and add to the list every time you learn something that would have made the last project easier.
The Most Expensive Lesson: Tenant Selection Over Occupancy
Asked for the most expensive lesson in business, Durkovic didn’t name a bad rehab or a blown budget. He named learning how to become a property manager — and the rule it produced.
It’s better to leave a property empty for six months waiting for the right tenant than to fill it with the first person who has enough money. It took him a couple of rounds to learn.
Run the arithmetic yourself and the logic holds. Six months of vacancy on a modest Northeast Ohio single costs you rent and carry. One bad tenant can cost you the same rent, plus eviction, plus damage, plus turnover, plus the months the unit sits while you repair it anyway.
His rehab standard is built to support this. He finishes properties to a higher level than the comps require, makes improvements where they’re visible, and pushes rents slightly above the area. The point isn’t the extra rent. It’s that a higher finish and a higher price attract a better applicant pool and leave less to go wrong afterwards.
The operational payoff shows up in his time. He still self-manages the singles and doubles because, as he puts it, they’re easy — he fixed them up properly at the start so there’s not a lot to go wrong, and the higher-value tenants don’t generate much to deal with. A manager handles his apartment units.
That’s the connection worth holding onto: spending more at rehab and screening harder at lease-up is what buys back your attention later. Cheap finishes and fast occupancy are how you end up managing your own portfolio full time.
Structuring Your Way Out of the Field
Durkovic turned 50 this year and has been explicit about the goal: get out of the field, keep selling and quoting, and free up time to buy more property. His concern is that he’s still swinging a hammer in three to five years. Here’s what he’s actually doing about it.
He hired outside help. A construction business consulting company, specifically for the remodel business, because he wasn’t getting where he wanted on his own.
He’s building a catalog of SOPs. He has some documented procedures already and is expanding them. His framing is that people and systems come hand in hand — the right help frees you up to build systems, and systems are what let you hire.
He’s systematizing a sales process he previously ran off the cuff. Lead comes in, he calls. No connection means voicemail plus an immediate follow-up text. On a live call he qualifies on timeline, scope and budget, and tells people directly when their budget doesn’t match the work. If it fits, he books a free consultation, measures, photographs, and gives a rough ballpark. Ballpark accepted, he takes a design fee, runs design and material selection with his vendors, then asks for the build. One to three touches to a yes on design, one to three more on the build, roughly a three-week cycle start to finish.
On the investing side, his marketing runs about $500 a month across direct mail and paid advertising. Mailers go on an indefinite four-week drip — some people call right away, some call a year or two later.
His advice to his younger self: start asking for help now. He spent years believing doing everything himself made him a man, and he calls that decision exactly what it was.
Frequently asked questions
Is doing your own rehab labor as a contractor actually more profitable?
On a single project, yes — you keep the labor margin. Across a portfolio, it usually isn’t, because your hours and your cash are the same constrained resources the client business needs. Durkovic’s pattern is the proof: when a self-funded rehab runs long and funds get low, he leaves it incomplete to go bill client kitchens and bathrooms, which extends the hold and the carrying costs on the property he was trying to save money on.
The labor savings are real but they’re paid for in holding time, deal velocity, and your own capacity to go find the next acquisition.
How do you keep a rehab timeline on track when materials are delayed?
Two different rules depending on whose property it is. On client work, don’t promise a date you don’t control — Durkovic won’t schedule off a vendor’s promised delivery date and waits until product is physically delivered before committing.
On your own investment property, you’re paying the carry, so don’t wait. Go to a second vendor for a similar product, or change direction and substitute something different altogether. The one thing you don’t compromise is quality — whatever you swap in has to match the standard you underwrote.
How long should you leave a rental vacant waiting for the right tenant?
Durkovic’s rule, learned the expensive way over a couple of rounds, is that six months empty beats filling it with the first applicant who has enough money. He describes learning property management as his most costly business lesson.
The supporting move is finishing the rehab to a higher standard and pricing rent slightly above the area, which changes who applies in the first place and reduces maintenance calls over the life of the tenancy.
What should an investor check before buying a heavy rehab if they aren’t a builder?
Pay someone who knows the build space to walk the property before you’re under contract or before you close. Have them assess whether the structure is sound and flag layout problems that will drive cost later.
Durkovic’s point is that an asking price plus a walkthrough is not a basis for an offer on a heavy rehab. You need to know what’s in the meat and the bones of the building, and if you can’t read that yourself, buy the opinion of someone who can.
How much marketing spend does it take to keep off-market seller leads coming in?
Durkovic spends about $500 a month across both businesses — direct mail, paid advertising and word of mouth — and rates his marketing effectiveness a seven out of ten, limited mainly by the time he has to work it.
The structural point matters more than the number: his mailers run on an indefinite four-week drip rather than a finite campaign. Some recipients call immediately, others call a year or two later. A small budget that never stops outperforms a larger one that runs for three months and shuts off.
The bottom line
If you’re self-performing your own rehabs, run one number before your next acquisition: whether you have enough reserve, separate from the rehab budget, to finish the project without needing a client invoice halfway through. If the answer is no, fix the capital or the sub bench before you buy the deal — because everything else in the hybrid model breaks at that point.
