All Forum Posts by: Michael Galloway

Peggy L. welcome from NORCAL. looking forward to chatting with you soon.

Brett Kennedy,

This is a great question with no BEST answer. It's going to come down to preference.

We all go through this at some point in our careers. WE WANT TO KEEP GOOD, DEPENDABLE PEOPLE(WORKERS) IN OUR COMPANIES, at affordable prices. Let's lock'em up with the employment handcuffs. It's capitalistic and it is critical in the fix and flip business.

You could go the route of full employment but here in California you would have to pay the price for workers comp, ss, disability inusurance, unemployment insurance taxes, not to mention all the paper work and reporting the ss4, w4, ein, w2s, employee benefits, background checks, liability blah,blah,blah blah blah.

With that said, the old adage "a penny saved is a penny earned" you need to keep your business "lean and mean"

Here is what i do, and hopefully shed some insight on your challenge.

1) When i find someone who is really good at their trait, and at a decent price, i try to keep them as busy as possible. (i don't want them working anywhere else) But you can not stop them... if they are so busy with you, then they have little time for side jobs. In fact when projects get really slow or i have a permit issue etc. I might even have them come work at my own house just to keep them busy ;)

2) i have them bid the job. I do not pay by the hour, (too many people drag their feet and stretch out the project.) The incentive is that if they finish the job sooner the labor per hour goes up. THIS IS THE ONLY INCENTIVE I USE. I used to give bonuses when projects were backed up, but that seemed to work out to the same effect.

3) Always have a second crew bid the job as well to keep your main guy honest. And if they come in less and the quality is good. Ask your main guy to match the price.

3) GET a HOME DEPOT or LOWE'S PRO Card. All purchases are to be made with this card. When your worker is checking out you can have the card set up where HOME DEPOT has to call you before they charge. I even have them FAX me the receipt immediately.

Now that you have your Labor and Your materials under control. You need to continue to do what you do best ... find another deal.

Last but not least NEVER EVER give them a percentage of your profits! If you open this door, there is no going back, and they will never settle for less.

my $.02

Thomas St John, welcome. I like your portfolio strategy. What are the rents that you are seeing on these houses that you have kept?

Robert Adams, Congratulations Robert!

Andrew Levin, Glad you're here. I look forward to hearing about your success. There are many investors here that are eager to answer your questions... looking forward to your posts.

Ryan Halverson is there any capx? are the units currently occupied? who pays utilities? are these in Alabama?

Looking decent... need ^ details^

Now before all you peanut gallery wanna be comedians jump all over this...

About 15 years ago, i went to a GURU Trap and the man on stage wanted to tell the audience how smooth of an investor he was. He craftily spoke,

"I'm not going to tell you how many doors I have" (this is GURUease for properties he owns) " but i will tell you that my goal is to have 1000 doors that are positive $100 dollars each!" he pauses for effect. The audience is doing the math and you see lots of nodding heads in approval.

I think i was the only one in the room thinking... WHAT A HEADACHE!

What are your thoughts? Sounds like a good headache to have? Better ideas for the same amount of passive income? let's discuss.

Jason Merchey , i second what Karen M. is advising you. I am a licensed broker, that said, if an agent brings me a deal, they get paid. The relationship is worth far more than saving several thousand on a deal. If it's a real deal, we all get paid.

If the margin is too thin for a seller to go through a traditional listing without it being a short sale, then you might want to offer the listing agreement to the agent after you rehab, if they don't feel that there is enough room for their full commission.

The last 3 transactions i have done were from Listing Agents not in my office. They called me and asked if i was interested in a property. If i tell them yes, i let them write the offer. They are taking both sides of the transaction. i Sometimes even give them the listing as well. (they get paid 3 times. I did one last year that made 4 commissions) Why do i give up so much of the fees? Because i am not after the fees. I am after the deal. Hopefully, you can follow this. If i lost you please don't hesitate to ask questions.

Go find the top listing agents in your farm and make a relationship ;) ... and if they bring you a deal you better be ready to perform.

J Scott, Karen M.,

@Michael Galloway and Brandon Foken looks like you two might be a good match!

I spoke with Brandon this morning... , in addition, several others have been emailing as well... i think this might work better for me as a group, (taking several newbies at the same time) i need to find out everyone's strengths, weaknesses, and come up with a game plan, depending on J's competition ;)

Gary Clark, welcome! you will find a lot of information here. Please don't hesitate to ask questions, and please keep us posted on how your doing.

Again Welcome from California