peteyoungsrealestatetraining

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Relationships That Build Wealth

Anyone who has been in the real estate business for any time will tell you that the more people you have that can help you, the better. Investing in single family or multi-unit housing is not an individual task, however you can do it by yourself. You just have to surround yourself with good business relationships. The more quality, professional people you can gather to help you will ensure that your success rate will skyrocket.

One of the most important aspects of being in real estate is that you must have a plan, or for most people, a system. My plan has always been that I am a rehabber. I buy homes, condo’s or multi-unit structures to remodel and then rent or sell them. Because of my general contractor background, I was able to excel not only in the investment side, but also the teaching side of real estate. My strategy these days is that my focus is buying REO properties. Here are the relationships that fuel my business to a great level of success.

  Have A Mentor & Coach

One of the most important people in your business should be a mentor. This can be anyone you want. They don’t have to be a pro or someone that charges you a fee for advice. This could be as simple as your father, a brother, sister, uncle or whatever. As long as you respect the thoughts and actions as well as the opinions of this person and are willing to perform in the same manner as this person, then they can help you make your way through your career.

Another important relationship would be a personal coach. A coach is someone that holds you accountable for your actions. They can give you advice as well as instruction. They can motivate you or back you down if needed. When I am coaching someone, we come up with short term goals, long term goals and strive to meet these a little bit at a time. A coach is someone that you have to report your progress to, and prove to them that you are capable of reaching the goals you have set for yourself and your future.

A Reliable Broker

My favorite person that I have on my wealth team is my broker. She is just the best. This broker has contacts with several banks and for these banks she is the BPO. For those who do not know a BPO is a broker’s price opinion. This is the amount of money that the broker recommends that the bank sell the house for in the current market. Also as a broker, the banks will provide a list of properties in their inventory that they are going to sell in a certain time frame and she is to list and show these properties until they sell. What you want to do is create a relationship with one of these type brokers and get on their “buyers list.” This is a list of investors that the broker reveals the property addresses and selling info in order for us to make offers on these deals. Make sure that your broker is also an investor for best results.

A Dependable Real Estate Agent

The next person you need to have is a real estate agent. This person is a different asset to you than the broker. The agent is more for valuable info on the properties and the broker is more for getting you the properties to buy. You agent can make offers for you or list your homes to get you buyers. Your agent can run a “comparable market analysis” (cma) on your property that tells you how much a like property would sell for. It will also tell you about how many days it would take to sell, and they may have some insight on what areas you would want to buy and sell in.

Attorney

All of us need to have a great attorney. Mine is, and yours should be a real estate lawyer and hopefully an investor too. This way they would be well versed on if you are allowed to do double closings, subject to deals and the foreclosure laws as well as other things that would be pertinent to your city and state. They can assist you in closings as well as prepare your warranty deeds. Quit claim deeds, deeds of trusts, deed in leau of foreclosure as well as other related terms. A good attorney is worth his or her weight in gold, and sometimes the fees seem as if they are.

Bird Dogs

I have created many relationships with bird dogs. A bird dog is someone who finds deals for you to buy. Normally they do this for a finder’s fee or a piece of the profit. My bird dogs are more often than not, trained by me personally. However most of them have obtained some sort of formal training prior to becoming a bird dog. In many conversations I have had with investors over the years the average fee paid to a bird dog is about $500 for finding a suitable deal. I am not talking mansions here, I am talking bread and butter easy deals with a modest amount of profit. Obviously the more expensive the home and higher profit, the more money you pay for your fee. So if you have cash but no time to hunt for deals, then a bird dog is a nice alternative to not getting deals at all.

Accountant

I have a wonderful accountant. She happens to be my wife, Barb. Having a great accountant really helps in this business. She keeps me up to speed on what needs to be paid and when. She knows how much is coming in and when.  I have available to me the budgets we have to invest with and I know in advance what kind of deals we can buy or fund. She works directly with my tax pro at tax time. Together they work out my land trusts and llc”s. It’s like having a cpa staff at your beckon call for all your money matters, tax wise or other.

Banker

If you can, try and make your relationship with your banker like I have. I can call my banker on the phone and have things done that most people spend hours waiting to be done. One reason is simply this. One of my banks is a credit union. They usually are easier to work with than normal banks and the rates are normally lower too. I have found that loans (in my experience) are much easier to get. Here is what I love about my banker. If I need 10K in certified funds to buy a property, I can call on the phone and tell her what I need and by time I get to the bank, she has the check ready and waiting for me. Another thing that I love about being in tight with my banker is that I can call in a loan. If I want a loan I can call her and tell her the amount I need and what I need it for. She gets the ball rolling and has me pre-approved so that when I get to the bank, my loan has already been processed and I sign a few documents and within minutes have my check. Keep in mind that I have been banking here for years, so make good friends with the top person at your bank and make sure to talk face to face with that person as if they were your best friend every time you go in. sooner than you think, you will be known by the employees of that bank. Also if I deposit a large check, most banks put a 10 day hold on it. My banker waves this hold because they see me in the bank all the time. This could work for you too.

Financial Advisor

My wife has a great relationship with our financial advisors. Yes we have more than one. One of them came from my side of the family, as my dad had been using this person for years. I followed my dad’s advice to use this guy for our personal stock and bond investments. The other person is out of state and comes from my wife’s side. He has expertise in real estate holding, stocks, bonds, muni”s as well as many other investments that I was not familiar with. Through his type of investing, Barb and I have obtained substantial wealth that without the ideas of this man we never would have gotten involved. I had no interest or knowledge in the investments he has made on our behalf. Now I am a big fan and really hope that all of you will take advantage of a financial advisor.

Contactors & More

I could go on and on about who is important and who is not, but I will summarize by saying this. Obviously I want you to have good contractors. Call material suppliers such as paint stores and drywall supply houses for recommendations of contractors. A good landscaper can change a houses appearance for very little money. A hard money lender who has reasonable rates is a must for real estate investors. Make sure to include an appraiser and a mortgage company in your strategy. And last, make sure and join your local investment club. Once you join, you have access to all of the people above and more. You have people who want to buy property and people who want to sell. You have access to partners, lenders, agents and many other real estate related opportunities. Normally the cost is very inexpensive, but the potential of being in a room full of like-minded people and using the assets available to you is beyond helpful it’s downright successful. For more info from Mr. Rehab visit www.PeteYoungs.com

Originally published here: https://www.peteyoungs.com/training/relationships-that-build-wealth/

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Making Huge Profits With Mold Inspection

Those who are familiar with me know that I teach an EPA based mold inspection class as well as that I am certified to teach the lead- based paint RRP renovator course. Not only do I do this in my live trainings at your REIA clubs as well as Metrolina and North Metro REIA, but it is also in my SWAT home training courses so you can get it without any wait time.

Fast becoming one of my most requested classes, the mold inspection course allows you to be qualified to test properties for molds, toxins, allergens, bacteria, radon and even meth contamination etc. Furthermore, no matter if you choose to do it at home by investing in my SWAT courses or see me live, you receive a certificate of completion after passing a test proving your expertise in mold.

Mold Is Everywhere

The reason why I started using this as a major strategy in my real estate arsenal is simply this…Every room ever tested shows mold as well as many other elements in the air. The training course gives you the knowledge to test properties (I only suggest vacant bank owned properties) and use this as leverage to get about a 25% discount on the purchase price of your deal.

Without explaining the whole course which takes hours, let me sum it up for you as simply as I can. There are only two ways that a mold test can come back from a lab. One is ELEVATED and the other is NON-ELEVATED. In the live training as well as the SWAT home course you will be taught the types of mold, if they are toxic molds, how to do mold clean up as well as remediation will be explained to you. However so there is no mis-understanding, this course is mold inspection, not remediation. We don’t want to do remediation just clean up.

How It Works

The process works like this. I qualify you to use an air testing machine that collects air samples that are sent in to an independent lab for analysis. There is no conflict of interest or liability on your part because all you do is collect the sample. And you are qualified to do that. The independent lab then sends you a report sometimes listing up to 10 or 15 types of molds, toxins allergens etc. It will also mention that these molds have been known to cause illness in some cases and they recommend (not require) remediation.

The Process

Here is the step by step, but keep in mind, you can’t do this without the course being completed as then you have no qualification and it becomes just your opinion.

First you take my mold inspection course either live or from my SWAT courses. Then find a vacant bank owned house and make a reasonable offer to get your foot in the door. In your offer ask for a 10 day inspection period for rehab estimates and such. During this time is when you so your air sample collection and send to the lab. This costs about $40 to test and you overnight the sample and ask the lab return the results by e-mail. Once the property has been declared elevated, you seek a mold remediation estimate to remediate the kitchen. The kitchen is where I always test because it gives the highest estimate.

Now I re-submit my offer to the bank MINUS the amount of the mold remediation estimate. I supply the bank with the estimate as well as the mold test to back up my lower offer. Now get this cause this is the secret…The bank now has to sell you the property for your price or huge discount OR they by law must disclose a copy of the mold estimate and the lab test to all who have made offers and all new offers coming in. The banks do not want to advertise they have  a mold problem that may cause illness to someone.

So they choose most often to sell to you. Then instead of remediation, my class teaches you mold CLEAN-UP so you can clean the kitchen area and re-test.  Send in the test after the mold clean up it then comes back non-elevated. So you got your huge discount and a non-elevated test that you now can disclose saying you tested for mold and here are the non elevated results.

Summing It Up

Well there it is in as simple as I can explain, but please do not try this without coming to the class first! You can increase your profit by an average of 20K using this technique. You can also use your certificate to get a license to do this as a business for another income stream charging $250 to $350 per test.  Remember you can also do this at home with my major SWAT rehab course at PeteYoungs.com

Originally published here: https://www.peteyoungs.com/training/making-huge-profits-with-mold-inspection/

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The Scope Of Work For Rehabbing Properties

The Scope Of Work – Don’t Get An Estimate Without One!

When buying distressed properties, one of the most important things you will need before getting repair estimates is a “scope of work”. A scope of work is a detailed list of repairs to be done and the fashion in how they are done. The main benefits to having a good scope are that you give the same scope to each bidder. Therefore, the bids can be compared as “apples to apples”. Everyone bids on the exact same thing so then you can concentrate on the best contractor at the lowest price.

In my S.W.A.T. training, I use my property inspection forms to compile a detailed scope of work. There are several things needed to build the best scope and I will give you some good guidelines to go by for yours. You must first list all the materials needed for each aspect of the job. If you are doing painting, list what brand of paint to be used, oil or latex, one or two coats, sprayed or brushed and rolled and so on. The more details the better. However, you should be able to describe your scope of work in just a few paragraphs.

As in all contracts, the scope should describe who is supposed to perform each article of work. That way there is no confusion as to what is expected of each person hired on the job. For example, if you are roofing the house and also having some carpentry repairs done and you find that some plywood needs replacing before the new shingles are put down, you must assign who is to replace the plywood…the roofer or the carpenter.

Specify Details

Aside from the choosing of who is to be given each job, you must also be very detailed about what they are to do and not to do. You might have someone putting in a new ceiling fan and changing a few light fixtures and such, and this is fine. But you need to draw the line and list that this person is not to do any electrical that requires wiring into the main service panel. The difference being that in most states anyone can do fans, light and switches, but to wire into the panel box requires a licensed person and possibly a permit. Set the limits on what they are allowed and not allowed to do.

We have talked about the who and the what portions of a scope of work. Now let’s talk about “when”. This is the part of a scope that tells when the job will start. It tells when the job will be finished. You can set the daily working hours to suit you and also can detail if Saturday and or Sunday are considered working days. Some people Do not want to have workers on their jobs on Sundays as that is a personal day to many. In most cases, I will let the worker give me the timeline that they think the job will take. Let’s say I was told the job would take two weeks to complete. I will agree to this but in my contract I may have a clause that says “ contractor is to complete this job satisfactorily in two weeks. After a one-week grace period beyond these two weeks a $50.00 a day penalty will be deducted from the balance due until job is completed. Just to make sure that the job does not linger too long or in case you have a contractor who abandons the job, this will eliminate your liability for liens or owing money to the contractor.

Payment Schedule

Another aspect of the scope of work should lay out the payment schedule. There are many common ways to have this set up. One of the most common payment plans is one third of the contracted amount down, with the remaining balance due on completion. This allows most contractors the ability to buy the materials needed for the job without coming out of their own pockets. Some people are wary of giving some money up front as in some stories we have all heard about someone running off with the money and never starting the job. But think of it this way. If you have done your homework before hiring someone, you’ll know if they are to be trusted. The reason I will give the one third up front is because if I have given them the money to buy the materials, then I have less worry that anyone can put a lien on the property for the materials used. If they paid for them up front…no lien. You may also choose to pay on draws or the amount of work completed. You can pay on Fridays, or you can pay at the 25% complete, 50% complete and final payment.Remember to get your lien releases signed every time you issue a check.

List Of Materials

When listing the materials to be used and the method of application you must be very specific to avoid misunderstanding. If you are having siding installed you want to list exactly what type you agreed to. Is it Hardi-plank or regular Masonite? Is it textured, beveled or T-111? Make sure the details are there. If doing a new roof then you want to know the same type of things…”the shingles to be used are Sovereign brand, 25 year shingles at $35.00 per square from Home Depot”. Something like that for each item to be done to the house. Now you also want the application of items to be described. For the siding, are they using hammers or nail guns? You want to know this because nail guns can be set to different settings that regulate how the nail ends up in the siding. If set too strong, the nail heads go too far into the siding and this will allow water to get into the siding at every nail and will start to cause your siding to rot out almost immediately. Or for the roof…is it a roof over (putting shingles on top of the existing ones) or is it a tear off (scraping all old shingles and felt down to the plywood and starting new).

Finalizing The Job

The last part of a good scope of work is the final acceptance of the work and materials done on a property. You want to make sure that all code for your area has been met. You also want to make sure that anything that required a permit did have one pulled for each aspect. If one was overlooked, it’s best to get it now and just pay a penalty than to let it go on for months or even years. This could escalate into lawsuits or worse later. It is important that all your needs were met as to the standards and quality of the material and workmanship of your job. Always hold back about 10% of the contracted price for your final punch list. This will insure that you will get your last items done, so they can receive the balance of pay from you. I know that I could have added so much more to listing what could be in a scope of work, but I feel that this will more than help you to get the best rehab for the lowest price.

For more info on my rehabbing techniques please visit PeteYoungs.com

Originally published here: https://www.peteyoungs.com/rehab-tips/the-scope-of-work-for-rehabbing-properties/

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Top 10 Renovations To Add Value

Recent trends show that home renovation is sweeping the country today. With homeowners and investors alike, this business has become one of the most popular trends this decade. There are many people out there who are confused about what to do and what not to do. Surely, making a part of the home look better is always a plus. However, you can spend a lot of money on renovations that merely make the house prettier and more marketable, but do not actually raise the value of the home. I have had years of experience renovating hundreds of homes and have seen people waste thousands of dollars fixing up houses for resale and can’t get the money they spent on rehab back out of the property when they sell. If you are going to sink a substantial amount of money in a property, make sure it is something that will add value to the structure.

Kitchens

For example, the kitchen is the top one thing that will add value to your deal. More than other renovations, the kitchen has far more of a payback value for the money spent…when you sell. Everybody loves a clean, modern kitchen that has all the latest amenities. A common renovation includes a new stove and oven. It should also include an island piece for prep and serving. New countertops and upgraded cabinets are great too. For big savings on refinishing cabinets, refer back to a recent issue of REIP magazine for my article on GIVING KITCHENS AND BATHROOMS AN INEXPENSIVE FACELIFT.

Bathrooms

The second best rehab job as far as paying you back when you sell is the bathrooms. A new toilet, sink and vanity freshen up old bathrooms quite nicely. Don’t forget new flooring and possibly upgrade the tub to a bigger size garden tub. Replace shower curtains with sliding glass doors to add value and appeal. Make sure you have a nice linen storage with plenty of room for towels and accessories. Use soft neutral colors so that it will go with almost any decorating taste.

Interior painting, carpet and décor will bring up resale value faster than water drains downhill. As a relatively inexpensive facelift, paint and carpet are one of the first things that catches a buyers eye. We all know that spouses and partners in the business are keen to the fact that properties are more appealing with fresh clean walls and floors. Adding a little chair rail or some crown molding really accents a room without costing you the farm. And once again, this adds value!!!

Flooring, Additions, Fireplace & Basements

Flooring of any kind when it’s new will make most any room look better. Never put carpet in bathrooms or areas the may become wet on a regular basis. A better way to go would be linoleum or tile for these areas. Then decorate with throw rugs that can be removed and washed.

When doing carpets, don’t overspend as most people do. As I teach in my training camps across the U.S. most people make the mistake of buying a great carpet and a cheap pad. This is exactly opposite of what you want. You want a great pad and you can lessen the quality and cost of the carpet. To get many years of great wear and being able to stand up to cleaning, you should use a 6 to 8 pound pad made of multi-colored specs and cover it with 40 ounce carpet. This is a very nice combination for rental houses and properties you are fixing up for sale.

Room additions are next in line for adding value. Most beneficial if it is added on the main floor, any room addition adds living space and square footage to the home. It can be a Study, office, extra bedroom, adding a bathroom and so forth. Anytime you can add useable space to a property, you are adding value.

Adding a fireplace such as in a den or living room is a popular choice from some of the research I did for this article. As many of you may have noticed, it is not uncommon to see fireplaces in the bedrooms of most new high end homes. Not only does it add a decorative flair, but it’s cozy, romantic, inviting and even warm. Though you may not want to add some additions to you house, pick and choose the one or a few that would work in you situation and use it to raise not only the value, but also the profit figure on the bottom line when you sell.

Renovating the unfinished basement is one of my favorites. Just think how much more appealing a house would be if all that space downstairs was suddenly useable living area. And talk about adding value…The sky is the limit. Think about what someone could do with this space. Well, let’s see. You could move the teenage kids downstairs. You could add bedrooms to the area and a kitchen and have a rental area. It could be an In Law suite. You could turn it into a home theater or you could make it a game room or you could use it as a home office and run a business out of it. You could practically interest a buyer in most of those possibilities listed above, but for Pete’s sake, if you have an unfinished basement…finish it!

Don’t Forget The Exterior

Exterior painting to re sell a property is a must. If you have seen my seminars, you will remember me saying that on rentals and lease options, I pressure clean the outside to see if it looks pretty good with just a good cleaning. I don’t just automatically paint it because that is how others have done it. See, If I am selling outright, there will be someone getting an appraisal on the house. Therefore, I will paint it because it adds value to the appraisal, but if I automatically paint my rental exterior, it does not add monetary value to what I get from my renter or lease op buyer. Instead I will leave the exterior painting for those situations up for a negotiating factor I can use to manipulate the terms or down payment of the clients. See the difference of the added value?

Next are window and door upgrades. This will add value and appeal to almost any home. To get a new look but also save money, leave the frames of the doors (jams) and buy door blanks. Add the new doorknobs and hinges and paint all doors and jams to match. A door blank is much less expensive than a pre-hung door. Also, look into windows that offer savings in heating and air conditioning bills. Over time, in the savings they create in utilities they may just pay for themselves.

HVAC

The last of these 10 renovations would be the Heating and Air conditioning units of the property. This is where the heat hits the fan! By upgrading and old HVAC setup in a house, you have literally relieved someone’s fear that the unit will fail and need replacing. What’s the most common thing we investors do when selling a house now? We buy a home warranty for a year and offer it with the house so if something goes out in the form of a furnace or A/C unit, then it’s covered and the buyers are more comfortable with that. To help make the decision on how to handle buying a new heating system or A/C unit,

Keep this in mind. The life of a furnace or air unit is about 15 to 17 years on most brand name makers. There is a tag on heat, a/c units and water heaters that tell what year they were made. Seek out this tag and you’ll have a pretty good idea how much longer the unit has before you can expect a problem.

Summing It Up

I hope that this information will shed some light on what renovations will I actually get value out of doing them, as opposed to ones that look pretty, but cost you profit and time, with not much benefit. For more tips on remodeling or learning about real estate investing, please visit my website at PeteYoungs.com

Originally published here: https://www.peteyoungs.com/rehab-tips/top-10-renovations-to-add-value/

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It Depends On The Weather

Almost everything in life is affected by the weather. Real estate is also affected by it. For example, I choose to live in Georgia because I enjoy the warm climate. James prefers to live in Denver because he enjoys the snowy slopes in winter. People in Seattle get rain all the time where in Arizona, not so much.

Areas With Extreme Weather

In places where the weather is severe, the materials used in housing are different from places that don’t face the same conditions. This will affect the price of housing and would most certainly raise prices. Let’s look at some other ways weather can influence the cost of owning real estate. Living in Georgia where the summer temps can cook an egg on the street, it requires us to use our air conditioners to remain comfortable. I have seen bills adding up to $300 or more in some cases. On the other hand in cold regions, the cost of natural gas and propane are raised very high. Extreme conditions cause us to maintain paint jobs and roofs as well as quality doors and windows to protect our investment.

Weather also impacts our everyday lives in other ways too. We build our schedules around the climate. The restaurants we eat in do their menus based on the weather as it allows certain items only during a short period. Think about how the cost of insurance is based on how much storm damage an area gets. Are you in an area that floods? Are there wildfires common in the area. There are so many things that weather has a real effect on the prices and conditions.

Have you noticed when there is a spike in grocery prices? You can usually pinpoint that to a weather condition somewhere that caused the price increase. Farmers as well as investors in commodities have analysts who perform long range weather forecasts so they can plan how to best take advantage of the good months and prepare for the bad ones. This has an effect on grains, beans, corn and such. Knowing if there is going to be too much or too little rain will have an impact on our daily costs.

Rainy Weather

Getting back to real estate, if the weather in an area generally has a lot of rain, I will insist on spending the money for a good gutter system. I need the water to be directed away from the foundation by at least 4 feet to prevent water-damage. I will also want a good quality asphalt shingle roof for protection. If I buy in an area that gets a lot of snow, I would spring for a metal roof and an extremely high quality exterior paint for the house. I would want it to stand up to harsh conditions.

I have been doing a seminar all day here in Tulsa where they have just had a bunch of tornadoes in the area with lots of strong thunderstorms. If I was going to buy a property here, I would make sure that it was built with metal studs as opposed to wooden ones. I would spend the extra money to make sure the structure was strong enough to stand up to strong winds. Keep in mind that anytime there is a tornado or an earthquake, the cost of plywood and building materials skyrocket and become scarce in the area. This means they have to bring it from other areas and supply is low and demand is high. So does weather have an impact on real estate? I think it really does. Not only on the cost to purchase it but also to maintain it.

Looking to learn more about real estate investing? Check out our main website at PeteYoungs.com

Originally published here: https://www.peteyoungs.com/training/it-depends-on-the-weather/

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Pete’s Metrolina Real Estate Investors Association

Start the new year off right! If you are in the Charlotte area, be sure and attend our monthly meetings at Metrolina. If you are an experienced investor or someone that has always wanted to learn how to invest in real estate, our meetings are for you. We meet every 3rd Thursday of the month and the meeting location is Sonesta Charlotte Executive Park, 5700 Westpark Dr, Charlotte, NC 28217, and run from 6:00 PM to 9:00 PM. We hope to see you there! Learn more here.

Originally published here: https://www.peteyoungs.com/training/petes-metrolina-real-estate-investors-association/

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Pete’s North Metro Atlanta Real Estate Investors Association

If you are in the Metro Atlanta area and want to learn how to invest in real estate, or take your real estate investment business to the next level, be sure and attend Pete’s North Metro REIA. Meetings are held the first Tuesday of every month beginning at 6:30pm and ending at 8:30pm. Meeting location is Country Inn And Suites Galleria, 4500 Circle 75 Parkway Atlanta, GA 30339.

Originally published here: https://www.peteyoungs.com/training/petes-north-metro-atlanta-real-estate-investors-association/

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Estimating Rehab Costs In Today’s Market

More money is lost in the fix up of properties than any other way, including overpaying when you buy. You can recover from overpaying by saving during the rehab but every dollar spent on the fix up comes straight out of your profit. That’s why a big part of my training programs covers the tools as well as the general contractor hires out lower costing labor to do the work and therefore pockets the difference in the cost of what he or she has charged compared to what they pay the lower cost workers. Usually this amount is around 40 to 50% of the bid.

Save Money On Lower Cost Labor

Here is how I direct my clients and members how to get lower costing labor. One way is to hire college students. I put up flyers in the common areas stating what the job is ( pressure washing for example ) and how much per hour I will pay. I also say that I require 3 references and that he or she must sign a waiver of liability for our protection in case they get hurt. I supply  all these forms to my students. Now you are covered as they know what the job is, you check the references and they already have agreed to signing your protection forms as well as how much they will be paid. This in itself saves $300 to $400 by not using high dollar help.

Try Hiring Retirees

I also love to use older retired people for my jobs instead of general contractors to save literally thousands of dollars over higher cost labor. Here’s why I do this. Most retired people did the job you are hiring for maybe 30 years before retiring. Now they are bored and would love to take on some simple jobs just for something to do. Or maybe they would love to earn a little extra cash. I hire them for an average of $20 per hour and I know the job will be done right as the older generation always too pride in what they did and never just did the job half-way. I put up flyers looking for things like this. “Looking for retired plumber to install 2 toilets in rental. I will pay $20 per hour. Call if interested. I use the same for Electricians, brick masons, drywallers, painters etc. I put the flyers in bingo parlors, Veterans of foreign wars, moose lodges, elks lodges and so on.

If you like these ideas you can learn more at PeteYoungs.com

Originally published here: https://www.peteyoungs.com/rehab-tips/estimating-rehab-costs-in-todays-market/

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Creating Wealth Rehabbing Properties

When I was growing up and about to graduate, I wondered what path to take as I entered the life of leaving mom and dads house and making it on my own. It was always a dream of mine, like everyone to become wealthy and be my own boss. So in my last year in high school, I got into a work for credit program that allowed me to get out of school early and go to work for school credit. I was given a job painting the inside of vacant properties at an apartment complex for a general contracting company. Like all jobs, I started at the bottom of the scale and was a trim man (painting the doors, windows and baseboards with a brush) following behind a spray man. He was a higher paid person and basically ran our crew for the G.C.

This is when my entrepreneur spirit was born. I quickly made friends with this spray man and he eagerly taught me how to paint with an airless paint sprayer. I was then given a raise from $5.00 per hour to $7.00 and they set me up with my own crew. It was here that I started to learn the pricing structure, the estimating techniques and how and where to get deals on materials and cheaper labor. Within a year or so, I started my own painting and remodeling company and began getting contracts to paint and remodel houses and apartments. I found that I was really making quite a bit of money, and little did I know at the time that I was setting a lifelong path of making money through rehabbing properties.

After a few more years in the business, I started to get big commercial jobs like Fidelity National Banks, Publix Distribution Center, MCI, part of the 1996 Atlanta Games etc.

It had become that I no longer could be physically working on the job, I now had to be the general contractor and oversee all aspects of the job myself. My finding was that a general contractor got the contracts, ran the job and labor, handled the materials and pocketed as much as 50% of the money charged for the job. The rest he paid out in labor and materials. What a great concept of making money! I would continue to get the jobs and hire out the labor and pocket huge dollars while other people did the work!!!

Well as I had come full circle in learning the ropes of rehabbing, my brother had bought some books and tapes at a seminar and coaxed me into fixing up the properties that he was buying. We quickly found that the real estate business and the property rehab business was a no brainer and started our real estate investing career by joining forces and a company to buy, fix up and sell properties full time.

By sending in copies of profit checks to the person whose books and tapes my brother had bought, he immediately got us involved in the business of teaching people how to buy, fix up and sell properties making huge profits all over the country. That is what started the teaching aspect of our real estate investing careers over 15 years ago. After buying almost everyone’s books and tapes systems that ever came down the pike, we now had become respected teachers of the trade and for the past seven years have shared the stage with almost all of the well known authors and lecturers on seminar circuits and national conventions. Also for the past seven years we had been contracted by the big names to teach Foreclosure-Rehab Bootcamps to thousands of students nationwide. But my favorite thing that I do is speaking to real estate investment clubs. I remember being involved and listening to real people in the club that had been using the techniques and actually making money in real estate…

No matter what strategy of real estate investing you are doing, wholesale properties, foreclosures or any other, the most common place that people reduce their profits is in the fix up or rehab. Most people do not have the knowledge to estimate damage or cost of repairs. They have to depend on the contractor and hope that the costs and repairs are reasonable and can be done without taking the majority of the expected profits.

Well this is where my expertise is it’s keenest. I over the past 15 years or more have developed a way to teach anyone the in and outs of rehabbing properties for profit. It is possible to lower your rehab costs by 50% to 75% less than the going rates.

You can act as your own general contractor and oversee your own jobs. If you are handy, you will be able to save a lot of money by do it yourself techniques. If you are not, there are several ways that you can hire out subcontractors and semi skilled labor yourself for a great savings in either cash in your pocket or equity in your property. Learning how and where to get contractor discounts is a must for any investor. Being able to do simple estimating on your own proves to be a great way of comparing estimates you get from your contractors. You can save money by pulling your own permits when applicable. Even knowing what day is best to rent equipment from a tool rental yard can save you hundreds of dollars.

Learn to run every property you do by acting as your own general contractor. In most cases not only will it increase your profits thousands of dollars in profit or equity, but you can pay yourself a salary or fee to run the job also. Just remember more money is lost in the fix up of a property than most other factors. So my suggestion is to educate yourself in all aspects of the fix up of properties. It is an absolute must for seasoned or new investors alike. This can increase the profit in any property from hundreds to thousands of dollars.  Every rehab technique that is a cost cutter puts cash in your pocket that would otherwise end up in someone else’s. Keep it in your pocket…it’s your money!

Learn more about investing in real estate by visiting my website at PeteYoungs.com

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Common Mistakes To Avoid When Rehabbing A Home

Beginners and seasoned investors alike are prone to making mistakes. Most mistakes can be easily avoided by just listening to people talking at your local REIA group or meet up sessions.

Some mistakes are minor and have little impact on the end result of selling or renting your property when others can become nightmares. This will not be the only portion I write on mistake but this one I am sure will affect everyone somehow.

One of the most guaranteed things you will have to do in your own house or investment property is painting. If you do it yourself or hire it out, you MUST know and follow this advice. You can not paint latex paint over oil-based paint anytime. It will peel and flake badly within about 3 to six months. Also, the paint will easily chip and scrape off as latex paint does not adhere to oil-based paint. You can however paint latex paint over an oil-based primer. I always use oil-based primer and sealer in one, such as KILZ or ZINZER. This will prime, seal in any stains and can be painted over with any latex paint. 

To know what type of paint you are painting over, there are a few ways to test the surfaces and paint over it correctly. You all may have heard of Goof Off, a canned liquid whose claim is that it removes dried latex paint. This costs about $5 in hardware stores for about 4 ounces. Squirt this on a white rag and lightly scrub an area on walls, trim, windows, doors and gutters or whatever you are going to paint. If it melts the paint on to the rag, its latex paint and you can easily just paint over it with latex, no problem. If all it does is clean the surface and no paint melts onto the rag, it is oil-based paint and must be painted with oil again. 

There is another way to avoid having to paint the oil-based paint. If you use an oil-based primer/sealer (KILZ) to prime the previously painted surfaces, you can paint latex on top of the oil-based primer and from here to eternity you can just paint latex on you house. That is how you change an oil painted house to being the easier latex painted house forever. You may also use XYLENE or DENATURED ALCOHOL instead of Goof Off. This will insure that your painted surfaces resist peeling away.

Another mistake is how do it yourselfers and painters paint cabinets and paneling in properties. The finished product can show runs, drips and brush marks making the job look shotty. To paint any stained surface, first wipe it down with white vinegar in full strength with a sponge or cloth. This will remove grease from cabinets and oils from wood stains and paneling. Then I apply one coat of Kilz oil-based primer. Before I apply the primer/sealer, I have it tinted to the same color I am painting the cabinets or paneling (usually a white color). With the white vinegar and the sealer/primer applied, I am positive that my latex paint will now stick. But here is the kicker !!! No matter what brand of paint you use (I use BEHR marquee from Home Depot) It MUST say “self leveling” latex paint. This self leveling paint is designed to dry smooth as glass and never leave brush marks or runs on the surface. Most people even pro painters, do not use my vinegar, sealer/primer and self leveling paint techniques and end up with cabinets that have runs drips and brush marks and paneling that will lets stains seep through within a short time after painting and will certainly look bad and need repainting.

I have hundreds more techniques to share that will stop costly mistakes and I plan on writing about them all. But until then, you can always follow PeteYoungs.com

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Winterizing Your Home

Old man winter has reared his head as we are now headed for cold weather. After concentrating on hurricanes and rainstorms, we now have the chore of prepping our homes and investment properties from cold weather related problems. Here’s a few suggestions to make the winter a little easier for us all.

First, make sure that the insulation in your attic is sufficient for your area. If it seems lacking in depth or amount, a cheap fix is blown in insulation. This covers well, keeps in the heat and is done very fast. Many companies that do this are listed in the yellow pages or business section of the phone book. Also, the pink stuff (in rolls) is equally effective for your attic. All exterior walls should have insulation, so when you are doing rehabs or adding to a house, make sure you insulate any outer walls.

Next is caulking. Use a good quality latex and silicone combo caulk such as White Lightning brand or Dap Alex. These are 25 to 40 year caulks with low price and water clean up. Check all areas around the house for a good and proper caulking job. Anywhere that has damaged caulk or is in need of some is one of the most common areas we lose heat and a/c and our bills skyrocket. You will want to caulk around all doors, windows, cornerboards, siding, vents and such. Cracks in siding should be done as well as entry areas on the house such as water spigots and where electrical wires come into the house. Exhaust vents for fans and clothes dryers too. Its also a good idea to get those Styrofoam covers that connect on to your outside water spigots to protect from freezing temps leading to busted water pipes. For just pennies per foot, you can buy foam insulation for your exposed water pipes in your basement or garage (the most common places for busted water pipes from freezing). 

Weather stripping around doors and windows can rob you from heat as well. Most hardware stores can sell you rolls of weatherstripping and it’s easily installed by any “do it yourselfer”. As far as this area goes, don’t forget the part under your doors on the threshold. This area is almost always forgotten and usually needs replacing the most. Open all your entrance doors and check the threshold for wear and tear. You’ll be glad you did. For those pesky drafts that get through the window sills and under doorways, you can buy or make what we call a draft snake, These are just round fabrics filled with whatever you want and made to the size of the bottoms of doors and window sill. This keeps the wind from coming in under the doors or sills. Use these anywhere that drafts give you a chill. 

A furnace check will insure that all will fire up ok. A clean filter and a newly serviced unit will be far more efficient than one that needs checking. This is also inexpensive and insures a safe, warm season. You may also want to have your airducts cleaned. This removes debris as well as allergens that can be carried throughout the house. In addition, a chimney sweep can come and service your fireplace to make possible some great cozy nights in front of the fire.

Make sure that your garage doors seat well on the ground when closed. You may need to put some rubber stripping on the bottom to seal any open spots. You can also use storm windows and doors to greatly improve keeping the cold outside. Cover your attic vents to keep cold from entering the roof area and if the temp falls below freezing, let your faucets drip. If you have a propane tank for heating or cooking or water heaters, make sure to have it filled.

Last, if you are going to use space heaters, make sure they are in properly vented areas and away from furniture and curtains as fire may be caused. Electric heaters are my recommendation because there are no harmful fumes to deal with. Well, I hope these tips will make your winter better, warmer and less expensive….see you next issue.   Mr. Rehab….Pete Youngs