The stick and carrot - let's start with the carrot:
#Innovator of the week Adam Ashkenazi # Post2
In the previous post, I concluded that in the round of posts I would talk about carrots and sticks, that is, about the nice things that I was able to do in my first year of entrepreneurship, and especially about the failures (and there are many....).
Today we will start with the carrot.
My first house - in a town called Brackenridge (the town is located in Allegheny County - the district of the city of Pittsburgh). Single family, 3 bedrooms, XNUMX bathroom and another half (in Pittsburgh and the surrounding towns, there is something called "Pittsburgh Potty". That is: toilets and showers in the basement, built in old houses, because the environment was an environment of coal miners. In order for that coal miner who returns home He will be able to shower without dirtying the house, build him a toilet and shower, usually in the basement). Usually, the toilet/shower is in the basement, and they are very old, and are found in very old houses (I'm talking about the beginning of the last century - at this level).
So after I arrived in the area on December 21, I got to know people, toured the area a bit, in the neighborhoods, and towns that I learned before getting to know "on paper" from the Internet, I came across this property, it was put up for sale at 75K.
It seemed to me to be simple, normal, not a bad area and town at all (neighborhood B you could say, in terms familiar to us), such that, if you really want to, there is really no renovation work that needs to be done in it (according to the words of my realtor, I was in the house with him in real time).
The truth is, already when I saw the house, I discovered one essential thing, that although it is a three-bedroom house, there is a separate attic, with a separate entrance and door, and it is comfortable. The attic was in dire straits, insanely neglected. But - I saw a simple thing: another room! Yes yes, instead of 3 rooms, 4 rooms. That was my vision.
So an offer was made, they wanted 75 as mentioned, I offered 60, we closed on 66, with the right to cancel after an inspection + termites.
Termites - there were none. But there was something called "KNOB AND TUBE", i.e. - electric wires with weaves, something that was already banned in 1978. The meaning - the whole house needs to be re-electrified. Well, I thought about getting out of the deal, but then I said to myself - oh well, you have to learn and start from something, overall the house was in perfect condition (proper roof, plumbing as above). The heating ("furnace") and windows also had to be replaced (something I neglected at first, but we'll talk about it later).
Well, we were able to drop another $2000 from the price, due to the inspection report, in retrospect, there is no doubt that with a slightly more aggressive broker it would have been possible to lower more, but there is no better wisdom than hindsight.
The apartment was purchased, renovation began.
First mistake: An electrician, I chose an electrician with good reviews, and the truth is, he was pretty good and in the end did a completely professional job. He just messed up on two issues, one of which is my fault. First of all, he worked alone. It's very nice to work alone, it's great to hire professionals who have been cleared, but if it's a big project, and re-electrification is a big project (it was made clear in advance in the agreement that the work would last 3 weeks, it's very advisable to take someone who works in a team (or has a team) even if it's more expensive .
Because what happened? The electrician, like any typical American contractor with his different stories, once had to take the child to the health insurance fund, and once to answer a customer's call, and once to just mess around and take his time. So at the end of a three week job it took close to 6 weeks.
Error 2 price - I was wrong, I only checked two quotes, I paid $16,000 for re-electrification (3 floors including the replacement of an electrical panel), even though, with a little more investment, I could have done it for $4000-6000 less.
Mistake 3 contract - I didn't worry that there would be a payment for late work in the contract, unfortunately I paid for it in two weeks, and a delay caused a delay for the other contractor who worked on the house who worked on the house himself.
Error 4 Aggressiveness - in retrospect, two weeks before the end of the work, the contractor had to purchase more equipment for $700, so why? Because he screwed up... why did he screw up? (I explain in a language I think I understand, but I'm not an electrician) because he made a mistake in several connections, which do not conform to the standard. The problem is that he also admitted to me on the phone that he was indeed wrong. I was wondering why I have to pay for it? And as Americans know how to engrave, he knew how to explain to me in a very convincing way why I have to pay for his mistake.
It's a big mistake of mine, it's a mistake that was primarily due to lack of experience. Second - in the absence of familiarity and in the absence of a proper team (today I have two great and reliable electricians whom I can always rely on and assign projects to, so I have more power in front of them), and also a mistake of cowardice that stems from lack of experience.
So far, the kind contractor got what he deserved, I got an electrifying house (literally), of course he lost me. messed up
At the same time, I closed with a general contractor, what did I want to do? Flooring, kitchen cabinets, a few more taps, and of course - turning the attic into a formal room (with a fixed closet, etc.). I met a great contractor there, who accompanies me to this day (with a certain stop due to a serious car accident he had). Total, worked part, passed part.
Another big mistake I made, windows - in real time, I didn't listen to the contractor, who said there was a problem with closing the windows. In my head I said to myself, well, okay, so not the most normal, let it work out. So it's not, in order to get a proper rental, and to avoid maintenance problems, as well as bodily injuries, windows are an important thing in the USA. In Israel - telling your tenant your problem will be solved, can still work (also inappropriate) with Americans, a little more complicated.
It was only in retrospect, when tenants came in (two proud and kind elderly people), that I realized the extent of the mistake regarding the windows, when the tenant was indeed injured by a window that was quickly closed on him (nothing dramatic happened to our happiness). Of course I hired a contractor who replaced 16(!) windows. Another story of $8000 or so.
Total, including everything, 108K.
All in all - quite a few mistakes that I learned from.
In total, and later, an appraiser determined that the house is worth 160K, and of course I also managed to get most of the cash back (I'm a foreigner so I was able to get a 60% loan from the appraisal value).
This time there were carrots, but also relatively small sticks, in the next chapters, we will talk about the sticks (Ya Vardy, some sticks....
In the pictures - the subject of the post.
Responses