The Super Bowl is finally almost here. As a die-hard New England Patriots fan, the past two weeks has been tough for me but I am still looking forward to a great game. Teams that win Super Bowls share two common traits:
- A great game plan
- A bit of luck
It’s the same for green real estate investing (although we can’t help you with #2). The most successful companies all utilize a great game plan to ensure their success. A great game plan is one that takes advantage of your team, your skill-set and your market. An effective game plan can 50 pages long or written out on a cocktail napkin. The most effective method is to create the game plan in Excel.
Using Excel for your game plan allows you to run scenarios, ROI calcs, materials bids, etc. All your info is in one place and easy to read and edit. Here are the 5 key sections you need to create a game plan for any potential deals you are working.
Profit Maximizer tab- Allows you to input your rehab expenses, target sales price, average neighborhood utility expenses, projected utility expenses for your property, end-buyers utility savings and increase in what end-buyers can pay and still be below their target monthly expense. For example, if their mortgage payment on a $150k home would be $1500/month and average utility expenses would be $250/month, their total is $1750/month. If you can save them $125 on their utility bills, then they can afford to pay approx. $5-15k more for your home and still be below that $1750/month number. it takes a little bit of work to get these calculations done but it could mean $5-15k extra on every one of your deals.
Materials Bid tab- Once you know what your rehab punch list is you can create a tab with all materials/quantities and bid it out to a few different home stores in your area. On the tab include: manufacturer, model #, sku, online price, quantity, discount amount. Have the bid room at the store fill out your spreadsheet so that you can compare apple to apples with another store. I’ve seen the exact same materials list go out to the 2 biggest chains (HD/L’s) and have seen the total prices vary wildly. This tab is definitely worth including.
Property Audit Checklist- List all of the things your contractor should be checking for along with the recommended actions to take after he/she checks it. Here’s an easy example- Contractor unscrews outlet cover on exterior wall to check for foam gasket. If no foam gasket is there then they install one. That takes 30 seconds. This makes your life easy because as long as you have a checklist, the contractor knows exactly what to check for.
Rebates tab- List all of the potential rebates available to your project. Make sure to list the following so you get all of the right information: Program name, Incentive type (rebate/grant/incentive), Eligibility, Rebate amount, Maximum incentive, Requirements, Expiration date, Site link, Notes. Once you have this built it’s easy to have someone fill it out for you.
Green Strategy Options- This is where the rubber meets the road. List all of the potential repairs/upgrades you could do on the project. List the original rehab cost for the item, the ‘green’ cost, the rebate and the net cost. As long as the green cost is lower than the original cost, you should pursue the method/material. For example- let’s say you have to replace the water heater and a non-green one is going to cost $500. A green water heater costs $750 but it comes with a $300 rebate. The net cost of the green water heater is less ($450 vs. $500) so you go with that one.
Pursuing ‘green’ in your real estate business can be very effective if you know what to do and how to do it. Creating a game winning game plan can be critical to your success. If you are interested in seeing functioning version of the game plan listed above, please shoot me a message. This is only available for BP readers. Thanks..