Broker's Corner with Tanya Chappell November 2020

It will take some time for all these wounds in our society to heal but heal it will guys. This too shall pass. As with every problem in life, there will be growth for us all individually and for us as a society from the experiences of 2020. Don't discount the growth that comes from pain. I'm reminded of a favorite saying "Don't miss out on the beauty of the collateral damage" so things like getting to work from home, more availability in online schooling, ease of shopping online for groceries, and anything else you need. The list will go on and on. Let's all take a collective breath and blow it all out with an extended exhale.... picture the stress of the year flowing out of your veins like the winding waters of the river....hahaha I thought I was in my Yoga class for a minute. But having let that slipped I wish everyone would practice calming their minds and creating more room for peace in the world. It really does start with you. Another quote I love by Lao Tzu

"He who controls others may be powerful but he who has mastered himself is mightier still" Feel free to hear more on practicing peace of mind at my online classes at Yoga Tanya Chappell on Facebook. This is not a cheap ploy to get watches but just my love for teaching how to live more peacefully.

OK on to the business at hand. Fixing and flipping is the topic of conversation this month. As you can see from the feature article my partner Jeff and I just completed our first "Fix and Flip" together. I have done plenty of this for investors and I own my own rental property, but this was the first one that I have done with a partner. And not just any partner. This one was with my beloved fiancé Jeff Schutt. Jeff owns a construction company and I"m a Real Estate Broker, Property Manager, and Investor, so it was a partnership built in heaven. Having said that you'll love (or hate) our LLC name "Byrne and Haile". "Say that five times fast," said Libby Ferrell, our favorite closing agent as they all got a good giggle out of it at closing time. Byrne is my maiden name and Haile is part of Jeff's Company name "Framers from Haile". So, we just couldn't resist.

As you can see in the feature article, we had a very successful first "Flip". As with most worthy projects it came with some bumps and bruises. I think most anyone that meets Jeff, and I would agree that we're a great match! We are both type "A" strong personalities that are used to being the one in control.... I think you are probably starting to get the picture... couple that fact with the fact that there's also a love relationship involved, and you have the makings of a spectacular fireworks show or two or 10 before it's all over! It's funny, our friends ask us "when are you getting married" and we explain it'll be after our River home renovation. That's because we want to make sure we live through it! I think it was by divine design that we snuck in this Fix and Flip before we renovated our home on the river. We definitely needed some practice in compromise and allowing each to do their respective parts of the job before we bring this home.

While it is fresh in my memory, I thought I'd share some things that I found to be really helpful on the organizational side of things that will also help cut down on misunderstandings and miscommunications.

 
online Storage:

Using your favorite online file storage system create the following folders:

• -Main folder with the name of the property and subfolders for the following
• Purchase Documents with a subfolder for Loan application saving everything you send to your loan officers because inevitably you'll be asked to resend things over.
• Closing documents within the Purchase documents and save your HUD closing statement, deed survey, title insurance, and loan agreement.
• Estimate folder – The obvious but name each saved file within it what it is so you can easily find it. Example-Carpet estimate Gainesville carpet and flooring etc.
• Materials folder: The final selections for the paint, flooring, etc.
• Ideas- Self-explanatory. I also like to create an idea Board (Word doc) where I put the pictures of all the various materials like countertops, flooring, tile, etc. that I'm looking at and paste them side by side so I can see how well it matches.
• Receipts- Be sure to scan and save every receipt and again it's important to use good naming conventions. I also create a spreadsheet of all expenses. I use the columns of Description, date, amount, what account it was paid from so we can settle up in the end.
• Pictures- with the subfolders of Before and After- Just because it's fun and you can use this later to show off your expertise if you're looking to finance more flip projects.

I have Pro accounts set up at Lowes, Sherwin Williams, Wayfair, Home Depot, RTA cabinets, etc. Anyone can set up a pro account and every penny saved is a penny earned. I like to use their apps when shopping for ideas. You can create lists within the apps and save it the name of the property. I also will save the pictures from the items in the apps that I really like in my ideas folder when I'm ready to see how they work together with the other material ideas.

I recommend making an agreement ahead of time with your partner on who has the final say on interior design. It's great to share ideas but somebody needs to have the final say because it is impossible for two humans to share the same exact vision and you want the project to have a nice design flow to it. Plus having that agreement ahead of time will minimize the arguing over design.

Jeff did all of the carpentry work and a myriad of other various work himself and sometimes with a helper. They completed things like land clearing, pump repairs, toilet replacements, install all new plumbing fixtures, Light fixtures, ceiling fans, door replacements, etc. I believe he calculated 623 hours! Having him there to supervise and look over contracted work was key in ensuring the quality of work to be top level.

I helped him put together and install the cabinets and vanities, which turned out to be very easy, along with some other projects. I picked out, purchased, and picked up materials and supplies. I also handled all of the business and real estate aspects of the project like creating the LLC, Banking, Financing, Buying, and Selling. We contracted out the flooring, painting, drywall repair, countertops, some landscaping, and tiled baths.

Don't be afraid to take down some walls. It was the absolute highest value and the cheapest cost of this project. Don't sacrifice style for cheaper materials. We went top of the line with cabinets, countertops, flooring, appliances, and light fixtures because it matters quite a bit. We spent about 25K more for upgraded or extra materials and that 25K netted us about 60K more in the end value. So yes! It is worth it. The little extras like the shelving above the cabinets, the backsplash in the kitchen, the custom backlit mirror in the master bath, custom fireplace mantel, waterfall tile design and custom tile in the baths, custom walkways and fire ring, the full view glass doors all were needed extras to get us to that higher price point we were looking for.

That is not to say you can't be thriftier and still make money, but on this one, it was more about our love for allowing a property to reach its highest maximum potential.

We are in the middle of another project much closer to home that we plan to use as a vacation rental for Divers and River enthusiasts. I can't wait to see how this one turns out. We plan to basically move our home into this Vacation Rental and then gut our River house and start with a fresh pallet. This new project has already gone much smoother on the relationship front being we were able to iron out lots of our personality kinks in the last one. I forsee by the time we get to the River home renovation it will be as it should be… an enjoyable and satisfying project with a beautiful end! We plan to have our wedding reception here once we are done.

I hope you enjoyed the back story of the project. Please feel free to reach out if you have any questions or would like me to handle your next fix and flip! Have a very Thankful, grateful, Thanksgiving.

 
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