Let me start out by saying, things are not bad for me.
Many people are in much worse situations and have had much more serious problems. No matter where we are in life or how successful we are, we all have problems and things don’t always go as planned. I have been writing a lot about my contractor problems on my fix and flips lately. I think I am starting to turn the corner with my contractors and I see the light at the end of the tunnel! However, life is never clear sailing, we all have problems and issues that we have to contend with on a daily basis. That is what makes life interesting and fun!
Another Challenge Has Arisen!
I have a large commitment set up with a local bank to help fund my fix and flips.
That commitment is coming up for renewal on September 1st. In the midst of getting my taxes done for 2013, I have discovered (my accountant actually) that my taxes were under estimated earlier in the year and I owe a lot more than I thought! This comes at a time when I have 10 fix and flips going, I just bought my 11th rental property and my main source of income for the last 3 years (REO listings) are way down. Even though things appeared dire to me this morning, I sat back and realized I am a very lucky person and I will be just fine.
How Did I Underestimate My Taxes?
With my fix and flips, real estate business, rental properties and a few other ventures, I have two S corps, 11 LLCs and my personal taxes.
There is no way I could keep track of my taxes so I delegated them to my staff. I think delegation is extremely important to any successful person or business, but you can’t delegate something and then forget about it. That is exactly what I did. I assumed my team manager, book-keeper and accountant could handle my taxes. They grossly underestimated what I owed and we didn’t find out until now, because my accountant has been dragging their feet getting my taxes done.
Lesson learned; if I delegate something I need to follow-up to make sure it is being done how I want it and in a timely manner. Even though I have 10 flips going and I recently bought a rather expensive car, I never stretch myself too thin so I should be fine. Especially when I get some flips sold! I did some figuring this morning to send to my banker and I estimated a total profit of $349,000 for those ten flips once they are repaired and sold. That does not include the commission I made on 9 of those when I bought them off the MLS.
Update on My Contractor Situation
I had a ton of feedback from comments on my last articles and that gave me a lot of great ideas.
I have been pursing starting my own contracting company and I even interviewed two contractors for becoming a full-time handyman. I have not found the right person to hire on full-time yet, but I did hire one of those contractors for a small rehab job on one of my flips. If he does well, I think there is a possibility he could become a full-time person who handles my flips.
He also has management experience and may be able to run his own team. I now have four new contractors I have used this year alone! Then out of the blue a contractor I had used years ago called me and said he is getting back in the business. He had quit contracting to take a very good management job. He is working on rental property 11 to get it ready to rent. My contractor problems appear to be working themselves out now.
My Real Estate Team
Last September I took over the real estate business and fix and flip business from my father.
It has been great, but challenging as well! I have ten people on my team to sell houses and help me with my various activities. Since REO listings are way down and that has been my biggest source of income, I have been working on generating income with the team. We hired a new agent this year, who unfortunately had to quit a short while later. We have one more new agent coming on in the next month or two and I am looking for at least one more agent. If you know anyone in the Northern Colorado area that wants to be an agent or is an agent, let me know!
It is challenging running a team, but I have a team manager who helps with much of it. If I can pull a team together that are able to sell houses on their own, I won’t have to rely on REO or my own sales to make money. I can focus on training and sharing my knowledge, which I much prefer to actual selling anyway.
When Life Gets Difficult is When You Learn What You Are Made Of
I am by no means complaining my life is horrible, but we all have problems that come up and things don’t always go as planned.
It is easy for us all to be happy when things are going great. The hard part is when things don’t go right, can you work through the mess? While you are working through the mess can you keep a smile on your face and not take out your frustration on your family or co-workers? Even if we don’t intend to be grumpy, we still may take out frustration on those around us.
I know when I get these challenges cleared up my business will set up better and will be more successful. The challenging times help us improve our current systems and see new opportunities if we aren’t too busy being mad at the world.
My contractor issues have allowed me to find more great contractors, which will allow me to buy more flips and get them sold quicker. The down turn in REO has given me time to grow my real estate team, which will provide more income. When REO comes back I will have it even better with REO listings and the buyers agents to support the leads they generate. The tax situation may not show much to learn from, except to improve my accountability. When I delegate something I need to make sure the right steps are being taken to complete the task and people know what their responsibilities are.
If you think it sounds like a huge hassle running a team and this many things at once, remember the team helps run themselves. When I see a problem like the tax situation, I can have the team work on fixing it, I don’t have to dig through my records to figure it all out. Slowly over time the team can take over parts of the business that I used to do, freeing up more time for me to pursue more income streams or to go play golf or go to the zoo with my family.
How do you look at the problems in your life? Are they a huge frustration that drains your energy or are they challenges that you enjoy conquering?
Be sure to leave your comments below!