If you have followed my blog or read any of the articles I have written you know that I am a big fan of “win-win” scenarios in all my Real Estate dealings. Truth is, If I cannot figure out a way where everybody gets what they want, I do not do the deal. There are WAY too many deals out there to go around screwing people, and besides, the last thing I want is to get a reputation as one of the “robber baron” investors in my town. Ultimately it comes down to a basic belief that “what comes around goes around”, or “you reap what you sow”, or a hundred other sayings that have to do with doing business and life right.
As an Investor I see my role as that of a problem solver. I figure, the more people’s problems I can solve, the more money I will make. So far this philosophy has come off tremendously well, and as many of you know, I have not “worked for the man” since 2005, and really only did that for a few years in order to get my professional Engineer’s License. One thing I like to do is solve other people’s money problems and profit while I do it.
This brings me to today’s subject – Garage Sales.
Recently we took a home in a subject to deal and stopped the foreclosure for the folks who owned it. If you are not familiar with this sort of deal, drop me a line at www.AskAlHow.com and I will train you; forget REO’s, wholesaling, and completing with morons who want to pay too much at the foreclosure auctions, this is by far the HOTTEST way to get property and you will only have pennies invested for major returns.
I digress. So we took the house on a subject to. The people left in a hurry as most people do in this situation and left all kinds of junk in the house. The truth is, we invited them to leave their junk. Junk is worth MONEY; especially if you concentrate on solving problems and not on the house itself.
I called a guy I know named Nick. Nick and his wife are professional dumpster divers. Yes guys, this is no kidding, these folks go around all the apartment complexes in town around the firs to f the month and collect up all the stuff that people, throw out when they move. They then sell it out of a metal building on the south side of town as something of an ongoing garage sale.
Anyways, here is what Nick and I do for each other.
Nick runs a garage sale at the property, selling all the items left behind by the former owners. The split is 50/50 for everything he sells. Whatever does not sell at the end of the weekend he gets to keep for his ongoing flea market, but he has to do something to get it…clean out the house! He removes all the trash as well as the “treasures” and pulls the carpet and vinyl on the floors so that my rehab crews can get to work. (Only in the “prettiest” homes do I leave carpet; in general I spend the money to have it replaced if for no other reason than it makes the home “smell good” to prospective buyers.)
The best part about this is that OTHER PEOPLE do the work. I am a firm believer in delegating the minutiae to others so I can concentrate on the bigger picture. Besides, when I hand over control of parts of my business to experts, whether it be my CPA, attorneys, contractors, or the guy who rakes the leaves, I am helping the economy by spreading some of the cash around. Nick is an absolute expert when it comes to haggling over some busted piece of furniture or a used lawn mower. He averages $200 per day in these sales. Three days of sale over a weekend; $300 for him and $300 for me.
So in essence, I get the house ready for rehab and get paid to do it. Nick wins because he makes money and has access to goodies he would not have otherwise, I win because the home gets cleaned out, the people who buy the junk win (God knows how…but THEY feel like they got a deal), and the landfill wins by not getting more crap added to it. How’s THAT for innovation?!