Why I Prefer Vendors in a Solo House-Flipping Business

TLDR

Employees can add control but also add payroll and management weight. Ross generally prefers outside vendors for his solo model because they run their own businesses. The source compares the two models; it does not document a mass firing or prove that firing employees caused business growth.

Table of Contents

• The Employee Urge
• What Employees Give You
• What Employees Cost You
• Why Vendors Work Better
• The Downsides of Vendors
• The True Asset Has to Be You
• FAQ

The Employee Urge

You probably should not have employees.

That sounds harsh, but I mean it for the solo house flipping business. I would rather build through 1099 vendors most of the time.

Ross describes a long investing career, hundreds of flips, and more than 150 rental units. He has also felt the urge to bring everything inside.

I wanted my own crew. I wanted an assistant in the office. I wanted project managers. I wanted sales staff. I wanted the office, the payroll, the whole thing that makes you feel like you built a real company.

That urge is strong. It is also dangerous.

Ross says he made the change from employees to outside vendors and that it changed his business. The source explains the operating difference and the bandwidth he regained; it does not give a firing date, headcount, or before-and-after growth figure.

Part of it is status. Part of it is control. Part of it is fear. You think if the person works for you, then the business will finally feel stable.

It usually feels heavier.

A vendor is different. A vendor is a 1099 contractor, not just a construction contractor. It might be a roofer, bookkeeper, CPA, attorney, marketing vendor, property manager, lender, agent, or any other outside business that serves your business.

An employee is W-2 payroll. You pay them on a schedule. You pay payroll taxes. You manage their time. You carry the obligation whether the business has good work for them that week or not.

The question is not whether people should help you. The question is whether you need to own their payroll.

What Employees Give You

Employees do have advantages. I am not pretending they do not.

That is the sales pitch.

You have somebody who comes to your office every day. You tell them what to do. If you are a strong enough manager, they do it. You train them. They learn your system. They become more useful.

That works better in a big corporate setting than people want to admit. I came from that world. The leadership books make more sense there because the company is bigger than any one person, and the employees are climbing a ladder inside a machine that already exists.

Your small business is different.

In your company, you are the company. The person working for you eventually sees that their work is helping build your asset. If they are sharp, they may start wondering why they should keep building yours instead of building theirs.

Not always. But often enough that you should take it seriously.

Key Concept

The better you train someone in a tiny business, the more capable they become of leaving with the skill you gave them. That is not evil. That is just how people work.

Ross puts the counterweight more sharply: as the employer, you are helping build the employee’s resume, which remains their portable asset rather than becoming part of your company.

Employees can be useful. They can also become a fragile point in your business because now you are depending on one person staying, caring, and improving inside a business that is mostly making you richer.

Control is real. So is the weight that comes with it.

What Employees Cost You

The big cost is payroll prison.

Every pay period comes whether you had a great week or a slow week. You have to hit payroll. You have to pay taxes. You have to make sure the employee has work to do because idle time is now your problem.

That changes how you think.

If I am about to go on vacation and I have employees, part of my brain is thinking, “How much downtime am I paying for while I am gone? Are they producing? Did I fill their week with real work or just busy work?”

With vendors, I can contract down. If the business slows, I do less. If the market wakes up, I expand. I am not feeding a payroll machine just because I built one.

Employees also make you own the problems.

If an employee messes something up, you pay them to fix the thing they messed up. You cannot say, “I am holding your paycheck until this is right.” Pretty sure that is illegal.

With a vendor, the contract gives you more room. If the job is not done, the job is not done. The vendor has to fix it before they get the full contract price.

Payroll Prison

Payroll does not care that the market is slow, that you are on vacation, or that the person has nothing useful to do this week. Once you build the machine, the machine needs fed.

There is also the mental cost. When someone leaves after you trained them, it hurts. Not just financially. It feels personal because you poured time into them.

That is another clue that the business is too dependent on one person.

If one employee leaving can ruin your week, your system needs work.

Why Vendors Work Better

Vendors hunt what they eat.

That is the main difference.

A genuine outside vendor runs their own business and is responsible for how that business operates. Tools, insurance, scheduling, and legal classification depend on the actual relationship rather than the label used in an agreement.

That hunger matters.

A bookkeeper who works inside a bookkeeping company is surrounded by bookkeeping all day. A roofer who owns a roofing business thinks about roofing, pricing, crews, materials, callbacks, and production every day. A CPA lives in tax problems. An attorney lives in legal problems.

I would rather pay the specialist who already built the machine than try to hire one person inside my little machine and make them good at everything.

Vendors also flex.

When I need more, I bring in more. When I need less, I use less. That matters in real estate because the market is not a smooth treadmill. Some seasons are heavy. Some seasons are slow. Some years you want to scale. Some months you want to be gone with your family.

I think of it like the old rental car line: the company in second place tries harder. Vendors have to keep trying. They do not get a safe little cave inside your business.

Vendors let the business breathe. Employees make the business inhale payroll every two weeks.

The Downsides of Vendors

Vendors are not magic.

You have less day-to-day control over an independent business. Ross’s model is to define the result and price rather than manage the vendor like staff. Calling someone a 1099 vendor does not by itself determine worker classification.

You also have less loyalty by default. Their business is a pie, and you are one slice. Sometimes a tiny slice.

This source stops after saying that you are only one slice of a vendor’s business and promises a later lesson on becoming a more important slice. The practical recruiting, scope, payment, and backup system comes from the separate vendor-management lesson, not from this transcript.

This is where most people mess up. They want vendor flexibility but employee control. That is not the deal.

If you want the lightness of vendors, you have to accept that you are managing relationships, not people on a clock.

You trade direct control for flexibility. Make that trade on purpose.

The True Asset Has to Be You

The true asset is you.

Not the employee. Not the vendor. Not the contractor. Not the bookkeeper. Not the AI. You.

Your skills, workflows, judgment, follow-up, and ability to recruit and manage the right people are the asset. Everyone else is a tool around that asset.

If you are scared that one employee quitting would blow up your business, that is not loyalty. That is fragility.

You can still create jobs without hiring W-2 employees. If you give a contractor half his yearly work, you are feeding his family and probably the families of the people who work for him. That counts. You are creating work. You are just not turning yourself into the payroll department.

That is the part I care about.

I want to build a profitable real estate empire without trapping myself inside the empire.

That means the operating system matters. The vendor roster matters. The way work gets handed off matters. The way I hold accountability matters.

It all comes back to the same rule.

Ross’s closer is that he is constantly offloading bandwidth—“working my ass off to be lazy.” He says the work that creates freedom is the same work that creates scale; what changes is how you use the bandwidth.

FAQ

Are employees always a bad idea for house flippers?

Ross strongly prefers vendors in his solo model, but he also names the real advantages of employees: direct control, dedicated capacity, training, and alignment. The transcript is his operating argument, not a universal employment rule.

What does Ross mean by a vendor?

An outside business or 1099 contractor hired for a defined result or rate. Ross’s examples extend beyond construction to bookkeepers, CPAs, attorneys, marketing vendors, property managers, lenders, and agents. The legal classification depends on the real working relationship, not the label.

Why are vendors better than employees for beginners?

Ross’s central advantage is flexibility: he can contract down when business slows and expand when work returns rather than carrying scheduled payroll through both periods.

What does Ross give up by using vendors?

Direct control, dedicated capacity, and default loyalty. A vendor runs an independent business, so Ross can define the result but cannot manage the vendor’s schedule like an employee’s.

What if I already have employees?

The source does not tell an existing employer to fire a particular person or eliminate a particular role. Its diagnostic is dependency: if the prospect of one employee leaving could collapse the operation, Ross says the owner still needs to make their own skills and workflows the durable asset.