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Article by Steve Majors

Finding, Fixing, Financing and Flipping
The 'Short Course'

  Most people get involved in Real Estate to make money.

  Pretty self-evident – or, is it?

  What would you say if I told you that everything you have been taught about Real Estate and making money ‘rehabbing' is wrong?

  Well, at least, much of what people tend to remember about it ... Let's take a look at something...

  While it is often true that the total price of a property that has had a lot of work done on it is more than one that hasn't, what has that ‘price difference' really cost you, the Real Estate Investor?

  I like to be sure to get everything out of a deal that is possible, but, there is a balance between the Time, Money, Effort and Appreciation the customer will get out of what you put in, as opposed to what they would rather do themselves – and be willing to pay you for the privilege! I call this the ‘M-E-A-T' of the deal, and it is a simple equation.

Function Money Effort Appreciation Time Total
Painting (full)
2
5
5
6
18
Kitchen Redo
7
4
3
6
20
Bath Redo
6
6
3
4
18
Landscaping (full)
4
6
4
4
18
Painting (LAZY)
1
1
4
1
7
Landscaping (LAZY)
1
1
4
1
7

  You can see from these figures, the appreciation factor of the customer is often the same – whether you put lots of time, effort and money into it or not.

  The reasons for this are as varied as the people looking at any given house, but how many times have you heard of people going into a house – just after it was fully ‘rehabbed' and they turned right around and put the paint they liked throughout the place? What about those that change the carpets?

  So, why did you waste your MEAT on doing it yourself? Because you thought it would be prettier? That you would get more money from it?

  I challenge you to think about this. Just how much more MEAT did you really get from that? The cash you got was more – maybe. The truth is, you can sell houses just like you get them – and get 90% or more of the price you will after all that work- and never even touch the place!

  When you use the LAZY way , you put very little extra into the deal, but raise your return another 5% (which means about 95% of the same total as you get otherwise) – without the added costs!

  So, who makes more profit from the deal? Those that do less work! Plus, there's more time, energy and money available to put into the next deal – while those other folks are still remodeling their last deal!

  In a year's time, you can do 30-50 houses this way – by yourself! How many can you rehab in a year – by yourself? Now, where is the bigger profit? Is that extra 5% or so worth loosing several deals over?

  Now you can see just what I meant by the training you had before. It taught you to ‘fix and flip' – but, unless you are doing it for the end user, you are likely wasting your time, money and effort for no additional appreciation factor, so, overall, you are wasting your MEAT for nothing.

  Just how much did painting that living room cost you? Since you missed another deal that might have $20,000, $30,000 or more in it, I would suggest you spent a LOT on it!

  Think about this before you start your next ‘rehab' project – just how many other deals could you do if you didn't put all your time in on fixing? Then, add on the energy (effort) that it saves you. Most people think about the money part, but leave out the rest of the equation.

  I think that is a big mistake.

  When you can get 90% or more of the same price, but do 1% or less of the work, keep 95% of the energy for other projects and 95+% of the money it would cost you – why would anyone want to do any ‘rehab' job – ever?

  Now, there may be times you find a house you want to live in that needs some work. That is a fine time to consider doing a ‘rehab' job, but any time you are working your investments, take a serious look at the MEAT of the deal – before committing to spending all your time, money and efforts.

Steve Majors - The Lazy Investor
Active Real Estate Investor, author of ebooks, training courses and seminars,
provides one-on-one mentoring and coaching.
Articles, news and more at www.TheLazyInvestor.com


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