I am against debt and taking on partners. I'm all about bootstrapping. And I LOVE my equity positions.
I've had to borrow in the past since I'm in the RE business. But I retire that debt as quickly as possible and try to do projects out of pocket. I'm very good at cutting my costs and stretching my dime. I'd rather take longer on a project than go out and borrow the money. Debt loads keep me up at night.
I prepare, prepare, prepare for projects and future projects by saving, saving, saving, and planning, planning, planning when possible. I like to have my pot of "strutting money" on hand just in case an opportunity comes up. I add at least a 20% contingency pad to my estimated project costs. I assume that things are going to go wrong. We will find that can of worms. Any overage on my cost estimates or 20% pad that is left over gets put into a slush fund for emergencies. There's a hazard around every corner in my world. I work really hard to buy in bulk at good prices. I have extra materials and parts on hand that use regularly. We use and reuse what we have.
That's how I want to see myself. And then there are those "other" projects.
I have bought properties that I couldn't properly look at when I made the deal. I bought a house last summer that had squatters inside and outside. There were piles of junk everywhere and RVs filled with nasty people. It was the local dope house. They had a hole in the floor of the downstairs bathroom where they were pooping in the unfinished basement. UG! I didn't see the inside of the house for 2 months until after I bought it. I had to legally get rid of the squatters in the house first -- without them burning it down. Challenging! I didn't know if it was teardown or what. The squatters in the yard took longer to get rid of. Yes, the house has good bones and we're working on it. We've gutted it and we're rehabbing it. It will be worth many times what I paid for the property and the included problems that came in the deal. My years of experience make it all OK and I'm improving our community.
The biggest lesson I've learned is: Cash talks and BS walks
I've had to borrow in the past since I'm in the RE business. But I retire that debt as quickly as possible and try to do projects out of pocket. I'm very good at cutting my costs and stretching my dime. I'd rather take longer on a project than go out and borrow the money. Debt loads keep me up at night.
I prepare, prepare, prepare for projects and future projects by saving, saving, saving, and planning, planning, planning when possible. I like to have my pot of "strutting money" on hand just in case an opportunity comes up. I add at least a 20% contingency pad to my estimated project costs. I assume that things are going to go wrong. We will find that can of worms. Any overage on my cost estimates or 20% pad that is left over gets put into a slush fund for emergencies. There's a hazard around every corner in my world. I work really hard to buy in bulk at good prices. I have extra materials and parts on hand that use regularly. We use and reuse what we have.
That's how I want to see myself. And then there are those "other" projects.
I have bought properties that I couldn't properly look at when I made the deal. I bought a house last summer that had squatters inside and outside. There were piles of junk everywhere and RVs filled with nasty people. It was the local dope house. They had a hole in the floor of the downstairs bathroom where they were pooping in the unfinished basement. UG! I didn't see the inside of the house for 2 months until after I bought it. I had to legally get rid of the squatters in the house first -- without them burning it down. Challenging! I didn't know if it was teardown or what. The squatters in the yard took longer to get rid of. Yes, the house has good bones and we're working on it. We've gutted it and we're rehabbing it. It will be worth many times what I paid for the property and the included problems that came in the deal. My years of experience make it all OK and I'm improving our community.
The biggest lesson I've learned is: Cash talks and BS walks