Here is a little BBC Tip for all of you aspiring or practicing flippers, renovators, or new-construction types: Keep all of your estimates, contracts, and Google Doc or Quickbooks or... Files.
If you sell a project you may be called upon later to prove that you had paid for the work, or a specific portion of the work, or that you did the work yourself. Receipts, checkbooks, credit card statements, estimates and contracts can all go a long way in proving that you have done what you have represented as being done. (Or at least paid for it to be done.)
We consistently try to put out a great product that makes the "conceal and cover" guys look like the fly-by-night people that they are. However, this is construction and real estate. Problems will abound. Therefore, we like to go all IRS with our records, and hang on to them for a minimum of three years.
Just a friendly tip as you roll through the land mine fields of this business.
Have a great week!
We are off to San Diego tomorrow. We'll be back next week Saturday -the first Saturday in March.
March means that the first quarter is coming to an end. We should be farther than we are with our projects, but we cannot control the weather. So, we will bend with the wind and try to make up for days of cold and days of rain, and celebrate the changing of the seasons. We are hoping that the end of March ushers in a better quarter.
We need to revisit our planning and also our take on our systems. The systems are pretty good as they are considering that we never make it to most of our properties. But, we need to even out the days in terms of income and, more important in light of this past quarter. that is, in being able to make up for the unforeseen. If we can crack that code, we may be able to take the business to the next level. What's the next level? Well, in a way it is a reversal back to doing multiple rehabs at the same time, only with the added fuel of more than one new construction project going at the same time. That would be fantastic; a couple of rehabs and a couple of new builds at the same time.
Currently, we have the new build at Hazel -greatly hampered by first cold and then by rain. And now we have Main -a renovation, gearing up. So, we are part way there. But the hard work, the thinking, has to take place in order to get us to where we want to go. Nothing like a long, long flight to be contained and centered and calm... and to think.
We have said it before; time is the one commodity we desire over revenue. "Communication," come in at a close second. That is, if time is respected, well used, and put into parameters of efficacy, revenue will follow. If communication is understood all around and amongst all participants in the renovation, new construction, or flipping process, to be just as much about offering information as it is receiving information, then a lot of misunderstanding and frustration will be avoided. This is what one colleague once described to us as the "open kimono" policy.
This is probably one of our bigger frustrations -having to chase information in lieu of having it come to us. However, and in the spirit of full disclosure, we are often told that the world doesn't move at our speed, but at its own speed. Fair enough. We have high expectations. Maybe too high. However, we will also have to say that it is refreshing to be updated without prompting. And, we can give the perfect example from yesterday: We transferred some funds from our personal account to one of our business accounts in order to cover some personal expenses that we had charged to our company credit card. (We might do another post on point accumulation and strategies for point accumulation another time.). We did not do this on line in the traditional way. We did this through our favorite banker and we made the request by email. We then went about our day with other business. When we circled back around to our normal or traditional email follow-up time, we had an email waiting for us that said, " Done!" from our favorite banker. How cool is that? And don't you wish that you did not have to chase answers, but that the follow-up would be there all the time?
Time wasters like having to chase down answers to previously asked questions are, unfortunately, the norm. A good question to ask is, "What hand did I have in establishing this protocol?" In our case, we have realized that we actually encourage a lack of follow-up and prompt communication in two ways: first, we are rather demanding. Being demanding has the opposite effect on people. It actually slows them down. It is the antithesis of encouragement. The second thing we do is that we follow-up with people. And of the two, this one walks the finest of lines. On one hand, following up is somewhat admirable because it is assumed that accountability and responsibility begins at home. "It is my job to follow up and keep everyone on course." On the other hand, following up behind people can encourage a non-reporting type of behavior. At the end of the day, one might be left with a question of what to do.
So, with that in mind, we have set out to establish some time bound reporting and follow up procedures. This is partly what we did over the last week while we were exploring some tangentially related business opportunities and simultaneously taking a small vacation. We've come up with a few ideas that we are still debating. These ideas run the gamut from simple to complex. If anyone reading this has some good protocol, we are all ears and would appreciate your input. For now, we have considered the following:
Stop doing business with those you have to chase. This is a little harsh, because expectations are not clear unless established. On the other hand, if they don't want your business why should you want theirs?
Sit down and discuss the importance of time and how money is based on time -even in passive investments. Chasing answers is a time matter.
Discuss protocol options with all parties involved. This is probably the easiest of the bunch and the most respectful. And even though it is easy to talk, it can be daunting because the outcome or goal is to have an operations manual that is simplified and clear, as well as easy to implement. We have a tendency to over complicate things. Each person or task or business has its own unique set of operating procedures -even if they are not written down. The question is one of arriving at mutual ground to satisfy time concerns for both parties -us and them.
Combo pack between the last two options. This is a little tricky because no one really cares about your time and your chasing answers -they care about their business. So, if going with this route, a diplomatic and "this-is-good-for-you-because" mentality is required. What is it that they want? Asking clarifying questions through statements is good. An example of this is, "Correct me if I am wrong, but I am making the assumption that you would like to be paid promptly, and that this might be one of your bigger frustrations. So with that in mind I propose..."
Go tech. Use tech and things like Trello and other applications to set a calendar and expectations. We like this idea. We like the Ron Popeil "Set it and forget it" mentality. Let's schedule everything with push notifications and automatic follow-ups. We really like this approach. One discussion, and if everyone is on board, go for it. Set it up, monitor, and tweak as needed. Then, and only then, if not successful, implement or revisit one of the other methods including, if need be, the very time consuming halt in business with some while searching for others.
Better to correct the course now before the vessel is miles off shore. Better to get a hold of time when the stakes are moderate. Time waits for no man. Neither should you. Put some kind of practice in to place now to address these course corrections, and your bank account will thank you later.
It should be quite a busy week. We should close on our renovation, and hopefully get back on track with our new build, which has been delayed due to weather.
We have been investigating tangentially related businesses. More on this (possibly) later.
Have a great week.
Just a quick note on opportunity hunting... If you are in this game, who or what is the number one source of your revenue or candidates? If it is a person and not a site, then the question becomes what are you doing for that person? Are you getting all or some of their deals? Why or why not?
We are finding that we don't need to hunt for more opportunities. We just need to take care of our hunters.
Have a great day!
Note: The image below came from the source of the flooring: Raleigh Reclaimed.
We picked up some hardwood that a friend of ours sold through his shop: Raleigh Reclaimed.
This wood is flooring from the basketball courts at UNC... The Tarheels.
We didn't buy much, but we did buy enough to inlay a small little area in an entry way -should we ever get a transformation candidate in Chapel Hill. In addition, we work with two raging UNC fans, and we will be able to give them a small pice of maple and "blue" for their desk, walls, etc. We already gave some to our contractor, who will use it for some bean bag toss game (called "corn hole" boards) he is building. It is these little touches that separate the wheat from the chaff or the corn from the silk. It also separates us from the majority of "lipstick" renovators that are out there who would rather cover things up, instead of making them right. Our contractor makes things right and understands the transferable value of going the extra step. We continue to work with him because he does a great job.
Too many contractor/renovators are going the cheapest route possible. This not only damages their reputation, but also the reputation of those around them. They fail to see that a proper job and a good reputation is a rare commodity. And, like all rare commodities, the value, and therefore the long term gain, go up. Will we have call backs? Sure. Will some things be wrong and need to be fixed at some point? Yes. And if it is within a reasonable amount of time, we will fix those items. At the end of the day, we would rather have a good reputation than not. How does this help us? We have already received information from insiders on candidates that aren't on the market. We have had people tell us about candidates because they know we aren't fly-by-night operators that are going to do shoddy work. This gives us an advantage. Not-to-mention that we can sleep at night.
Speaking of sleeping at night, we sent a check in for a bill that we received in the mail. Our lawyer tells us we shouldn't have to pay it. She is right, but we want to sleep at night knowing that we don't owe anything on our real estate. And we also don't want to make enemies with the local people who, like us, are doing their job. At the same time, we will not continually be a scapegoat for the mistakes of others. We won't be a soft touch for other people or their numerous problems. However, one has to ask if they are being a soft touch, or if they can soften their will for later gain? That is, are we winning a battle, but losing the war? It does us no good to be obstinate with the people who are executing the work in their office. Pick your battles carefully. Prioritize your strength and be guarded about where you spend that strength. And always remember that long-range views are usually worth more than short-sighted actions. It is okay to have a soft-will on some things... But only to a point. If it goes too far, or if you get backed too far into a corner, than come out swinging and swing hard. 99% of the time, we have found that sleeping at night is worth more than being right. The question becomes, "What is our long range goal?" Follow that up with, "What are we trying to accomplish and how do these actions affect that goal?"
Hardwoods and soft wills.
We apologize for the Radio Silence lately.
We've had a family member end up in the hospital, and that has been taking quite a bit of our time and effort. Which is good. We are glad that our priorities are family first and not the back burner relegation we so often see around us. It is important to maintain some perspective as one goes forth in attempts to conquer new domains or meet new challenges.
The Box Bend story has been moving forward. We're in the process of paying some back taxes (a roll back bill- which is code for bilking you for a deferment that took place before you owned the land), filing for a subdividing of our larger parcel, arranging seller-financing on a smaller parcel of land (which should cover our monthly overhead rather nicely), rolling forward with our construction of Hazel (the contractor is prepping us for the next "draw" on the build - which is cool), and we are a week or two away from the close on our latest transformation candidate. (Please see the previous post.)
So it has been a little crazy lately. Which is kind of a lame excuse for not posting lately. We'll get back on the stick shortly.
Here it is... The Newbie on the block. This is Box Bend's newest candidate. This one is going to take a little time. (9 to 10 month guesstimate)
just a quick update...
We made an offer on a transformation project and it was accepted. This will be our biggest renovation ever... Bigger than Moreland.
Permit snafus on Hazel have been resolved.
Roll back taxes appeared out of the blue on Sanford -the 70+ acres we have. No worries. We' ll settle up today. We are possibly doing seller financing on one or more of the lots.
We have a loved one in the hospital, and that has been consuming our time. That's good. Critical priorities usurp the merely important. So, we apologize for the laconic approach to the blog, however...
Have a great weekend and spend a moment basking in the glow of your loved ones.
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