Who In Here Rehabs Full Time...as Their Primary Job??
I am just curious as to how many of you actually do rehabs as a full time job and depend on it as his/her primary source of income??
And also, at what point were you brave enough to leave your day job? Thanks.
Darius
I have been doing it about 8 months but not full time. I do know a wholesaler that started out as a general contractor and when he started rehabbing full time he quit his contracting job in 6 monthes. He now wholesales and rehabbes. Every 5th house he finds he keeps and rehabs for his own portfolio.
Hope this helps.
Good poll question, Darius.
I'm curious to see the responses.
Myself, I work full time for UMass as a communications specialist. But I rehab multi families and convert them to condos a couple times a year (using all my vacation time to do the work).
I'm planning on taking the plunge and doing this full time next year.
[addsig]
Full timer here....More than full time. But I enjoy what I do and have fun.
1 Year. Jumped in with both feet. I had a friend that happens to be very wealthy and was willing to start another company (he has at least 6) and was very interested in R.E. He is now my business partner. We started the Corp., He made the company a loan (let's say 100-200K) and I put myself on the payroll as a salaried employee to start. Our + cash flow has since surpassed original loan amounts, and we have begun to pay the return. And collect additional profits for ourselves.....In less than a year.
I sold electronic components to major OEMs for 6 years, and ultimately did very well. But, this year I will more than double my earnings in my best of 6 years there.
SG
Quote:
On 2004-06-22 21:11, Giovanini_2 wrote:
Full timer here....More than full time. But I enjoy what I do and have fun.
1 Year. Jumped in with both feet. I had a friend that happens to be very wealthy and was willing to start another company (he has at least 6) and was very interested in R.E. He is now my business partner. We started the Corp., He made the company a loan (let's say 100-200K) and I put myself on the payroll as a salaried employee to start. Our + cash flow has since surpassed original loan amounts, and we have begun to pay the return. And collect additional profits for ourselves.....In less than a year.
I sold electronic components to major OEMs for 6 years, and ultimately did very well. But, this year I will more than double my earnings in my best of 6 years there.
SG
Hey Gio_2,
What type of real estate does you and your partner specialize in as far as fixer uppers are concerned...or do you specialize in fixer uppers at all?? And also would you care to share some numbers w/ the profits you have been able to obtain??
I am still trying to reach a point in my real estate investments where I KNOW I can afford to leave my day job.
Darius
Darius, I have been fulltime selfemployed for 3 years (as sole support of my family) as of last month (not doing real estate but as a loan closer - just branching into real estate now with the excess money I've earned the past 3 years by being self employed). but, when I decided that I wanted to quit my 'real' job, I mapped out a one year plan before taking the plunge. for the first 6 months, I put all of my 'parttime/loan closer' monies into the bank and spent none of it. the next 6 months, I only lived on my loan closer money and banked all of my 'real' pay checks. I saw that I could get by so I took the plunge. you will also find that once you don't have the 'real' job, you will start to earn more money immediately because you will have the time to devote to your new career
I own a contruction company by day, I have done CRE on the side for years. This year I plan on full time while a partner takes over running my company. IF you have ever been self employed this is like any other job where you go out and sell yourself and create work
I figured that I have made more $$ hour for hour without the headaches of 5-10 whiny employees and long days with rehab.
[addsig]
Hello Darius / Shamund...
Yes we specialize in fixer-uppers to retail ourselves or with our agent.
We happen to be in a market where there are THOUSANDS of investors doing wholesale (or trying), or buying rentals and most doing a terrible job of it. Some properties change hands 3-4 times in just a couple of months. (and still look like garbage) Alot of money floating around here.
So we decided long ago, although we do limit ourselves, to focus on obtaining properties that are in very desirable areas for young professionals or young families. Although you cant pick your buyers, they are usually the ones HERE that are more emotional about buying something they like fast.
I look for homes that have alot of hidden POTENTIAL / Curb Appeal and usually the 3 brs that the above local clients usually require, or room to expand. I can afford to wait for the right deals. Once you get started you will find that there are many who prefer to do deals for 5-10K a pop maybe wholesale maybe not. I prefer to do fewer deals (original goal 10 a year) and increase margin in the range of 25-40K per deal. Guess what if you are constantly looking for properties IT WORKS.
AS for profits I'll give you an idea....An early on deal we bought at 109K and sold @ 136K. We only made about 10K pft. But I was pleased at the time as it only took 45 days and I had heard many horror stories from those who lost big bucks early on. Our latest deal will bring me a closing check for about 75K and net profit of about 55K including all expenses. We continue to see solid returns and and have watched our company cash flow increase steadily by 25-30% or so with each deal.
suekostalas..had the right idea. I was lucky to have an excellent partner as a friend. But if I had not I would have continued to Bank my own $$$ and possibly made the transition to some investment related job at least part-time until I was comfortable with the move to R.E. investing. All I did was speed up the process by a couple of years. Thank God.
SG
I'm new to this forum and I have a question regarding Monkfish's previous post.
I am in the Boston area and am looking at purchasing, rehabbing and condoing out three-family homes. I noticed Monkfish takes the same approach and I was wondering what cost is associate w/zoning a three family into three seperate condos (aside from repairs)?
Any info would be greatly appreciated.
thanks
First, can it be done.
I just started the process of buying a 4-plex, perhaps doxing it and building town homes instead.
Dispite the land be zone RM5-12, which meand 5-12 residential units / acre.
I have to get a CUP O(5-10)
Then do a sub-divition (4k)
then do:
plans
architecture review
plan check permits
Here a 4-plex might sell for 800K, but 4 townhouses would sell for 1.8M-2M, so it can be worth the effort.
Thanks for the info, I really appreciate it.
That's exactly what i'm trying to do, condo-ing the property out will yield at least an extra 200k.
Shamund
My partner and I stared full time in this last Dec. I was a general contractor for over 30 years. Now , I rely solely on this for my livelihood (my partner owns an investment co in DC area and still maintains that) . We originally started out to buy/rehab/sell . But since our market is a relatively slow one here in Pittsburgh, we have started to keep some of the properties for hold/rentals.
Trust me, it was very easy for me to make the jump from day job to this. I hated the rat race and now find myself doing something I love to do and are making a great living in the process.
Dave
gleonard22, you came to the right place.
Drop me a line privately if you are serious about pursuing condo conversions.
I'll give you some insight and hook you up with professionals (architects, surveyors, RE attorneys, etc.) who specialize in this particular REI arena from the metro Boston area.
Take care.
[addsig]
Quote:
On 2004-06-24 14:10, davezora wrote:
Shamund
My partner and I stared full time in this last Dec. I was a general contractor for over 30 years. Now , I rely solely on this for my livelihood (my partner owns an investment co in DC area and still maintains that) . We originally started out to buy/rehab/sell . But since our market is a relatively slow one here in Pittsburgh, we have started to keep some of the properties for hold/rentals.
Trust me, it was very easy for me to make the jump from day job to this. I hated the rat race and now find myself doing something I love to do and are making a great living in the process.
Dave
Dave
I am curious as to why you decided to make the switch from being a contractor to doing this?? Reason being I had planned on doing rehabs just as a stepping stone and then ultimately become a general contractor while doing rehabs from time to time.
Is there more to be made in rehabs than there is in new construction?? If there is I have just learned something new today.
Thanks for the replies guys..great info.
Shamund
Let me put it this way. If I could drive a truck into any suppliers yard and drive away with everything I needed to do a job and never needed to place any "special orders" and never had to scramble at 7:00 am to find a replacement concrete finisher who didn't even bother to call off work on the very same day I had a 25 yard pour scheduled to go at (coincidentally 7:00 am) and never had to spend too much of my time documenting child support claims for numerous employees and never had to make any financial concessions to any of my clients because of some bozo employee who decided to show up for work after being out half the night boozing or snorting or both...then I might...might have remained in the GC business. But the truth is, it happens all the time and eventually I realized, there had to be a better way.
Now, I do many of the same things I did before. The primary differences are.
Special orders no longer impact my bottom line nearly as much, because I don't have the concern about something showing up wrong or damaged or late. I simply go out, buy something else and put it in. Since it is me who I am working for now, as opposed to someone else (who is by now pitching a bitch over the problem) I am able to satisfy my clien (Me) and move on. And when someone doesn't show up for work and doesn't call to advise me either, I simply pull someone from doing something else to do whatever is the priority. Some thing I couldn't always do before, because whomever I was pulling off to replace the missing man was being taken away from someone else's job and so then...it's their turn to get pissed. I think you get the point
And yes, as an added bonus to all of this, I now actually make much more money doing REI than I made as a GC. And I have a job that is now, much less stressful. Gotta love it.
Dave
davezora
But isn't your profit margin per property lower on a rehab than it would be on new construction??
I'm assuming that you are able to make more money by completing more rehabs than you would new construction in a given time frame. Is that assumption correct??
Shamund
Shamund
Several years ago, I got out of new construction per se. The margins were thin to begin with, but all of the aforementioned things only compounded it. I had gravitated towards renovation work, specifically residential. I also had begun specializing in 2nd and 3rd floor additions. (remove the entire roof structure of a home and raise another floor level or 2.
Now, I rehab (actually upgrade) 200-250K houses and turn them over at a rate of every 3 months doing 2 at a time, with an expected profit of about 50K per house. So do the math. I love this job!
Dave
So I am assuming that you sell them immediately as oppose to doing a refi and renting/lease optioning?
Shamund
Yes. Unless for some reason they don't move as quickly as we need them to. In which event we try other alternatives. L/O is one I am exploring for a 300K house I have right now.
Point being here, that for me, and several other contractors I am aquainted with, the problems I mentioned to you are very inherent in this business. These aren't isolated incidents that randomly occur. They happen with great frequency. Through REI, I have managed to minimize their impact on my bottom line. Since these houses are mine, I am free to rip them apart and rebuild them in most any fashion I choose and not have to be concerned about a client who is still trying to live in the house while the work is going on. This is where the biggest impact is felt whenever these "problems" start to occur. And usually, as an end result, the GC ends up making some form of monetary concession in order to appease the irate client, thereby heading off any potential problems toward finishing and getting paid on the job.
For me, it's less stressful and more lucrative on the rehabs.
Dave