Well, the time is almost upon us.
December 8th at Lee County Civic Center -7:00 PM (Click the picture above.)
The land in Moncure will be put up for auction with a low reserve.
We have subdivided the lot, bush-hogged the land, and our buddy cleaned up some of the garbage that had accumulated on the land.
We will be out of town that night, but stay tuned and we will let you know how it worked out.
We are thankful for the opportunity to be here.
We are thankful for our friends, our family and even our enemies.
We are thankful for problems that educate and expand our capabilities.
We are thankful for challenges that either make us stronger or show us who we really are inside.
We are thankful for our partners and our associates who have made our business possible.
We are thankful that we get to do something that we enjoy.
We are thankful that we get to write about this gig and occasionally ramble on about it.
We are thankful that we live in this country.
We are thankful that there are men and women who serve.
We are thankful that there is a day devoted just to thanks in this country.
We are thankful that we have been afforded the opportunity to be good stewards of resources.
We are thankful for the roof over our heads.
We are thankful for the gifts that we have received -99.99% of which were received without merit.
We are thankful that you have taken time out of your day to read our blog, or visit our site.
We, like the Pilgrims before us, are thankful for, and to, our God.
We are thankful.
Old Tom nailed it in his song, The Waiting.
The waiting is the hardest part
Every day you see one more card
You take it on faith, you take it to the heart
The waiting is the hardest part
And now, as an ode to Tom, we are going to give you an update on where we are at and the battle that one might face while waiting. We don't want to be too petty, here. Nor do we want to be doing the kind of clever verbal gymnastics that turn people from readers to non-readers, but we intend to play within the written landscape of this blog and update our readers at the same time.
The waiting actually is the hardest part. And that is where we are at right now. We are waiting to see if the bid we made on a property is accepted. That bid is near the upper reaches of what we are willing to pay for that particular property. Excuse the coyness of this post, but we won't say which property or even which auction service we are talking about right now. You may be saying, "But, I need to Know," but we won't tell -not at this point. We will say that we are waiting for December because December is going to tell us so much.
We are also waiting on the auction of the Moncure land. December 8th. Will we be successful? Stay tuned and come on back, ya hear? We may be packing up the plantation and moving on after that auction. BTW, it is good to be Rebels and to be on the other side of the fence in the auction world. We have purchased a few auction properties in the past. It is now nice (at least on paper) to be the ones doing the auctioning. Quick side note: Contact our Realtor here if you want more information on the actual auction.
And we are on needles and pins waiting for the Moreland property to sell. We know that we are priced correctly, we know that the area is seeing rapid gentrification, and we know that the quality of this Box Bend transformation is second to none. But the waiting for some good souls with Southern accents to walk through the door and say, "We're home!" has us free falling. Waiting. Waiting. Waiting.
Not that we are sitting around like some refugee adrift on a raft of our own making with nothing to do but wait. It is only that the waiting sucks. On the contrary, we are planning for our next move. We are looking for that mythical room at the top of the heap. And we have made the mantra of "I won't back down!" a personal rallying cry. We are making plans and backup plans because we don't want people to say, "You got Lucky." We want people to say, "Wow! I need to know what you are doing, here." We want to help people by first being that example of success in this sphere. That requires planning and action. (More action than planning, by the way.) But in truth, at the end of the day, no matter how much waiting we do, and no matter how hard it is to wait, we truly are still in the process of learning to fly.
Box Bend is made up of a crew. There is the husband and wife team that started this thing. There are the handful of people that make it work consistently and work hard to ensure that it is successful; the Contractor, the Realtor, the Attorney and the various people behind the scenes are absolutely crucial for success. And then there are the people that either buy the real estate, rent the real estate, or sell the real estate to Box Bend. In short, we are blessed to have this support team -both direct and indirect.
However, if we go back a few years (like say 9+ years ago) our world was completely different. The husband on the crew (the guy writing this blog) was a project architect for a small firm in the Midwest. Our approach to life was simply to work. We worked three jobs. More truthfully, I worked three jobs. "I" being the husband. (Side note; we use the word "we" because Box Bend is not simply one person. As noted in the first paragraph, it is a team.) Our thoughts back then were that we could work ourselves out of our problems. And, more truth, we still believe that. HARD WORK.
So, back then, I would wake up early in order to deliver newspapers to farmers and ranchers on a route that was over 60 miles long back in the day when people actually read newspapers. I would then go home and shower and then go to work. At night I would freelance for other people or firms. People used to laugh about the "architect paperboy," but I did not care. The pay was the same as I earned for 40 hours a week as a project architect on a chain of 200+ retail stores. (We also worked on a couple of small dining gigs, a hotel, etc.) The freelancing was also good, and for some reason felt very necessary. LOOK FOOLISH
Our conversations back then were centered around our growing family, and our want and need. We spent hours talking about our debt and about how we would need to get out of debt to get ahead. We worked and worked and worked and worked to the point that I would steal fifteen minute naps on my lunch hour and spend most of Sunday afternoon in bed. Finally, after a healthy raise, I jettisoned the paper route.
And then our focus shifted. We took a job in a related industry with the idea that more doors may open if we venture beyond the tried and true. We also started to look at life not as a world of scarcity, but as a world of abundance. We moved from the Midwest to North Carolina. The job paid exactly the same as the old gig as project architect. We took an apartment and life became easier. Nothing had changed other than location and job. As a matter of fact, living in North Carolina was slightly more expensive than living in the Midwest -even though the real estate was comparable, or even slightly less in Raleigh. The point being that our whole focus shifted. We actually had less money because I was not moonlighting.
I said to my wife one day, "Isn't this great? We are doing much better."
"Yes, but we actually have less money," she replied. Up until then, even though I knew it, I didn't know it. So what changed? Only our perspective and focus. FOCUS
We then started hanging out with different people. Our experience of investing in two lake lots in Minnesota continued our tradition of scouring the classifieds (and now the web) for opportunities. We hooked up with a family member and made our first dent in flipping a house. OPPORTUNITY AND PARTNERSHIPS
Today, after a couple of years of ups and downs we are moving forward with Box Bend and are waiting on the outcome of two projects: The subdividing and auction of the 73+ acres that we call "Moncure," and the latest remodel and renovation of a two bed, one bath home into a three bed, two bath home that we call "Moreland." We are sitting on three empty lots. We are bidding on one additional property -a house. We are finally closing on "State Street" -and that is slated for tomorrow. And we are moving forward with some new plans. ACTION
So, allow the following digression for a moment. Being a professional in the day gig, and having received two degrees from North Dakota State University, the outlook around the ranch is always one of continued improvement and education. Jim Rohn once said, "Formal education will make you a living; self-education will make you a fortune." back in those halcyon paper route days, all one normally heard on the radio was Jim Rohn, Zig Ziglar, Autobiographies and religious programs. There was, and still is, a conscientious effort to feed the mind and the heart continuously. The purpose of this blog is not to convert you with spiritual belief structures. Only to say that education and improvement has been, and still is, a continual effort on our part. SELF EDUCATION
So, with that being said, we have the tendency around the Box Bend office to read, listen and read some more. If we are driving around looking at real estate, which we do almost every weekend, we are listening either to podcasts, or to an audible book. This past week found us in New York City. We were searching for some Pace Picante Sauce. (Sorry. Bad, and rather old, joke.) In the bag was a book on design fundamentals (old habits die hard), a book on the civil war and George Washington, and a phone full of audible books including the current self-improvement and business one - The 10X Rule by Grant Cardone. I will provide links to this stuff in a moment. The takeaway here is that there are more than one way to fill one's mind with good information. I love the audible version of books simply because I can multitask on planes and in cars. Like I can drive and "read." Or I can enjoy a beverage, close my eyes, sit back in the seat on the plane, and "read."
We took the subscription plan of $14.95 per month for one credit once we blew through our free trial. We found it to be worth it, and we now use it for self-help, business, children books for those long drives, etc. I am not trying to sell you on doing it, per se -even though, full disclosure, we are Amazon Associates. I am trying to sell you on the idea of changing your perspective by filling your mind with different thoughts and possible some new people.
The Grant Cardone book (link below) is good so far. He is a little rough around the edges and is an almost rabid cheerleader from time to time, but his book has hit the right notes so far, and has inspired us to go back 9+ years and look at our blueprints. Of course, that is meant figuratively and not literally. Grant has made us stop for a second and evaluate our plans and our efforts. Currently, without being all the way through the book just yet, we can recommend the book to you. Even if the second half sucks, the first half was worth the price of admission. EVALUATE YOUR PLANS
Grant stresses action. We couldn't agree more. We know far too many people who talk about things but never act. Action is the only thing that will separate the dreamers from the doers. A goal without action is merely a dream. This isn't a dress rehearsal, and this isn't the lottery. We all have talents and ability, but it is up to us to use them. I am including the book link for those that like to physically read, and the Free Trial link for Audible below the book link. The plan that we are on is below the free trial.
A smart way to do this is to get the Audible version for free with the free trial. If you like the book enough, you can always go back and get the print version. If you like the audible version you can decide on a subscription or not. Just a suggestion that will cost you nothing out of pocket. CONSERVE YOUR RESOURCES
It is time for a new blueprint for Box Bend. We need to move off the dime and decide which directions make the most sense for us now. How do we move from a half a million in revenue to a million? How do we move from where we are at to the point where we feel that the day gig is not necessary -even if it is enjoyable and we don't want to leave it behind? How do we position ourselves for zero gravity? Cordone has us questioning that and is reinforcing a few good lessons. EVALUATE
It is time to move. ACTION
There is not a lot going down this week. However, we did put in a bid on a house being auctioned. We'll see if we are successful with that one. If not, no worries. The actual bid process doesn't start for a week or two, but we were able to arrange a "highest and best" number with the auctioneer, and we will see if we get it. We have notified our preferred real estate agent -just in case we are successful.
We have also slated the auction date for the Moncure land. The subdividing of the land is complete (see the earlier post) and the seven lots should be ready to rock and roll. We have set a minimum reserve on the land, now what that reserve pencils out to per parcel, and will not sell unless we can pull those numbers. Stay tuned on this one (post December 10th) for the autopsy. We will take an accounting of the life of this deal and try to extract some lessons from it.
State Street is slated to close with the buyer (us + our business partner in our local real estate franchise) for next week Monday. If you are coming into this blind, take a peek at the earlier posts for the daytime continuing saga of "As The State Street Turns."
We also are looking very long and hard at some opportunities in other states where we have lived -including Oregon, North Dakota and Minnesota. We lived in California and Boston, too, but we won't be playing there at this time. There seems to be some opportunity, but right now it is all lightweight talk under a steady gaze, because there are still more-that-enough opportunities right here in our own backyard. We are still sitting on three lots and will be looking to do a spec home at some point. None-the-less, it is good to be aware of other markets and what is going on. Speaking of which...
We will be spending some time in the Rotten Apple this week; NYC. We love New York in short little bursts. We have toyed with the idea of a pied-à-terre, but it is only toying with the idea at this point. One of our children is talking about NYU or Columbia for college. We are hoping for State, but hey, if the kid ends up there...
We are also looking at some math equations for a new business. This is only slightly or tangentially related to Box Bend. And we may have been mentioned this before, but if not, let's just say that the next endeavor, should it come to fruition, involves wild bears.
Sorry for the silence... please forgive us.
Here is a quick update on what is going on in the Box Bend world.
We have our contractor adding value to our own personal home right now. He is taking an unused storage room upstairs and converting it into another permitted bedroom, and a separate home office. He has been on other projects, but for now, and for us, he is in a holding pattern on Box Bend business.
Moreland is done and has been on the market for a little while now. Showings in general are way down for a lot of properties including this one. We think (and we hear) that this may have a lot to do with a couple of weeks of miserable weather. It has rained and rained and rained some more. We are praying for sunshine and showings and sales.
State Street's little bungalow, as pointed out in the last post, is being sold back to us through another business that we co-own. (See the post before this one.) We are super stoked about this one. Again, check out the earlier post.
And Moncure is going to auction. We have paid to divide the land into seven parcels, and we are being told by the auctioneer and our Realtor that the auction date is set for December 8th. We are (truthfully) hopeful, but unsure. This is a test to see what happens and possibly use this as a model for other land sales. We have set a reserve, we have developed about a gazillion questions, and we are looking forward to seeing what happens. If it is not successful, it will have been worth the price of admission based on the education alone.
It doesn't show in the picture, but there is an easement to lot 7 from the other (non-main road- side) of the property. We are more than comfortable with the reserve, because the land prices are incredibly reasonable as compared to land 30 minutes away in the western suburbs of Raleigh. We are also fairly sure that the auctioneer and our super Realtor are both comfortable with the price and the reserve. This is a good place to be.
We are also debating starting a new home or two on one of our lots in Durham. Recall that we have three lots and they were purchased with the intent of starting Box Bend Home.
We are also in the process of starting a new business that is only slightly related to Box Bend and/or our real estate franchise. This has been eating up some time as we put together the dossier and financial models for the business. We are still in the evaluation phase of this business. As we work through the models, we will know if it is a "go," or a "no go." Needless to say, this business assessment has eaten up a little bit of our time. None-the-less, we are still focusing on Box Bend. We haven't been so good about the blog, though. (Sorry about that.)
So now (today) there are just a few question marks floating around out there...
Will we sell Moncure's land and Moreland's beautifully renovated home before Christmas? Will we start new home construction on one of our three lots in Durham? Will we buy another transformational home instead? Will we do both?
In the last episode of "As the State Street Turns," we spoke of State Street becoming a rental for us.
This is a good solution to an untenable situation. If you can't sell or even if you can sell, but not on your terms or on terms that are agreeable to you, then rent until you can. Renting will bring your cost basis down and provide cash flow to cover the carrying costs +++.
Well, since that last post, we have been in talks with one of our business partners in a different endeavor (a real estate brokerage franchise). We have talked about the importance of having a cash reserve to move forward with in the event that we see a downturn in the economic cycle. <By the way, this is something that will happen. It is only a question of when and not one of if.
So our partner has agreed with us that a reserve is good. Keeping the doors open every month is the result of spending a huge amount of money. Not having a reserve can mean disaster during the next economic downturn. We talked about cash. We talked about starting with three months of reserve, building that to six months, and then pushing that to at least one year's reserves. Ideally, we think that two or more year's of reserves is the ticket (think Apple or even the world's largest design firm, Gentler -both with healthy cash reserves) but we are way too premature to be talking about that idea for any length of time.
We then talked about his idea of a cash reserve in the form of an asset that might appreciate and throw off a little money in the interim. Hmm? What could we put our money into that would give us a little bit of additional cashflow and might appreciate in lieu of cash in the bank? Nope. Nada. We drew a blank. No ideas at all.
Just kidding. We talked about rentals and we talked about a couple of specific areas where owning a rental might make a lot of sense down the road. When the VA sale fell through on State Street, we talked about that property as well. Our agreement with our partner is that we are not buying it to help us out. If it isn't a good deal, we should pass. And Box Bend should rent it out and go from there. However, at the end of the day, it is a good deal. It is a good deal because at this price point almost every single thing that we could address has been addressed. Anything that is not addressed should be covered by the home warranty we offered with the sale.
SIDE NOTE: A home warranty is a good idea even if you are a landlord and not a purchaser of property for flipping or renovating. This is cheap insurance, and if something breaks, the deductible is very small.
If we went out with our partner and purchased a new piece of rental property at our price point, we would almost certainly be putting money into it to fix all the things that are wrong with it. Even new construction experiences call backs for issues. As landlords ourselves, we know this to be true.
So we can pick up State Street instead, and a lot of the big items have been replaced or are brand new. The rental rates in that sub-market are good, too.
For Box Bend this is good news. We were always a little hesitant about selling it. We see that area as appreciating rapidly over the next five years. However, our business in Box Bend is not primarily to buy and hold. Our business is to renovate and sell. With this arrangement we get our cash out of the deal -the vast majority now, and the rest by midyear 2016. We retain our rights until it is paid off by our other business. We also get to keep half of State's cashflow through our other company and half of the asset, and we can move forward with the next set of problems seeking our solutions within the skill sets of Box Bend. Win-win-win-win.
We stand corrected. State Street will be a rental (at the time of this writing), only it won't be a Box Bend rental.
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