What You Missed October 2012 General Meeting
by Robert Davis
Rehabbing is Back and Making Investors Great Profits Again
Presented by: Robyn Thompson
October 2, 2012
Robyn Thompson, who is called the “Rehab Queen,” went from working at a diner at night to earn extra money to running a multi-million dollar business of buying, rehabbing, and selling properties.
One of the important things she said is we may think we are saving money by doing rehab work ourselves, but in her case this is not true. Robyn says we make more money by concentrating on the buying and selling aspects of the business. Often the time we spend doing a contractor's work such as painting, carpentry, plumbing, etc., could be spent finding another great deal. Painting a house may save us $1,000.00, but may cost us a deal that would have netted us $20,000.00 or more. Have we really saved anything? Of course, the answer is no. The more stuff we can contract others to do, the more time we have to concentrate on the things that make the real money for us. Also, some mortgage companies want to see that all improvements were permitted and/or done by licensed contractors.
She says to hire good contractors, let them do what they do best, and let us do what we do best – finding great deals. But Robyn never tells a contractor to just “rehab a house.” She gives contractors a specific and detailed list of what she wants done, what specific materials they are to purchase, and when they are to be done with all work. She wants every house she rehabs to have many wow factors. She has wow factor fixtures installed in the kitchen and bathroom areas. She said to check out the Internet site www.signaturehardware.com for fixtures. Her houses must stand out as the very best in an area. By doing that, she gets top dollar for her houses and they tend to sell quickly.
According to the IRS, true independent contractors must supply their own tools and supplies. Robyn’s contractors must sign an Independent Contractor’s contract stating what they are to do and when all the work must be finished. If a contractor doesn’t finish in a timely manner, it costs Robyn money. The cost is more than just the price of her money and the utility bills, etc. Robyn pointed out that by delaying the finished product, they delay the ultimate sale of the property. This creates "lost opportunity" by delaying when that sale money is available for another deal. Her contracts have a daily dollar penalty imposed for contractors who do not complete their work by their deadline.
The type of properties she looks for are ones owned by distressed people and out-of-state owners. For out-of-state owners, she looks for people who have owned a property for seven years or more. She uses www.listsource.com to provide a list of prospective sellers. In the MLS book, she searches for empty houses, cash offers only, and REO’s. She also checks owners of record for probate, estate, and trustee houses. Another thing she looks for is OWC or “owner will carry,” meaning the owner will hold a mortgage instead of cashing out. She won’t buy a house in a “war zone,” or one of less than 1,000 square feet.
Robyn Thompson has created a multi-million dollar company by having others do the normal-paying jobs. This lets her concentrate on the money-making things. It takes knowledge and ability to have others get things done for us. Robyn periodically gives seminars and they are all worth going to.