Wine Salesman, Turned Real Estate Student, Turned House Flipping Intern Part 2
It is great to finally post another update of my progress here at GII, as well as USD.
Last semester went great. I learned a great deal both here and in school, but the knowledge acquired here at GII is far more beneficial than what was covered in class. During the fall months at GII, we focused on obtaining more deals. We contacted agents and held classes to find more deals and more investors.
We had a few come in, such as Coronado and Shannon. We were very successful with Coronado, as we were able to flip the property without any construction work. We acquired Shannon, but I headed to China before any work began.
Classes went great. I finished the semester with straight Aâ€™s- a first for me!Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â
Now that I am back, things are getting busy here at GII. Over the break, Curtis and Nick found four (4) additional properties, all of which require renovation.
Additionally, Shannon has started heavy renovations. It has been an experience dealing with design and construction, and working to find the best options on a limited budget. In each of these properties, we would like to do everything we can to make them absolutely spectacular; the challenge is finding the balance between what accomplishments would add the most value for the least cost. This is because most properties have a maximum achievable sales price, regardless of the amount of work put in, which is usually due to their location and surrounding neighborhood. It is important to find the perfect blend of speed, construction cost vs. return, and sales price.
My favorite part of design is brainstorming and choosing what to do and how to configure each project. In the majority of our properties we typically redo the kitchen, bathrooms, any touch ups such as paint or flooring and often times remove wall, changing the layout of the home. Itâ€™s fun trying to redesign a home for maximum value and finding new things to place in each home. For example, Curtis has fallen in love with this new shower and would love your opinion.Â
The difficult part of the design stage is again finding the balance. The shower above is nice and a really cool feature, yet its cost about double the cost of anÂ insert we could pick up from Home Depot. With a limited budget, each decision is made carefully. When working on a fixed budget for a project if we spend money someplace we need to take it from somewhere else. This becomes one of the most difficult pieces of the puzzle.
For example, Shannon has a construction budget of $55,000, since we realize that no matter how much work we do, the most we could receive is $500,000. Having a maximum sales price sets a maximum construction budget in order to make the returns projected to our investors.
The most challenging part of the construction is finding good contractors. We have already had to let go a contractor who was working on Shannon. Fortunately we are very quick finding replacements when needed.
We are currently using a different contractor on each of our properties, hoping to find two or three good ones we can use consistently. The trick is to find an efficient contractor with reasonable prices that produces quality work on schedule. This is more difficult than one might think. You need to look for contractors who specialize in these types of remodels so they have the efficiencies and experince necessary to complete the project on the budget needs and in the time frames needed.Â
Finally, school this semester is going to be extremely busy. We will be covering capital markets, appraisals, sustainability and LEED training, and finally development with a capstone project of redeveloping the Morena Neighborhood with presentations being conducted at the end of May. While all of these assignments are beneficial, I will be looking forward to soon being done with school are making deals come June.
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