I learned a long time ago that you only know what you know. And the many bunny trails that have led me to where I am today have helped to shape every new process and efficiency I use. I work now to help others avoid following that same path in their renovation and real estate investment journeys.
Those who have mastered the world of real estate investment – including yours truly – know the one simple secret: Plan.
Plan for the expected, the unexpected, the knowns and the unknowns. In the end, I promise your plan will minimize the grey area and maximize your budget, letting you focus on what’s important – your investment.
The following are six things all masters of real estate investment should know before day one, and why they should always be a part of your plan, without exception.
1. The completed floor plan.
I suggest using a digital measuring company to measure and arm you with all the specs and coordinates that will allow you to “work the numbers” on your own. This should include overall square feet, square feet of all areas needing construction materials and/or trades to work on, current layout, and a new preliminary layout (always have an Option B ready to compare and contrast expenses and labour).
Remember, labour and materials are not equal. Sometimes a project will be much more economical to execute and much higher in material costs than expected. Sometimes it will be the opposite. You can’t make executive decisions when you rush the details and don’t know the right information.
2. The scope of work.
Scope of work is not ... “I need a new kitchen, bathroom and main floor.” A scope of work is who is doing what in each area, and what details are to be achieved and actioned by each appropriate party.
For example, I don’t walk an electrician through a home verbalizing that I’d like this or that. If fixtures are to be installed, I document exactly what they entail and if they require uncrating of materials, inspection, assembly or removal of old fixtures.
Never hire smoeone for a task that can be done by someone less skilled for a fraction of the cost. I have an assistant who does all the light fixture assembly, leaving me without the time and material costs needed for wiring by a master trade at the highest hourly rate. I know I have the best man for the job, and I take the time to do all I can to remove any variables – a win-win.
3. The market values.
These include installation costs, typical wages and/or costing breakdowns that are specific to your area and level of quality expected. If you have 100 square feet of tile floor to install, know what the average square-foot installation cost of a standard builder is. This leaves no gap in your communication, and keeps the unknowns from causing leaks in your budget.
If you don’t know a basic grid cost, you likely don’t know if there’s a variable from tile to tile – and there could be. So if you got a “deal on stone” and didn’t realize that the cost to install it is about one-and-a-half times the installation fee, your deal just went south.
4. The budget.
Know your budget. Not a number that you hope it will cost, but an actual tangible number that is based on research and optics. What are you willing to put into it? What are you willing to let it go for? What details will your crew need to ensure the numbers align?
Your scope, your goods and your labour costs should all have a column. When – and only when – the three align, the project should move to the next phase.
When the budget is clear and the scope is defined, the labour is easy to estimate. The numbers become much more finite. Then extras are extras, changes have fees attached, and everyone is clear.
5. The hire-and-fire process.
They say it takes 10,000 hours to become an expert. Well, I’ve likely got five times that in renovation experience, and I can tell you there are always ways to mazimize your investment potentials. Hire for attitude, train on skill, be patient, take the time to help someone else flourish, and share the team strategy and goals for future collaborations. It basically boils down to this: hire slow, fire quick.
And while we’re talking about the people we hire: create your dream team. Stop struggling and adding to your stress pile by trying to fix what you can't. Find others who are brilliant at the things you can’t do. Share your brilliance with them. Collaborate, share, exchange – Make your own lie easier. SIMPLIFY.
6. Last, but not certainly least, know thyself.
I say this in an effort to share the single most important piece of advice I have ever received: “Everyone is brilliant at something." Find what you are brilliant at and soar to new heights by focusing on what you can do with ease.
What’s your secret sauce? What makes you great? Are you tapping into that brilliance 80% of the time? In other words, when factoring in the majority of what you do daily, are you the best man for the job? You either hire out where you have a gap, or you trudge through in jack-of-all-trades mode. And we all know Jack. Remember, he is master of none. You are the master of your investment strategy; don’t let it master you.
Now that you’ve learned from the masters, enjoy the new life before you – working in your bliss zone. I’m in mine. Just get out of your own way and make it happen. Much of what we believe we can't do are stories, myths or tales we have falsely begun to believe are true. Dump those off at the corner, rock your gifts, be the master of your sweet spot and build your business to suit you. I have and it's utter joy.