Ok. We've been in the Windy City for a few days... Day gig convention thing out by O'hare (Rosemont.). Soaking up the meetings, reacquainting ourselves with that whole Midwest passive-aggressive thing, and waiting for our flight back to Dixie.
Don't get us wrong, Chicago is a great town. And we are from the Midwest originally. So we appreciate the work ethic and can handle the bluntness. No worries. It is just that now (and for the last ten years) the Triangle area of North Carolina has been home. So, naturally, we miss it.
And, speaking of Raleigh-Durham-Chapel Hill, we have a little spec home (severely delayed) going up. Traditionally, we have been renovators. We have been transforming train wrecks into beautiful homes. However, in a market where inventory is low, money is plentiful, and everyone and their dog thinks that they are HGTV material, we needed to change tactics to a certain extent. Voila! The Spec!
We are still a few weeks away from the house being done, but we are starting to think about the next project. We have a lot or two in reserve, and we have a renovation project mothballed and just waiting for us to go all Rolling Stones on it and Start it Up. And then there is that little issue of actually selling the spec home.
We think that the way the house will sit on the lot -high and proud with a good view of the neighborhood-will be a strong selling point. We also think that the cathedral ceiling's combined with a good overall price point will be appealing to buyers. But, you know how it goes… It is never over until Mick Jager sings.
Specultion, musings, and odd mixed musical metaphors aside, we are still starting to think a little bit about our strategy for the months to come. Too often we are looking at tactics. We are wondering (dare we say it), if it is a good idea to possibly pull some money off the table? We are starting to sense something which we noticed before... back in, oh… say, 2008.
We think that instead of building the second spec home right away, we might want to do the renovation first. Our thought is that the renovation project is a much larger house. The profit potential is almost identical to the spec home. However, if we end up sitting on the project when it is complete due to a declining economy, we end up with a house that will rent for far more money than the spec home. (Due to more bedrooms.).
And that is the name of the game. If you cannot handle the worst case scenario, then you should not be playing the game.
Hope is not a strategy.
So, for today and possibly tomorrow, we are thinking that the next project will be the big renovation project. We already own the house. And, the cost of the renovation would be comparable to what we would pay to do the second spec house.
Of course, a lot of that hinges upon the current spec house that is under construction. "No sale" there would mean no starting on the renovation project -at least for the time being. (If you are new to this blog, we have a zero debt policy.). We are a little too diversified right now with acreage, spec home, lots, and renovation. And some of this will hinge on watching the various markets. At the end of the day, news is really only useful at a pedestrian level if one can use it.
So... It might be time to pull in the horns. Wait and watch for the wannabes to get out of central casting. Wait for the band to take the stage surrounded by abandoned wholesale signs, and a general loss of liquidity, equity, or both. After all, the real music, and the real deals, kick into a higher level during a recession. (The Blues always accompany recession or depression.) We might be way early on this, but either way we're telling ourselves, "You're going to want some cash for this concert."
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