Posted by HR on November 24, 2000 at 19:24:26:
Tom,
I have really profited from a book I bought at Jeffrey Taylor’s site (www.mrlandlord.com): “Perpetual Income” by Bryan C. Wittenmeyer. Lots of good tips. Worth the $20-30 bucks I paid for it.
This is not a niche I would recommend to everyone. If it fits your personality, though, you will enjoy the cash flow!
Good luck
HR
Time to thank some folks around here… - Posted by HR
Posted by HR on November 22, 2000 at 13:02:57:
Hey Gang,
This is the first time I’ve logged on in over a month. I’ve been real busy workin’ my deals, and while they are going well, they are eating up some time.
In the meantime, though, I wanted to thank many of the seasoned pros here who have helped me and countless others. You know the names: Jim Piper, Phil Fernandez, Ed Garcia, JP and Terry Vaughn, Lonnie Scruggs, Bill Bronchick, Joe Kaiser, Steve Cook, Dirk, Ray Alcorn, David Segars, David Alexander, John Behle, Carol and Dennis, Bud, Johnboy, Rob FL, Ben, Jim Kennedy, Bill Gatten, Laure, etc etc etc. I’m gonna miss some names – and I apologize ahead of time – but I just wanted to let you know, as I eat some turkey in Alexandria, Louisiana this weekend, I will toast to your good health and continued success.
Ya’ll have certainly helped me be successful, and I appreciate it. Thank you!
In a nutshell, I’ve been selling some of my rehabs. I’m finally feeling, after about 7-8 rehabs, like I’m getting a handle on doing it well: which means fast, low hastle (relatively), and for a good profit. My best rehab is probably going on now. It’s a 10k duplex I picked up out of an estate that I’ll put 25k into and sell for around 65k. I should net around 15-20k. A pretty typical deal. This is not nearly my best rehab in terms of profit. But since I spend less than three hours a week there, and will have it completely renovated and on the market in about 6 weeks, and I’ve had to do so little (because I already have my vendors and materials picked up, contractors established, realtors ready to market, etc) it will finally be a lower hassle, higher profit (time-wise, proproportionately) deal.
While I didn’t intend for this to happen, I’ve developed a specific niche. I buy blighted property, fix it up with a crew of good but unlicensed help, and then either 1) sell; or 2) keep and rent out section 8. In fact, I have to thank Jim Piper for the last option. Jim and I spoke at length at the last convention at the bar about these cheap inner-city properties, and I got so intrigued by the cash flow that, after picking Jim’s brain, I decided to try one. It’s been so outrageously successful and profitable, that I’ve done more, to good effect. You just never know when someone you meet here will help you down the line…
Also, as many of you know, my wife and I have been renovating a gorgeous 5500 sf, 8bedroom, 5 bath home for us. NEVER will I do this again! While it is gonna be gorgeous (and hopefully done in the next few months), It has been a MAJOR rehab. Wow. What an eyeopener. I’ve learned a ton, and have no regrets, but no more large, major rehabs for me! Once it’s done, I hope ya’ll will stop by and stay awhile while we sip mint julips on the porch and enjoy the hot, Southern sun…
Anyway, life for me is a little hectic but good. Been flippin and rehabbin, and maybe this next year I’ll bet into some lease options and owner finance deals. My gameplan the last two years has been to really master home construction and rehabs… and while I now know there is no such thing as mastery here, there is competency, and I getting a lot closer to that.
Anyway, thanks all. I look forward to seeing you at the convention, and maybe sooner.
Cheers, and happy holiday.
HR
Up North For Thanksgiving, Huh? LOL - Posted by Vic
Posted by Vic on November 23, 2000 at 04:59:04:
Anyway, Hal, I just wanted to wish you (& anyone else reading this) a Happy Thanksgiving.
Don’t forget we need to get together & talk sometime in the next few days. Let me know when you get back.
Vic
Congrats! - Posted by TRandle
Posted by TRandle on November 22, 2000 at 16:13:16:
Hal,
Congratulations! Kel and I hope to spend some time with you in the Marriott bar again. Are you going to have to do a Lonnie deal to buy the golf cart so you have transportation in the MANSION? Hope all is well. Take care…
A quick question HR… - Posted by IB (NJ)
Posted by IB (NJ) on November 22, 2000 at 15:13:19:
First of all, congrats on your success.
How do you handle liability issues when working with unlicensed (and probably uninsured) help. I’m doing the same thing but would like to protect myself against “handymen” who may get hurt on the job. Is there any insurance that can cover this? Will my company’s liability insurance cover this? I haven’t talked to an insurance agent about this but will do so Monday. Just wanted to know everyone’s thoughts.
Thanks in advance and enjoy the week/weekend.
Re: Time to thank some folks around here… - Posted by Tom
Posted by Tom on November 22, 2000 at 13:18:30:
HR,
I am considering buying cheap inner-city homes for rehabs/rentals…any advice would be appreciated!
Tom
Re: Up North For Thanksgiving, Huh? LOL - Posted by HR
Posted by HR on November 24, 2000 at 19:48:17:
Hey Vic,
Lets get together for lunch or something this weekend. Give me a call.
Alexandria… what a boring ride. Man, I’ve never seen so much sugar cane in all my life. It’s good to be back. Thanks for the shirt, too; I dig it.
HR
Lol; thanks; if we ever get IN it! (nt) - Posted by HR
Posted by HR on November 24, 2000 at 19:45:11:
nt
liability of uninsured on rehab projects… - Posted by HR
Posted by HR on November 24, 2000 at 19:44:07:
IB,
This is an important topic. What I’m going to tell you is my informed opinion, and what I am comfortable doing. I don’t necessarily recommend it to anyone else. What I do recommend is that you find out all the details, so you can make an informed opinion, especially regarding the costs/benefits of using insured vs. uninsured labor.
First, my opinion: I suspect, despite my legal and psychological defenses used (which I will describe in a minute) that if one of my skilled, uninsured workers (no worker’s comp, that’t the biggee and the only issue, really; being licensed or unlicensed, bonded or unbonded is unimportant) got hurt, I could be screwed. I have doubts my defenses would provide adequate protection, but I live with that risk.
My defenses are twofold: legal and psychological. First, the psychological. In my contract used with all subcontractors, they state and warrant that they are licensed, bonded, insured, yada yada yada. They tell me they are; I (and they) know they aren’t. These are skilled workers – highschool dropouts, minority workers – who have been carpenters for decades. They are good workers, more or less. They don’t conduct themselves professionally enough to land big contracts, but I tolerate their (sometimes) sloppy work which I must constantly look after and their (sometimes) sloppy adherence to deadlines because, overall, the quality of their work is good, they work for cheap, we know each other and work well, and they are available (I have kept them employed nonstop for over a year now, going from one rehab to the next). These guys are slick. They know how to get over, and I have no illusions that if they had to get over on me, they could and would.
My first line of defense is that my contract MAY scare them (and others in the same boat) into settling out of court because they misrepresented themselves on the contract. Would this work? Legally? I doubt it. Psychologically? If I waived a big bunch of cash in their face and settled out of court? Maybe. I don’t know.
My second line of defense is all this business is conducted through my C Corp for my rehabs and my LLCs for rental properties I buy blighted and rehab for rentals. Could they get thru the corp or llc to me personally in a workman’s comp lawsuit? (That’s really the ONLY question here, to my mind…) I suspect so. Nonetheless, the corporate structure, with their misrepresentation of themsleves on legal contracts, may allow me to settle out of court: and that is my BIG goal if a problem ever arises.
Would this all work? Again, I don’t think so. But I am comfortable with the risk and living with it. My electrician is licensed and has workman’s comp; so I have no exposure there. My plumber does too. All my other workers: tile, floor refinishers, general carpenters, roofer, etc don’t.
I don’t know where you live, but here in the deep south, I can get good minority laborers for relatively cheap prices. The licensed, bonded, insured guys are just too expensive.
Anyway, this is a topic I hope others will join in on. these are just my thoughts. Good luck.
HR