Always Have a Contract With The Contractor #71

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. In this segment, we’re going to be talking about renovations. I’ve made a fortune in renovations. It’s been absolutely incredible. I learned a lot about what to do and what not to do. I didn’t know anything and I didn’t have any background in rehabbing anything. Having been raised by a single mom, being raised in apartments, having no dad, having no background in construction, not taking any classes, or going anywhere to learn about those things. I learned about it through hard knocks and I’ve got all kinds of advice for you on this. But one thing is that, when you do hire someone to do your work, you always start with a good contract. Now, what I recommend you do is actually go through and make a list of everything that needs to be done in the home.

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Always Get Recent References on the Contractors #72

Hi, it’s Lou Brown. I’m your local certified affordable housing provider. We help people to end up with homeownership regardless of credit or financial background.

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Understand Who Will Get Permits, You or the Contractor #73

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators.

One of the things that can help you a lot is to save money when you are doing renovations. And one of the things that you have to get clear in your contract with your contractor, I jokingly say CONtractor, it’s built right into their name, right, is that it gets, you get very clear at the beginning who’s going to do what under what circumstances, in what time frame. And one of the things you always want to get clarity on is the concept of having to give permits from the County. Is it you that’s going to get the permit and they’re going to work under your permit or are they gonna get the permit? Well, I always recommend, that you have the CONtractor get the permit. They’re putting their license on the line. They’re putting themselves at risk when they don’t do what they’re supposed to do. We always want to get the sign-off from the County before you proceed with paying them.

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Tie Money Releases to Permit Inspections #74

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators and we’re talking in this segment about renovations.

I’ve made a fortune in the arena of renovations and I want to help you to do the same and I’ve learned an awful lot about how important the contract is. Listen, your contractor, many times these folks are in desperation most of the time and they’re always angling for ways to get their money out of you before the work is done. I find it best to not be the owner, be the manager, so the hat that you should wear is that of a project manager and then you have the authority to release payments based on the contract when the actual sign-off occurs from the County. When they have the inspection done by the County, they’re the ones that need to organize that and set that up and be present for the inspection when the sign off on the permit occurs, that’s when you pay and if you have any suspicion at all, whether that’s a legitimate sign-off or not.

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Always Have a ‘Scope of Work’ for Each of the Trades #75

Hi, I’m Lou Brown and I’m back with another of my 101 cash flow accelerators.

We’re talking about renovations in this segment. And one of the things that’s always very very important is to do your homework in advance of bringing in any contractors, go through the property yourself. Make a list of the items that need to be done room by room and trade by trade. Now trade by trade. So one of the things that I’ve created in my system call renovations is that separated what’s called the scope of work by trade. So you should have a separate scope of work for plumbing, heating, and air conditioning, electrical roofing, carpentry general, and painting. So those six different trades are typically done by different people. You’re giving them a different list of things, things to do. Now what I did is break it down room by room so that you’re actually walking through the room, walking through the project, determining by tip-offs that I have on each one of the different rooms of things to look at.

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Know All the Costs Before you Proceed with the Project #76

Hi, my name is Lou Brown. I’m here with another of my 101 cash flow accelerators.

And in this one I want you to be aware of what your costs are when you’re doing renovations. I know that sounds simple and uh, but it’s really not. A lot of people really don’t understand what they’re going to spend when they go into a project. Often, actually, as an investor, I buy from wholesalers all the time and one of the things is they bring me projects that are failed projects. Why? Because the unknowing untrained investor came in, purchased the property, started the renovation, ran out of money, got taken advantage of by the contractor. Didn’t know what to do, didn’t know how to do it, crashed and burned. Brings me the deal. I buy it for pennies on the dollar. I’m able to finish the renovation. It’s something you need to be very aware of, particularly if you’re just getting started in the business.

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When in Doubt Get a Professional Opinion #77

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators. I want to help you to be successful in this great business called real estate.

And one of the things that are very, very important is that you identify when you don’t understand what it is that you’re doing. For example, you may think to yourself that you are supposed to do something, and I’ve seen too many times when people buy carpet when they need to be buying drywall and they bring things to the project that’s untimely for where the step is in the project. So critical that you have deliveries related to the installation of those things. The reason is that contractors and their workers are often very sloppy. Careless, it’s your materials. They don’t care about those things. And secondly, theft is that it’s easy to take something that’s right there on the job. I hate to tell you this, but some of the people working on the job might be the thieves or they might tell someone else, Hey, I know some stuff that’s on that job over there.

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Know your market and the type buyer you will have and renovate accordingly #78

Hi it’s Lou Brown. I’m back with another of my 101 cashflow generators where you can make more money and less effort in a single bound.

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Always have a budget #79

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow generators, planning for you to make more money with less effort. This is a great one and it is always has a budget. You know, a lot of people jump into a renovation. They really don’t know what they’re gonna do or how they’re gonna do it. They just decide along the way, which is a really bad plan. So my advice is to do your homework, design the house the way with the end in mind. Always know what materials you’re going to put into it and how much you’re going to spend, otherwise, you can spiral out of control. I’ve watched many people crash and burn. You know, they watch TV, they think that they are now in a renovation business. It looks so easy. It’s amazing how they’re able to do all of those months of renovations in just half an hour, isn’t it? And many times you can see the pain and suffering that people go through in their renovations. Way overspend, tear out things they shouldn’t have torn out, and really not taking advantage of the fact that you need to be making a profit.

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Give the contractor a bonus #80

Hi, it’s Lou Brown. I’m back with another of my 101 cash flow accelerators to help you be more successful in your real estate business. You know, renovations, I’ve done so many of them. I used to do entire neighborhoods. I’m very familiar with turning things around, and one of the things you gotta deal with who can help you make a lot of money is your CONtractor, right? I’ve made jokes about the word con being in contractor because you definitely have to be on your toes. You have to know that the deal can change at any moment in time, and if you’re not alert to it, they can actually get over on you. Always have a CONtract when you’re dealing with CONtractors, always know exactly what the deal is. Who’s going to be responsible for what. And if you don’t, I promise you, you’re going to have some pain, suffering, and expenses you could have avoided. Now I’ve got an independent contractor services agreement. It took me years to work through that and come up with a plan that absolutely works. It’s in my volume 11 renovations. You can find that at StreetSmartInvestor.com under tools, click on renovations, volume 11 you can learn more about that. Hopefully, this has been helpful. Like it. Love it, Share it, and I’ll see you soon. Yeah, baby.

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