Today is my birthday. My personal New Year's Day. My major goal for this new year? Turn this overgrown side hustle of ours into a real business, with proper corporate structure, multiple streams of income, and clear profit margins.
It's a tall order, one that's going to take up all of my time. All except the time I will set aside to be the “Best Mommy Ever” as Savannah calls me. And time to enjoy my little family. Sunday will remain Family Fun Day. I know one person in this world who's more of a workaholic than me, and that's my husband and business partner, Steve. Part of my job description is to make sure he can take some time off, too.
So I've decided to put this blog on ice for a little while.
I'll be back, though. I'm amazed people actually read this! I started writing Ginger Snapped in 2015, after one of our investor partners' rental property was shut down by Wilkes-Barre's One Strike ordinance. I was pouring all my rage into a private journal every morning, and it just wasn't enough. One Strike was such a blatant example of overreaching government – something you'd expect to happen in some Soviet bloc state during the Cold War, certainly not in the United States of America. Why this law wasn't immediately struck down in the name of common sense and decency still mystifies me, but justice moves slowly through the courts. Eventually the first landlord affected by One Strike, his tenants, and the ACLU struck it down forever, with a six-figure monetary judgement that every landlord and homeowner in Wilkes-Barre will end of paying for through ridiculous property taxes. You can check out that first blog post here: http://thisgingerjustsnapped.weebly.com/blog/why-this-ginger-snapped
My involvement in the One Strike fight ended well before the ACLU ended the fight for good. Our investor partner decided not to pursue his own lawsuit. He didn't want to spend the money or incur the media circus. I was told if Wilkes-Barre shut down one of my properties I could go as nuts as I liked. They never did. So I sat on my hands and followed the ACLU's case. And my blog turned from a chronicle of fighting city hall to a chronicle of a husband-and-wife real estate venture. I wrote about what it's really like to work with your spouse. I wrote many posts about rental management and the crazy stuff tenants do. I wrote about the trials and tribulations of actually flipping a house – it's nothing like those reality shows on A&E. You can't actually get it done in half an hour!
Writing this blog has been like therapy for me. And the fact that people actually read it was mind blowing! I got comments and e-mails from people in California, Minnesota, Montana and Michigan as well as the local landlord community here in NEPA.
That makes me nervous, though.
I wonder if people are reading this blog and taking my advice to heart. I hope not! I feel like I should put a big disclaimer up – THE BUSINESS STRATEGIES I WRITE ABOUT MAY ONLY SEEM LIKE GOOD IDEAS AT THE TIME, PLEASE APPLY THEM TO YOUR OWN BUSINESS AT YOUR OWN RISK. Two years ago I believed debt was a tool to build and expand a business. Today I am convinced debt is a death-spiral – something we were lucky to realize before it was too late for our business. We are over-leveraged, and will need to sell off some properties to get our overall cash flow back to where it needs to be. This is hubris, and I am grateful it didn't take down our business, because it could have. We're extremely lucky because now that we've learned this lesson we can apply it and come back stronger than ever when we're ready to start buying rental property again. I just hope somebody didn't read an earlier post of mine and go out and get a huge loan their cash flow cannot support.
I also wince when I think of what I wrote about hiring a property manager. We hired one in 2015 out of fear – One Strike freaked me out so much I lost all confidence in our ability to manage our own properties and thought they'd be better off in the hands of a professional. Of course this is something I didn't know at the time, I only figured that out after the fact. At the time I thought I was making a Smart Business Decision.
We hired a big name real estate company – and they didn't manage our properties any better than we did ourselves. In fact, we were losing a ton of money because they couldn't fill our vacancies! So we got out of our contract (they actually fired us because Steve was such a pain in the ass!) and contracted with a local landlord we knew who also managed properties. We lost money, and after six months we took our management back. That was a personal decision – if we had decided to move away, we probably would have left that contract in place, for better or for worse. But we decided we weren't moving, so we resumed self-management. That is not a decision I want to steer anybody else into.
So now I'm in the process of turning this business that has vastly outgrown its little LLC structure into the corporation it has to be in order to survive and thrive. Mistakes will be made, that's inevitable. I'm afraid if I continue to write this blog week by week I'm going to rave about a great business decision that's going to turn out 6 months later to be a disastrous mistake.
My other fear is that it's just going to be boring. A lot of what I'm working on now is record keeping systems, and spreadsheets analyzing the cash flow of different aspects of our business. Not exactly riveting reading! But necessary, in fact essential to the success of this business or any other. This process is going to take months, and once I've gone through it I'll be able to write a great 1200 word blog post that will be a valuable piece of business literature. Until then, it's just going to be a big snooze. I can only work on it myself for two hours at a time and there's got to be coffee involved to keep me awake!
Steve is out there doing all the exciting stuff – finding the deals, making the deals, working with a merry band of contractors to get houses flipped. I've got the tenant management, which offers an endless supply of entertaining stories, no doubt. But I'm automating my tenant management systems in order to reduce drama. And those systems are working, which is great for my sanity and my rental cash flow, but it's taking away a lot of my blog material!
I came to the realization this week that I need to put this blog away for awhile and focus on the not-so-exciting-but-oh-so-essential aspects of business structure and systems. My husband and I have a lot of decisions to make that I'm not going to be able to write about until they are final, and it may take quite awhile for them to be final. We will likely keep our current streams of business income – rental property, wholesale commissions, licensed realtor commissions, flipping houses for retail sale, and rehabbing properties for other investors. But we're going to analyze the profit margin of every single one of them, and will likely make significant changes. When that's done, I will write about it, and it will be awesome.
When this blog returns, it will be completely revamped. This was thrown together on a free Weebly site in 2015 just so I could get my posts out about One Strike. This is no longer the “tribulations of a red-headed mom who only wanted to grow a rental real estate business to support her family, and ended up fighting city hall.” The site still has the DONATE button up from when I was trying to get $20 from 500 fellow landlords in order to have $10,000 to sue Wilkes-Barre in Pennsylvania's Supreme Court. In two years, I haven't had time to revamp the site. All that's gotta go.
Ginger Snapped will be back, but not as an accidental activist. She'll be a seasoned and successful businesswoman, offering true inspiration and guidance to fellow real estate entrepreneurs and those who dream of becoming. I may not have had the chance to really fight city hall, but I was fully prepared to, and that makes me kind of baddass. I quit an unsatisfying career to devote my energies to building this American dream of small business ownership. That's definitely badass. I plan to harness the energy of that badassery to turn this clunky collection of LLCs into a real estate entity to be reckoned with.
Til then, hasta la vista, baby.