Get a grip, Steve… - Posted by HR
Posted by HR on June 21, 2000 at 19:51:45:
First, I am going to comment on the substance of your response, then I will comment on your process.
Before I start, let me say I don’t have my LeGrand course in front of me (or the tapes); my brother in law in a neighboring state has had them for awhile, so I can’t refer to his actual materials, as I would like. I am going to make some comments about LeGrand that may be wrong; they are what I have taken away from his stuff. I don’t think they are wrong, though. While I have studied his stuff over and over and put into practice a few times, I do believe my recollection is right. If I am in error, though, I hope someone else (not you, Steve, but an objective soul) will point out the error. Having said that, allow me to get to the point.
First, I go back to my original statement, which I now believe with all my blood: LeGrand’s inspection process is fatally flawed and will ultimately come back to haunt someone who is not a pro at home construction.
What is LeGrand’s process? To quickly walk thru a property, note all the deficiencies, and use his formula to calculate an offer. (You know the one, arv, mao, etc). This, I again offer to you, is sheer insanity.
I’ll give you this: maybe it can work in some markets with some construction types. Not here, though. In New Orleans, we have much older housing stock (average age 50+ years), it’s all wood with hard wood floors and high ceilings, yada yada yada. No exterior paint jobs here for $800. In my experience, there is often extensive damage to sills, ceiling rafters, floor joists, etc. ESPECIALLY with the beat up homes, ie the stuff you can get cheap, ie the stuff that has been neglected, ie the stuff with lots of stuff wrong with it. My point: it’s this structural damage, which you often can not see readily, which can come back and bite you. And you can’t see this stuff in a 15 minute inspection.
As far as the 15 minute inspection, that’s EXACTLY what LeGrand suggests. Don’t you remember that point on the tape where he says you should be able to walk in and out in 10 minutes? I do. If in another market one can buy homes with little likely structural issues wrong with them, then this might work. Not here (and I doubt not anywhere.) LeGrand’s method is based on speed and assuming it needs to be fixed, but herein lies another problem.
If, as you suggest, you assume it all needs to be inspected, then are you saying to assume every floor joist or roof rafter or sill needs to be replaced? Should I just make an offer based on the land value and calculate a tear down with new construction? Obviously not. You can’t assume it’s all bad, or even half bad, or even 1/3 bad. That would lead one to three wildly different rehab estimates, and, assuming you have competiton for the deal, the higher (inaccurate) estimates could cost you the deal. You need to check it out with a good inspection, so that you can accurately crunch solid numbers to come up with a solid offer. I now believe a quick inspection is not adequate.
And where, Steve, are you getting this “get it signed up and then inspect it” stuff? That’s not LeGrand (from my recollection). NEVER does LeGrand say bring in a licensed inspector to back up your figures. Myers does, and I now think Myers is right. LeGrand doesn’t advocate this at all, though.
In fact, Steve, if I’m not mistaken, LeGrand says offer NO CONTINGENCIES at all. Renegotiate? Use your escape clause? What module do you have? What tapes did you hear? LeGrand advocates offering so low, with no contingencies, that, as he says “it doesn’t matter if it has an inside.”
I’ve done that. It works. One can buy stuff real cheap. The problem, though, is not that you didn’t buy it cheap enuf. The problem is, if one is starting out and/or still learning about all the intricacies of home construction, is that you may miss rehabbing something that should be rehabbed because you didn’t know it was a problem. It’s what you don’t know you don’t know that will kill you. There may be other, inapparent structural issues that a more thorough inspection would have caught, and that’s why it’s important to get the inspection done by a licensed home inspector. Because, in my experience, when a deal killing inspector may/does come thru with your potential buyer, it will be found. And it ain’t a happy day when it is.
I find it interesting that some many folks commented on the different market prices for things. Of course you need to do the research for one’s own market. I don’t have a big beef with this, which is why I didn’t comment on it much, but I think his numbers, even for a Florida market, must be ridiculously low.
I coulden’t possibly disagree with you more, Mr. Steve. LeGrand touts himself as the greatest rehabber in America. Putting his arrogance aside, the guy does know his stuff. And his three module course is a good price for only a grand, but it still has some major flaws. Think about it: you’re going to teach someone about doing rehabs and your only including purchase and sale contracts (and land trust documents)? Give me a break. I’m hardly being unprofessional to expect the king would provide some legal forms. I created mine from some of Bronchick’s stuff and something Kevin Myer’s sells. It’s assinine not to provide them, in my opinion. It’s a huge flaw in his system. Contracts are an integral part of real estate, even rehabs, and he who has them in his favor is a step ahead. It’s a flaw steve; let’s call a spade a spade.
Handyman doing most of the work idea. I’m curious about other’s experience with this. I’m open I may be wrong here. Hasn’t worked for me. I like subbing to different groups better and maintaining more control. It’s more work, and requires more skilled crews (which I have) but I get better control and better outcomes. Right now, I think it’s worth the extra effort.
Finally, Steve, a comment about your process. You obviously can dish it out, so I assume you can take it too. I don’t like the tone of your post or the unprofessional comments. I’m not going to give you the low-life response I would like to give you, though, or that you deserve. I have been and plan on being a part of this cyber community for awhile. You probably won’t be around in 60 days. Turds like you come and go frequently. If I’ve pee-ed on your little LeGrand deity, then get over it.
LeGrand’s stuff is worth $1000, but it has some serious flaws. To those that are willing to conduct some critical thinking, this is not a threatening exercise. Your post is borish, assumptive, and rude… not something some of us welcome around here. And, not to disappoint you or anything Steve, but I could care less what you think; your post is a chance to clarify my thoughts and help, maybe, someone else from making the same mistake. Maybe a minor deity like yourself doesn’t make any mistakes, but for me, it sure is nice to post here, admit my mistakes and needs, and get some feedback that both eggs me on and challenges me to keep moving (and falling at times) forward.