Real Estate Investing Adventures

Marketing Plan 

If you remember from a previous post, we had decided to not have the development’s agents represent our property because of their unwillingness to negotiate on the 6% commission. We were going to sell the property ourselves. We developed our own marketing plan that consisted of:

1. Produce color renderings and floor plans and have them mounted and on display at the construction site along with contact information to attract any “drive-by” traffic.
2. Advertise in the NY Times real estate section as well as in a number of other metropolitan papers.
3. Set up a Google Adwords campaign targeting people searching for homes on this particular lake or region.
4. Send out a mailing to everyone who had previously bought in the development to start some word of mouth buzz with family and friends of current owners.
5. Contact the individual sales people in the development and offer a 3% bonus for a sale. Read the rest of this entry »

Construction Completion 

The typical construction project starts off slow, goes like crazy for awhile and then slows back down to a crawl as you are trying to get the project done. Finishing the last 10% of a project is tougher than doing the middle 30%. You are dealing with all the little finish details and items that didn’t quite work right that were put off until the end. The coordination of the various types of work and the large number of subcontractors all make the final 10% of completion a real challenge. So how do you manage it? There is no easy answer. You just have to dig in and push every day. It is well worth your time to do so. Without actively managing the completion of a project, you could lose a month or two. In interest carry alone, think of what that does to your potential profit. When you add up all the costs, management time and missed opportunities, the cost of not completing well can be staggering. Read the rest of this entry »

 This post is about negotiation tricks and tactics. Successful real estate development and investing requires you to be a good negotiator. Understanding the common negotiating tactics that may be used by you or on you is essential to becoming skilled at negotiation. Whether or not you choose to use these tactics, it is vital to understand that tactics work. However, once you recognize the tactic, its effects are reduced or eliminated.Here’s a number of negotiation tactics along with how they are used: Read the rest of this entry »

As discussed in a previous post, the development we were building in has its own dedicated sales team. It made sense to have them represent us for a number of reasons:

• They ran both a national and regional advertising campaign
• They typically showed all available properties to potential customers no matter how them became interested in the development
• They were physically located at the development and were selling only this development every day Read the rest of this entry »

Never enter into a contract with a contractor without a defined schedule as part of the contract itself. Just agreeing on an end date isn’t good enough. Why? Because no matter how far behind schedule your project is, the contractor will always insist he can still make the end date. Without some agreed to schedule definition, it is near impossible to successfully argue the point.

Construction Schedule Level of Detail

You don’t need a 6 inch thick stack of paper with 3,000 activities to manage the typical types of developments a single investor will do. However, at a minimum I insist on 15 to 20 very clear and measurable milestones. These would include items such as: Read the rest of this entry »

You want your contractor to provide you the highest quality project, in the shortest time frame for the most inexpensive price. What we call the three-legged stool. Unfortunately, some of these desires are in direct conflict with one another. For example, it is tough to get the highest quality project when the schedule is very aggressive. In my opinion, cash is still king and this post will discuss a number of ways to protect your cash.

Managing Contractor Payment Applications

You typically pay your contractor from a payment application which lists the various work items, their values, the percent complete the work is for this payment period and the amount due on each work item for this pay period. The estimate listing in this previous post is typical of the work items that may be on a payment application. The AIA has a payment application form that is standard in the industry. Read the rest of this entry »