We closed on 736 Grove St. Avoca Wednesday afternoon. Our investor-partner is funding the rehab and the first check has already been written to our contractor. This is our first time working with this contractor, but Steve has worked with him as a fellow real estate investor for a few months now. Fingers crossed that we finally got it right!
Building a Team of Real Professionals for Our Real Estate Business
What a contrast between our new contractor and one of the merry band of idiots that worked on our last flip. One Merry Idiot contacted Steve about some work. Steve didn’t recognize the name. That is until he started trashing the other members of the crew he worked on during our last Avoca flip. Then Steve remembered him – no, he shall never lay a hammer on any one of our projects again! (Details of the heaven and hell that was our first real flip can be found here: http://thisgingerjustsnapped.weebly.com/blog/how-it-all-began-part-8-house-flipping-reality-not-reality-show)
The Merry Idiot described here was a member of Contractor Crew #2 in case you’re wondering.
The main difference between our new contractor, Mike, and the Merry Idiot is professionalism. Mike’s main concerns are the scope of work, the quality of the materials and the timeline to finish the flip. The Idiot’s main concerns are whether he will be paid in cash that night, whether we have tools he can borrow, and who talked smack about whom. There is an awful lot of smack talk among people of his caliber. It’s like high school all over again. I’m really too old for this and I just don’t have time.
We’re actually building up a nice compliment of reliable contractor, handyman and maintenance types. The list of people we can call is small and they do not work cheap, but I find that to be a good thing. What I’m finding is they only need to come and fix it once.
And so the ship that is our business is slowly beginning to turn around.
Cash Flow is King
We had our first positive cash flow month since November of last year, thanks to some wholesale deals Steve had in the works that finally closed. Rental income is up, too, since we’re now self-managing and saving the management fees. We rented four of our seven empty apartments. We had to evict two non-paying tenants, but were able to salvage five others with payment arrangements. There will likely be more evictions in the month to come, but I’m praying for a miracle.
I’m praying the ones we filed eviction on will find the funds to be able to stay. I’m praying the others we worked out payment arrangements with will honor them and catch up. I don’t like being the Big Bad Landlord. I hate evicting people. But I’m learning that sometimes the eviction notice can be the catalyst that turns someone’s life around, and that I’m not doing anyone any favors by letting them stay without paying their rent. That’s called enabling. I will not be an enabler. It is possible to retain my compassion for my fellow man while doing what I need to do for my business.
Speaking of that, Mr. Landlord is speaking Tuesday night (June 28th) at the Wyoming Valley Real Estate Investors Association Meeting at 6:30pm.
Here is the link to WVREIA’s Facebook page: https://www.facebook.com/WVREIA/
Funny – I just went to their Facebook page and there’s a link to this blog there(!)
Mr. Landlord’s awesome website: http://www.mrlandlord.com/7/
I really want to go. I’ll need to bring Savannah so I don’t know how long we’ll be able to stay. She’s six years old now, and we’re starting to integrate her into the family business and sometimes she’s really good. But other times, especially if she’s tired, things can melt down pretty quickly. I could get a sitter, but she’s away at YMCA camp all day so I can work, and nights are when I see her. I’ll bring her, we’ll have something to eat, I’ll let her play Minion Rush on my phone if necessary, and if we have to leave early, so be it. It’s a choice I make.
Time is Money? Time is Everything!
Time is an issue – and not just making sure I spend time with my daughter. Making sure I spend time with my husband, who is also my business partner, on activities not related to work is a huge issue! We set aside several hours on Sunday as “Family Fun Day” to go out and have fun with Savannah. Steve and I are also trying to set aside Tuesday afternoons for just us. Savannah is at camp. The theory is to work in the morning and knock off at lunchtime till around 4:30. Just block off that time as an ultra-important appointment that can’t be moved, right? Easier said than done! We spent our date last Tuesday moving a filing cabinet from his truck into the house, driving his truck over to one of our rentals so the crews working there could load it up with construction debris, and then stopping at Lowes to order materials! Then we drove out to Harvey’s Lake to pull a part from our little sailboat that needed repair. We had just enough time for lunch before I had to leave for work at the radio station and he to get Savannah from camp. NOT exactly what I had in mind! The forecast next Tuesday is 88 degrees – I want to spend the afternoon on the lake, not at Lowes!
Progress, Not Perfection
Steve is also feeling a bit overwhelmed by time. We took on a huge undertaking when we took rental management back, and it’s mostly on him since I’ve been scheduled to work a lot of hours for the radio station. When we took management back we had seven empty apartments! He has been able to rent four of them, and the calls continue to come in to our Google Voice mailbox we set up for this purpose. Too many calls to return in a timely manner. He’s doing the best he can to set up appointments for showings, and sometimes the people won’t even show up. It’s very frustrating. I hope I can take some of that load off him next week when my work schedule slows down.
Another thing we’re trying to deal with is these empty apartments need some sprucing up. The four that are rented for July 1st need to be fixed up now! We lucked out with one of them, though. The couple we rented it to told us they wanted to do all the work themselves, because they want to live there long-term. The place was trashed – we had a long term tenant that just up and left after a domestic incident with his wife and she left it a terrible mess. So bad we’re actually suing them for $12,000 – the maximum amount one can sue for in magisterial-level small claims court! The hearing is July 6th, I’ll let you know how that goes.
Anyway warning bells and sirens go off in my head when a tenant tells me they want to remodel the place. But we decided to take a chance on this guy, because we were desperate. We told him – paint one room and we’ll see how it is. Well – here’s an example of his work!
So many works in progress! Progress, not perfection.