Concept

Contractor Poaching

What it is

Contractor poaching is when another investor sees your contractor doing great work — sees the trucks in front of your house — and makes them a better offer. I also know this as the crewjack.

It’s like if you or your kid built a lemonade stand and put in serious work to get it right — designed the booth, tested the recipe, squeezed the lemon by hand, made the best dang lemonade in town. Word spreads. Your stand is booming. And then one of your customers sets up right next to you to sell candy bars. He didn’t test the recipe or build a stand. He just watched you build something great and swooped in to ride your coattails.

That’s what contractor poaching is like. You’ve spent the time recruiting and building relationships with the contractors who do the work on your flips. Top 1% real estate investors understand this. They spend a big amount of their time growing what I call their contractor pipeline. It’s just like any other sales pipeline. You have to constantly be working it. Or think of it like a depth chart on a sports team. You don’t just have one quarterback — you have a second string, a third string, because you never know when the first stringer is going to get their knee blown out.

Why it matters

The strength of your business is directly correlated to the strength of relationships you have with the vendors you work with. Main vendor is of course your contractors. Also, the strength of your relationship is inversely correlated to the amount of bandwidth — time — you’ll spend on each project. Without strong relationships the only option is micromanagement. And micromanagement is not conducive to a stress-free wealth-building enterprise.

It’s also not illegal. It’s dirty. You’re not going to make friends doing it. But knowing it exists means you can protect against it. The crewjack is the same mechanic as deal lurking — someone waits for you to do all the work and then swoops in at the end when you’ve got something worth taking.

The defense is being the better customer. Pay within 24 hours of milestone completion. Give them enough volume that you are their next job, always. Treat them with respect. Build the written scope of work that makes their job clear and easy instead of confused and frustrating. Keep the site clean. Contractors choose their customers. Make yourself the customer they won’t leave.

How it shows up

Referrals from fellow real estate investors for contractors — be careful there. If they have a good contractor, wouldn’t they be holding tight to that? Because that’s what people do. When they have good contractors they’re not sharing them. They want to buy another house to put that person on. No shame in that. You’re trying to grow a business.

Referrals from other contractors are different. If your electrician has a buddy who’s a plumber or HVAC tech — that’s a good referral. Those are the ones you want.

Build your recruiting pipeline at Home Depot and Lowe’s, gas stations, job sites, suppliers. When I first moved to a new area, I went to specific suppliers and asked who their top three to five buyers were. Those are the busy guys. Busy because they’re good. That’s where I wanted to build relationships. Then I did the approach, the follow-up, the engagement. That’s the pipeline. Always be filling it. Because the second string becomes the starter all the time in this game.

depth chart, relationship capital, job confidence, costco bid, contractors, miy method