\n<\/p>\n
When done well, home renovations <\/strong>can help you make a SERIOUS profit on your properties<\/strong>. Whether it\u2019s a simple fix<\/strong> or a complex rehab<\/strong>, having a few systems and processes in place will go a long way toward ensuring your success. The best part? Any rookie can implement them!<\/p>\n Welcome back to the Real Estate Rookie <\/em>podcast<\/strong>! Today, we\u2019re chatting with graphic designer turned full-time investor<\/strong>, Serena Norris<\/strong>. After a friend introduced her to the book Rich Dad Poor Dad<\/em><\/strong>, real estate <\/strong>quickly became Serena\u2019s new obsession. She quit her job<\/strong> to spend the following months networking<\/strong><\/a> and attending meetups<\/strong> until, naturally, she found a mentor<\/strong><\/a> to show her the ins and outs of investing<\/strong>. At first, she was willing to take on all kinds of mundane tasks and soak up as much information as possible. In no time, Serena was running her own <\/strong>BRRRRs<\/strong><\/a> (buy, rehab, rent, refinance, repeat)!<\/p>\n Whether you need help convincing a mentor <\/strong>to invest in you or managing your own home renovation projects<\/strong>, Serena\u2019s got you covered! In this episode, she delivers a thorough breakdown of how to estimate rehab costs<\/strong><\/a> and find a good contractor<\/strong><\/a> for your home renovations<\/strong>\u2014as well as some of the invaluable systems, tools, and templates you\u2019ll need along the way! If you\u2019re EVER going to do a home renovation (which you probably will), DO NOT skip out on this!<\/p>\n Ashley: Serena: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Tony: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Tony: Serena: Ashley: Serena: Tony: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Ashley: Tony: Ashley: Serena: Ashley: Tony: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Tony: Serena: Tony: Serena: Tony: Ashley: Serena: Tony: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Ashley: Serena: Tony: Serena: Tony: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Tony: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Tony: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Serena: Ashley: Tony: Ashley: Serena: Ashley: \u00a0<\/p>\n<\/div>\n Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n
This is Real Estate Rookie episode 330.<\/p>\n
I figured out right away that he just needed help keeping everything organized in his mind because he\u2019s got so many projects going on. It\u2019s like when you\u2019re project managing and you don\u2019t have systems going up, and so I just started recording as much as I could, information, recording where they\u2019re at in the construction process, what they need to do, keep all the tasks organized, so that way, he\u2019s on the road calling me, \u201cHey, run through the priorities right now.\u201d So that was in the beginning where the value was, and then just continuing to organize from that so that we could be more effective and efficient.<\/p>\n
My name is Ashley Kehr, and I\u2019m here with my co-host, Tony J. Robinson.<\/p>\n
Welcome to the Real Estate Rookie Podcast, where every week, twice a week, we bring you the inspiration, motivation, and stories that you really need to hear to kickstart your investing journey. If I look a little bit different, I\u2019m actually sitting in a hotel room. I\u2019ve been here since Sunday, and I didn\u2019t even tell you this yet, Ash, but there\u2019s this idea called a Think Week that Bill Gates used to do where he basically go into a cabin in the woods somewhere, and lock himself away for a week, and just read a bunch of stuff about whatever is pressing in his business. So I\u2019ve been trying that out. I\u2019ve been here since Sunday. I leave on Friday. So, really, just deep diving in a lot of different parts of our business, and it\u2019s been incredibly helpful to have a week with nothing.<\/p>\n
So are you shutting out everything else, like your normal daily activities, like you are actually on vacation? Yeah?<\/p>\n
Yeah. So, literally, I mean, outside of the podcast, I really haven\u2019t had any meetings or calls this week at all, and I\u2019ve even deleted social media from my phone just so I could really be focused in, and it\u2019s been an incredibly productive week.<\/p>\n
So that\u2019s why you haven\u2019t responded to the 5,000 memes and reels I sent you?<\/p>\n
That\u2019s probably why.<\/p>\n
I\u2019m just kidding. But today, we have an incredible guest on today, one of my best friends that lives across the country from me, Serena Norris. So she is coming on today as an expert in systems and processes, and mostly, we\u2019re really going to focus on project management of a rehab. So if you were doing any kind of rehab in a project, whether it\u2019s for a BRRRR, you\u2019re going to keep it as a rental property, or it\u2019s going to be a house flip, or even it\u2019s a short-term rental that maybe you want to furnish, we are going to go through systems and processes you should have in place, including the checklist, the templates, and the software.<\/p>\n
Yeah. Serena is just a wealth of knowledge, guys, and there\u2019s some episodes where she\u2019s like you\u2019re going to have to go to and re-listen multiple times just to really soak up all the knowledge, and this is one of those episodes. So you guys are going to get so much from the next, I don\u2019t know, 45, 50 minutes, however long this conversation is with Serena.<\/p>\n
Yes, and get your pen and paper ready because towards the end, she goes through every template you should be creating to run your rehab projects, and I think that is so informational. Every time I talk to her about real estate, I learn something new.<\/p>\n
Learn something new. Yeah.<\/p>\n
It\u2019s like, \u201cI need to be doing this.\u201d So this is a great opportunity for us to get her on. She also works alongside Nate Robbins who was on episode 326. So they co-exist together making these flips happen that they\u2019ve been working on.
Serena, welcome to the show. Thank you so much for coming on with us today.<\/p>\n
Thanks so much for having me.<\/p>\n
So tell us a little bit about life before real estate.<\/p>\n
Oh, life before real estate. So I actually went to college for graphic design, marketing, and branding. Then, I did that for a few years in Beverly Hills for a really high-end men\u2019s wear company on Rodeo Drive. After a few years there, I was in my early 20s, and I just realized that I wanted to work for myself, but I didn\u2019t want to freelance graphic design, and I didn\u2019t know yet what I wanted to do. The only thing holding me in LA was I had a country music\/classic rock band that I was in, but I decided to move to Hawaii just for a couple months, and it ended up being a year and a half. When I was out there, I had a friend that made me read Rich Dad Poor Dad, and he plugged in my ear about buying a duplex and house hacking before house hacking was coined a term. I started really thinking about my childhood and my interest in real estate in general, and that\u2019s when I really just started thinking.
I was literally obsessed with anything houses, any shows, remodel shows, HGTV, and my\u2026 thinking about it like it just runs in my family. My dad was a general contractor. My stepdad was a general contractor. Obviously, my mom had a type. My grandpa was a general contractor. My other grandpa was an architect. Ever since I was little, I was in and out of remodels from the time I could walk because that\u2019s all my dad did, and we\u2019d consult on floor plans. Even Sunday mornings, we\u2019d open up the newspaper, and there\u2019d be like Floor Plan of the Week, and he\u2019d dissect it for me and tell me why the bathrooms all have to be on one side of the house, and this, and whatever.
So I then was like, \u201cOh, when I was little, I used to draw floor plans for fun, and I used to ride on my bike all through the neighborhoods. Anytime I saw a house for sale, I\u2019d always pick up all the flyers, and I\u2019d go home, and I\u2019d spread them out, and I\u2019d literally comp them without even comping them and trying to figure out why one was worth more than the other,\u201d and I was like\u2026 I lived in the poor neighborhood behind a really, really nice neighborhood. It was one of the first dreams, and so all the houses were really awesome, which is probably why I wanted to look at the flyers. Then, even if there was an open house, I was a kid, and I\u2019d put my bike to the side of the road and walk in. They\u2019re like, \u201cWhat is this kid doing in here?\u201d
So I just realized I had an interest in real estate and that it fit how I wanted to make\u2026 had the opportunity of making passive income, working for myself, being self-employed, and so I just was like\u2026 At this point, I actually don\u2019t know anyone else in construction or real estate. My dad had retired, and my grandparents had passed. So I just was like, \u201cOkay. I\u2019m going to go online, get my license, and move back to Washington where I know people, and start from there.\u201d So, literally, three days after I moved back, I was at my cousin\u2019s wedding, and I met my mentor, Tarl Yarber. Maybe you guys have heard of him. I actually sat across from him at the rehearsal dinner, and so it was one of those moments where right time, right place, and he was talking about how he flips houses, and I started getting really excited because I was like, \u201cI don\u2019t know anyone who flips houses, and here\u2019s this guy right in front of me. This is what I want to do.\u201d
So I played it cool for a while, for a couple days, the wedding, his destination wedding. Then, right as he was about to leave, I was like, \u201cHold on, hold on.\u201d I was like, \u201cCan I get your contact info?\u201d He\u2019s like, \u201cYeah. What\u2019s up?\u201d I was like, \u201cI\u2019m going to work for you. When can we meet next week?\u201d So we ended up meeting next week at a Starbucks, and I was telling him what I want to do. I was like, \u201cHey, I\u2019m not working. I can do this full-time with you, whatever you need.\u201d So I just started assisting him because at that point, he was flipping 20 to 25 houses at a time just him, and so that was a lot. He was like, \u201cYou know what? I actually need some help,\u201d and he really did. So I jumped in and just started helping with everything. A lot of it was choosing the finishes at first because he was really not design-oriented, and then we pretty much had no systems in place. We were writing scope of works on Word documents and really-<\/p>\n
Wait, that\u2019s not what you\u2019re supposed to be doing.<\/p>\n
I mean, you can, but\u2026 I mean, not Word document.<\/p>\n
Yeah. I know what you mean.<\/p>\n
Not pages on Word. I\u2019m talking about one page Word doc for a whole house remodel, and the thing was it\u2019s like it\u2019s because at that point in the market, it wasn\u2019t\u2026 Contractors weren\u2019t really busy, and so he would leverage the contractor and the agent that was going to list the house and had them work together. He trusted both of them, and that ended up working for him. But as he got busier, and with more projects going on, and then how contractors were getting more busy as the market was getting\u2026 There was more demand for them. They weren\u2019t going to take the time to go and plan the house. You need to tell them-<\/p>\n
You got to do that legwork for them, right?<\/p>\n
Yeah.<\/p>\n
This is so much good information, but I just want to pause for a second because there\u2019s so much in this story that we got to circle back to. So I don\u2019t know how many times you and I have talked, and I never knew that you were in a country\/rock band, so that\u2019s something we got to\u2026 We got to talk about that offline a little bit, but we also interviewed Nate Robbins. I can\u2019t remember which episode he was, but if you guys just go back up\u2026 326. All right. So you guys go back four episodes, you\u2019ll hear Nate\u2019s episode. You, Nate, and Tarl, this trifecta that manages this massive flipping business, and now events and all these other things together, but it all started by these just chance interactions.
If you guys go back to Nate\u2019s episode, Nate was working in a bank, and Tarl walked in, and it was through that conversation that led to something. You and Tarl sat across from each other at a rehearsal dinner, and the relationship grew from there. The reason I bring that up is because I think for a lot of our rookies that are listening, you might oftentimes or every once in a while also find yourself in a position where you might be sitting across from someone that could potentially change your life, but you have to have the courage to take that opportunity when it\u2019s presented to you. Certainly, you very much could have had that conversation with Tarl, let that weekend pass, and then never said anything to the guy, but you said, right before he walked off, \u201cHey, hey, hey, I\u2019m going to work for you. Let\u2019s figure this whole thing out.\u201d I think that\u2019s the level of courage should it takes. So my point to my rookies, if you\u2019re listening, when that opportunity presents itself, you\u2019ve got to have the courage to take it because it could pass you by.<\/p>\n
Yeah. No. Absolutely. I also want to note. I came from a place of\u2026 I\u2019ll just jump in. \u201cI don\u2019t want to cause any more work for you. What can I do today that will just alleviate any stress for you?\u201d Because a lot of times people would come to us once we were established and was like, \u201cHey, is there a position for me, or what can I do, and dah, dah, dah?\u201d I was like, \u201cIf I have to think about this that hard, you\u2019re actually adding work for me. I\u2019m not ready to hire anyone.\u201d So it\u2019s like when you do find a mentor, and we can touch on this a little bit later, some advice on getting started, but let them know that you\u2019re here and really be assertive, and going, and intuitive like what they need, and then try to fill that as soon as possible so they can see the value that you\u2019re going to give them so that they want to invest in you.<\/p>\n
What was that for Tarl, and how did you figure that out with him? Was it just picking up on things at the conversation at the wedding?<\/p>\n
Well, I think it started in our conversations, and then I went\u2026 We met at a Starbucks, but then we went and started walking properties, and I figured out right away that he just needed help keeping everything organized in his mind because he\u2019s got so many projects going on. It\u2019s like when you\u2019re project managing and you don\u2019t have systems going up, you\u2019re really flying by the seat of your pants. When you don\u2019t have other team members, you tend to keep all of the information in your head and not put it down. Well, now, you\u2019re adding the second person that needs to have information, and so I just started recording as much as I could, information, and started organizing that for him. He would call me throughout every day and say, \u201cAll right. Run through what I need to do.\u201d
So I was just like the sounding board where I was at the computer doing some tasks that he needed, started analyzing properties. I didn\u2019t even have my license. I didn\u2019t even have access to MLS. So I\u2019m literally analyzing through the Zillow and whatever the best I can and at least giving him like sending him some sniff tests on deals, but I would be recording where they\u2019re at in the construction process, what they need to do, keep all the tasks organized, so that way, he\u2019s on the road calling me, \u201cHey, run through the priorities right now.\u201d So that was, in the beginning, where the value was, and then just continuing to organize from that so that we could be more effective and efficient.<\/p>\n
One thing that makes me think of Serena, we recently had Mike Michalowicz in the podcast as well. Gosh, guys, I should be better with our episode numbers, but anyway, I\u2019ll figure it out. I\u2019ll say it, but Mike came on, and he talked about his book Clockwork. One of my favorite books that I\u2019ve read in the last couple of years, but it ties into what Serena is talking about right now. She said that Tarl was managing 20 plus flips by himself, which is insane, but when you are by yourself, you don\u2019t have to systematize everything because like you said, it\u2019s all in your mind. But the second you want to bring somebody on, now you\u2019ve got to go through this pain of taking all this tribal knowledge that you have and trying to download it into this new person. So, for all of our rookies that are listening\u2026 and believe me, I made the same mistake in my business as well. The lesson for all of our rookies that are listening is that even if you just have one property, if your plan is to scale up and to buy more, focus on those systems and processes on day one because it\u2019s so much easier to build out SOPs. It\u2019s so much easier to get your processes in place when you have one property than when you have 10, or 20, or 30, or 50.<\/p>\n
Absolutely, and when you get to that amount of properties, all of a sudden, you\u2019re like, \u201cI need someone now,\u201d and then you have to pause, and then your projects delay, and then the training process. So, honestly, one of my biggest things that I tell new investors is just start recording information. The whole systems and processes label can sound really scary, and it\u2019s super complex, but keep in mind the best systems are super simple to use. Right? One of the first systems that I put in place for Fixated, our company, was somewhere where we could all access the lockbox codes. It sounds so simple, but I would show up to a property, and then all of a sudden, the lockbox code had changed, and I\u2019m trying to call Tarl, and then he\u2019s not answering because he has a meeting, and I\u2019m just sitting there for an hour. Right?
It\u2019s just such a time wasted, same thing for him, and so I was like, \u201cI\u2019m going to find a centralized place online, so Google Sheets, Smartsheets, whatever it is, where we can put the address, the lockbox codes, the entity names, and who\u2019s driving it that week.\u201d That was one of the first systems we ever made, and it saved everyone so much time, and we just elaborated from there. So I\u2019m really big on centralized information, and start that from day one. I hate doing something twice. So if you find yourself keep trying to look up information, it\u2019s taking you a long time, then that\u2019s your cue that you need to put a system in place.<\/p>\n
Or relying on someone else to give you that information via text or whatever. Text messages go through so fast that something Tarl told you last week as with the code boxes, having to go through back text messages, scrolling, looking for that piece of information.<\/p>\n
Then, we added location of lockbox because that was a thing, too. It was like, \u201cCool. Lockbox. 1, 2, 3, 4,\u201d but I\u2019m walking around the whole house, and it\u2019s on the neighbor\u2019s fence on the right side like behind the bush. So, yeah. Like I said, really simple system. It saves a lot of time, and time is money.<\/p>\n
So once you started putting this together for Tarl, what was your actual position with him? What did you bring to the team? What does your role look like now, and how long have you actually been doing this?<\/p>\n
Yeah. So I started with Tarl back April 2015, so over eight years ago. At that point, it was really just assisting him in anything he needed for the projects, learning\u2026 biting off more and more as I was learning, and then I became an agent. So then, I could help him analyze deals better by using the MLS, and I also split my time at that point actually becoming an agent full-time and then also helping him. I started putting finished packages together. So with the design, and the market increasing in demand, and housing prices increasing, and doing a little bit more higher-end stuff, we needed to be much better at picking the design, and the finishes, and the floor plans, and so I took over making the design packages, and then also driving the properties once a week, and reporting back anything for him, coordinating some of the finished stuff like cabinet people, and that\u2019s where it started.
Then, as it evolved, I started taking on some of the project management, and then over the years, I pretty much ended where I\u2019ve taken over all of the project management, managing all the contractors, making the scope of work, managing our coordinator and material orders, and just pretty much getting the property from A to Z. Also, I confirm the underwriting because I\u2019m the part of the team that has to get the property from acquisition disposition and make the business plan work, and so I\u2019d sign off on the underwriting for that because I was the one closest to the numbers. Construction costs are constantly changing, and I was the one that knew that the most, so Nate would send me over the projects and his underwriting, and I would do the stamp of approval. So then, we would go into construction, and then I\u2019d list them on the backend and disposition, and get them sold so we can make some money.<\/p>\n
I was just going to say, Serena, so you mentioned\u2026 You\u2019re throwing some phrases around. I just want to break them down for our audience here. Define acquisition and disposition for folks that aren\u2019t super familiar with those phrases.<\/p>\n
Yeah. Acquisition, buying the property, and then disposition, selling the property. So we would do, mainly, fix and flips. We\u2019ve done probably a quarter of the deals that we\u2019ve done together, our BRRRRs. So we\u2019d buy them, we\u2019d rehab them, then we\u2019d rent them out and refinance. So our \u201cdisposition\u201d would be that we are now renting them out and turning them over to a property manager. But yeah, acquisition would be sourcing the deal, running the numbers, making it make sense, which is underwriting, and then acquiring it and putting it in our name.<\/p>\n
So I want to go further more into your project management role such as how you\u2019re estimating rehabs, how you\u2019re hiring contractors, how you\u2019re managing the contractors, how you\u2019re managing the rehab. So let\u2019s just start with the estimation and deciding what materials you\u2019re going to use, and walk us through what is the best process that you have put together for this.<\/p>\n
If I can jump in before you answer that, Serena, I just want to let all of our rookies know. Ashley, Serena, and I spent a day together. Maybe that was a little over a year ago, and we got to walk with Serena through a few of her projects, and Serena is like a savant, like an encyclopedia of project management for flipping houses. I love James Dainard, and I feel like you and James, when it comes to managing a rehab, are neck and neck with each other, so you guys are-<\/p>\n
Except Serena\u2019s process is-<\/p>\n
God, I was like, \u201cWow, that\u2019s the most complicated [inaudible 00:21:00].\u201d<\/p>\n
If you see the difference of their templates, and worksheets, and actual computer screens, Serena\u2019s is way more detailed than James\u2019 is.<\/p>\n
Yeah, yeah, but I think even for me, Serena, before we even get into that piece, I feel like people can sometimes feel overwhelmed, especially if this is your first time doing this. So if we can even just start there first, like how do you\u2026 I\u2019ve got this old beat-up house my first time doing this. How do I even take that into like\u2026 How do I not get overwhelmed, I guess, by looking at the start of this big project?<\/p>\n
Yeah. The first thing that comes to mind with that, putting myself in their shoes, is rely on\u2026 Work backwards. Start with the comps. The comps are king. You have an example. So the comparable houses that you need to achieve, you\u2019re after remodel value. That\u2019s what you\u2019re going to reference in a map of what to do with that property, and so when you are in the\u2026 Planning starts during acquisitions because you have to think, \u201cOkay. What\u2019s the strategy for this deal? Am I just putting new carpet in, and I can sell it that way, and that\u2019s what makes me a good deal, or are we going all the way down to the studs, putting in all new electrical, plumbing, whatever?\u201d It\u2019s, \u201cWhat value do I need that project or that property to get to in order to make sense for my deal?\u201d
So if you\u2019re feeling overwhelmed with the amount of rehab, then maybe that\u2019s not the project you start with. But if you\u2019re like, \u201cOkay. I see the finished product of what it needs to be, and now the house is in this state right now. What\u2019s the difference in that?\u201d well, that\u2019s your scope of work, and then anything that you need to fix to make it sellable. So, yeah. Comps are king. A lot of people will buy houses, and they\u2019re like, \u201cI want to make it so cute. I want to make it like HGTV. I want to\u2026\u201d They end up overdoing it, and it\u2019s like you don\u2019t have to. Don\u2019t get emotional. Don\u2019t get attached. Don\u2019t worry. There\u2019s going to be houses where you can get super excited about as you grow your business, and you invest more capital, and do higher-end deals if that\u2019s what you want to do. But today, this is still a business, make sure that you\u2019re not investing too much in it. So that\u2019s my answer would be just comps are king. Always rely on those for your initial direction.<\/p>\n
Now, you\u2019re using a lot of the same materials for each flip. How are you tracking this? How are you deciding as to what material, what toilet you\u2019re going to use, or what paint color you\u2019re going to use? So you talked about looking at comps, but once you\u2019ve decided what your ARV is, your after repair value, what\u2019s the next step for you to actually build that scope of work to build that budget? Do you have information that you\u2019re pulling from? How are you knowing what estimates are going to be, all of that? What\u2019s your best advice for a rookie on how to do that?<\/p>\n
Yeah, so I would say\u2026 So building out a scope of work, really, the way that we structure it is we\u2019re going to go\u2026 We have everything like exterior, interior, and we just label out a lot of it, like materials and labor for some of the things, but also\u2026 Honestly, if you\u2019re just starting out and you really just don\u2019t even know where to start, you\u2019re like, \u201cThe fascia looks like it\u2019s bad, but I don\u2019t know,\u201d one of the things that-<\/p>\n
Wait. Can you explain what fascia is for anyone that might not know?<\/p>\n
Fascia. Sorry.<\/p>\n
I mean, that\u2019s one thing right there that\u2026 It was a long time before I even knew what that was.<\/p>\n
That\u2019s true. Part of the siding. If you see part of the siding underneath the roof, side of the house, it looks like it\u2019s rotting a little bit, but you\u2019re like, \u201cI don\u2019t know. Is it okay if I just paint it? Do I have to replace it? I don\u2019t know.\u201d Honestly, one of the things that we used to do when we weren\u2019t as knowledgeable about construction would we\u2019d hire a home inspector. Yeah, it\u2019ll cost us a couple hundred bucks, but we would ask them, \u201cHey, I don\u2019t need a report. Can you just walk it with me, and I\u2019ll make all the notes?\u201d just so maybe they\u2019ll give you a half price or something because they don\u2019t have to spend time making a report.
Go through with them, and then they\u2019ll point out all of the defects of the house like, \u201cThis\u2026\u201d Tell them your intention with this house, \u201cI need to fix it up to be like this. Can you help me identify things that I must fix for this house?\u201d Then, that should cover then some of the more structural items where then you can look at the comps, and then decide for the finish level and the design items. Right? If all of your comps have quartz, or granite, or stone countertops, and that\u2019s the level of finish you need to get to to get the value that you need for the deal, then you\u2019re going to put in\u2026 that\u2019s what you have to put in.
The other thing is walking with a bunch of contractors and having them give you a line item estimate, and that\u2019s also going to just give you more and more information. Ask questions. Contractors love to talk about construction, so you\u2019re walking\u2026 and they love to show you that they know what they\u2019re talking about. So if you walk with them and go\u2026 Trust me, you don\u2019t need to know everything. I didn\u2019t know everything by no means. Even though my dad was a contractor, I didn\u2019t know a lot about construction. I didn\u2019t know what fascia meant either, but I\u2019d walk with them. A lot of times, they\u2019re like, \u201cWell, this needs fixing,\u201d and I was like, \u201cOh, it does?\u201d in my head. They\u2019re like, \u201cWhat do you want me to do with this?\u201d and I go, \u201cWell, what would you do?\u201d Then, they\u2019d answer, and then they\u2019d give me a few options because they love to talk about what they love\u2026 They love to hear themselves talk, so I\u2019m like\u2026 and then I go, \u201cOkay. What\u2019s the most cost-effective of those?\u201d and they\u2019d be like, \u201cThis.\u201d \u201cIs it going to look okay?\u201d \u201cYeah.\u201d \u201cThat\u2019s what we\u2019re going to do then.\u201d Right?
So contractors will be your friend, for sure, and also, hiring the home inspectors or going to meetups, creating relationships with other investors. Maybe you trade off, \u201cHey, I\u2019ll go walk your properties once a week, do reports for you, take pictures for you if maybe you can just walk a couple projects for me and help me build a scope of work or something.\u201d Right? Our investor community, we found, in Seattle was so supportive. I know that\u2019s not everywhere in the US, but we know how the world it is out there especially to learn, and no one got to where they were without the help of someone, and so there are people out there that are willing to help you and want to see you succeed.
So getting that information and like, \u201cHow do I even build a scope of work?\u201d that\u2019s going to be your starting point. Going back to the technical side of it is we used to\u2026 We started with Excel or I guess Word doc, and then Excel, and then we moved up to Smartsheets. From the first scope of work that you create, have that be your template. Start a template from day one. Right? So we\u2019re going back to that whole don\u2019t have the information in your head and keep it there or repeat the wheel over and over. Again, if you make a scope of work, use that as the foundation for a template and just continue to build on to that, so that way, when you go to make another scope of work, you\u2019re not starting from zero. You\u2019re going to save a lot of time.
The way that we ended up figuring it out was that we wanted to start with a template, scope of work, on anything that we\u2019ve ever done on a project. Anything we could ever do with a project, even like removing a car, removing an RV, whatever it was, we made a massive list of whatever and built on it. Don\u2019t get me wrong. We didn\u2019t start that from day one. We built on it as we\u2019re doing more projects, so that way, we could just take that list, and then delete what we don\u2019t need from any new project so we didn\u2019t miss things. The reason why we started doing that, which was years later, by the way, was because I can\u2019t tell you how many times I forgot to have the contractor put in a dryer vent. So a dryer vent is where the dryer exhausts to the outside, and we don\u2019t really put in a washer and dryer into our flips. We have the buyers buy them, but we at least put the hookups, obviously. But a lot of times, the dryer vent, that actually goes in the wall, but you don\u2019t think about it until the end of the project, really, and so-<\/p>\n
So what you guys have to do, like cut the drywall?<\/p>\n
You have to cut in sheetrock. Yeah, we\u2019d have to cut in drywall and put it in, and I can\u2019t tell you like when\u2026 three or four times, and it\u2019s at the end of the project, or it came up in inspection, \u201cThere\u2019s no dryer vent.\u201d I\u2019m like, \u201cOh my God,\u201d and then we look like idiots to the buyers, right?<\/p>\n
Yeah, but mistakes sometimes are the best teachers, right? We had a similar issue where we rehabbed a home, and our crew didn\u2019t put a P-trap into the drain in the shower, and it was causing the smell to come back up out of the sewage. We were like, \u201cWhat the heck is going on?\u201d We had to send all these plumbers, and one plumber finally found the issue that it was a P-trap. So now we make sure. Anytime we\u2019re doing a flip, we go, \u201cDid you put the P-trap in there?\u201d You know?<\/p>\n
Yeah.<\/p>\n
It\u2019s those experiences that teach you that.<\/p>\n
Yeah, 100%, and I bet the plumbers go, \u201cWell, duh, I put in a P-trap.\u201d My answer to that is I never assume. Never assume. Also, the biggest tip here, never assume that something is going to be done. Always over-communicate. Even if it ticks off your contractors, you let them know, \u201cI never assume. I just want to communicate with you.\u201d Yeah, that\u2019s how we started that process with the scope of work is we just started missing small things, and it\u2019s like, \u201cI\u2019d rather start with something big, and then delete what we don\u2019t need.\u201d That would make creating scope of work so much faster too for us.<\/p>\n
[inaudible 00:31:48].<\/p>\n
I want to tie that into how you were talking about getting a friend or another contractor to walk with you and help you out build that scope of work. I think one really big thing is don\u2019t rely on that person to build the scope of work. Go and do it yourself, and have them look at it, and see if there was anything you missed as a second set of eyes. Don\u2019t ask a friend from a meetup or somebody you met to help you on it and be like, \u201cCan you build the whole scope of work? I have nothing.\u201d Have something prepared for them to present to them to look through so it doesn\u2019t take up a ton of their time. They can just maybe point out something you missed like a dryer vent. We had a project where a contractor used the old wax seal on the old toilet, put in a brand new toilet, put in brand new tile floor, but used the old wax seal, and we had the same thing. The smell was coming up, and it was because the old wax seal in there.<\/p>\n
Yeah. The other thing for scope of work that\u2019s really, really important that we learned the hard way is that be very specific in your scope of work. So what we would do is we\u2019d have one column for the label, like just drywall. But then, we\u2019d have an information, description column next to it to say, \u201cReplace drywall A, B, C areas,\u201d or like, \u201cRepair everything to this level of finish.\u201d Right? Be really specific because if you just put \u201cRepair drywall,\u201d legally, that contractor would be like, \u201cI repaired the drywall over here,\u201d and they\u2019re like, \u201cWell, what about the drywall over here?\u201d or, \u201cWell, that didn\u2019t look like it needed to be repaired.\u201d So be really specific in your descriptions in your scope of work, so that way, if\u2026 You don\u2019t want to assume every contractor is going to be a bad apple, but there are ones that will take advantage of you, and so you need to make sure that you protect yourself in that verbiage. Yeah.<\/p>\n
Let me ask one follow-up question on the scope of work. I want to get into the contract and the payment schedules. I guess this ties into it, but are you having\u2026 and Ash, I\u2019m curious of you as well, but are you having your contractors sign the scope of work before the job starts? We\u2019ve had some issues in the past with some contractors where once I asked them to sign the scope of work, they just ghosted me, which is probably a good sign that we didn\u2019t work with them. But I guess what\u2019s your process for holding contractually the contract, the scope of work?<\/p>\n
Yeah. Absolutely. So my process is I create the scope of work off my template that I\u2019ve already used, I delete what they don\u2019t need, I make sure that the descriptions match what\u2019s actually needed on the project, and then I export that into an Excel, and I have them bid right off of that Excel.<\/p>\n
So they\u2019re going and filling in the line items for each amount?<\/p>\n
Yep.<\/p>\n
Okay.<\/p>\n
Filling in the line items, and to be honest, the contractors love that because it saves their time. They don\u2019t have to type up a scope of work on their estimate because you\u2019re like, \u201cI want a detailed line item estimate.\u201d That creates so much work for them, and it might not be in the verbiage that you want. So we would control the verbiage, and then at that point, they\u2019d give us the Excel sheet back with their numbers on it.<\/p>\n
It\u2019s so easy to compare then, too. Yeah.<\/p>\n
Then, I could compare apples to apples so I\u2019d be able to make decisions quicker, or I\u2019d go back, and then we\u2019d talk about it. We\u2019d negotiate. That would also help me. On that scope of work template sheet, I also had my unit costs so I could go and plug in quantities to create a detailed budget. I\u2019d obviously delete that before I send it over to them, but that would also help me understand how to change those numbers if I needed needed to. If costs went up, labor went up, or something, then that makes me be able to revise the template. So, anyway. So I create the scope of work, export it to an Excel-<\/p>\n
Hold on, Serena. Before you go on, I want to really highlight that as to how you are tracking what the going rate is for different labor in your area and in your market. I actually remember. Six months ago, a year, or whatever, you had told me that you were working on updating everything because everything had changed so much in the market [inaudible 00:36:08].<\/p>\n
Yeah, every three months. Yeah.<\/p>\n
You\u2019re like, \u201cI\u2019m spending my day going through and actually updating pricing for what the painter costs per square foot and all these different things.\u201d I think that is something very simple, that information, to just start gathering as you\u2019re getting contractor estimates in for each project and just slowly keeping that information together. It\u2019s just going to help you become better and better at building more accurate estimates.<\/p>\n
Yeah. Absolutely, and I just want to note. Some of you might be thinking, \u201cOh, how do I budget a unit cost?\u201d Right? Because carpet has a different unit than square footage for paint or however they\u2019re going to\u2026 the contractor is going to bid it out. A great book to read is Estimating Rehab Costs by J. Scott. He lines that all out and how contractors do their estimates. Yeah. So that would really help is like I control the format of that, so that way, I can compare apples to apples and update my templates. So that way, when I\u2019m going through and confirming during underwriting before we buy the property, I have the most accurate numbers that I can predict that I\u2019m going to get when I finally get the estimate back from the contractors.
So then, at that point, contract related, I have the scope of work in the Excel format with their numbers, we\u2019ve agreed on it, and I\u2019ll save it as a PDF, and I\u2019ll attach that to a contract that we have that lines out, \u201cHere\u2019s the property. Here\u2019s the owner. Here\u2019s the contractor that we\u2019re going to use. Here\u2019s the estimated\u2026 or Here\u2019s the deadline date that they\u2019re going to be finished with. Here\u2019s the deposit amount they\u2019re going to get, how they\u2019re going to get draws.\u201d Draws are partial payments towards the total payment, and what happens if we want to split ways, and then we\u2019ll also do a penalty per diem, like $125 a day if they go over their completion date.
So all of that verbiage that we need. It\u2019s just a couple pages long contract, and so I\u2019d attach that PDF to that contract, and then I\u2019d also attach our finished packet that I would create with all of the materials that we\u2019re going to use and for them to order. Then, also, if we have floor plans as built, which is the existing floor plan, and then the proposed floor plan, and I\u2019ll attach that all together in the same PDF, and I\u2019ll have them sign the contract and initial each page of all of those pages, so that way, it\u2019s binding.
The best part is that the scope of work is in our verbiage, so we control anything. If there\u2019s any dispute on\u2026 There\u2019s no miscommunication at that point. To be honest, what Tony said is he\u2019s had contractors that haven\u2019t wanted to sign that. Well, that\u2019s a red flag because contractors should want to get into agreement where both parties are on the same page and they\u2019re happy with what they\u2019re signing and moving forward in a partnership.<\/p>\n
Yeah. Serena, so much gold there. Everyone that\u2019s listening, you\u2019re probably going to have to go back and replay this episode a few times because there\u2019s so many nuggets in what Serena is saying here, but yeah, that last point you made about it being a red flag, 100%. Absolutely true. I guess one last question. So you\u2019ve got that all laid out, but in terms of actually paying out the contractor, are you walking the property with them to say, \u201cHey, these milestones were met. I\u2019m going to release this draw,\u201d or how were you actually validating the work is done before paying them?<\/p>\n
Yeah. Absolutely. So different contractors require different deposits and payment schedules. So if you\u2019re working with a general contractor, we typically wouldn\u2019t give them more than 20% deposit, but that\u2019s not a hard rule. If they have to purchase a lot of materials upfront and you can look at your scope of work to determine that, say, maybe they\u2019re redoing all the siding that\u2019s going to be heavy upfront cost to them, then we might increase that a bit, but we would do draws on completion. So we, our team, what our process was is we\u2019d walk the property at least once a week, and we\u2019d take full pictures, at least 100, 150 pictures, and then we\u2019d upload them into Dropbox. You can also do Google Drive, and we\u2019d review those pictures.
So whether it was me walking through and deciding the completion and feeling uncomfortable for them to request a draw payment, then I would allow that, or I would do it from all of the pictures, so from afar, and then confirm, \u201cOkay. This completion seems about right,\u201d and we would have them do equal draws for the remaining. Then, if we had permits on the property, and so we needed to have final inspections, typically, all the construction is going to be done, and then you have final inspections. The inspections might come back with corrections that are needed to be made. Even if the scope of work is technically done, we would withhold about 10% until everything was finalled, all the inspections were finalled. So that way, we still had leverage over them, something to use, because if you pay them too much too fast, then you have no leverage. They\u2019ll just leave, right?
The other thing is that anytime that you have a contractor bidding, if you think that it\u2019s too low, then really consider that as well because we\u2019ve had contractors that they were good contractors, but they didn\u2019t know how to estimate, and so sometimes we\u2019d get things back and be like, \u201cThis just doesn\u2019t seem right. This actually seems too low.\u201d Instead of going, \u201cWoo, we got a deal,\u201d I just want to let you guys know that that can cause problems in the long run because they might run out of money halfway through your project, and if they run out of money, they\u2019re going to have to go find other jobs and work on other jobs, and then let your job sit, and they may not even be able to ever come back. So just keep that in mind down the road.<\/p>\n
So you\u2019ve mentioned a lot of things that you\u2019re doing to track this rehab for each project. Can you go through like, \u201cHere\u2019s the different templates I have,\u201d and the different softwares you\u2019re using? What are the things that rookies should be creating? You mentioned scope of work. What are some other types of templates they should be creating and use to work from for every single rehab from start to finish?<\/p>\n
Yeah. So I\u2019ll go through our platforms first. So we always use Dropbox for our file storage. So what we would do is\u2026 and everything is a template. The second that we\u2019re purchasing a property, we would go into Dropbox, create a folder for that project, and then have these same uniform folders for everything. We\u2019d have our Analysis folder, which all of our acquisitions, our P&L sheet, anything having to do with the deal, the comps. Right? Comps, P&L, anything that has to do with the deal. Then we\u2019d have the purchase docs. We\u2019d have our Rehab folder. So all of our contracts are going to go in there, our bids that we\u2019re going to collect, invoices, whatever.
Then, we have our Rehab Pics, and in that folder, we would label each time that we would drive the property and upload pictures. We\u2019d label it the date, who took the pictures, and the status of construction that it was in. So it\u2019d be like, \u201cApril 1st, this date, Serena took the pictures, and electrical rough-in completed.\u201d So, at that point, we could go back and go, \u201cAll right. I\u2019m trying to find\u2026 I need to see in the walls. We\u2019re at the end of the project. I need to go find where an outlet is because it\u2019s hidden in the drywall.\u201d So now I know instead of sifting through hundreds of folders of dates and stuff, I know, \u201cOh, electrical rough-in. Right there.\u201d That wasn\u2019t perfect from day one. I did that a lot until I realized, \u201cMaybe I should label these folders in the order of construction.\u201d<\/p>\n
Some organization, right? Let me ask. Just out of curiosity, is there a reason you went with Dropbox versus Google Drive?<\/p>\n
Honestly, Google Drive wasn\u2019t a big thing eight years ago, so it was like-<\/p>\n
Yeah, that\u2019s true.<\/p>\n
Because we started that process way back in the day, and so Google Drive works just as well. So we\u2019d have Dropbox. That\u2019s where\u2026 all of our file storage. Anytime I got a bid, whether we used it or not, I put it in the Bids folder. Every invoice, we put it in the Invoice folder. Then, we\u2019d have also our plans. So that\u2019s where we\u2019d keep our floor plans, finished packet, our safe scope of work. So that\u2019s one platform we\u2019d use for our file storage, and all of our team members had access to it.
The other one is we use Smartsheets. So Smartsheets can be a bit pricey, but if you plan on doing multiple projects, it\u2019s something to invest in. That\u2019s where we\u2019d build our scope of work and budget template. So, we had that. For those of you that don\u2019t know Smartsheets, it\u2019s pretty much just a really high-tech Excel. So we\u2019d have our scope of work and budget template within that. Then, we\u2019d also have this sheet called Our Accounting Hard Costs, and that was pretty much it, just an ongoing\u2026 any expenses for that one property. The second you purchase something, the second that anything is paid, it just goes in there, and so-<\/p>\n
Was this something that was then sent to a bookkeeper who actually formally entered it into QuickBooks or something?<\/p>\n
Yeah.<\/p>\n
Okay.<\/p>\n
Exactly. So our bookkeeper had access to that sheet, and she would audit the accounts to make sure there wasn\u2019t any fraudulent activity, and making sure it was all balanced, and then she would then input that into QuickBooks.<\/p>\n
Gotcha.<\/p>\n
Yeah.<\/p>\n
So she was using that spreadsheet to reconcile against the bank statements or whatever to make sure there weren\u2019t any transactions missing or anything like that?<\/p>\n
100%, and then at that point, our whole team at any point could be like, \u201cHey, was this contractor paid?\u201d I don\u2019t need to go and call Nate\/Tarl for that or my assistant for that. I can just look it up and see if it\u2019s paid. Right? So a lot of these systems that we\u2019ve created, these centralized information places that, that\u2019s what I like to call it, limits the amount of time I have to communicate with my team members because the more time we have to pick up the phone, and call, and we\u2019re waiting for information ever\u2026 It just takes so much time.<\/p>\n
I never want to talk to Nate and Tarl either. I totally get it.<\/p>\n
Honestly, at the end, people are like, \u201cDo you talk to Tarl all day every day?\u201d I\u2019m like, \u201cI haven\u2019t talked to him in a week.\u201d We just wouldn\u2019t talk and we\u2026 So, yeah. So we have our scope of work and budget sheet, we have the accounting hard cost sheet, and then I also have a finish package template. So the finishes are going to be the types of doors, the door hardware, the countertop cabinet, tile design, whatever, and the same process as the scope of work. I just started as, \u201cI need to make a template. Okay. I\u2019m going to start with this project, and I\u2019m going to put, okay, what it is. Exterior door, what the description is, where to get it, and a picture of it, and then I\u2019m just going to\u2026 Anytime we have a project, I\u2019m just going to add this in to the template.\u201d
So, eventually, I just built this massive template of all of these materials, and I could just go shopping. A lot of times, we would redo the same finishes on each house. So when I\u2019m in the planning phase, and I figured out what a scope of work is going to be, I\u2019ve looked at the comps, I figured out the level of finish that we need to\u2026 what type of materials we have to put into it, I\u2019d pull up that sheet, and I would just select what I wanted, \u201cgoing shopping,\u201d and then I would export it into a PDF. That\u2019s something that my team could reference, the contractors can reference, I can reference, and that would be something that we\u2019d also attach to that scope of work within the contract.<\/p>\n
Serena, I\u2019ve heard you talk about this sheet a ton of times, so Daryl and I actually built this out, the materials list. One thing we did is that we would just link the actual product in there. So we did flooring, here\u2019s the types of flooring, we\u2019d link it in there, then we actually hired a virtual assistant to actually take the data from the link and actually fill out the other six columns or how many there were, and that was so much faster.<\/p>\n
Look at you. You\u2019re better than me. I didn\u2019t have that. I still do it myself.<\/p>\n
At first, I was like, \u201cI cannot sit here and do this. This is getting so much data.\u201d I\u2019m like, \u201cThis is awful. My fingers are\u2026\u201d So then, we just did that, and it was so cost-effective, and somebody could do it way faster than me that has a better attention span, I guess. Yeah. You just go to Upwork and search, \u201cThis is what I need done.\u201d You\u2019d show a screenshot of your template, and do a Loom video of exactly how to pull the information, what information you want from each link, and have it all filled out. Yeah.<\/p>\n
I also like keeping\u2026 Now that I\u2019m thinking about it, I actually should have had the link. I\u2019m going to add the links to the product within that PDF because I used to put the pricing down in for each line item, and then I\u2019d give it to the contractor. But if I didn\u2019t have that pricing updated, and they estimated right off that, and they\u2019re responsible for buying the material, but then they go to Home Depot, and now it\u2019s gone up $10 per door hardware, they come back to me, and they\u2019re like, \u201cI need more money.\u201d Now, I\u2019m like, \u201cWell, shoot. That wasn\u2019t what was in the projection.\u201d So I said, \u201cI\u2019m going to delete all the pricing,\u201d and they\u2019re going to have to just be responsible for looking it up. If I put the link in it, they could just click it and do their own quicker research, but yeah, that was a thing. It\u2019s like don\u2019t put the pricing.<\/p>\n
That\u2019s one piece, too, yeah, that we struggled with this. If it changes, it goes on sale, or whatever, even like it\u2019s discontinued is having to go. So maybe that\u2019s something, even like hiring a VA every quarter to go in or whatever, and just all you have to do is make sure these links are updated.<\/p>\n
Yeah, that was one thing we would do periodically every couple months is I\u2019d have my assistant go through and make sure everything was updated on the scope of work, prices. So I wouldn\u2019t put the prices on the finish packet because that\u2019s what the contractor is referencing when they\u2019re estimating, but at least for\u2026 If there\u2019s a door unit cost on our scope of work budget and they\u2019ve gone from $260 to $350, I want to know that. So I\u2019d have her do that.<\/p>\n
Serena, one question I want to ask was you\u2019ve got these systems dialed in to really high level of detail, and I think one belief, maybe a limiting belief that a lot of people have when it comes to flipping homes is that you got to be there to walk the properties, you got to be there to shake the contractor\u2019s hands, and make sure that you\u2019re checking on their work. Is that true, or is it possible to do this remotely as well?<\/p>\n
It\u2019s totally possible to do it remotely as long as you have boots on the ground that are driving the properties at least once a week. So even if nothing changes in the rehab, say, it\u2019s sitting there, we\u2019re waiting for permits to get processed, we will still drive it every week because you never know if squatters are going to show up. All of a sudden, a pipe is going to burst. Whatever. You want to make sure that you also have pictures if anything happens that you need to go to court for. Not to scare you guys, but if someone breaks in, and you need to file an insurance claim or something like that, you now have a record trail.
So the blessing, the biggest blessing for being efficient in our business was the fact that both Tarl and I lived over an hour away from all of the projects that we did. So there was no way we\u2019re going to drive two, maybe three hours in traffic to and from those projects every day or every other day. So we created these systems to be able to manage them afar. We\u2019ll go down once a week, and we\u2019ll take pictures once a week. Then, we trained our contractors that if they had a question, they text us a few pictures, they send us a video, or we FaceTime them, and we\u2019ll get them the information that they need. Then, we also made sure that we had boots on the ground in that area, networking maybe newer investors that wanted to learn where if we really needed something, then they would help us out because we\u2019re also contributing and helping them grow their business.
The other thing is we\u2019d also have a handyman on-call where\u2026 Say a basement all of a sudden starts flooding and our contractor can\u2019t get there that\u2019s on the job or it\u2019s not part of his scope, we need it clean up something after hours, and they\u2019re just going to be too expensive to do it, they\u2019ll go, and put bags, and check it out, or something like that. So in the beginning when we didn\u2019t have systems set up, I was working six and a half days a week. Long, long fricking days, but mainly on the computer. I\u2019d only drive the properties once a week. As you start setting up these systems, these templates, and getting really good at the planning in the beginning to get the contractors, all of the information that they need upfront, then you\u2019re really just monitoring the construction as it goes along and problem-solving little things that come up that were unforeseen in the beginning. So, within the last few years, I\u2019ve gone to South Africa for two months at a time while I have seven projects going on, for example, or I travel a ton at least once a month, and so-<\/p>\n
You\u2019re not even home right now as you\u2019re doing this podcast.<\/p>\n
I\u2019m not home right now. Yeah. Exactly, and having that freedom. Honestly, that\u2019s why we got into real estate, right? So start today and building those systems, building those templates, and it\u2019s\u2026 Like I said, they\u2019re not scary. Just start putting information down on paper, and then figuring out how you want to organize that. If you\u2019re not the best at that, then hire a VA that is good at organization, and then eventually lead up to hiring a team member that is. Then, I did realize that we didn\u2019t cover another platform that we use that\u2019s really important. Should I touch on that?
So we have Dropbox for our file storage, and we have Smartsheet for all of our data, like scope of work, costs, finishes, whatever. But then, we use a project management tool, like communication. We use Asana. So you can also use\u2026 I know Ashley use Monday.com, right? But very similar platforms, and we would create, again, a template, surprise, for all of our projects. So when we\u2019d acquire a property even\u2026 Actually, there was a template for acquisitions too, making sure like, \u201cYou need A, B, C, D. Purchase things,\u201d just to keep you organized. It\u2019s exactly what you need, right?<\/p>\n
Like you have insurance in place. You\u2019ve got the electric meter, you know who the electric company is. Yeah. Account number.<\/p>\n
100%.<\/p>\n
Yeah.<\/p>\n
So we just created a template for project management. So did we transfer the utilities in our name? Have we requested a bid from the general contractor? Have we done the floor plans? Have we done this or whatever? So that way, nothing goes missed, and then we\u2019d also use Asana to communicate with each other. So instead of emails, texts, whatever, we would try our best to actually communicate with each other in that task that\u2019s related to that item, and that worked really well for us. That\u2019s also where we would manage our schedule of construction. Again, build it to however works for you and your team, and if you\u2026 The way that we laid it out is in the order of construction, chronological, how things needed, and that\u2019s how it stayed organized for us. Yeah. I think that\u2019s pretty much all of our platforms. I mean, QuickBooks for the accounting.<\/p>\n
What about for the rental properties that you guys keep? What software are you using for that?<\/p>\n
I\u2019ll try to elaborate on that. I honestly don\u2019t do any of the property management at all, but I do think-<\/p>\n
Is it AppFolio?<\/p>\n
AppFolio? I\u2019m not sure. Actually, for acquisitions, Nate, he would use Podio as a CRM, but I was never in there. Yeah. I\u2019m not sure actually what we use for our property management because I don\u2019t want anything to do with that, so.<\/p>\n
I guess before we wrap up, there\u2019s one last question we want to ask you, and that\u2019s, if you have to start all over, what would be some of the first things that you would do today starting completely over?<\/p>\n
I know. This is a tough one. I think [inaudible 00:58:21].<\/p>\n
Start a new band?<\/p>\n
Yes. Start a new band. Honestly, if you\u2019re out there really deciding like, \u201cOkay. What asset class should I go into? Should I flip houses? Should I do short-term rentals? Should I do commercial, or what should I do first?\u201d at first, consider the lifestyle that you eventually want. In the beginning, you\u2019re going to work your butt off wherever you go, but imagine down the road the lifestyle that you want. What\u2019s the liquidity that you need? Right? Do you need cash now consistently, or are you able to keep your equity in like you just want a longer-term hold?
I get really clear on that because wherever you go, whatever you decide to do, you should put your all into it to become the best at that before you pivot to something else, and then you could also help to become clear of what you need for other people in your community, so really defining\u2026 Just like you would define a buy box for a project, a property that you want to flip, become branded of like, \u201cThis is what I\u2019m after.\u201d So that way, people know how to help you so that when\u2026 and then also, the type of mentor that you\u2019re looking for.
Like I said, no one got to where they got in this business without a mentor, and people do want to help you. It\u2019s just that\u2026 Come to them. First, go to meetups, and the simplest thing that comes to my mind is if you want to get into house-flipping, but you\u2019re like, \u201cI just need to see to learn, and I\u2019ll feel more comfortable,\u201d just say, \u201cHey, how many properties you got going? Oh, cool. You\u2019ve got eight projects going on. That\u2019s amazing. Would it be helpful for you if I drove your properties once a week, took pictures in an organized way, I\u2019ll take at least 150 pictures for you every week, upload them in the way that you want to be uploaded, so that way, you have them, you can reference them, and I maybe can take a drive off your plate?\u201d Then, they\u2019re probably like, \u201cYeah. Why not? Okay.\u201d Right? But then go, \u201cThen, would it be okay\u2026 If you\u2019re going to meet a contractor there, can I just come along? I\u2019ll be a fly on the wall. Can I just shadow you, see what you guys talk about, or whatever?\u201d
Real estate isn\u2019t hard, right? It\u2019s not rocket science. The hardest thing is having the courage, the grit, the compassion to do it. Right? So by learning through familiarity, you\u2019re going to feel so much more comfortable in it and realizing this isn\u2019t actually rocket science. You see that needs to be fixed, you write down that needs to be fixed, you have someone give you an estimate of what that\u2019s going to be fixed, and then you decide yes or no. Right?
So that\u2019s where I started. Also, create systems from day one, so that way, when you do end up amping up and you need to add team members, the information is there, and it\u2019s not all in your head, and then if\u2026 I would put healthy contingency margins. If you\u2019re not really confident on your rehab costs and your analysis, just make sure you put some contingency in there so you\u2019re not eating into your margin, and always follow the comps. Don\u2019t get emotional or attached.<\/p>\n
So where can people find a consultant?<\/p>\n
Huh.<\/p>\n
But really, Serena, thank you so much for coming on and taking the time today to teach us all about this, your process.<\/p>\n
Yeah. It\u2019s fantastic.<\/p>\n
I know. I was writing notes. I could see Tony taking down notes too because anytime we talk to you about this stuff, I always learn so much information. So I\u2019m sure every single listener has at least five takeaways that they can put into action today. So where can everyone reach out to you and find out some more information about you?<\/p>\n
Yeah. So, on Instagram, my handle is @serena.claire. So S-E-R-E-N-A-.-C-L-A-I-R-E. Also, you can email me, [email\u00a0protected]<\/a>. I love helping new flippers and people in real estate find their way. Yeah, that\u2019s where you can find me.<\/p>\n
Thank you so much for joining us. I\u2019m Ashley at Welcome Rentals, and he\u2019s Tony, @tonyjrobinson on Instagram, and we will be back on Wednesday with another guest. We\u2019ll see you guys then.<\/p>\n