You need to check out the newly re-listed State Street. Brand new floors and foundation. Updated kitchen. And a great price. http://century21tg.idxbroker.com/idx/details/listing/b026/2027061/212-S-State-Street-Raleigh-NC-27601
Don't forget to visit our main site from time to time. You can find it here.
We just love mornings. Not all mornings, mind you, but most. And out of all the meals in a lifetime of meals, breakfast is our absolute, hands-down, no holds barred, favorite meal of the day. Yesterday, we were fortunate to have a meal with our friend (and realtor) at a little local place close to our real estate flagship office. "Flagship" sounds so pompous. In reality, it is our main office. One of two that used to be three, but we closed the downtown office.
Allow us to explain if you are new to the blog, or Box Bend. We started with flipping one home that we purchased at auction. We then went on Facebook quite a bit later, with a site called Earth's Pull. Earth's Pull was all about us (a married couple) escaping the gravity of normal existence, and our journey down various roads -mainly renovations of older homes -in an attempt to make that happen. We assumed names from childhood memories in order to protect our identities on Facebook; Boris and Natasha. We then decided to go legit. The house flipping/renovation business became Box Bend, LLC. We wanted a brand for our endeavors. We wanted to separate ourselves from the dreamers and non-doers in the bunch, and also attempt to create some value for our business through the simple act of giving it a name.
We looked at quite a few names. We debated. We made lists. We polled a few select people, including our kids. In the end, Box Bend was the hands down favorite. We met a graphic artist who transformed our original Boston Red Sox influenced logo into something that could stand on it's own. It exists by itself.
At any rates, we work day-jobs, we are not so silent partners in a couple of other businesses (including the real estate franchise mentioned earlier, a property management group, etc.), and we have Box Bend and Box Bend Home. And yesterday, we met with our friend who just happens to be one of the realtors we work with regularly.
And we discussed planning. Planning is one of those things that makes us laugh a little. Life happens while we make plans. Or, if you want to get biblical about it, consider Proverbs 16:9 and come back to us. This is not to say that we do not plan. We do, and we do have goals. Yesterday, we spent some time talking about those goals.
Our plans and goals are fairly specific (leaving our price on Moncure in place for X amount of time before reassessment of price and/or use, X-amount of profit in the coming year, etc), and general.
The general is more important to us at this moment. What we want to do is make sure that the clarity is there for the what, why, who and how behind our actions. We want to make sure that we are exercising a level of specificity that allows us to duplicate and compound our good results while negating our bad results.
Part of this process is methodology -which in and of itself is something that we are becoming more clear about, and focusing more energy towards. We want to make sure that we are spending the majority of our time on the tasks that make Box Bend a value play to our customers, while maximizing our resources. After all, a comme ci, comme ca attitude is not a "good steward" approach to business that we want to embrace.
To wrap all of this verbal diarrhea up; we can break this down into three components, and we will be diving deeper into these components in the future. Kind of a Blog-as-Therapy meets Help-You-Out hybrid. The three components are:
PSA: Here is a quick and hopefully useful encouragement for your day. Disregard the naysayers and doubters. "Haters going to hate." However, if their jealousy or lack of courage were somehow tempered by insight and wisdom, they might stand up and cheer for you instead of trying to tear you down. This probably won't happen. And as your business progresses, the taunts and jeers of those that are hoping for your downfall may become more frequent. If you are fortunate, you will not run into this at all, but chances are someone, somewhere is going to say to you, "What? You think you are going to..."
One of the Box Bend Crew has a coworker at their day job who readily fits this mold. This person lives this crazy, mixed-up life that dances between entitlement and the certifiable. The kind of person who will cling to habit and culture instead of leaving comfort behind in the pursuit of greater comfort. (Which is what we do when we take on the twin dice of risk and reward.) This person loves to make sport of the effort exhibited by others. This is the person who may have read Teddy Roosevelt's admonishment on this subject, but gives it little credence. But we would encourage anyone and everyone to listen to this North Dakota Badland's rancher, President, Statesman, Leader...
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.”
Yeah! You tell 'em, Ted!
But seriously, excellent point. Forget those barbs and angry arrows aimed squarely at the imaginary target on your back. Even if it is coming from those that you care about and love. Forget those negative people who can not go through more than a morning without either cutting someone or something else down, or who wallow in their "victimhood." Go forth. Conquer. Or die trying. This isn't a dress rehearsal.
Have a great day!
Our land near Sanford is finally on the market. This is one of those cases where a great realtor (Judson Vickery from Century 21 Triangle Group)* really sets the stage for a seller. Judson spent hours upon hours hunting down opinions and facts about the mineral rights, the lumber prices and worth of that lumber -if any, the neighborhoods nearby, the development opportunities, and the value of the land, ad infinitum. He labored. He toiled. He went down there a few times and talked to city officials. He talked to neighbors. He walked the land. He picked his way through the trees. He explored back roads and routes into the property. He worked his butt off.
In addition, he had to endure an indecisive owner. Us. Do we keep the land and wait for the mineral fracking thing to catch up? (We own the mineral rights, too.) Do we turn it into a solar farm? Do we develop the land ourselves? Do we... Or should we... What about hanging on to a small chunk and selling the rest? What if...
After all of that work, and after a final decisive moment ("Let's sell all of it -lock, stock and 72+ smoking barrels of acres."), he used his professionalism and experience to set what he believes is a fair number. And we believe him because we know him (first), and because this is not some comp that was done on paper or the internet without any real knowledge of the market conditions. This is/was/is some more actual work. This is what separates the men from the boys. (Or the women from the girls.)
We will see what transpires. There are never any guarantees. We are realists first and foremost. However, if you are getting into this business, let us recommend one more time that you really, really, really, really want a realtor like our friend, Judson.
So an ode and a salute to Mr. JV.
IF you actually want to see the land online, here is a great link that captures the listing in fine form: 72+ Smoking Hot Acres of Developmental Goodness.
Stay tuned, kids. Tomorrow is the listing for the land in Sanford. Yeah! Love listings. Love sales more, but we love it when a project is ready for judgement and (hopefully) sale.
More to come soon.
PS We haven't forgotten about the co-workers question(s). That post is coming soon.
If you have questions, feel free to leave a comment, or contact us.
This week should be a good one from the sense that we should see Moncure listed by our good friend, Judson. Prices have certainly been on an upswing and we have noticed that the "foolish" money is back in the game. At the end of the day, this should mean a good listing price (stay tuned) and hopefully a good selling price. The fact that the Sanford area is in the heart of what is known as a possible fracking zone, should not hurt the price.
Concerning the "foolish money," we only mean that there are more bandit signs and people trying to get into this business than ever before. Subsequently, a lot of auctions have shot up to the point where there is marginal profitability in the deals. This is where knowing an area, or having someone actually on the street level is a good, good thing. There are also a couple of other approaches that can be employed to make sure that a "backlog" is always at the ready.
Right now, part of that "backlog" for us is the three residential lots that we are sitting on. Current sales and winter may be the perfect recipe for Box Bend Home to finally take flight. However, the one thing that we always look at is the amount of resources employed VS the return + the time it takes on that return. In the corporate world this is called, "ROCE." (Or at least in our corporate day job world.) Return on Capital Employed. IF we can make X percent on a project (renovation) that ties up less capital and can be completed in less time than, say, a longer project (like a spec home), it makes more sense for us to work on the renovation from a risk and return standpoint.
That is, X return in 90 days is better than the same X return in 180 days -provided that X truly is the same amount. Additionally, if we spread out our risk over 4 or 5 projects and leg into them*, we are at less risk than if we put all of our eggs, or even half of them, into one basket. So, less time at a similar percent return is actually a greater return and, for the most part, renovations should be less risk than new construction.
Let's look at the return portion one step further: If you double a penny every day ( 1 penny on the first day, two pennies on the second, four on the third day, eight pennies on the fifth day, and so on), you will be a multi-millionaire by the end of the month. If you double that penny every 30 days, it is going to take you a few years to get to the same point. Sit down with a piece of paper and work it out. (Side note: This is a great lesson for kids on the value of money.)
So, if we can turn that money over every 90 days, or even every 120 days, or less, than we are going to be doing a lot better than if we turning it over every 180 days. (State Street what?) And State Street is a good example of this idea in motion. If State Street represented all of our capital employed, we would be in a holding pattern for way too long. But because State Street only represents a fraction of our capital employed in Box Bend, we are okay to ride it out for now, make some necessary repairs, and move on.
We have a friend in the Charlotte area who is in a different but related industry. His goal is to turn over his business money (capital) every 60 days and at twenty-two percent interest. Do the math on this one and you will quickly realize why we approach him to mentor us a few times a year, and why we seek his advice in general. (He's successful at it and to say that he is "well off" is an understatement.) Quick side note on this guy; you would never know how wealthy he is. He isn't flashy and doesn't brag. In a room full of successful people, he will be the quiet one sitting at a table talking quietly. I think that I may have seen him in dress clothes once. He always wears jeans. What's the point of all this? Humility. And it is a great point. Our experience is that the ones bragging and driving the expensive cars can either rarely afford them, or are wondering why they can't get ahead. They neither understand the value of a penny, nor that of a dollar; or they have their priorities way out of whack. Usually it is all three. This guy is the opposite of that model. He can live a life that others only dream about because he is willing to prioritize, focus and live way below his means. He understands risk and diversification. He is a great model for the rest of us.
So, back to this week... We are going to try to keep our models in front of us this week, and watch the action we have set up on our own and with others. By sharing these little thoughts and lessons with you dear reader, we are hoping to engrain those lessons deeper into our own lives, and increase our own focus. To recap in five easy points (one or two may be "added" points.):
1) Moncure in Sanford (73 acres of land) should hit the market this week.
2) We are working on Moreland and State, and both should be done by the end of the month and on the market. Both are lessons in diversification and risk.
3) Risk and diversification go hand-in-hand. This is partly why we earn a return: willingness to take a calculated and diversified risk. Especially under the protective gloves of the return-time-continuum. (The other "why" we earn a return has to do with value.)
4) Speed counts but not at the cost of quality. (It is hard to purchase reputation.)
5) Humility and priorities are two sides of the same coin.
Stay tuned... We had a question from a coworker that we intend to answer here.
* "Leg into them." Legging into a position simply means that we are not jumping in with both feet at once. If we own five properties, we may complete two at the same time and then move on to the third, fourth, and fifth. This helps us manage money in terms of expenses and minimize cash needs. We first heard this term in options trading in the stock market.
Rehabilitating an old home is truly a joy. There is a certain satisfaction in not only overcoming a degenerated state, but in adding value to a property. We probably do not need to even mention (though we will) the joy of getting paid on the flip side of effort.
Along with that joy comes a certain responsibility to face problems and challenges head-on, while attempting to stay cool and logical about those challenges. This is not always easy, but it helps immensely if one can do this effectively. Humor also helps.
So, here is a humorous situation from State Street: We went over to discuss the floors with the contractor who is working on correcting them. As we approached the house, it was apparent that someone had stolen the meter off of the house.
This is a fairly common (albeit stupid) crime. More-than-likely, the individual responsible took the meter because his or her electricity was shut off. What to do? Oh! I know. Steal the meter from the unoccupied house on State Street, and plug it in to my base.
The problem with this kind of thinking is myriad. A couple of the more obvious problems come to mind immediately: First, the chance of getting caught is high -especially when the meter is being read. Second, the chance of getting caught is high -especially when the owner of the property (Box Bend) calls the power company and the person representing said power company tells us that the investigator will be out to the site tomorrow. Furthermore, the crime is common and that they always start canvassing the neighborhood for any homes that recently had a disconnect. Third, if one is caught with this crime, then one can expect to pay not only for the power that was ripped off (we have been paying for someone else's electricity), but also a fine and possibly for any damage to the base. This "Free Electricity" scheme, can end up costing the perpetrator thousands of dollars -not hundreds. But the fourth problem is bigger than all of the first three combined.
The fourth problem (the real problem) is that here we have someone that has learned to hustle in all the wrong ways. Instead of using that considerable capability and intellect to move in a direction of independence and service, he or she has chosen to use their cunning mind for a way to get free electricity in an illegal manner. Now that is a crime!
We use to tell our kids (and still do) that at least one of us had the whole motivation thing completely wrong in his younger years. This individual screwed around for the better part of a decade after high school and then, at 25, got serious, went back to college, got married and started working three jobs to support his growing family. No kidding. Three jobs. And the three jobs turned to four when he started to freelance for actual clients on the side. (He worked a day job, delivered newspapers on a rural route of over 60+ miles every day, and moonlighted for other firms. Moonlighting for actual clients -instead of firms alone -added a fourth dimension to his week.)
The object lesson for the kids is that he hustled after he had responsibility and, if they are smart, they will hustle well before they find themselves with massive responsibilities. They will use that youth and energy to put together the beginnings of a financial freedom plan that will pay big dividends (figurative and literal) down the road. They will avoid getting on a hamster wheel by getting on the wheel voluntarily before they have to actually do so. This plan of attack may allow them to get off that wheel whenever they want at some point in the future.
In a similar fashion, this electricity thief could use his or her time to bag a few more jobs. They could put together a small amount of money, buy a few books, or get their tail to the library, and educate themselves on making money legally and legitimately. They could buy an i-Pod or i-Phone and subscribe to great life-changing podcasts. (What a worthy investment in their future!) They could realize that with their brains and energy, almost nothing is off limits. They could do the math and come up with the answer that America is a ladder; it is much easier to climb then to complain on the ground. Or to make excuses when the law (or the power company) comes knocking on the door.
But instead they risk freedom, electrocution, and their own income to rip-off a meter. We have to laugh a little. Laughing in the way of anyone who shakes their heads and says, "You have to be kidding me." All those gymnastics when the U.S. is an economic uptrend and jobs are plentiful? It is inconvenient for us for a day or two. Nothing more. The contractor has a generator on his truck. So, no real skin off of our noses. But it is an incredible crime for the thief because he or she has robbed themselves of determination and motivation to climb without regard to the pain associated with the climb. They have deprived themselves of the opportunity to use that time that is now gone to make a real and lasting difference in their life, and in the lives of others. They have burned daylight on the inconsequential instead of the lasting. Wow! We take it back; that is not funny. It is tragic.
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