I was shocked when I first heard the news.
Overcome with disbelief.
How could this happen?
Who could have possible seen this coming?
The popular tabloid headline (which I read on a rack at the grocery store because I would never buy or subscribe to that kind of ridiculous gossipy trash) – rocked my world.
Tom Cruise and Katie Holmes were getting a divorce.
No, I wasn’t surprised the famous couple was splitting up. What stunned me was that their marriage lasted as long as it did (6 years). That’s like 50 years in Hollywood.
Much like celebrity marriages, long distance relationships rarely last long either.
My wife and I were in one for almost a year until we reached a breaking point. It was either we move to the same city or break up. The long goodbyes at the airport and the time apart took its toll on us. Fortunately, I was able to find a job in Phoenix and the rest is history. We’ll celebrate our 15th anniversary later this year.
How to Estimate Rehab Costs!
Estimating rehab costs accurately can make or break your real estate business, and it takes years of experience for even the best rehabbers to master the art. However, you can expose yourself to less risk and get more accurate with your projections by learning how the pros think when estimating construction costs.
Fixing and Flipping from Afar
Having a long distance relationship with a house can be a challenge too. Besides the obvious geographical separation there are several other issues to deal with, including:
- Learning the market and understanding what buyers in the area want.
- Building a whole new team of contractors, Realtors, lenders, appraisers and inspectors.
- Making important structural and design decisions without being at the property.
- Writing offers on properties – getting them accepted – and then having to drive or fly out to see them to do the inspection.
When J Scott, a fellow BiggerPockets.com contributor based in Atlanta, and I decided to do a joint venture fix and flip in Milwaukee, Wisconsin last summer, we had to start from scratch. Here’s what we did:
- I found a Realtor there that found us a distressed house, which J and I bought.
- J, using BiggerPockets.com members and their contacts in the Milwaukee area, built a team of contractors to rehab the property.
- Meanwhile, I got my real estate license in Wisconsin so I could better understand the market and have access to the MLS to comp future deals.
- J made 8 trips back and forth from Atlanta to Milwaukee to meet, consult, advise and do quality control with our contractors.
- Along the way I found a better Realtor and more houses to buy.
- J spent an entire week there working with the trades to finish up the property, which we put under contract last month and is set to close in a few weeks.
- J hired our best contractor from the rehab to be our project manager for future jobs, meaning fewer trips back and forth to Milwaukee.
All of the travel cost about $15,000. Of course, some of this included sushi lunches, steak dinners and several bottles of wine. But, it was all a necessary expense. J and I bought a second property last month and have only had to go back once. The next time we visit, at the end of this month, the house will be finished. Hopefully there won’t be any surprises.
The lesson here is this – if you’re considering a new market to conquer in a land far, far away then be prepared to spend a few bucks on education and commuting. As you learn the market and build a team of trustworthy contractors your travel budget will be reduced.
And unlike Tom Cruise and Katie Holmes, you and your houses will live happily ever after.