As an investor, you know that time is money. You also know that every day a property sits unrented or unsold you are losing money. In the case of rents, a lost day of rent can never be made up.
So, what do you do when your local inspection office staff is slashed? What happens when you can’t get the inspections completed in a timely manner?
This is a situation more and more investors are facing across the country as local governments deal with shortages of revenue. To the average homeowner, this type of situation is a minor inconvenience. But, to an investor who needs to get a property placed (back) into service or sold after a rehab, this type of situation could be devastating.
Of course, we are talking about governments here so the options available to mitigate this risk are limited.
The most effective is proper project planning. I know, you are probably thinking, that is your contractor’s problem. Well, yes and no. Yes, they are ones the responsible for properly planning and managing the project. But, no, you are the one who will be making the extra payments on the mortgage while the project falls farther and farther behind. I am not saying you should micro manage your contractors and subs. Far from it. Anyone who knows me, knows I am not a micro manage kind of guy. Yet, you can make sure your contractor is that kind of guy or gal.
Before the first permit is pulled, or demolition started, sit down with your contractor and go over the project plan. Look at every single timeline item. Discuss the estimated start, duration and end dates. Talk about the milestones, required inspections should be milestones. Discuss what can happen in parallel. Discuss what happens if things slip, for any reason. In other words, make sure you understand WHAT and WHEN is going to happen with your project. The HOW and WHY are the contractor’s problems, unless of course you are doing the work yourself.
See, re-inspections are number two reason projects fall behind. There is some deficiency noted in an inspection and it must be corrected before it can be re-inspected and that inspection is required to take the next step. For example, plumbing and electrical rough-ins must be inspected before the walls, floors and ceilings are covered with sheetrock and in some areas even before the insulation can be installed. And in those communities getting the insulation inspected may be required. So, you want to avoid re-inspections This is such a big deal I encourage you to write an incentive into the contract with the contractor to encourage them to do everything in their power to prevent the need for re-inspections.
The local inspector is over loaded and they just want to do the inspection, find everything okay, sign the paperwork and move on. They are not interested in trying to make your life difficult so you owe to them, and yourself, to not make theirs difficult either.
Some communities are experimenting with using outside inspectors who have been trained and tested to accepted standards. These private inspectors carry malpractice insurance and they do the inspections and certify compliance to the local authorities.
Oh yeah, the number one reason projects fall behind? Changes to the plan requested by the property owner.
Tags: Advice, Consulting, Investing, Real Estate Investors
Last Thursday morning I spoke at a breakfast meeting of real estate investors. One of the questions that came up was about forums on the internet. The person asked me if there were any forums I could specifically recommend for general reading about real estate investing. I named several and noticed the pens flying to scribble them down. Which is great! I think everyone should have many sources they use for information. I happen to believe we maintain one of the best for our members but that is beside the point.
Then another person stood to ask a question. They said they had a hard time dealing with all the flashing ads trying to their attention on some of the sites I listed. They said even when it just google ads they were often for scammy guru types. They asked me why I would recommend sites with advertising like that.
I said, “I don’t see their ads.”
“You mean you are able to ignore them?” was the follow up.
“No, I do not see them, period.”
I then explained I use Firefox as my browser and a plugin called AdBlock. AdBlock comes preconfigured to block over 95% of the spammy ads you will see on these types of sites. The ones it doesn’t block automatically you can easily add with just a click or two of the mouse. I then mentioned I could not stand to read the Drudge Report without this plugin because the number and aggressiveness of the ads was too much for me. I also talked about the pop ups and pop under ads and how most browsers effectively deal with those now.
Then someone stood and said, “but isn’t that the price you pay for using sites like that? Isn’t it like ad supported television? Aren’t you being unethical in telling others how to prevent the site from generating revenue?”
“No,” I said.
See, I don’t tell the sites I am looking at their ads but not doing so. In fact, they have no way of knowing whether I am looking at them or not. I just don’t see the ads at all. Does that mean I miss out on some kind of once in a lifetime opportunity only offered through those ads? Well, do you really think that happens?
Then someone said, “but your latest project you talked about, the AntiGuru Radio Show, that is advertiser supported…”
“It will be, hopefully,” I interrupted.
“Doesn’t that mean you will be using these same types of advertising for your site for the show?”
“No, our advertising model does not rely on spamming our visitors with anonymous, uncontrolled and most importantly untargeted ads.”
I then went on to explain about the media agency we are working with to help formulate the right approach on ads.
For giggles, they did a test with Google ads to see what kind of ads Google would place on the site. The result? We would be flooded with ads for the gurus. Now, why would that be a good match for someone who is, by definition, ANTI-guru?
FWIW, I encourage everyone to use the FireFox browser with the AdBlock plugin.
That is an EXACT quote I received from a “customer service” representative this morning.
You are probably thinking, “So? You must’ve interrupted them.” You are right, I did, several times.
As Paul Harvey liked to say, “and now the rest of the story.”
Yesterday, in the mail, I received a new business VISA card to replace the one expiring next month. The issuer isn’t important because they are all outsourcing their customer service overseas in an attempt to cut costs.
So, this morning, I called to activate it.
After keying in all of the bits their automated system asked for, I was rewarded with, “Please hold while I transfer you to a customer service member who can help you.”
Five minutes later I am met with the voice of someone I can barely understand. They ask for the exact same information I keyed in earlier and after having to ask them to repeat things a few times we finally get everything exchanged.
Then the sales pitch started for their “credit protection services”.
“No thank you,” I interrupted.
She didn’t even miss a beat, she just kept right on with the pitch.
“No. Thank. You.” I was more emphatic this time.
She continued.
Finally, I asked, “Has the card been activated yet?”
Then she stopped and replied, “I am sorry, but I cannot be answering your question until I finish reading this.” Then she started over!
I hung up.
Later today, I will visit the local branch of the issuer to share my opinion of this experience and to ask them to check to make sure the card has been activated properly. If it hasn’t, they can either activate it for me or they can close the account. From this point forward, I will refuse to interact with any customer service member of this bank who is not fluent in my language.
Say whatever bad things you wish of me for that, but life is just too damn short to waste time on basic communication issues with any company I do business with. There are other choices out there.
Tags: Customer Service
Over the last 18 months I have managed the rewrite of several software tools my partners and I use in our investing businesses. When we embarked on this journey we had very high hopes. We were going to outsource. The outsourcing firms give really GREAT interview, by the way.
Our list of “benefits” was long. We were going to be able to get everything rewritten using current technology; we would get a long list of features added; save a ton of money; and productize them into something we could offer to others.
The projects started well, as just about all projects do. I have developed enough software and managed enough teams to know the start is easy, it’s the finish that’s hard.
As the months went by it became increasingly clear we were not dealing with developers in the sense I knew them. See, I am used to a developer who is a problem solver. If I have to virtually write the software for the developer to translate that into the programming language, I might as well take that last step.
Every penny we thought we were going to save was eaten up by resources needed to guide and essentially spoon feed the “developers” writing the code.
Finally, about four months ago I made the decision to freeze the code. The basic functionality had been written but it needed to be cleaned up and the performance improved. We concluded our business arrangement and parted company. The outsourcing firm has asked if we’d be willing to talk to potential clients about our experience.
The number of new features added after more than a year of development? Zero. Hmmm, would I be willing to talk to your potential clients? Are you sure you want me to do that?
For the last four months, I and one other developer have been cleaning up the code and improving the performance. I can’t say enough good things about Dave and I really do wish I could convince him to come to work for us permanently. But Dave has other plans that involve traveling around the world. He knows he has a spot waiting here with us should he ever decide to settle down somewhere.
Anyway, at this point, all but one tool has been migrated to the newer technologies. Unfortunately, it is the one tool I would’ve really liked to have migrated. However, it was apparent there was absolutely no way it would be successful if included in the outsourcing projects.
I will be looking to hire some great development talent over the next few months and I’ve always had a long list of things I look for in a software developer. That list grew significantly because of this outsourcing ordeal.
And that is about the only real positive that came out of it.
Tags: Consulting, CRM/SFA, FastDraft, Software
I am on a quest. I want to add the blogs and other websites you read on a regular basis to this blog. It will be in a blogroll in the right hand column.
You can submit them either through a comment below or the contact me page above. The link will be added as long as it is a site that covers or is related to investing, is not pornographic, does not promote anything illegal or hateful and in my sole subjective opinion, is useful to other readers. I am pretty generous with my “useful” designation.
It does not matter whether the site links back to this blog or not. Getting links is not the purpose, compiling a useful list of resources is the purpose.
So, submit those links!
Tags: Investing
Over the years, I’ve read a lot of guru materials. At the predecessor of the Field Guide for Real Estate Investors we used to do extensive evaluations of guru materials. A member would purchase a book, ebook, home study course, etc and send it to us to be examined and evaluated. That experience taught me a lot about the gurus, their methods and their real experience levels with the methods and successes they claimed.
Over the years we developed some objective metrics to gauge the value of the materials.
For example, margin size. There are accepted standards for “normal” margins in any kind of printed material. There are entire industry groups dedicated to helping with normalization of layout and such. Their standards adjust from time to time but they are amazingly consistent over time. When margins exceed the accepted norms, our objective metrics would reflect that. In the most extreme case the margins were 2.5 inches on each side of the page and three inches at the top and bottom. That left a “printed” area of 17.5 square inches out of 93.5 available inches on the page. In other words, less than 19% of the available area on a page is used. But, they also double spaced the text, so it was really less than 10% was used.
Compare that to the typical or normal used in the printing industry of about 68% of the area being used you can see this guru’s materials took up about 7 times more space than they should. So, the 150 “page” book they advertised was really about 21 real pages. At $99 that meant each page costs about $5.
Another area that has always made me chuckle is the amount of time a guru will spend on background or filler material. Sticking with the example above, this guru’s materials “taught” how to buy subject to existing financing. Yet, more than half the book was about their life story. Almost 11 of the 21 real pages were devoted to telling about where they started and how awful their life was before they “discovered” how to do this new thing!
Of the ten pages left, five were spent telling how great the reader’s life will be after they start following the “system”.
In less than five real pages, they described the mechanics of buying subject to the existing financing. Only five pages dealt with the subject advertised to sell the eBook! That means the real cost per page of the real subject matter covered was about $20 per page.
Now, I am not saying motivational materials have no place in this world. But, motivational materials disguised the way the gurus do are useless to a serious investor. There are some really great motivational speakers and writers. They can help you make much needed mental adjustments in your thinking process that will directly affect your long term success. But, they don’t claim to be showing you the secrets the rich keep for themselves and then spend most of time on self gratification through an autobiography.
Just something to think about as you are reading your next squeeze page where the guru is breathlessly telling their life story leading to the discovery they want to sell you. Don’t be surprised when you get to read that life story, in even more time and space wasting detail, when you get the materials.
Tags: False Hope, Gurus, Investing
One of the suggestions I’ve received is to make the podcasts more fun using parodies of the gurus.
So, take a listen and tell me if this goes too far. Leave your reaction in the comments below.
Yesterday, Vice President Joe “The Plagiarizer” Biden said everyone just guessed wrong about the employment numbers. He also said, even though they put forth the myth of The Porkulus Package keeping unemployment at 8% or less for the year, the fact that it is now over 9% AND CLIMBING should not diminish support for the Porkulus Package.
Now, there are a number of problems with this. Not the least of which is it is an outright lie. Not everyone guessed wrong about the consequences of the Porkulus bill. In fact, intelligent people didn’t “guess” at all. And, those of us who didn’t “guess” have not been surprised by the unemployment numbers.
Well, at least one thing has been confirmed. The numbers from the Obama Administration are just “guesses” and they aren’t able to “guess” very well.
Tags: False Hope, Obama
I got up this morning a little earlier than usual, fired up the MacBook Pro to check email (and because I’m a parent, the weather at the summer camp my son is attending this week.)
Anyway, I open my email and receive this…
I want to thank you, the last segment episode 5 of your podcast is exactly what I needed to hear. I am trying to get started but agents and brokers keep shutting me down hard saying my offers aren’t reasonable. Thursday morning I sent a hand written letter like you said to do and the next day the owner called me! I was so excited we open escrow [Monday].
I have added this to my iTunes subscriptions. I look forward to learning beyond the same hype the others are covering. You cover stuff I have not heard or read any where else in the three years I have been learning. If you are ever in the Denver, Co area please let me know I know I would enjoy seeing you speak live.
A new fan,
Dan
Ft Collins, CO.
I have asked Dan if I can use his last name, if he agrees I will update this post.
I am very happy Dan was able to gain something from the podcast. I am trying hard to not spend much time on the same old stuff the gurus and wannabes cover. After all, how many times do you need someone to walk you through the hype, uh, I mean, system for buying subject to the existing financing? The same old 50,000 foot view is pointless. I want to go beyond that and as Dan put it, “cover stuff [you won't] hear or read anywhere else.”
That’s my goal for The AntiGuru Radio Show.
Tags: Advice, Brokers, Gurus, Investing, Podcast, Real Estate Agents, Realtor
Yesterday, I received a phone call asking if I would be interested in speaking at a conference.
“Maybe,” was my reply.
“Great! We want to tie into the anti guru thing you’ve got going there because [removed] isn’t your typical guru. I’m sure once you meet them you will agree they are the real deal and …”
“Do you know how many times I’ve heard that?” I interrupted.
“Heard what?” they asked.
“That so-and-so is the real deal and unlike the gurus I detest,” was my reply.
“No, really. [removed] has made more money for others than he has ever earned himself. He does this to pay forward. His fully automatic system makes it easy for anyone to get into real estate with no risk, no hassles and and unlimited income stream for the rest of their lives. He …”
“You must have brown eyes,” I said.
“What? My eyes are greenish. Why did you say that? Wait, are you saying I am full of #@$%?”
“Actually, I said, ‘You must have brown eyes’,” was my reply, “but, I wouldn’t disagree with the inference you drew from my comment.”
“By the way,” I continued. “If this system of theirs is as good as you say, why do they need to spend time, effort and money to market it?”
“Huh? They want others to enjoy the riches they have received from this system and that is why they are sharing it with the world. This is a life changing opportunity for anyone smart enough to …”
“Do they charge for someone to learn this magic system?” I asked.
“Well, do you work for free? Do you host your show without the expectation of compensation? Do you do everything you do for free?” was their weak reply.
“No, but I am not claiming my motives to be altruistic. What’s more, I don’t purport to have some kind of magic system like you describe. I provide information through a variety of channels targeted to serious investors. I …”
“Then you understand why they couldn’t afford to just give something this powerful away, right?” they interrupted me this time.
“Oh, I understand why they charge what they charge. I completely understand the marketing model. My problem is with the bogus claims. My problem is with targeting people who don’t have a clue about what they are getting into.”
The conversation kind of went downhill from there.
You know, for 25 years I’ve seen gurus come and go and it is always the same. They all claim to have the magic secret if you just pay them enough and work your way through the continual upsell process.
Astonishingly, about an hour after the call, I received an email from them. They still wanted me to speak, but would need to “approve the text in advance”.
Yep, I’m pretty sure their eyes really are brown.
Tags: Advice, Consulting, Gurus, Investing, Podcast
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