Yesterday, we talked a little bit about the strategies we can employ for our benefit and how they differ from buy-transform-sell to buy-build-sell. We also talked about meeting our contractor and our realtor for a beer and a burger last night. You know, a little talky-talk-talk and a review of options on the board. So... that was a lie.
We met at the place for the burger and a beer. But the place was closed for the holidays. We then went to a place that was a little too haughty. A little "hoity toy." (Which always makes us laugh. We've met garbage men with private Bell Helicopters, and "Big Time" players with leased Mercedes. Garbage man or CEO, we are all people. No room for the "better than thou" set.) So, we set out from there in a hurry and went up the street to a little Mexican Restaurant chain and had way too much food, a ginormous beer and some quick and serious talk.
The upshot? We are going to build on one of our lots. This is a little more of a commitment than the typical Box Bend Transformation of diamonds in the rough. The reason being is that we can always rent diamonds in the rough. One cannot rent a partially completed project that hasn't passed inspections. So... it is all the way or no way.
To expand upon yesterday, we just see too much "dumb money," chasing too few resources. And, again, we would rather wait for that one throw to come over the plate that we really want to swing at, rather than the ones that are dusting our shoes, or brushing us back off the plate. We talked about the TV flippers a little, and our contractor told us of a very "well-to-do" man who went to the "free seminar" put on by one of the TV Flip Couples. There were meetings following the opportunity meeting. At the end, the "free seminar" was a product to "teach" the well-to-do man how to flip a house. The price of admission for these teachings: $30,000. Thirty Gs! The well-to-do guy paid it. What did he learn? Well, one of the things he "learned" was to use the contractors and subs as a bank. Bad idea sparky. If your contractor goes broke, you are starting over with the permit process, and left holding a bag of crap that other guys are going to see is crap and charge accordingly to "pick up" your crap. The upshot? His first flip is boarded up and nothing is being done. This was what our contractor told us about last night.
"I ran away from that guy as fast as I could," he said.
So, we will wait for the right diamonds in the rough to give us a little glint of sunshine, and then we will Box Bend over and pick them up. In the meantime, we will let the depreciating asset crowd (those willing to overpay and over improve) play themselves out. And we will resurrect one of our reserve lots and build a spec home in a neighborhood that is on fire. That reminds us...
There was a book a few years ago that got a lot of play called "Reminiscences of a Stock Operator." It was an interesting book because it was supposed to be about the legendary trader Jesse Livermore... or something like that, if memory serves. At any rate, we think it was that book that pointed out the obvious about the stock market: It is good to be going in the direction of the market. In other words, buying and speculating on appreciation makes sense in an up-market. Right now we have a hot market in this little neighborhood we are building in. We will ask our agent to pull inventory and DOM numbers, but we are fairly confident that we know the answer. We just completed a renovation transformation in that neighborhood. And with that...
Say "Hello" (again) to Box Bend Home.
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