Recycle the Real Estate Oink
|The grandparents from my mother's side of the family had been in the butchering business for over fifty years. As a kid I visited their butcher house with great curiousity. The amazing thing they showed me was how virtually every part of the animal gets processed into some salable product. There's a saying in the slaughterhouse business--"We use everything but the oink." I will relate how all of this fits into your real estate business in a moment. Indulge me, please.|
In the meat processing business every single by-product and meat part gets used (if you are a militant vegetarian stop reading now). The bones are sold to fertilizer factories where they are ground into powder and dried. Ditto for most of the blood. Blood makes fine fertilizer. The hides are obviously sold to leather tanning companies where they too are processed. The best cuts of meat are sold as steak and roasts, while the lesser grade cuts are ground into hamburger with a little blood added for color enhancement. The inedible entrails are typically sold to petfood companies where they are mashed and cooked into a nutritous dinner for North America's pets. Some of the more unknown organ meats are sold to Asia as various food delicacies, while some are sold to pharmaceutical companies to extract life-saving medicines or chemical substances. I could go on, but I think you get my point.
In your real estate business (rentals, flipping, or management services) you need to model yourself after the butcherhouse model. How? By taking all of the materials and supplies that you use and not waste a scrap. This means saving all end of can paints, screws, nails, carpet pieces, vinyl scraps, wood, and 100s of other things used in rehabbing and maintenance.
For instance. I saved about a 4X5 foot scrap of leftover vinyl used on a house 5 years ago. That house developed a hole in the vinyl. All I had to do was take the "scrap" piece to my handyman and have him splice it into the hole area! Same thing works with carpet--ever have tenants burn holes in carpet? Things you should save: celing tiles, miscellaneous hardware, outet and switch covers, nails, screws, cabinets, roofing supplies, glass panes, etc.
Next, with this philosophy, start stopping and picking up unwanted stuff left by the curb as junk by homeowners. This means old cabinets, windows, doors, storm window glass, vanities, etc. As you know, if you have read my book, Perpetual Income, that I am a dumpster diver. I root through job site dumpsters. People throw out lots of good stuff. I have carpet in several of my properties that was gotten for free or almost-free prices.
To have long-term success in real estate you need to be frugal. Being strategically cheap is fun. Frankly, when I use some supplies I have either found for free or have stored in my inventory, I get a lot of kicks out of it using them.
Do this: Save everything remotely usable. Inventory the stuff so you know what you have. Check out buildings that are scheduled to be torn down. Strip them (with permission). Stop and pick up freebies. Be cheap!
This works once you get going with it. You will need some storage. Buy or build a small barn or garage out behind your house, if possible. The costs of a small out building are extremely low--especially if you do it yourself with the many kits available. This will payoff big in your housing business.
|Bryan Wittenmyer has been investing in real estate for the past 15 years. He's not the new kid on the block. In the past five years he has written extensively in the real estate field. His articles have appeared in Creative Real Estate Magazine and the Real Estate Entrepreneur. Bryan served on the board of directors of the Real Estate Investment Association of Berk's County for 3 years. |
Although Bryan hasn't attended formal university studies, he keeps himself educated reading a plethora of books, newsletter, journals, and listening to hundreds of audio tape lectures. He jokingly considers himself to be an information junkie. You can also benefit from his years of practical business experience, having managed several income stream businesses, ranging from automobile debt instruments to appliance paper. He also has bought numerous real estate debt instruments - he knows the income stream business.
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