Making people and ideas findable
The RIGHT investors for rehabs
First a disclaimer. If you are an investor and offended by what follows then rest assured it doesn't apply to you. So, no angry emails about how you're different. I'm sure there are quality minded investors out there...I just have trouble finding them. Maybe that's the point.
Here's the thing...
My wife and I own a building and remodeling company based out of Plainfield. We started this business to do green rehabs, new construction and, eventually, an entire community that is "off the grid".
We really enjoy remodeling homes. I mean down to the studs remodeling. The problem is the investors we've run into.
I have been told I want to do too much work to these properties and that I need to understand that it's poor people renting that don't take care of their stuff anyway. An example of this was a duplex on the near East side. The selling price was $28,000. My bid for rehab was $47,000. That was windows, siding, insulation, electrical, HVAC and a host of other stuff. The total invested would have been $75,000 on a property that produced $1500/month in rent. I was told by an investor from New York that I had to find a way to do it for under $10,000.
I turned down the work.
The thing is a family that is having trouble doesn't need to move into a new place where the gas bill in January will be $400. That doesn't help. They don't need a hand out...just a break.
We want to do rehabs that are profitable and a blessing to the family that rents/buys the property. That's it. There's room to make a living and help people out.
So that's my frustration. I feel like we're good at what we do and we have a passion for both green building and helping people. I just wish I could find investors that felt the same way...
Here's the thing...
My wife and I own a building and remodeling company based out of Plainfield. We started this business to do green rehabs, new construction and, eventually, an entire community that is "off the grid".
We really enjoy remodeling homes. I mean down to the studs remodeling. The problem is the investors we've run into.
I have been told I want to do too much work to these properties and that I need to understand that it's poor people renting that don't take care of their stuff anyway. An example of this was a duplex on the near East side. The selling price was $28,000. My bid for rehab was $47,000. That was windows, siding, insulation, electrical, HVAC and a host of other stuff. The total invested would have been $75,000 on a property that produced $1500/month in rent. I was told by an investor from New York that I had to find a way to do it for under $10,000.
I turned down the work.
The thing is a family that is having trouble doesn't need to move into a new place where the gas bill in January will be $400. That doesn't help. They don't need a hand out...just a break.
We want to do rehabs that are profitable and a blessing to the family that rents/buys the property. That's it. There's room to make a living and help people out.
So that's my frustration. I feel like we're good at what we do and we have a passion for both green building and helping people. I just wish I could find investors that felt the same way...
Replies to This Discussion
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Permalink Reply by JOEL R. HOFFMEISTER on -
We should get together so that I can share a mortgage program with you.
Thanks
Joel R. Hoffmeister
Senior Mortgage Consultant
www.joelsmortgage.net
317 885-4560 ext 104
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Permalink Reply by Polina Osherov on -
Greg, unfortunately, there are a lot of unscrupulous investors out there. Don't be discouraged. Keep networking and meeting as many people in the industry as you can and you will eventually cross path with investors who are honest and nice. Truly. They are out there. :-)
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Permalink Reply by Greg Mayo on -
Polina,
Thank you for your response and encouragement.
It's a rough gig...truly. I started this company to do something different than other contractors were doing. We wanted to do green, safe, effecient homes. Most of the investors I have bid for wouldn't live in the homes they flip. I wanted to do houses I would be comfortable putting my family in.
In short, I wanted to be the Tom Silva of Indy...even though I'm not quite to his skill level yet.
Anyway, it's frustrating and now it's slow and frustrating. I think I am going to have to take a "regular" job and work in what projects I get when I can.
Thanks again for the encouragement!
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Permalink Reply by Polina Osherov on
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:-) One other thought just occurred to me: You have a great idea, but I don't think investors should be your target market. Fact is, investors are in it to make money and they will, some scrupulously and some very unscrupulously, take whatever shortcuts they can to save/make money. You should be marketing to young, savvy business professionals who are buying older homes and wanting to rehab them or even wanting to build from scratch. I know that more and more people in the 20-40 age group are wanting to "live green". Maybe offer some free seminars about what small things people can do to make their homes more environmentally friendly and see if you can start building a client base from that.
Anyway, just my 2 cents. :-D Really, you're onto something - hang in there!
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Permalink Reply by Greg Mayo on
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Polina,
Turns out you have worked with my wife Stacey Mayo! She's a MUA.
At any rate, she told me your husband does public speaking. I would like to get into contact with him and pick his brain over a cup of coffee if possible.
Thanks again for the encouragement.
Greg
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Permalink Reply by Polina Osherov on
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Greg,
What a small world! lol
Honestly, as far as Ben and coffee, he's super busy and it may be a while, but there is nothing about public speaking you can ask him that I wouldn't be able to answer - i've been managing for going on 15 years, so I know all the ins and outs. Just drop me an email and I'll be happy to answer any questions or give you my phone number if you want to chat.
cheers,
polina
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4. You can post pretty much anything you want on your own personal page (self promotion, etc), and you can change the style of your personal profile page to reflect your corporate identification if you so choose.
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