Short and Medium Term Goals

We need to get more posts on this site!

I've been absent from the site basically since the forums inception. Got sidetracked with life.

In the time I've been gone, I've dropped out of college, got my general contractors license, and starting a painting company.

We're on track to gross about $120,000 our first year, and it only takes about 10-15 hours of my time every week. Recently my wife started staying home with the kids, so I know have time to get back into real estate. I never really got started, and have had my license for almost two years with absolutely no activity.

I recently scored a really awesome sub contracting job in a nearby town, and that should bring it a minimum of $2,500 a month with no activity on my part. Goal is to hire two more crews to do that work, which is difficult, but then it'll be closer to $7,500 per month, almost entirely passive. Painting is seasonal, so that'll dry up around late September or early October.

Short term goal by then is to have at least 10 transactions by the end of the year. I've got 6 months to do it. Target is going to be FSBO. I've gotten used to being uncomfortable, the majority of my painting has been marketed door to door. Which sucks, but now calling FSBO's isn't going to be so hard.

If I can accomplish my goals over the next six months, that will get me enough money to get through the winter, while keeping my best painters on staff(paid time off so I don't lose them). It will also put me in a position to substantially pay down debt. Moving multiple times in the last 2 years, and the transitions from military to college to work has done a number on my credit card balances. $6,000 for a new transmission on our main vehicle didn't help either.

After the majority of that is paid off, hopefully within that 6 month time-frame, I want to try and acquire my first property or two early next year. Depending on the market, it may be fix and flip, or buy and hold. Right now it is an extremely strong sellers market over here. It seems like 5%-10% of the the listings are under contract before they even get put on the MLS. Everything is going for over asking price. Possibilities for fix, refinance, and hold early next year, depending on finances and the market.

Aiming for 50 transactions next calendar year, $300,000 in gross for the painting company(should net $80,000-$120,000, depending on what type of work we get), and 4 fix and flips next year.

Comments

  • Hi Shawn, nice work! I would try to not get too scattered. If the painting business is doing that well, focus on it until it is really running smoothly and don't ignore it with other actives. Not that you can't do other things, but it counds like it is doing awesome. Thought about marketing it to other agents?
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


  • I did have that thought, but it just isn't what I want. I'll gladly take more business as it comes, but winter is incredibly slow for painting, and I don't want to be relying on that.

    The subcontracting work is actually with a friend of mine. His area is way better for the type of painting company we run, and he has multiple brothers and friends who are pretty dedicated to the type of sales we do, which is mostly door to door. He's going to grow faster than I could, but intends to use me as the primary subcontractor.

    I already have a part time sales rep on staff that will take extra estimates as they come, which helps if I get busy with something else.

    I actually just started marketing to other agents. I became a business partner with my KW office, which has roughly 140 agents in the surrounding area. Super good use of $150 for the year. I'm actually going to start reaching out to appraisers, and agents from other offices. There are a lot of FHA loans around here.

    With this new round of hires to handle subcontracting, I'm also in a unique position to take on a flip. At least one of the new hires has pretty decent experience with almost all aspects of construction, from framing to roofing.

    Painting started out of necessity, and while I love business, I'm not too passionate about the industry in isolation. Real estate really excites me.
  • That sounds like a good plan! I know around here there has always been a need for good painters. You said it was very seasonal, do you just do exteroir?
    Creator of Invest Four More
    If you want more help with your investing, check out http://investfourmore.com/blueprint-for-successful-real-estate-investing/


  • I do interior as well, but those jobs are far more difficult to get. There is quite a bit of competition for interior jobs, so the prices are a race to the bottom. More than that, people don't expect or understand why interior prices are so high.

    For some reason, there seems to be a price zone, around $300-800, where people just don't go for it. A simple 10 x 10 room has 420 sqft of surface, which is about 20-25% the amount of a normal exterior job out here. If someone said it would be $400 to paint one side of the outside of your one story house, it seems like a pretty decent deal. $400 for one tiny room sounds insane, even though it's the same surface area.

    That perception is very difficult to overcome. The necessity just also isn't there for interior work, it's not like not painting will cause rotting and failure of substrates.
  • howdy all,
    NY salesman in training
    once i get licensed in the next month here im looking to put in $600 into outsourcing
    i already see the work is mundane, posting, calling it all gets tiring really fast.

    with that $600 ill definitely have a deal, my VA is a state licensed realtor so she should know more already than i do.

    heres my scheme: hire better people every step of the way. What i dont know my VA will, at a rate of $600 she will definitely be able to get at least one deal in for me. of course a percentage of that commission goes right back in, a better VA if I see fit, any investment to make this business grow.

    I have a great mentor on my side, im going to buy his mercedes benz in a month.
    real estate is extremely lucrative, one must know and master delegation.

    I will go very far in this business.
  • Baeza, generally it is more productive and clean to start a new thread when there is a new topic.

    That said, I have some advice for you.

    First, don't delegate something you aren't willing to do, and haven't done. It's far more difficult to set proper expectations, and be aware of how things should be running. Delegating phone calls and follow up to a VA before you even have a license is asking for trouble. I can see that $600 going up in flames in less than a week with nothing to show for it, and you left there with no idea what happened.

    Second, one month is way too quick to see any real progress. If you're hoping for a standard real estate transaction, even if you put something under contract the day you were licensed, it would probably take longer than a month to close.

    If you're talking about a flip, that'll take a few months for the whole process. Buy and hold isn't going to get you enough money for a car in a month.

    The only thing that moves that fast is wholesaling, and one deal isn't likely to be enough for a Mercedes. Do you have a buyers list built up, and do you know how to estimate rehab costs?

    Hiring better people is always a good option. I'm the worst painter in my company. But you also have to make sure that you give the people who work for you the respect they deserve. Employees aren't a tool for you to use to achieve your goals at their expense. They are partners who should get some credit for helping you get where you want to go. Treat them as such, and you will have a much better experience.
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