Hello Dr Ro here hope you are all well and enjoying this beautiful weather.
I wanted to tackle a question that’s come in last week because I’ve been talking about some of the stuff they were doing on the renovation and people have asked, are you involved in the actual renovation itself?
I think it’s a very important question, but also one I need to tackle from the point of view it depends on your circumstances.
I have been in this situation just recently where our home has been renovated and there’s been a lot of work that had to be done whilst we’re actually in the property and the result of that has meant that we are literally moving around whilst the work is being done. I’ve had to drop a lot of things in order to be involved in the process, so the question that’s come in is as property investors what would you recommend, should we get involved and do the renovations ourselves?
I’ve been teaching for the last 15, 20 years in the subject. One of the things you’ll hear me say is if you want to build this business don’t get involved in the renovation itself. Don’t be hands-on all the time because your time will be sucked up and it has.
Even this week I was invited to speak at an online presentation and I just evaluated about a week and half ago and I looked at just how much work has been leading up to today actually Friday and just to give you an idea the house is an absolute tip. We’re trying to live in and around yesterday I was moving whole bunch of stuff around floorboards, et cetera working with the builder, so if you are an investor and looking to build this as a business my personal belief and my suggestion is get your teams in place, operate remotely and don’t get too hung up with the idea of doing all the work yourself.
Because if you do and we’ve got a couple renovations going on at the moment in one specific area of the country another one going on somewhere else and if I were to actually physically have to go see just those couple that are parallel, those projects would take up hours and hours of travel time. Sitting down, speaking to the builders, looking at the works as a rule, I don’t get involved. You’ve got to decide as a property investor do you want to be hands-on or hands off?
If you have a lot of time and you don’t have a lot of money, but you can raise money to do projects you might decide you want to be more hands-on. When somebody is starting off when they’re first getting into real estate investing and doing renovations and buying properties below market value which is what we did and we have continued to do and adding value to them, then there is an argument to say at the beginning, you might want to get a little bit more involved in the sense that you want to understand the process, the different stages.
But the key thing is once you understand the foundations, then it’s scaling up. If you scale up from one project to five to 10 to 15 you’re building another job for yourself. If you decide to manage them all and I get a lot of people that have come through the training over the years they haven’t invested in themselves or in training and mentoring and coaching all the stuff.
I wish them luck kick as if you’re busy already and then suddenly you want to expand the portfolio and that portfolio you want to get 10, 15, 20 properties, it is actually unrealistic to assume that you can actually manage those projects and manage a full-time job and manage a balanced life with your kids, et cetera it’s not going to happen.
So just to clarify what I’ve been doing the last month or two I’ve been involved because it’s our own property, et cetera, and I have been more involved in it from that context. I would not be doing this had it not been for that reason, there are other projects that we have I don’t get involved. I know the market and the builder very well et cetera and we’ve done our due diligence, but I don’t need to be there whilst the work is being done.
In fact, the builders that I use will upload photographs into a dropbox or Google Drive. We see the photographs we keep in touch, we see video footage, et cetera . I’m able to maintain that relationship with the builder and the property to make sure it’s been done to a certain standard.
That allows me to be five hours away from the properties and still at the same time operate whatever I want down here in the south whilst my properties for example, in the North being done up. That does involve you having the right team, a trusted team so that’s the first thing you’ve got to decide if you want to be hands-on or hands off.
Also how quickly and how fast and how big do you want to scale your business? If you are happy to do this slowly then there’s an argument to say you could be more hands-on, but were talking really slowly, but if you want to scale up and put three properties, five properties in place in this next year and have all done up and be looking for more properties that’s what your energy and time is probably best spent. Going out and finding money and finding deals and that’s your skill set and then you have other people help do the work for you now.
By doing that what you have the opportunity to do is not only scale up your pot of money for investing, you also get the opportunity to bring deals to the table which many you can source onto other people, and equally those you can keep for yourself. Which means your business can expand and at the same time, your properties can be renovated, but the minute you try to put a stranglehold on your business control every element of it by being involved every element of it, chances are you will find yourself in a situation where it won’t expand. It won’t grow so that would be my main tip on that subject.
And yes, I will be a bit more involved again over the weekend and next week as unfortunately there is more work to be done here.
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