All Forum Posts by: Michael Woodward

I agree with @Carrie Giordano.  You need as much education as possible BEFORE you jump in!  J's book is an excellent place to start because it condenses and focuses a lot of the most important information that's relevant to what you're doing.  It's taken me years to learn enough about the business in general and my local area to be confident that every project I buy will be a winner.  Even with years of experience though, it's possible to do something wrong that can blow the project and set you back financially for years.  

I look at this business a lot like learning to fly and airplane.  You know it can be done because you see people flying around all the time.  It looks easy but what you don't know is how long the pilot trained to become good enough to take off and land without hurting or killing themselves.  Doing a bad real estate flip obviously won't kill you but it can do enormous financial damage.  Sometimes that effects families and marriages so it's not to be taken lightly.

I'm not trying to scare you.  I just want to warn you that success in this business requires hard work and excellent decisions.  Read everything you can.  Get a local mentor if you can.  Do it right and you'll succeed.  Good luck!

Jordan,  I'm really impressed with your effort at such a young age!  Some of the wealthiest people in history have said that it's tenacity, resilience, and hard work that make the biggest difference between success and failure in business.  I agree with that!  I think you're off to an incredible start! 

Great!  Glad it worked out!  That's the best scenario where you get to negotiate the deal before the installation.  That way you know you're doing the right thing.  Good for you!

.... one more book I wanted to mention that's not offered here on BP is the book "The Millionaire Real Estate Investor", by Gary Keller.  It's an awesome book that will give you the complete "big-picture" view of how to build a successful real estate investing business.

@Chris Marvel,  Congratulations on your decision to get started investing!  Warning..... You're entering something that can set you on a path to success or it can literally ruin your financial life.  I'm not trying to scare you, I'm just warning you that this is NOT an easy business and you have to make very good decisions as you develop your business.  If you do it right, you will succeed.....but you have to get it right.

I STRONGLY advise you NOT to begin building your team or start looking for deals until you've given yourself a proper education.  There are many smart, honest investors on BP that have been doing this for many years that will tell you that they are still learning. 

Your education needs to include (this is not a complete list):

1) Learning the general vocabulary of real estate

2) Learning the different types of real estate investing

3) Learning the rules/laws of real estate

4) "Paper-trading" deals (analyse deals that other people have done to see how it works.... J. Scott is a great source for this.  He posts all the details of his projects on his website.)

5) Construction, contractors, real estate agents, buyers, sellers,.....many, many more.

The good news is that you're in the right place to start learning.  Get and read all of the books provided here on BP.  Listen to all of the podcasts (perfect way to spend your daily commute or travel time).  Take your time.  A good education for anything worthwhile is going to take a LONG time.  Once you thoroughly understand the business, THEN you need to build a good team. Don't fall for the advice that you just need to jump in and learn as you go.  I'm sure you've heard the term "sink or swim".  That's not a good way to teach someone to swim and it's not a good way to start your business.  Start at the shallow end of the pool and work you way into deeper water as you're ready.  Good luck!

.....I also meant to add...... I pay around $1.50/sq.ft. to have carpet installed but the refinishing cost closer to $3.00/sq.ft..  The floors came out beautiful but it was much more expensive than carpet.

@Allen Thomas,  Good choice going with carpet!  I've only found one house with old hardwood that could be refinished and that was because most of it had never been covered with anything (carpet, vinyl, etc).  Having plywood on top of yours pretty much guarantees that it will be too damaged to save.

@Dean R.,  Your question about estimating added value and predicting results is one that I personally never try to answer. The only person that could answer with any accuracy would be someone in your market that's actually done it.  If you don't know anyone like that, you should ask a bunch of your local real estate agents to get their opinions.  They should know better than anyone what buyer's will pay for things like that.  Be careful though.... most of them will only be guessing based on their own experience.  Good luck!  

Mark,

It sounds like you're looking for a creative strategy to (sort-of) flip houses with the minimum cash outlay..... and you want to use the equity you built into the home-owner's house to get paid (win-win..... maybe).  I'll give you credit for thinking outside the box but I'll also warn you that this kind of setup could lead to all kinds of problems for you!  I'm not a lawyer but my gut tells me that you might even run into legality issues with this approach.  Especially because you're bringing the idea to them instead of them soliciting you. 

Beyond that, you'd be dealing with a "home-owner", which can be very difficult to manage (disagreeing about the renovations, access to the property, something's missing in the house and they suspect one of your guys of stealing it, the homeowner changes their mind in the middle of it and they want out, etc, etc).  I'm not trying to sound like the sky is falling but this business is difficult enough when things are simple.  When you buy an empty house, it's just you, the house, and your decisions......simple.   But don't forget that THEN you have to do everything else right (by the numbers) to make a profit..... not so simple.  I think you will find it far easier and more enjoyable in the long run to buy and renovate vacant homes.......or be a contractor....... I wouldn't try to mix the two ideas.

Good luck!

@Rao V.,  My advice would be to put yourself in the buyer's shoes and mentally walk in the house for the first time so you can visualize their reaction.  Does it feel badly out of place with the rest of the house?  If the house is very small and there isn't room for it in a more "normal" place, they might be willing (even happy) to over-look it.  I renovated a 900 sq.ft. house a few years ago that didn't have washer/dryer hookups because there just wasn't room.  I was able to convert the bathroom closet into a laundry closet and put a stack unit in there.  This was a lower-income area so the people were thrilled to at least have a washer/dryer even though it was in the bathroom closet.  

If your house is fairly big and well-laid out though, a little extra money to remove a big problem could be well worth it.  You never know what people will like or dislike so my strategy is to always remove every potential problem if at all possible.