A Mastermind Group is a group of like-minded individuals who get together to brainstorm on business ideas.
Here's what I propose:
For the past few weeks, one of our regulars has been documenting his progress as he starts a business doing real estate rehabs.
He's gotten a lot of great input from some of the more experienced rehabbers on these forums, and he's also gotten a number of "you can't do it that way" posts.
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Time for something different.
In this thread, we will only talk about one thing:
How to transform an "S" (self employed) RE rehab business into a "B" (business)
that does not require constant on-site presence of the owner.
Here are the rules:
1. To post a mastermind suggestion/idea/solution, you must have completed at least 2 successful real estate rehabs (be prepared to give a brief summary of what you've done).
-You will have experience doing rehabs, either as an E (employee) working on a house, as an S (self employed) contractor working on a house --which could be yours or someone else's, or you're a B (business owner) who is doing exactly what we're discussing here:
How to build a business improving real estate.
Note that "improving" can mean a lot of things:
-Buying distressed properties and giving them a quick facelift
-Buying decent properties and improving them (changing use, adding on, you name it)
-Buying vacant land and building on it
-NOT buying but brokering transactions where the property is improved
(I'll add to this list as we come up with other ways to improve RE).
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So first, I'd like to set out a few things that I have experienced as limiting factors-- things that have hampered/slowed me from turing my "S" rehab business into more of a "B" business.
The things that we need:
(Making your RE business a FASTLANE venture)
1. Scalability
We need to figure out how to make this business capable of MASSIVE growth. I'm not talking 10 SFHs. I'm talking 1000. Or 10,000.
Or maybe something totally different-- like ala Monopoly, you get 4 houses, and then trade up to one larger property.
Whatever the approach, the goal must be to grow the business to the point where it is doing $10-100 million dollar transactions --not single properties, but overall.
2. Monitoring, but not babysitting
How to take the "S" out of RE rehabs. Through either hired help (other people's time/skills/experience) or some other automated or in-place system that allows for project management without your constant presence.
For instance: A system that allows you to visit or monitor 100 job sites within a day.
3. Profit in numbers
This exercise is pointless if we figure out how to make things a "B", but the B costs so much to run that it's not competitive. So we have to figure out how to grow the business AND the profits.
4. Exit Plan
We have to provide for an exit strategy. How to sell or cash in on the business and walk away from it.
*******
These are some of the goals.
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Speed Bumps:
Things that we need to address to make this all work. Obstacles you've encountered, and proposed solutions.
Or even better-- an obstacle you've overcome, and how you've done it!
Here are some of the potential hold ups from my experiences
(25 years as a contractor, 19 of those as a rehabber):
1. Rehabbing existing homes has TONS of variables. (things that can go wrong or cost more to fix than expected).
2. Hard to find good people.
3. Hard to make the permit/inspection process consistent (different personalities = different requirements)
4. Hard to bring things in on time, and on budget (unless you've done it with success repeatedly, please don't tell us to implement per diem fines-- we all know how well that works when the entire crew just up and walks off the job, and trashes/sabotages the house on their way out-- or even worse, the ones who hide things in walls that won't get caught by inspections, but also won't work, just so they get their checks and scram).
5. Hard to predict resale market.
******
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So let's hear from the experienced RE rehabbers on these forums.
What have you done/are you doing/can you do
to make your business less dependent on your constant oversight?
Focus on SOLUTIONS.
:banana::banana::banana:
-Russ H.
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