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IWP!, flagship product is Chicago's premiere real estate Investment
magazine. Entitled Invest With Passion!, it is the tool for investors and professionals in the
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REHABBERS CORNER
REHABBING IN CHALLENGING TIMES
by Scott Rubin
The “Perfect Storm”- when the
housing market and the lending market crash at the same time. I've always
considered myself somewhat of a philosopher. Even my projects are less
about nails and studs and more about how you feel when you walk into that
room where those nails and studs might be.
Recently, I came back from a Frank
McKinney Palm Beach Experience trip. For those of you who aren't familiar
with Frank, he builds multi-million dollar estates on the oceanfront in
Florida. I flew down with my mentor and seven other investors from
Chicago. The purpose of the event was to raise money for Frank’s Caring
House Project Foundation which, among other things, raises money to build
homes in Haiti.
Like Frank, I consider myself a
developer. Just like adults have an inner child, I believe that developers
have an “inner rehabber”. We saw Frank's first $50,000 rehab and the site
of his $135,000,000 development. Frank once sat with one of his homes for
19 months before it sold. One of my projects was built in 1899. I call it
the “Jewel of Edgewater”. It was under construction for six months and has
been on the market for 15 long months.
The history of the Edgewater area
is amazing! Motion Pictures started next door in the Uptown area. Charlie
Chaplain was signed with the first ever movie studio, Essanay Studios.
They would put the stars up at the Edgewater Beach Motel. The Lone Ranger,
Clayton Moore, grew up right around the corner from the “Jewel of
Edgewater”. And the stagecoach used to stop right next door to the
“Jewel”.
What I learned from Frank is that
being a developer requires a tremendous amount of organization and focus.
Though I am saying this in one sentence, it deserves many books of
explanation and study. It is the most important line in this article.
Frank has two books that are a great start and the proceeds, of course, go
to his Caring House Project Foundation.
So what does all this mean? I'm
sure when Frank started out, he also called himself a rehabber. It is the
beginning stage. We grow into developers. You could say that rehabbers
grow up and become developers. Some wise person once said, “there are no
accidents, only inattention.” Just like a parent who is holding their
inattentive child's hand as they walk them across the street, it is in
this beginning stage I call “rehabbing” that it is the most important for
you to surround yourself with people who can take your hand and guide you
until you learn how to pay attention.
When I started out, I was like a
kid in a candy store. I was having so much fun rehabbing and creating,
that I wasn't paying attention. I forgot that there was this thing called
a “business” that had to be run. There is no auto pilot switch in your
business. You need to pay attention every day. You need to find good
people that will pay attention for you and then you have to pay attention
to them and what it is you are paying them to pay attention to.
One night at Frank's Palm Beach
Experience, we were dining outside at the hotel. I decided to go back up
to my room before the “Coffin” exercise that Frank was going to perform.
I was walking briskly and ran into a full-length plate glass window. No
one saw me, but a bunch of people heard the sound of me going nose first
into the glass. Embarrassed, dazed and confused, I said I was fine and
found the door as I headed up to the elevator. I rubbed my nose and
realized blood was pouring out into my hand. I thought it might be broken
considering that it was now located on my cheek. Two girls saw me in the
elevator bleeding and asked if I needed a paramedic. “No,” I said, “I'll
be ok”.
Fifteen minutes later, I was in
the ballroom watching the Coffin exercise. Though several others and I
contend that the plate glass window was an accident waiting to happen, it
might not have happened if I was paying attention.
These are challenging times -
particularly for rehabbers. Surround yourself with knowledgeable people, a
mentor, and a mastermind group. If you get knocked down during a tough
market or run into a plate glass window, pick yourself up, rearrange your
nose and call your mastermind group or mentor. Two or more heads are
always better than one.
Something else I share with Frank
is my desire to give back. According to my parents, when I was very
little, I was “curious”. That is the word two of the kindest people I know
use to describe my taking apart and breaking everything! When I was about
9 years old, my Dad gave an old alarm clock that he was going to toss out.
It didn't work. I took it apart and fixed it! From that moment on, I was
fixing everything! I even fixed things I broke years before. My parents
would have lists of things for me to fix when I would come home from
college. I guess it was payback time!
That passion to fix things even
spilled over into my relationships. One of my old girlfriends said “stop
trying to fix me…I just want you to listen”. It is in my nature to fix
things and I want to help people. I feel I am doing that in my Allergen
Reduced Homes. I plan to start 5 Star Properties Charitable Foundation
shortly.
I am not sure that I can rightly
call myself a developer like Frank McKinney. In many ways, thinking about
the organization and focus required to build a $135,000,000 single family
home makes me see myself as a rehabber again. Even though I am in the
process of restoring a $1,000,000 home in Lincoln Square, I believe that
it will be me developing the organizational skills in my business and the
focus that will ultimately make me feel like I've grown up into the
developer that I truly want to be.
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Scott Rubin is an active investor
and founder of 5 Star Property Solutions, Inc. and 5 Star Reconstruction,
Inc. For more information, he can be reached at 847-579-4830 or visit him
on the web at www.a5starProperty.com. |
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