From REI Academy
Every rehab technique that is a "cost-cutter" can put
cash in your pocket. Keep It! It's Your Money!
When I was growing up and about to graduate, I wondered
what path to take as I entered the life of leaving Mom and
Dad's house and making it on my own. It was always a
dream of mine, like everyone to become wealthy and be my own
boss. So in my last year in high school, I got into a
work for credit program that allowed me to get out of school
early and go to work for school credit. I was given a job
painting the inside of vacant properties at an apartment
complex for a general contracting company. Like all jobs, I
started at the bottom of the scale and was a trim man
(painting the doors, windows and baseboards with a brush)
following behind a spray man. He was a higher paid person
and basically ran our crew for the G.C.
This is when my entrepreneur spirit was born. I quickly
made friends with this spray man and he eagerly taught me
how to paint with an airless paint sprayer. I was then given
a raise from $5.00 per hour to $7.00 and they set me up with
my own crew. It was here that I started to learn the pricing
structure, the estimating techniques and how and where to
get deals on materials and cheaper labor. Within a year or
so, I started my own painting and remodeling company and
began getting contracts to paint and remodel houses and
apartments. I found that I was really making quite a bit
of money, and little did I know at the time that I was
setting a lifelong path of making money through rehabbing
properties.
After a few more years in the business, I started to
get big commercial jobs like Fidelity National Banks, Publix
Distribution Center, MCI, part of the 1996 Atlanta Games
etc. It had become that I no longer could be physically
working on the job, I now had to be the general contractor
and oversee all aspects of the job myself. My finding was
that a general contractor got the contracts, ran the job and
labor, handled the materials and pocketed as much as 50% of
the money charged for the job. The rest he paid out in labor
and materials. What a great concept of making money! I would
continue to get the jobs and hire out the labor and pocket
huge dollars while other people did the work!!!
Well as I had come full circle in learning the ropes of
rehabbing, my brother had bought some books and tapes at a
seminar and coaxed me into fixing up the properties that he
was buying. We quickly found that the Real Estate business
and the property rehab business was a no brainer and started
our Real Estate investing career by joining forces and a
company to buy, fix up and sell properties full time.
By sending in copies of profit checks to the person whose
books and tapes my brother had bought, he immediately got us
involved in the business of teaching people how to buy, fix
up and sell properties making huge profits all over the
country. That is what started the teaching aspect of our
Real Estate investing careers over 15 years ago. After
buying almost everyone's books and tapes systems that ever
came down the pike, we now had become respected teachers of
the trade and for the past seven years have shared the stage
with almost all of the well known authors and lecturers on
seminar circuits and national conventions.
Also for the past seven years we had been contracted by
the big names to teach Foreclosure-Rehab Bootcamps to
thousands of students nationwide. But my favorite thing that
I do is speaking to Real Estate investment clubs. I remember
being involved and listening to real people in the club that
had been using the techniques and actually making money in
Real Estate
No matter what strategy of Real Estate investing you
are doing, wholesale properties, foreclosures or any other,
the most common place that people reduce their profits is in
the fix up or rehab. Most people do not have the
knowledge to estimate damage or cost of repairs. They have
to depend on the contractor and hope that the costs and
repairs are reasonable and can be done without taking the
majority of the expected profits.
Well this is where my expertise is it's keenest. I over
the past 15 years or more have developed a way to teach
anyone the in and outs of rehabbing properties for profit.
It is possible to lower your rehab costs by 50% to 75%
less than the going rates.
You can act as your own general contractor and oversee
your own jobs. If you are handy, you will be able to
save a lot of money by do it yourself techniques. If you are
not, there are several ways that you can hire out
subcontractors and semi skilled labor yourself for a great
savings in either cash in your pocket or equity in your
property. Learning how and where to get contractor discounts
is a must for any investor. Being able to do simple
estimating on your own proves to be a great way of comparing
estimates you get from your contractors. You can save money
by pulling your own permits when applicable. Even knowing
what day is best to rent equipment from a tool rental yard
can save you hundreds of dollars.
Learn to run every property you do by acting as your own
general contractor. In most cases not only will it
increase your profits thousands of dollars in profit or
equity, but you can pay yourself a salary or fee to run the
job also. Just remember more money is lost in the fix up
of a property than most other factors. So my suggestion is
to educate yourself in all aspects of the fix up of
properties. It is an absolute must for seasoned or new
investors alike. This can increase the profit in any
property from hundreds to thousands of dollars. Every
rehab technique that is a cost cutter puts cash in your
pocket that would otherwise end up in someone else's. Keep
it in your pocket it's your money!
