- Joined
- Feb 23, 2008
- Messages
- 211
Rep Bank
$415
$415
User Power: 29%
The long term strategy of acquiring synergistic Real Estate in a specific area expands choices geometrically with a Zero Based Spending slant. You are positioned for good things to happen.
In April 2009 a 1300 square foot rental house burned down in a commercial area just outside of downtown. After cleaning the land it was assessed at $92,000 (60X100 lot) which would be difficult to sell in the current market. The vacant land sat until February 2011 until I moved a 1794 square foot 2 story home on to the site.
A Zero Based Spending policy is real work and real education. The commitment to the area meant taking care of business by challenging property tax assesments, taking on excess fixed charges in the city water business, stopping excess charges of the trash company for dumpster lid left open, etc, etc. The challenges are long term in that they prevent future attempts of bureaucratic extortion. The friction is adversarial but preserved capital and builds a solid base.
An assessor who I had previously done battle with actually called in Sept 2010 and mentioned that an Insurance Company in the commercial area was building a new office behind and older 1920 home they were doing business out of. They intended to demo the house which had been upgraded and put in a parking lot. Long story short I got off the couch and went down met the owner and purchased the house for $1.00. The home was 5 lots down from my vacant lot. I can't get an A+ because I still paid a dollar.
The logistics of the house move is more complicated than building a house because you are a middle man between the home owner and the mover while scheduling multiple parties for what was to be a Super Bowl Sunday morning move from 7am to noon. The deadlines included dealing with the city, county, cable lines blocking the exit of the house off the property including Qwest, Comcast, Rainer Connect, and the PUD Electric lines. In addition traffic control (signs) had to be scheduled. If anyone failed to show up it could sabotage the move.
The budget for the move was $30,000 and I considered $10,000 of that as education as this was a virgin move. The second would be easier and tighter in the future. Competitive costing is part of proper due dilligence.
One problem was with Qwest which had 4 cables in the way of the move. Upon the first inspection with the superintendent and measurements he stated that each cable had 300 connections and they would have to build slack into the line at each connection. He also stated there would be a charge and the money would have to be paid up front. I drilled him asking him to think outside the box. Suggested that a crane could simply lift the cables. I even had a bucket van. He would have to coordinate with engineering who also eventually came out and quoted $25,000. I went through the roof:
1) My position was that the cables were Qwest's responsibility to move and the
cost should be zero.
2) Qwest did not own the air space.
3) The quote was more than the cost of the entire cost of the house move
4) I wanted the pecking order and a corporate officer
5) Stated that the cables were like a car parked in the street and to be asked to
pay $25,000 to move it.
6) Qwest was providing no service for me as I pay for production and usage only
which is my mover, excavator, and foundation, etc
7) The other lines were being moved at no charge, why is Qwest unique
8) Qwest is a monopoly with no competititive bid for costing or any other way of
doing the job
9) They came back with a $9,000 quote and would disconnect cables from 3 pole
down on each side of the project to attain the slack
10) They had no franchise agreement with the city
11) I finally reached and attorney (4th party) who was the right hand of the Pres
of the western region and stated the very fact that the quote went from 25k
to 9k showed no credibility, he actually agreed
12) My guys could do the job at $18/hr for half day thats $72 and have my own
lift truck which I paid $2000 for
13) I stated Qwest was big and had more money than God and had their name on
Qwest Field in Seattle and tried to extort money from a small guy just trying
to move a house across the street
14) For that kind of money one could dig up the street and drop fiber optics and
bury them for a premanent solution for any future moves
15) That you are asking me to pay for built in obsolesence of exterior cable lines
that are grandfathered in and will be changed in the future anyway
16) They came back with $7k which I said was impossible and I had allocated a
maximum $3500 (mistaken concession) overrun for the whole project
17) They were stringing out the job as the last contact which endangered the
whole project and commitments by the city and local business owners
18) Further there was a cost/benefit to Qwest with the house moved they are
likely to provide service to the new residence for years to come. A demolished
home produced no income.
19) The lawyer came back a second time at $3500 with 50% down and 50% on
completion which was accepted
20) Other arguments were made not mentioned here
The actual costs thus far:
House move $14,600
Excavation 8,000
Foundation 7,800
City Variance Hearing 200 (Lot reverted to commercial when burned
down, variance needed to restore
residential rental status)
House move permit 200
Foundation premit 82
Traffic control 356
Qwest 3,500
House purchase 1
Reinstall water meter 700
City fixed charge from burn 191
Tenant unpaid utility@burn 400
Film, Gas, Supplies 288
Plumbing/Electric hookup 4,000
Total 40,318
With a standard expected rent of $900 it would take 45 months for a pay back or 4 years (25% per year).
The land value is solidified and the project would have a basis of 132,000 with an easily liquidated sale price of $150,000.
If refinancing a conservative loan of $115,000 would generate surplus funds of $74,782 after paying back the house move costs. This would be a 285% return over 3 months or an annual return of 1140%.
This is not all, the home after refinance would still produce a postive cash flow in an appreciating area and also produce an additional write off of interest and depreciation after the refinance. Not to mention all the proceeds are tax free.
This is a controlled return and only the beginning, with a $200,000 trade value I may leverage into a 20 unit building next door to my existing office futher leveraging the gain.
At this time I do not put a premium on liquidation events because of inflation, this may appear like a small deal but it is very big and controlled. A second move is already being planned.
The numbers, imagine 10 a year = 1 million leveraged into other projects accelerating returns.
This is about building a base in posiitioning which matures and the ball comes to you. This is based on a zero based spending concept which produces the most education.
In contrast the government has no respect for spending and the ignorance and risk multiplies beyond anyones control.
Which side does one want to be on?
In April 2009 a 1300 square foot rental house burned down in a commercial area just outside of downtown. After cleaning the land it was assessed at $92,000 (60X100 lot) which would be difficult to sell in the current market. The vacant land sat until February 2011 until I moved a 1794 square foot 2 story home on to the site.
A Zero Based Spending policy is real work and real education. The commitment to the area meant taking care of business by challenging property tax assesments, taking on excess fixed charges in the city water business, stopping excess charges of the trash company for dumpster lid left open, etc, etc. The challenges are long term in that they prevent future attempts of bureaucratic extortion. The friction is adversarial but preserved capital and builds a solid base.
An assessor who I had previously done battle with actually called in Sept 2010 and mentioned that an Insurance Company in the commercial area was building a new office behind and older 1920 home they were doing business out of. They intended to demo the house which had been upgraded and put in a parking lot. Long story short I got off the couch and went down met the owner and purchased the house for $1.00. The home was 5 lots down from my vacant lot. I can't get an A+ because I still paid a dollar.
The logistics of the house move is more complicated than building a house because you are a middle man between the home owner and the mover while scheduling multiple parties for what was to be a Super Bowl Sunday morning move from 7am to noon. The deadlines included dealing with the city, county, cable lines blocking the exit of the house off the property including Qwest, Comcast, Rainer Connect, and the PUD Electric lines. In addition traffic control (signs) had to be scheduled. If anyone failed to show up it could sabotage the move.
The budget for the move was $30,000 and I considered $10,000 of that as education as this was a virgin move. The second would be easier and tighter in the future. Competitive costing is part of proper due dilligence.
One problem was with Qwest which had 4 cables in the way of the move. Upon the first inspection with the superintendent and measurements he stated that each cable had 300 connections and they would have to build slack into the line at each connection. He also stated there would be a charge and the money would have to be paid up front. I drilled him asking him to think outside the box. Suggested that a crane could simply lift the cables. I even had a bucket van. He would have to coordinate with engineering who also eventually came out and quoted $25,000. I went through the roof:
1) My position was that the cables were Qwest's responsibility to move and the
cost should be zero.
2) Qwest did not own the air space.
3) The quote was more than the cost of the entire cost of the house move
4) I wanted the pecking order and a corporate officer
5) Stated that the cables were like a car parked in the street and to be asked to
pay $25,000 to move it.
6) Qwest was providing no service for me as I pay for production and usage only
which is my mover, excavator, and foundation, etc
7) The other lines were being moved at no charge, why is Qwest unique
8) Qwest is a monopoly with no competititive bid for costing or any other way of
doing the job
9) They came back with a $9,000 quote and would disconnect cables from 3 pole
down on each side of the project to attain the slack
10) They had no franchise agreement with the city
11) I finally reached and attorney (4th party) who was the right hand of the Pres
of the western region and stated the very fact that the quote went from 25k
to 9k showed no credibility, he actually agreed
12) My guys could do the job at $18/hr for half day thats $72 and have my own
lift truck which I paid $2000 for
13) I stated Qwest was big and had more money than God and had their name on
Qwest Field in Seattle and tried to extort money from a small guy just trying
to move a house across the street
14) For that kind of money one could dig up the street and drop fiber optics and
bury them for a premanent solution for any future moves
15) That you are asking me to pay for built in obsolesence of exterior cable lines
that are grandfathered in and will be changed in the future anyway
16) They came back with $7k which I said was impossible and I had allocated a
maximum $3500 (mistaken concession) overrun for the whole project
17) They were stringing out the job as the last contact which endangered the
whole project and commitments by the city and local business owners
18) Further there was a cost/benefit to Qwest with the house moved they are
likely to provide service to the new residence for years to come. A demolished
home produced no income.
19) The lawyer came back a second time at $3500 with 50% down and 50% on
completion which was accepted
20) Other arguments were made not mentioned here
The actual costs thus far:
House move $14,600
Excavation 8,000
Foundation 7,800
City Variance Hearing 200 (Lot reverted to commercial when burned
down, variance needed to restore
residential rental status)
House move permit 200
Foundation premit 82
Traffic control 356
Qwest 3,500
House purchase 1
Reinstall water meter 700
City fixed charge from burn 191
Tenant unpaid utility@burn 400
Film, Gas, Supplies 288
Plumbing/Electric hookup 4,000
Total 40,318
With a standard expected rent of $900 it would take 45 months for a pay back or 4 years (25% per year).
The land value is solidified and the project would have a basis of 132,000 with an easily liquidated sale price of $150,000.
If refinancing a conservative loan of $115,000 would generate surplus funds of $74,782 after paying back the house move costs. This would be a 285% return over 3 months or an annual return of 1140%.
This is not all, the home after refinance would still produce a postive cash flow in an appreciating area and also produce an additional write off of interest and depreciation after the refinance. Not to mention all the proceeds are tax free.
This is a controlled return and only the beginning, with a $200,000 trade value I may leverage into a 20 unit building next door to my existing office futher leveraging the gain.
At this time I do not put a premium on liquidation events because of inflation, this may appear like a small deal but it is very big and controlled. A second move is already being planned.
The numbers, imagine 10 a year = 1 million leveraged into other projects accelerating returns.
This is about building a base in posiitioning which matures and the ball comes to you. This is based on a zero based spending concept which produces the most education.
In contrast the government has no respect for spending and the ignorance and risk multiplies beyond anyones control.
Which side does one want to be on?
Dislike ads? Become a Fastlane member:
Subscribe today and surround yourself with winners and millionaire mentors, not those broke friends who only want to drink beer and play video games. :-)
Membership Required: Upgrade to Expose Nearly 1,000,000 Posts
Ready to Unleash the Millionaire Entrepreneur in You?
Become a member of the Fastlane Forum, the private community founded by best-selling author and multi-millionaire entrepreneur MJ DeMarco. Since 2007, MJ DeMarco has poured his heart and soul into the Fastlane Forum, helping entrepreneurs reclaim their time, win their financial freedom, and live their best life.
With more than 39,000 posts packed with insights, strategies, and advice, you’re not just a member—you’re stepping into MJ’s inner-circle, a place where you’ll never be left alone.
Become a member and gain immediate access to...
- Active Community: Ever join a community only to find it DEAD? Not at Fastlane! As you can see from our home page, life-changing content is posted dozens of times daily.
- Exclusive Insights: Direct access to MJ DeMarco’s daily contributions and wisdom.
- Powerful Networking Opportunities: Connect with a diverse group of successful entrepreneurs who can offer mentorship, collaboration, and opportunities.
- Proven Strategies: Learn from the best in the business, with actionable advice and strategies that can accelerate your success.
"You are the average of the five people you surround yourself with the most..."
Who are you surrounding yourself with? Surround yourself with millionaire success. Join Fastlane today!
Join Today
