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Have any of you guys or girls taken a big financial hit when you've started up?
My first house for myself is bigger than average and i was meant to get a good deal from a builder who i had worked for before. my plan was to build this house cheaper than i could with anyone else and then finish it off in a way that would make it worth a lot more than i put into it. I was then to borrow against the house which I would have had a good amount of equity in to fund more smaller houses to build and then sell.
Well its been over 2.5 years since i signed with the builder and the house is still not complete the work that the builder has done needs to be fixed as his workmanship was not as good as it used to be because of the builders financial situation, at present the builder is being sued by clients/trades/suppliers.
Im paying a mortgage on the property at the moment and cant live in it and will still be a while before the house becomes livable and it was meant to be finished a year ago!
So now i have had to work myself stupid to get my company up to the point where i can buy a small block of land with it and build a house on it to sell.
So now i have put a heap of money into the first house but am not going to see a return on that for a while (if at all, in fact i may lose the money i put into it) but now i have another little block of land which is getting development approval at the moment so i can build a house on it myself, i then plan to flip it and do the same thing again. After i have done that i have a friend who wants to invest with me in the build from scratch and flip market. I plan to keep doing this and offer the houses at a cheaper than average rate so that people can buy houses from us for cheaper than what they could otherwise build them for.
I have learnt a couple of valuable lessons along the way here;
Don't take peoples words for anything, get it in writing. Its hard to ask someone you have built a somewhat personal relationship with for what they promise you in writing but it is well worth any unpleasantness it may cause.
Keep clients/suppliers/employees happy, I do my best to keep everyone in my network happy so that they know I can deliver and will recommend my services to other potential clients, the other builder that i trusted for my first project on the other hand, well now almost daily i hear of another person they have screwed over, and i will never let that happen to me.
Don't do business with people you know unless both of your intentions are clear with each other first, dont leave anything to chance. Also write up an agreement for action to take if unforseen circumstances do happen should one of you want to pull out, how to divide money up?
Should one of you become ill or die, who receives the money then etc.
I have had many sleepless nights due this whole ordeal and will more than likely end up losing money on my first house, but i did learn a couple of good lessons. Even if it does end up costing me a lot of money now i will know what not to do next time and how to be smarter so this doesnt happen again!
Im also interested to hear if anyone got stuffed around when they were starting up and how did you overcome it?
My first house for myself is bigger than average and i was meant to get a good deal from a builder who i had worked for before. my plan was to build this house cheaper than i could with anyone else and then finish it off in a way that would make it worth a lot more than i put into it. I was then to borrow against the house which I would have had a good amount of equity in to fund more smaller houses to build and then sell.
Well its been over 2.5 years since i signed with the builder and the house is still not complete the work that the builder has done needs to be fixed as his workmanship was not as good as it used to be because of the builders financial situation, at present the builder is being sued by clients/trades/suppliers.
Im paying a mortgage on the property at the moment and cant live in it and will still be a while before the house becomes livable and it was meant to be finished a year ago!
So now i have had to work myself stupid to get my company up to the point where i can buy a small block of land with it and build a house on it to sell.
So now i have put a heap of money into the first house but am not going to see a return on that for a while (if at all, in fact i may lose the money i put into it) but now i have another little block of land which is getting development approval at the moment so i can build a house on it myself, i then plan to flip it and do the same thing again. After i have done that i have a friend who wants to invest with me in the build from scratch and flip market. I plan to keep doing this and offer the houses at a cheaper than average rate so that people can buy houses from us for cheaper than what they could otherwise build them for.
I have learnt a couple of valuable lessons along the way here;
Don't take peoples words for anything, get it in writing. Its hard to ask someone you have built a somewhat personal relationship with for what they promise you in writing but it is well worth any unpleasantness it may cause.
Keep clients/suppliers/employees happy, I do my best to keep everyone in my network happy so that they know I can deliver and will recommend my services to other potential clients, the other builder that i trusted for my first project on the other hand, well now almost daily i hear of another person they have screwed over, and i will never let that happen to me.
Don't do business with people you know unless both of your intentions are clear with each other first, dont leave anything to chance. Also write up an agreement for action to take if unforseen circumstances do happen should one of you want to pull out, how to divide money up?
Should one of you become ill or die, who receives the money then etc.
I have had many sleepless nights due this whole ordeal and will more than likely end up losing money on my first house, but i did learn a couple of good lessons. Even if it does end up costing me a lot of money now i will know what not to do next time and how to be smarter so this doesnt happen again!
Im also interested to hear if anyone got stuffed around when they were starting up and how did you overcome it?
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