So you’re walking through the supermarket shopping for some fruit cocktail for a quick desert for you and the kids tonight.  As you walk down the canned food isle you come up on your possible selections.  There’s the black and white can with red stripes that simply reads “fruit cocktail” for 49 cents.  Then there’s the store brand which has a picture of some fruit whose tag lie is “always fresh” for only 79 cents.  Finally there’s the Del Monte can is full blazing color.  Lush fields in the background with beautiful pineapples, a cherry tree, and a ripe peach are what you’re greeted with-for a whopping $1.19!

I’m sure you’ll agree that in the end the contents of all three of the cans do pretty much the same thing, fill your belly with some fruit.  Some shoppers buy the “no brand” because they aren’t emotionally affected by the marketing ploy.  Others opt for the 79 cent can because they don’t want the cheapest but they’re unwilling to pay the premium just for the pretty picture and “promise” of sweeter, plumper fruit.  While another percentage of the shoppers go all out and pay almost 250% more for essentially the same fruit, but buying the Del Monte will make it taste better to them, in essence making them “feel” better about spending more for can.

What in the world does this have to do with houses?  

Everything.

Focusing in particular on fully rehabbed properties that we’re planning to retail for maximum sales price.  During a recent conversation with a Michigan real estate investor they said something to me that really stuck about kitchens.  They said they’d be willing to sleep on the floor and bathe in the laundry sink in the basement just to have a magnificent kitchen!  That’s the kind of emotional hot button we have to be able to push as investors who are remodeling Michigan foreclosures.  My focus of this training article however won’t be the importance of kitchens and bathrooms.  No instead we’re going to dive into what’s been proven to me to be the second most important part of a rehab after you’ve already made your purchase and planned the kitchen and baths…it’s the details.

I’ve tested many prospective buyers reactions in both my own rehab projects and countless others.  Always paying extra attention to one thing, if and how those buyers notice, react, and remember the little things.  I know a dynamite kitchen looks like.  I know what a jaw dropping bathroom looks like also.  What I’m always studying and making changes to in my projects is the details.

Here’s a list of obvious ones that I usually pay attention to buyer’s reactions;

-fixture style and finish (matching your light, plumbing, and door fixtures and finish)
-new electrical outlets and light switches (how ugly are dirty old outlets on a freshly painted wall?)
-professionally cleaned and pleasant smelling atmosphere (nothing impacts a buyer like a clean, warm, inviting house)
-bright light bulbs (you know how I love those)
-manicured lawn and landscaping (make them feel like their pulling up to a house on the cover of a magazine)
-clean and bright basement (dark, scary, stinky basement…need I say more)
-custom, but not crazy paint colors (you’re not selling a hospital so get some colors on those walls)

Now here’s my list of 5 sneaky details (plus prices) that my competition is not usually creative enough to use, too cheap to buy, or just plain too lazy map their contractors or themselves do.

1. Color matching switch plates in kitchen back splash.  I pay around $4 a piece and buy 3 to 4 per rehab. Which makes it about a $10-$12 upgrade

2. Crown molding in rooms that looks natural to them.  You can do most rooms in houses under $200,000 for $75 in materials plus labor.  I figure a total of $150 per room on average.  It makes an enormous impact in a master bedroom or small boring front room.

3. Dimmers on all overhead lighting in kitchens and main living rooms.  Along with recessed lighting, do the math it’s not that much more than using a couple fixtures, I always add dimmer switches.  $8-$12 on average per stitch, usually 3 per house.  Hopefully the agent who’s showing your property will notice if your buyer doesn’t.  People love this.

4. Modern cabinet pulls/handles. Use your Google-ability to see what’s being used in custom kitchens and try to get something close.  Then use your Google-ability to find a good deal on them, shouldn’t be more than $3 maximum per piece.  The ones I use are $8-$12 per piece at Home Depot or Lowes and my supplier sells them to me in packs of 100 for $3 a piece.  But it looks like $12…get it?

5. Order a custom address bar.  The design I prefer is silver writing on a black background with the street name spelled out below the number.  I pay $40 to $60 per house and EVERYONE comments on it.  What is that worth to the sale in the end?  I don’t know.  What I do know is when they don’t see it on my competitors houses, or homeowner short sales it makes my house more memorable.  

I believe the average cost for all of the sneaky details I outlined above is right around $500.  A big factor is how many rooms you’re going to finish with crown molding.  The impact to your buyers, their agents, their home inspectors, and possible the appraiser is impossible to project.  However it’s those sneaky details that most Michigan real estate investors miss/skip/don’t know about that will set you apart from the other homes they’ve been touring.  That will cause the buyers to “just like your house the best”.  They can ‘t quite put a finger on it but they have to have your house.  And a lot of times they’re willing to pay full ask, as long as you’ve listed it right, or even fight against other buyers and your house could go the the highest and best bidder.

These are all of my own opinions that have been formed through first hand experience because I buy, rehab, and sell houses right now in Southeast Michigan.  I’m not reciting stories I’ve heard from a national speaker or internet webinar guru.  I am the guy they spin their stories about.  If you want to know what’s really going on in the front lines of Michigan real estate investingmake your way to a REIA of Macomb event where real investors are doing real deals making real money.

Back to my details,
Dylan Tanaka-Founder

MORE PICS HERE

Custom remodel in Beverly Hills with Birmingham Schools! Top location in private culdesac. Solid Cherry chef's kitchen including prep sink, built in refrigerator and combo wall over/microwave. All new STAINLESS appliances with miles of granite.Master suite with custom woodwork and huge walk-in-closet, amazing tile work in private bath with stand up shower. Wine bar in formal living room.New front load washer and dryer also included. FREE home warranty

Unless you utter the words “I’m a full-time real estate investor, and I’ll I do is buy, fix, flip, wholesale, rent, and sell houses all day every day”, plus have a team of about 6 strong employees, it’s very difficult to implement 3 different investing strategies at one time with success.  I wrote this article because every month, week, and day I speak with different REIA of Macomb members and they’re all over the place in terms of what they’re doing.  They may be trying to do sandwich leases, wholesales, and full rehabs all at the same time.  The most successful real estate investors around usually have the 1 thing that they’re focusing on right now in their business.  When you’re first starting out it’s like trying to drink from a fire hose.  Information’s coming in from all directions; National Guru’s who have their ultimate system, late night infomercials, and even the 30 year veteran agent in your town who’s trying to sell you their listing so they can get double the commission.

How do you realign your Focus to ensure your success?

It’s simple really.  Think about what you’re naturally attracted to in this business of real estate investing. 

Maybe you have some retirement money put away and you like the idea of real estate but have no clue where to buy, how to fix, and when to sell.  In that case get out and meet some successful investors and find out what it takes to be the bank. 

Maybe you’re broke as a joke and don’t have the confidence yet to secure private lenders to fund your deals.  All you need to do is find some great deals out there and let investors like me who have the funds to close and the expertise to get them re-sold for a profit.  There are dozens of investors at all of the networking events around southeast Michigan who are hungry for good properties all the time.  So go out and find them.

Maybe you’re a contractor of some sort.  You can offer to partner with investors who may have the pieces of the puzzle that you’re missing.

One things for sure…you can’t be all things to all people.  Believe me, I’ve tried.  I know where my strengths lie and I try to exploit them to best of my ability.  First and foremost I understand and enjoy cultivating relationships with people, hence REIA of Macomb.  I also enjoy rehabbing.  Not just my own flips but I’ve been a consultant to many investors to help them make the right decisions which ultimately result in making them more money.  Wholesaling is one of my favorite ways to sell houses which is based on getting properties cheap enough to re-market for a tidyimmediate profit with little or no work.

What I’m not good at is being a landlord.  That’s why I’d rather just flip to a person who’s better suited for it.  How do I know?  I had close to 20 tenants at one time.  And I sucked at managing them.  If you’ve known me for a while I’ve had gray hair since I was 25, tenants are the cause.  What I’m also no good at is doing the construction work myself.  That’s why I have a team who is able to turn my vision into a reality.  HERE’S A LINK TO MY CURRENT REHAB.

So what’s it going to be for you?  Are you going to let the SPAM emails for “tonight’s get rich quick webinar” blow you around like a leaf in the wind or are you going to start taking your business serious and stop treating it as a hobby? 

The choice is yours,

Dylan Tanaka-Founder

If you haven’t noticed rehabbing is back…in a BIG way.  What’s rehabbing?  My definition is buying a house, repairing/updating/& finishing it to the maximum allowable by neighborhood standards in hopes to sell it for the highest realistic price.  That’s a mouthful.

If you don’t already know, selling houses retail is a delicate balance between budget & final product.  There are a lot of variables that play into your end profit. 

1. Purchase Price
2. Rehab amount
3. Rehab time
4. Rehab quality
5. Rehab style

Let’s pretend that you have all of those already figured out.  If you even paid attention to the title of this article, now that you’ve finally read it, today’s all about the special sauce.  You know, it’s what make a Big Mac a Big Mac.  It’s what keeps Coca-Cola the most recognized brand in the world, and it’s what make people literally freak out to have the newest Apple gadget. 

Well a big part of the special sauce in my rehabs is…Lighting. 

Boring?

Not really, and here’s why..

Picture this, you are invited to a mini REIA get together at a current listed finished rehab of mine.  As you drive up you notice a dozen or so cars and a few friendly faces in and around the yard.  The curb appeal is there, nice accent colors on the house, clean and classy landscaping, even a high end address bar.  You walk into a freshly custom painted front room with gleaming hard wood floors, an amazing fireplace, but wait a second…something’s just not right.  You can’t exactly put your finger on it but you just feel like something’s a little off.  As you enter the kitchen it’s almost like a gray overcast is looming above the cherry cabinets and miles of granite.  Finally you take a trip downstairs to the basement and it hits you.  The eerie feeling that a vampire may be lurking right around the corner.  All of this negativity has been caused by one thing…lack of proper lighting.

The first thing I make sure of in all of the houses I am selling is that there are 100 watt light bulbs in every single outlet.  That’s even true if I’m wholesaling a stinky old foreclosure.  But even before the light bulbs you have to make important decisions regarding your fixture choices during your remodeling planning process.  I always opt for fixtures that have 2 if not 3 bulbs for general lighting; bedrooms, hallways, closets, foyers, etc…  In bathrooms I typically go for a fixture with 4 lights as opposed to 3 unless that bathroom is tiny.  Remember the brighter and cleaner a house is the larger and more welcoming it becomes.  Next when it comes to laying out recessed lighting in the kitchen, family room, or master bedroom I always put in more than the room “seems’ to need.  As long as it doesn’t look weird with too many holes in the ceiling too close together of course.  Last but certainly not least in the basement.  How many basements have you walked into in the last 5 years that made you say “Wow, this place is so clean and bright”.  Not very many I’d assume.  Typically Ill have 2 switches at the bottom of the basement steps that turn on all of the lights.  This way when potential buyers go down to what’s normally a dungeon they are more than pleasantly surprised. 

A $2 pack of 100 watt light bulbs from Home Depot or Lowes can help you sell faster for more profit.  That’s my goal with The REIA of Macomb: to help you make real money in real life in real estate investing.

Illuminated,
Dylan Tanaka-Founder

As we kick off the 2012 real estate investing season only one word comes to mind…TURNAROUND! In the first week of the year RealtyTrac came out with numbers proving that foreclosures are at their lowest point in 7 years in Michigan. What does that mean for us Michigan real estate investors?

Well if you’re not on the front lines day to day as I am you may have missed that over the last 12 months the trend to buy, fix, and completely rehab to the nine’s is what’s producing the highest profits for investors. There are quite a few different reasons for this. The first I believe being a stabilization of values in good neighborhoods that people want to live in. Secondly, mortgage rates are low. And lastly in my opinion, a general positive change in the market itself due to consumer confidence, the stock market, and hopefully the end of overseas wars.

This makes investing easier…if you have the right formula.

First things first you have to buy in good areas. You have to know what comparable rehabbed properties are selling for. And most importantly you need to know how to rehab. These three principles will be the focus of all of the REIA of Macomb’s training articles and seminars from the early part of the year through summer. Is this the absolute only subject we’ll cover? Of course not. We’ll still be talking about wholesaling, rentals, and private money, but our focus will be on rehabbing.

The best investors whether real estate, stock, private equity, etc. are always on the cutting edge. That’s exactly why we’re so excited about rehabbing. The opportunity is tremendous right now to buy properties in areas that people want to live in for a very low price that will allow you to do an amazing remodel and resell for mega profits.

As the weeks and months go on we’ll dive deeper into exactly what it takes to be an all-star rehabber. I don’t want to overdo it and drown with with too much information in this article. What I want you to do is to start identifying neighborhoods that you believe people want to live in or are even obsessing over. Then find out what the beautifully rehabbed homes are selling for. This will give you a good base for the next few months and training articles.

Remember real estate is cyclical and the new cycle is pointing towards rehabbing.

Excited about 2012,
Dylan Tanaka-Founder

Flip Houses The Easy Way

I got my chops busted everyday when I first stepped into the professional world by my sales manager.  He used to have to beat it into my head that you have to give the customer what they want-not what’s necessarily best for them.  He had a saying, “Don’t fight it, write it”. What he meant was if the customer asks you for something, give it to them and don’t try to change their minds.

So now I ask you-Are your houses you are flipping, wholesaling, or renting (yuck), being advertised online on your website?

If you answered No, then you are fighting it.  The Wall Street Journal reported in 2008 that over 82% of buyers look for properties online before they call an agent, that was 2008!  With the recent addition of smart phones and iPad type computers they say that over 91% of all buyers find their houses online.  So the data supports my belief that if you’re not online your losing money, missing out on sales, and just plain crazy.

The next excuse that a lot of investors have is that they only do a few deals a year or haven’t even bought a house yet.  Well you certainly don’t need your own houses to sell to have a website.  We all started somewhere, myself included and I didn’t have houses but I did have a website that I made money because of.  Here’s a few simple ways to make people want to go to your site often to look for deals;

1.  You can say that you have no inventory at this time but sign up for e-mail updates

2.  You can have “stock” coming soon pictures and generic house descriptions to help your visitors visualize your upcoming deals

3.  The best thing to do is to get in touch with real investors who are doing a lot of business, myself included, and ask me “Can I list your houses on my website because I don’t have any right now?’  What do you think I would say to free foot traffic and eyeballs on my houses, YES! By the way at REIA of Macomb events you’ll find people who have lots of houses to sell, private money to lend, and investors looking for deals-get registered for our next event HERE.

DISCLAIMER-for all of you wet blankets who are reading this yes you’re right, you cannot sell houses for others unless you are a licensed real estate agent, well I’m not saying that I’m offering them any compensation if they do secure me a buyer

My dear readers you may be unaware that it is actually true that you can’t ask for compensation if you secure a buyer for someone else’s house if you’re not a real estate agent-however any Make It Happen person realizes that one good turn deserves another, right?

Okay I just gave you 3 easy ways for your site to appear like you’re the next Donald Trump.  Now you have no excuses why you don’t have a website up and running for your real estate business.  In my next training article I’ll show you how your website can practically put thousands of dollars in your pocket and you don’t need to spend a nickel.  People like myself will finance the whole deal and you’re only risk is running your website.  More on that later…

Anxiously awaiting your deals,
Dylan Tanaka-Founder

The #1 Mistake You Can Make On Your Website

Rockin-n-Rollin Champions Club Member

Here’s a quick snapshot of what a real rehab looks like just when the fun is getting started.  The investor above is Bob and this is his first full rehab on his own.  Now it’s not his first construction project he’s been involved in.   He’s had his builder’s license for over 30 years.  So between doing remodels for homeowners and putting in 50 plus hours a week in with one of the Big 3 for 30 years Bob started to get the itch to flip houses.  Before I forget to mention this and get Bob is big trouble, he’s got a business partner who’s the real brains behind the operation, his wife Michelle.   Finally after his retirement and a good year and a half of rehab training as both a REIA of Macomb and Champions Club members they now have  the confidence and team in place to move full steam ahead on a $25,000 rehab construction project.

In the coming weeks I’ll be delivering more updates on Bob & Michelle and their project.  If you have yet to take that first step toward your own investment house what are you waiting for?  Maybe you lack the confidence?  Maybe you lack the funds?  Maybe you lack the time?  Or maybe you lack the education and the right group of positive like-minded people surrounding you.  Whatever the reason is if you posses 2 0r 3 of the 4 mentioned above then you should be Making It Happen also.

Learn more about Champions Club HERE

Hopefully the next Member’s Spotlight article will be about You!

Rahabbing all summer,

Dylan Tanaka-Founder

Pay close attention to the words delivered in this video.  Although it may not be the end all be all-the earth, the United States, and finances are always changing every second.  However there’s definitely a lot of truth to what Scott Pelley is reporting even in his somber tone.  As most “regular” homeowners around the country are losing equity and possibly being driven in a housing slump mental depression, we as Michigan real estate investors can only do one thing-rise above.

Rise above all of the baloney.

Rise above our competition.

Rise above the no-win situation the Fed was very happy to get “Regular America” into & become GREAT.

It’s not often I comment on an op-ed piece but I watched this in my car on my Apple iPad outside a coffee shop last month while waiting for an investor who’s property I was providing the financing for.  Somehow it took me a month to find this and I had to share it.

Please leave your comments as I am very interested in your thoughts on this 60 Minutes piece and the way Scott Pelley from CBS reported it.

Comments highly encouraged,

Dylan Tanaka-Founder