Archive for the ‘ Time Management ’ Category

Day 24 – Build a Great List of Contractors

Today Day 24 and we’re going to talk about a technique we’ve used to build a very good list of contractors in a short amount of time.  Over the past year, we’ve had a lot of difficulty finding good contractors.  The process is very slow, but once you find a good contractor you want to hold on to them and keep them very busy.  We’ve been able to do that with our contractors, but inevitably there are times when we’ve needed additional help because our go to guys were busy on other jobs. 

So, I’ve decided to put together a system for streamlining the process of finding contractors.  So far it has worked very well.  Here’s what we did…

Step 1 – Create a Simple Website

The first thing we did was to set up a simple website www.MichiganTurnkeyContractors.com.  We’ve placed a video on the site explaining what we’re looking for along with a simple questionnaire for contractors to fill out.

Step 2 – Create a Craigslist Ad

The next step was to market this website.  So, we put out a simple Craigslist ad that looked like the following:

We Need Residential Contractors!

We will be rehabbing a number of homes in Pontiac & Detroit and we need contractors for all types of work. Please go to http://www.MichiganTurnkeyContractors.com for more details. Thank you!!!

Step 3 – Watch The Leads Roll In

We were amazed at how quickly our list was able to grow from this one piece of marketing.  Literally in the first day, we had 18 new contractors signed up – painters, electricians, plumbers, you name it.  Since then the list has grown to well over 100 contractors.

Step 4 – Schedule Quotes

The next step in the process is to schedule quotes with each of the contractors on the list.  We haven’t completed this step just yet, but on our next rehab project we plan to set up an open house of sorts for contractors.  We’re going to spend a day out at the house and schedule the contractors in 15 minute intervals.  During this initial meet and greet, we’ll be having them quote the work on the house, and we’ll be evaluating them on the a number of items:

  • Did they show up on time?
  • How do they present themselves?
  • Are they professional?
  • Are they organized?
  • What is their experience level?
  • Do they have references?
  • Are they licensed?
  • Are they insured?

When we receive their quotation, we will evaluate the competitiveness of the quote along with how they have organized the quote.  All of these things will be indicators for us on how good of a business the particular contractor runs.

Based upon our experience with contractors over the last year I’m expecting quite a few of them to receive below average grading, but I’m sure we will find a few diamonds in the rough through this process…and we’re going to keep those guys for sure!

More to come…

2011
07/21
CATEGORY
$60000 in 60 days
Financial Education
Networkding
Time Management
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FreedomSoft Contract Crusher Fails – Here’s a Better Way to Automate Your Contracts

 

I recently had a discussion on Facebook with another investor and they were talking about the “Contract Crusher” online software offered by FreedomSoft.  These guys are expert marketers because they do a great job getting their information in front of everybody myself included.  So, I have to admit I was intrigued by their offer to provide this free “Contract Crusher” software.  Their marketing makes it sounds like Contract Crusher will revolutionize how quickly you can create and send contracts.

Well, I checked it out, and quite frankly I was not impressed.  Their software gives you the ability to upload a contract to their online portal and then point and click where you want to add your information to the contract.  They do have a nice feature that allows you to email or fax the contract right from the web portal, but here’s why I’m not impressed.  If you have your contracts written up in Microsoft Word (or any other word processor software for that matter) you could do the same thing by putting the information in with text boxes…that’s essentially all they’re doing.  I’m not sure how this makes it more efficient for you.  And, if you’re a little more savvy with Microsoft Word you can create a “Form”, and then you’ll just be able to tab between each of the fields to fill the information in.

So all things consider, I’m giving Contract Crusher a failing grade.  I also think I have a better way for you to create your contracts because my method AUTOMATICALLY fills out your contract while you complete your due diligence on the property.

Here’s how…

When I take a look at a property I start off like many do taking a 30,000 foot view of the property.  For instance, if we’re looking at a rehab property I use the following formula:

Purchase Price = 65% x ARV – Repairs

If I think the seller may accept a purchase price given by this equation then I’m going to do a more in-depth analysis.  I start a property analysis using an excel spreadsheet I created.  The spreadsheet is organized with the following 5 tabs:

  1. Tab 1 – Property Information – Includes property address, seller name and phone number and date of analysis
  2. Tab 2 – Property Inspection – Includes property inspection report including summary of required repairs.  The output of this sheet is an estimate for the total cost of repairs including labor
  3. Tab 3 – Comparative Market Analysis – Includes information about subject property, data on sold properties, pending properties and listed properties.  The output of this sheet is an estimate for the After Repair Value (ARV).
  4. Tab 4 – Property Cashflow – Even if the primary exit strategy is a rehab we always do a cashflow analysis in case we “get stuck” with the property.  The output of this sheet is the cashflow the property will generate if rented.
  5. Tab 5 – Rehab Analysis – This tab includes a summary of the purchase costs, holding costs, repair costs, & selling costs associated with the rehab.  The output of this sheet is the maximum purchase price and the expected Return On Investment (ROI) for the rehab.

 Now, we have a standard contract for purchase that we use, and it requires that we fill in the following information:

  1. Seller’s Name
  2. Property Address
  3. Purchase Price
  4. Date
  5. Signature

Well, it occurred to me that for every property I analyze that I have already input this information into my analysis.  So, I created a 6th tab with the purchase agreement on it.  The power behind this is that I can link the cells in the purchase agreement to the other 5 tabs and as I fill in my analysis on the property the purchase agreement is AUTOMATICALLY filled in.  For example, in the area of the contract where the property address needs to be filled in, I just pull this information from Tab 1, and the purchase price is pulled from Tab 5, etc.  If the analysis I put together looks good, then I just print the purchase agreement and fax it, or I can print it to a PDF and email it.

One more thing I should mention is that I even went so far as to add my signature to the document.  To do this I simply signed a piece of paper and scanned it in using my scanner.  Once scanned in, I was able to save it as a picture file.  Then I just inserted the picture into my purchase agreement tab in Excel.  It took about another 30 seconds to crop, resize and move the signature to the right spot on the contract, but now I have a contract that fills itself out and is already signed.

My next step is to put together additional contract that I frequently use and have them automatically populated as well.  (Assignment of contract, mutual release agreement, contract addenda, etc.).

I think the guys from FreedomSoft had the right idea to take this to a web application, but perhaps they should redirect some of their marketing dollars to create a piece of software that has a little more capability…currently I’m not impressed…

2010
11/09
CATEGORY
Deal Analysis
regular
Time Management
Uncategorized
Video
2 comments

Getting Started in Real Estate Investing – Step 5 – Build Your Power Team

Today we are going to continue our series on Getting Started in Real Estate Investing.  In previous posts, we talked about:

Today in Step 5 we are going to talk about building your power team.  If you’re just starting out in real estate investing, you should wrap your arms around the fact that you cannot do everything yourself.  I know a lot of people, myself included, struggle with this.  When starting out, you probably want to know every detail of what you’re doing and you’re eager to learn the business.

However, there aren’t enough hours in the day for you to learn about everything or do everything that you need to do.  Rather than fight this fact, you need to embrace it.  I know personally it took me a long time to figure this out.  I was always the guy that spent time figuring things out and doing things myself.   However, eventually I realized that I spent so much time learning and doing that I could only do so much.  There are only so many hours in a day.  So, I needed help, and you do to.  The good thing is that there are many people out there that are looking to help you.  They will be charging you money for their services, but look at it this way.  If you can do one deal, and make $10,000 doing everything yourself, and it takes you 6 months to complete the deal that’s great.  However, in that same timeframe, if you could do 10 deals but you only made $5,000 per deal because you paid for help, doesn’t it make more sense to pay for some help.  You will net $50,000 in that same time, doing the same amount of work.

You see, the key to doing more deals is building a team of individuals or companies that you can go to at a moments notice and know that they are going to be able to answer questions, provide services, or just simply help you get out of a jam.  Below are a list of individuals or companies you should have on your team:

  • Other Investors
  • Mentors
  • Title Agents
  • Mortgage Brokers
  • Bankers
  • Hard Money Lenders
  • Attorneys
  • Contractors
  • Real Estate Agents
  • Property Managers
  • Home Inspectors
  • Accountants
  • Bookkeepers

As the list indicates, it is normally a good idea to have more than one team member for each category.  For example, if you have one contractor on your team, and you go to them to look at a rehab that you’re going to do and they’re tied up on another job, you’re going to be stuck without a contractor.  Or, if you’re looking for money, many times one banker or hard-money-lender will be limited by the programs they have to offer.  However, each lender has different programs available, and the more relationships you have, the more options you will have available to you.  Like they say, it’s not who you are, it’s who you know.

So how do we build a power team?  First off, please do not go to the yellow pages or Google and start searching for team members.  This is probably the worst thing you can do because you have no idea whether the person or company you find is reputable.  The best way for you to find team members is simply through networking.  Every team member you find should come through a referral by someone you know.  This is important for a few reasons.  First of all, the person you got the referral from has likely done quite a bit of business with the person they are referring you to.  This is invaluable because they have already completed the screening process from you.  If the person wasn’t worth their salt, they wouldn’t refer you to them.  Secondly, when you go to this person, and you tell them you were referred by another investor, it helps give you credibility because you are associated with this other investor. 

Now, if you’re still struggling, I can tell you by far the best way to network on a daily basis is to get on Facebook and join the conversation on real estate investing.  Awhile back we dedicated another post to Facebook that you can find here, so I won’t go into details on the things you can do on Facebook to build your team.  However, I will mention one thing – focus on the quality of the conversations you have with the people you meet.  This is not a numbers game, it’s about building relationships.  Remember, Facebook is a social network, and people expect to have excellent conversations on there.  Do this, and you will build relationships that will enable you to build your power team very quickly.  This one single resource has helped us build a great power team in literally less than a month’s timeframe.

So get our there and start building your team!

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2010
09/27
CATEGORY
Getting Started in Real Estate Investing
Networkding
Power Team
regular
Social Media Networking
Time Management
Video
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Getting Started in Real Estate Investing – Step 4 – Set Your Goals

     

Today we are going to continue our discussion on getting started in real estate investing. In the first three steps we talked about the following:      

Today we’re going to talk about setting your goals.  Now, if you’re like us, you have the goal of obtaining financial freedom through real estate investing.  Quite frankly, that’s really easy to say, but how do we really get there.  Do we just start buying houses and eventually we will get there?  Well, not exactly.  We really need to have a plan.    

When I look back at any significant accomplishment that I have made in my life and really think about how I achieved that accomplishment, it becomes clear to me that achieving your goals is really a process.  Achieving your goals doesn’t just happen, you have to work at them.    

Figure Out Your Drive    

As we mentioned in Step 1, you have to figure out your drive.  We’re mentioning this again because it is really that important.  Investing in real estate is not easy and it can be daunting at some times.  Other times it can seem like a piece of cake.  You will ride a roller coaster to some extent when investing in real estate, and to get through the hills and particularly the valleys, you need to have something significant driving you.    

Focus On Your Goals    

Books like Think & Grow Rich, The 7 Habits of Highly Effective People , Secrets of The Millionaire Mind and The Secret all share the same concept.  They all promote focusing on your ideas to make them become a reality.  Focusing on your goals has the same effect.  By focusing on your goals, you force yourself to think about them all the time, and thus your focus on achieving them.  So what happens…well, you take the steps necessary to achieve them.  It’s really that simple.    

Elements of a Goal    

There are really two elements of a good goal:   

  1. It must be measurable
  2. It must have an expected completion date. 

For example, you wouldn’t want your goal to be “I want to be rich”.  This statement is neither measurable, nor does it have any expected completion date.  A much better goal would be    

I want to have a net worth of $1,000,000 by January 1, 2015    

Create a Plan – The Success Pyramid    

Creating a plan is key to achieving your goals.  Let me say that again, CREATING A PLAN IS KEY TO ACHIEVING YOUR GOALS. You will not be successful if you are not guiding your thoughts.  How many times have you heard someone say “I wish I was rich”, or “I’ll get there someday’.  Well in all likelihood, these people will never achieve their goals because they are simply wishes.  They know what they would like to have, but they do not have the drive, the focus or a the plan to get there.    

So how do you create a plan?  You need to start with your Dream and break it down into Goals, Projects & Actions.  I call this the Success Pyramid.     

Success Pyramid

   

Start With a Dream     

As we have stated many times in this blog, our ultimate goal, or our Dream is to become financially free by May 15, 2012.  This goes at the top of our pyramid.    

Set Goals     

To achieve our Dream, we have asked ourselves what do we need to do to achieve our dream?  The things we need to do to achieve our dream become our goals.  We have established the following goals:        

  1. Payoff $200,000 in “bad debt” by May 15, 2011
  2. Generate passive income from real estate that exceeds our monthly expenses by May 15, 2012

These have become our main goals.     

Create Projects       

To achieve each of our goals, we ask ourselves what do we need to do to achieve our goals?  (You should see a pattern here).  The things we need to do to achieve our goals become projects.  We have established the following projects:     

  1. Build a real estate business
  2. Educate ourselves in real estate investing
  3. Complete our first deal netting $20,000 by August 15, 2010
  4. Complete 3 deals netting $20,000 each by November 15, 2010
  5. Complete 10 deals netting $200,000 by May 15, 2010

Create Actions       

By now you are seeing the pattern here.  For each of our projects, we have created a set of actions that we need to complete each project.  I will not list all of the projects we have here, because of the space it would take, but you get the idea.       

Create Your Dream Glidepath       

Now, you can see that we have systematically broken our dream down into Goals, Projects and Actions.  We are focused on these things, and they feed right into how we setup our mini-goals that we focus on each week.  To put all of this together, we have set up a document that we call our Dream Glidepath.  You can check it out by clicking on the link, but basically we are using it to guide us and track our progress.      

It is a very nice document because it shows our Dream, Goals, Projects & Actions but it also ties together the timeline and allows us to really track our progress.  Feel free to use this format to set up your very own dream glidepath.  If you would like the excel version of the document, please email me and I can send that to you.    

Happy Goal Setting!    

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2010
09/20
CATEGORY
Getting Started in Real Estate Investing
regular
Time Management
Video
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Plan Your Week of Real Estate Investing With Mini Goals

Welcome back.  First off, I would like to thank everyone for all the kind thoughts on our drive for $60,000 in 60 days.  We’re going to continue our drive towards financial freedom, and with that we plan to update this blog about 1-2 times per week.  We will continue to provide information on what we’re doing and insights into the things we have learned or are learning about real estate investing.  We encourage everyone to provide feedback and really make this a great community of real estate investors.

So, for today, we’re going to talk about a habit we have gotten into that helps tremendously to keep us focused on our real estate investing business.  Each Sunday night Kelly and I sit down for a few minutes and we brainstorm about what we need to do for the upcoming week.  We normally start by reviewing what we accomplished the previous week and then talk about what we need to complete for the next week to stay on track.  Through this process we are able to set our goals for the week, or “mini-goals” as we call them.  These mini-goals are the things that we really need to accomplish for the week to keep the ball moving forward.  For example, last week our mini-goals were:

  • Get the utilities turned on at the West Bloomfield Property
  • Setup appointments & meet with contractors
  • Obtain pre-approval for funding on the West Bloomfield Property
  • Set a closing date for the Pontiac Property

Once we determine the goals for the week, we then break down each of the goals into simple tasks that will help us accomplish these goals.  For instance, we broke the mini-goals into the following tasks:

  •  Call electric company – Todd
  • Call gas company – Todd
  • Go to West Bloomfield Township water department – Kelly
  • Get recommendations for contractors – Todd
  • Set appointments with contractors – Todd
  • Set appointment with home inspector – Kelly
  • Send credibility kit to hard money lenders – Todd
  • Phone conference / meet with hard money lenders – Todd
  • Meet with Pontiac property hard money lender – Kelly

To manage these mini-goals and keep them at center stage, we write them down on a big dry-erase board in our kitchen.  This board really helps keep Kelly and I organized and on the same page because we can update it throughout the week with things we have completed, or add additional things that come up throughout the week. 

With this list of mini-goals and tasks, we were able to systematically accomplish each of our goals last week.  All it took was to focus on the tasks at hand, and we were easily able to complete these goals.  I cannot tell you how much this has really helped in keeping us on track in our real estate investing.  It is something that is really simple, but it just takes a little discipline to do on a consistent basis.  We are happy to report that we accomplished all of our mini-goals last week, and this week our dry-erase board looks like this:

We are already on track to Close on Lydia, get contractor bids and obtain more properties like Lydia…maybe we’ll have to add more goals for this week…we’ll let you know what happens :)

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2010
08/30
CATEGORY
Photo
regular
Time Management
Video
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Day 56 – Planning For Success in Our Week Ahead

Today is day 56 in our drive for $60,000 in 60 days through real estate investing, and today we spent the day celebrating birthdays. The 20th was Todd’s brother’s birthday, and the 23rd is Todd’s dad’s birthday. So happy birthday everyone!

Today we spent a little time planning out our week this week because it is going to be really busy and we have quite a few important tasks to complete with the deals we have going. This is something we like to do every Sunday, and then we evaluate ourselves on how well we were able to accomplish things in the week past. It really helps us keep things organized and on pace for what we’re trying to do. So here’s our list for this week:

Monday

  • Talk with the West Bloomfield Township to get the water turned on at Tamson – Kelly
  • Talk to 3 contractors and schedule them to come out starting Thursday – Kelly
  • Talk with a hard money lender about financing Lydia – Kelly
  • Meet gas company at Tamson to have gas turned on – Kelly
  • Speak with a hard money lender about funding the Tamson deal – Todd
  • Speak with our hard money lender on the Lydia deal to obtain a closing date – Todd
  • Determine date for closing on Lydia

Tuesday

  • Physical therapy – Kelly
  • Continue discussions with hard money lenders – Todd

Wednesday

  • Have home inspection done on Tamson – Kelly

Thursday

  • Meet with contractors to get bids on Tamson
  • Attend Facebook training seminar in Southfield – Todd & Kelly

Friday

  • Meet with contractors to get bids on Tamson – Kelly
  • Go to Lake Orion Dragon’s Home opening high school football game – Todd & Alivia

Saturday

  • Drive for Dollars – Todd & Kelly

Sunday

  • Toby Keith Concert at DTE – Todd & Kelly

So this is our tentative plan for this week.  I say tentative because it always changes, but it gives us a good outlook on the week and keeps us organized.  Of course these are the highlights for the week.  We will also be continuing our networking and marketing throughout the week.  These are really everyday activities and have really become a part of our normal day.

So wish us luck as we move through our final week in our drive for $60,000 in 60 days.

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2010
08/22
CATEGORY
Deals We're Doing
regular
Time Management
Video
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Day 48 – A Day in the Life of A Real Estate Investor

 

Today is day 48 in our drive for $60,000 in 60 days and from the video you can see we had a full day of activity today. We had two showings on the property in Highland, and we also looked at a duplex that we are going to be putting an offer in on. This is probably a pretty normal day for any full-time real estate investor, and we got a lot done. We had 3 appointments, but we also had a lot of fun together as a family and with our friends.

The great news is that we may finally have a buyer for the property out in Highland. We have to put some numbers together on how we’re going to structure the deal, and it will really hinge on whether we can get funding for the deal. We will let you know in the next couple days…

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2010
08/14
CATEGORY
regular
Time Management
Video
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