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|  Income-Planning Worksheet Advanced tip: Permission Marketing Warm Calling Advanced tip: ABCs of Prospects Broker tip: Add Rehab to Your Business Prospecting Buyers Call-Ins Advanced tip: Use Personal Assistants for Prospecting Advanced tip: Public Speaking Community Involvement Prospecting in Print Tracking Prospecting Results Advanced tip: Lead Analysis Quiz: Prospecting Bright Ideas: Prospecting Code of Ethics: Prospecting More Resources: Prospecting | WARM CALLING For the Broker Adding Home Renovation to Your Business A real estate professional is in the ideal position to locate homes that can be bought low, improved by renovation, and sold for a profit, says Eric Goosen of Goosen Realty in St. Clair Shores, Mich. Q: Where do you find the homes you renovate? Goosen: Most of the homes are in urban areas of Detroit that are beginning to see some improvement. We watch tax sales, foreclosure sales, and the MLS. But mostly my salespeople and I just keep our eyes open when we are out in the market every day. Q: What do you look for in a house you plan to buy? Goosen: Price is the most important consideration. You need a price low enough to cover the renovation, the carrying costs for the short-term loan, and the taxes and still leave room for a good profit. In my market, which is primarily first-time homebuyers, I try to look for houses priced at $100,000 or less. Of course, location is also important. Q: How do you handle the renovation itself? Goosen: I act as a general contractor on the renovations we do, meeting with the subcontractors and managing the costs. It’s really almost a full-time job in itself. We use a group of subcontractors on a regular basis, so we generally get very good prices and response times. I also recommend this same group of contractors to my clients who need work done on homes they have sold or bought through me. Q: What is the most critical factor in successful home renovation? Goosen: I think it’s the ability to know what renovations will cost and the willingness to act quickly. I know how much it costs to replace the plumbing, put on a new roof, and paint. Because I assume I’m going to replace everything but the outside walls, I know my costs and can decide in a hurry whether or not to buy. I’ve actually bought properties sight unseen, just from the documentation. The ability to respond quickly is particularly important in today’s market, where there is a lot of competition for properties to renovate. Q: What advice would you give to other real estate brokers who are considering adding a renovation component to their companies? Goosen: Being in real estate and knowing the markets and how much homes will sell for gives you a real advantage over other investors. Market knowledge, the ability to sell the home once it is completed, and a good grasp of renovation costs are all things that many real estate brokers know already. The competition is getting tougher, but I still think it can be a very profitable addition to a real estate brokerage business. I have earned about 20 percent of my gross income from renovating houses over the last three years. Prospecting Buyers, next page > | |