Transcription

“Getting the momentum going is getting a bunch of your ideal buyers to look at that project and get interested in it.“

Intro

Hello! It’s Bernadette, back with another episode of She Renovates. Now, if you are someone that’s considering making the move from hobby renovator to professional renovator. Maybe that’s to replace your income or to fund retirement, pay off your mortgage, whatever it is. And you’re wondering what it takes then this episode is for you.

The episodes are entitled Hallmarks Of A Pro Renovator And A Case Study. So I see a few people come through our training and it’s a reasonable shift to make, to go from the backyard renovator for one of the better words and that’s certainly where I started renovating your own home to doing it on a professional level.

And when I say professional, I’m talking about buying, renovate and sell because it is a whole new ballgame. It has a whole lot of pressure and has a deadline. And you want to get as much as you can. We never get it completely because there’s always something to learn. So don’t feel like you have to get it perfect.

There are aspects of the project that you absolutely need to get on point. I have noticed that some people do much better than others. And I thought to enable you to get some insight into what’s required from you, that I would outline the hallmarks of a pro renovator.

I’m going to pair this up with a quick case study, a student that I had to go through our Bootcamp not that long ago. She looked like any other one of our typical students however, she really took on the mission with gusto. And I would say that she possesses a lot of these qualities, skills, whatever you’d like to call them. I just want to give you a quick case study to show you what that looks like. Okay. So let’s get into it.

So you are a planner, you have taken the time to plan your path from where you are now to where you want to be, and you have those steps in place. You can see really clearly where you are going. What that means is that the strategies that you’re going to employ, you’ve decided on an area and you’ve figured out how you’re going to finance your projects and you figured out what your role is going to be in the projects. And you also know what support you need. So you’ve got those things in place before you move forward. Okay. So planning is critical at every step of the way.

Planning

Now with planning, I just want to jump in here and say, I personally believe a plan is a dynamic document. It needs to move and flex with what’s happening in the world and in your environment. I read it somewhere where the goal should be set in stone but the details need to be flexible. And I think that’s a good way of thinking about it so that you aren’t absolutely married to doing something a certain way, just in case things move, we might have a pandemic, a GFC, whatever, and you’ll need to be able to shift quite quickly. I think the word is the pivot.

The main thing is that you think things through. And certainly, in terms of your projects, you get that as much planning done as possible upfront so that when you actually get to site, it’s really things fall together pretty quickly.

Training

Second thing is that you implement training. If you’re going to make this shift without any training, then you will adjust when I’m not even going to discuss that because it’s madness. But the other thing that’s madness is spending the time, money and energy on training. And then going back and doing things the way you’ve always done them. Not taking the training and implementing it so that you get better results. They say that the definition of madness is doing the same thing over and expecting a different result. So I do see that quite a bit and it’s incredibly frustrating.

One of the things that I see being missed is doing proper feasibility. I did a whole episode back in Episode 80  I went over how to do a killer feasibility and that is critical because you need to know that property is going to deliver the result. The property that you’re looking at and you’re going to be able to do that within budget.

Making sure that you get the right property at the right price. Now often the price is right but the property is wrong. And the reason the property is wrong is that the renovator has not done their research. So they don’t have a full understanding of their market, what the market is for their product. And just finding a bargain isn’t always going to be a winning project.

The other thing that I wanted to mention here is the lack of attention to detail.  Not paying attention to the finer aspects of your renovation, things like the tax implications. So they’re just a few things that I see being skipped in projects. They’re the things that differentiate a hobby renovator from a professional renovator.

Decisions And Action

The next point is you take decisive action. Now, there are two words in that phrase, decisions and action. So the first thing is you need to be able to make a decision in a timely manner. So the first decision would be to actually take action but then there are numerous decisions that follow during the course of the project and you need to be able to make them. Some of those decisions we can make easier by templates and processes for say, choosing colours, help with doing floor plans. But if you finding that you’ve done 30 or 40-floor plans and you still haven’t made a decision about your project, then that’s a warning sign. Being able to make a decision in a timely manner is absolutely critical.

The second one is taking action. The main thing that stops us from taking action is fear. If you are finding that you are feeling paralysed by fear, you’ve got everything in place, you’ve got your plan,  you’ve done your training and you are set to go,  and you’re paralysed by fear, then that may mean that you need a mentor or a coach to get over that. Do whatever it takes to get over that because I can promise you that on the other side is the magic.

Emotions

The other hallmark of a professional renovator is that you look at it as a business. So firstly, you manage your emotions. Now I hear a lot of property people say “don’t, you should be removed from your emotions.” I personally don’t agree with that because I don’t think it’s possible. I think if you are emotionally driven and I know that I am, then what you need to do is have self-awareness and I guess put some processes in place so that you are able to manage them.

One of the places where I find people’s emotions get the better of them is when they finished a project and they will have done the feasibility on a sale price, and as the project progresses, they become more and more emotionally involved with that project. They feel so incredibly proud of what they’ve achieved, but in their mind, the value of the property goes up and up. So when they have to set the guide, they set that price on realistically. What often happens is the price guide is set outside the price bracket of their ideal buyer.

So what happens is that the ideal buyer doesn’t see it, it sits on the market too long. Then people start to think there’s something wrong with it. So something that my agent always says to me and I have seen this work time and time again is we’ve got to get momentum in the first two weeks. If we do that, then the sale will go well.

By getting momentum, it’s getting a bunch of your ideal buyers to look at that project and get interested in it. But if they’re not seeing it because you’ve pitched your guide price too high, then you can’t get momentum, so that’s a problem.

The other thing in terms of viewing it as a business is really standing back and taking an arm’s length view of the activity. It also applies to your roles. So in your business, I’m sure that the, I know it’s not a single person, but the owner of Kohl’s is not down stacking shelves. So if this is your business and you are spending all your time on the tools then you’re not able to be strategic and to keep moving the project along. It’s that old saying about working on your business rather than in your business.

The other thing is when you take a more objective view of it, then you look at things you get some perspective about what’s happening in your business. So if you have something go pear-shaped, look, let’s say, there’s a change in the market and you can’t get the price for your property that you had anticipated, then you can stand back and look at that in the bigger scheme of things.

Generally, I would hold onto a property because you don’t make a loss until you sell it. But sometimes you might look at that and you think if I sell it, then I can move on whereas if I’m holding it, I might weighing up the opportunities that you will miss. So I’m not saying that’s necessarily how you will view it, but just it standing back and getting some perspective because if you’re really down in the ditches doing the work you are once again, become very emotionally involved. Then you start thinking about, if it looks like I’ve failed, I look foolish all that sort of stuff. So being incredibly professional about how you operate.

The other thing is, and I’ve touched on this is the whole DIY story I’m not going to go on about that right now, but if this is a business and you are planning to make your life renovating, and you’re limited to how much you can do yourself, then you’re really putting a cap on your earning capacity. You really want to get the system in place so that you can do unlimited amount of projects.

Responsibility

The next hallmark is that you take full responsibility for your results. What that means is that you don’t really leave anything to chance. So you do everything that you can to make sure things flow as smoothly as possible. You follow a process when you are tendering your trade. You don’t just hand it over to the trade and say,  there’s your scope off you go. You actually manage the detail and make sure that it’s done in a way that works both for your trade and for you.

A really simple example of that is if you get, say three quotes and one of them is half the price of the other two.  Winning, however, that trade may have left something out. Okay? So you could say “too bad, so sad,” you quoted and when you come to me and say, you’ve left something out.

Or you could actually go back to that trade and say, “Can we please go through your price and make sure that you’ve covered everything? I love the price, but I just want to make sure that everything is covered”, I can promise you that will produce a much better outcome, both for you and the trade. It’s a sign of professionalism.

Problem Solving

Lastly, you’re a problem solver. What that means is you don’t give up very easily. And that’s really important because at times it’s challenging. You need to be persistent in finding solutions to problems. So to give you an example, and I say this a bit, when you are getting quotes for trades, you may find that all of your quotes are out of budget. So of course the first thing you’ll do is look at your budget and see if it’s realistic, but you might’ve got three quotes and they’re all out of budget. Now, some people just throw their hands up and think that’s it. But a problem solver would actually go back and see if they can find a solution to the problem, to get it into the budget without compromising the result for either party.

One of the things that you might do look, let’s say try and look at what risk padding has been put into it and maybe eliminating those risks. For example, a trade might be catering for the fact that they may be some hidden expense and what you could do is say, “Look, how about we do demolition?” and then you quote when you can see what the situation really is. In order to be effective, you do need to be willing to solve problems.

It’s probably scaring you all to death and you don’t need to have this all stitched up on day one but it is something that you develop over time as a renovator.

So your first renovation, and that’s why it’s really important to grow the complexity of your projects with your skill level.  As your skills grow, then you can start taking on more projects that are more likely to throw up some curly questions or problems.

I mentioned that I had a little case study and I want to share with you the story of Kim.

Now, Kim is very shy and there is no way in a month of Sundays I’ll get her onto a podcast. I know that, but she did agree to have a journalist interview her. And so this is the story of her first project from that interview.

Kim had planned her departure from her traditional life for quite some time. She was single, she had two young adult children and she had dreamt about renovating for quite a long time. So she renovated and sold her own home in order to be in a position to do projects and build her skill. And she was on a pretty tight budget. One that often makes me worry a bit because when you’re in the lower price points, sometimes it creates more challenge, but she was incredibly determined and decisive to master the skill.

She did the training and followed the steps. The first step, and probably the most life-changing step was to use one of our specialists who source a property for you. She ended up buying a property for $285,000 in a place called Shortland, which is just out of Newcastle. It was a very modest two-bedroom home and she followed the plan to renovate that home.

She used trades, managed the budget really competently and just to give you an example of the way that she managed the budget. She opened up a wall between the kitchen and the living room to make it a little bit more open plan. One of the main stretches of the bench in the kitchen was the old style, 450 wide. So she looked at different ways of maybe keeping the same cause she planned to keep the same cabinetry and to widen the bench, move the cabinets out, but it just didn’t work with the doorways.

What she did was just accepted that bench was only going to be 450 wide, put the sink and the oven in the return leg of the kitchen. So they were in 600 wide benches and put new doors, new benchtop and kept it like that. Now she knew her market because her market is an entry point property as a first-time buyer. So she made the right decision for her project. It’s easy to get swayed because trades especially will push you to rip it out because they’ll say, “you can’t do that,” but she was decisive in that and would not be swayed and made her decision to stick at it. So that is how it was sold.

To look at it, you would not have noticed.  It’s only to the trained eye that you would notice that bench was much. It wasn’t much but it was narrower.  In that, she demonstrated good management of her numbers and also being decisive and sticking to her decision, regardless of what others would say about it.

She took a business approach to her renovating. So anyone looking at buying a property with a budget of $300,000 might think you’re crazy to spend money on a buyer’s agent sourcing it, but this is her source of income so she needs to make sure that she gets it right. She’s self-aware in that she knows that she hasn’t built those skills yet so she goes to a professional who can fill in the gaps.

She also engaged that same buyer’s agent to act as a seller’s advocate. What that does is it means that you’ve got someone that’s not emotionally attached to the property, helping you to make decisions. So helping you to detach from the actual project yourself and make decisions that are in the best interests of your strategy. And I think that’s really smart.

She didn’t DIY, she spent her time managing the trades. She was courteous and looked after her trades. My view of how she operated was she’s just an all-around professional. And of course, the minute that property was sold, she had her buyer’s agent outsourcing the next one. So she had the next one within a very short amount of time and so she’s well into that as well.

That’s someone who’s really taken the learnings and while she’s just done her first project and one swallow does not make it summer, but she’s demonstrating the characteristics that would suggest that she’s on her way to a career is a very competent professional renovator.

What’s more, she sold the property. She bought it for $285,000, she sold it for $430,000, which meant after all costs, she ended up with an extra $55,000 in her pocket.

I will include the photos of that project in the notes from this podcast so that you can have a look at it yourself.

Okay. So that’s it for today. I am in the second week of the 75Hard challenge, and I’m happy to say I’m feeling very invigorated. It’s a good thing to get out of your comfort zone and I’m definitely out of it big time and life is good.

The other thing that I’m really happy about today is that our oldest daughter, Hannah, is coming up next week. So we finally get to have our Christmas-New Year’s celebration with her, which will be absolutely lovely. That’s about all I’ve got for today.

If you haven’t come over and joined the She Renovates Facebook group, please do. One thing I did yesterday was I asked the group what topics they wanted me to cover? And I was so thrilled because I have got a list as long as your arm. So I will be working my way through those topics over the coming months.  If you have a topic that you would like us to cover, please come over there and add it to the list. I would be very grateful.

So that’s it for me today. Take care and I’ll see you next week.