What drove Geoff and Paul to attempt a 12 hour renovation?
The Reno Kings property investment philosphy is simple. Do your research, buy the property well, add value and increase rents quickly, revalue and refinance and do it all over again.
Build up a property portfolio over 10 years and take control of your financial future … and give yourself choices to do what you want to do.
Professional investors know today’s property market is a buyers market and Paul and Geoff are now out there on the streets picking up bargains. What is the key here? It’s counter cyclic investing, so for the Reno Kings when everyone else is investing in the stockmarket they want to go against the ‘herd’.
It was outrageous – why would you attempt to renovate a house in 12 hours?
It is simple really, Paul and Geoff usually complete a cosmetic renovation in under 4 weeks. This is what they mean by adding value and increasing rents quickly. In the past people would say, well if the Reno Kings take 4 weeks we should take 8 or 12 weeks. So Paul and Geoff wanted to change your perception of what is possible. Now hopefully you will say “if the Reno Kings can do it in 12 hours I must be able to do it in 4 weeks using their workshop strategies”. There it is. Simple!
So why is time so important? As Paul would say “Time is money!” Geoff sat down and calculated that a 6 week over-run can cost up to $17,900! “That is why some people just can’t make money when doing a cosmetic reno” says Geoff.
Did anyone watch the 60 Minutes show and what did you think?
I thought that it is all relative..$40K on the worst house in the best street with a multitude of tradesmen was easier than adding a similair percentage of profit to a lower priced IP.
Their property *started* at around $370+ didn’t it?
I was impressed that they got so many tradesmen in one place at one time [biggrin]
Nothing against the RENO KINGS I love em..just wondering what everyone thought..
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorI thought the whole program was a load of rubbish
Firstly your purchase costs in Qld would have been around $15K then your sale costs at $400K around $12K.
Then you have your BSA premiums, insurance & interest. Even if you assume that a couple of these were covered in there $40K reno i thought the whole thing was a poor stunt.
Quality work takes time and you could see the look on the face of some of the Trades Guys faces they were not impressed.
Cheers Richard
richard at castlewhite.com.au
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They may have increased the value by $40K, but what did it cost to achieve? All the materials and tradespeople would have come close to this?
Terryw
Discover Home Loans
North Sydney
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I didn’t see what the Reno Kings attempted. It might be possible to do a small reno in 12 hours but that would obviously depend on what you needed to do.
Believe me (I’m as a tradesman) and these hit TV shows on DIY renovations aren’t what they appear to be. You don’t see the 50+ labourers in the background what the camera rolls, but once that camera gets switched off, the labourers are working their back sides off to get the job done in the 48 hours before the family returns home!!
Unless you’ve seen it the production take over the street (actually will close off the street in many cases).
And all of a sudden Joe Bloe who can’t get enough of his Back Yard Blitz becomes an EXPERT in quality work, materials, and prices.
So naturally quality takes time, but then I guess if you aren’t going to live in it then what do you care??? You’re going to rent it out. Let the insurance take care if something goes wrong…
Learn, Love, Strive. Make a difference!
I saw the show and a few things jumped out:
1. The Reno Kings said they would expect this reno would normally take 4 weeks.
2. They used a veritable army of apprentices from the local TAFE.
3. They took over the whole street with trucks everywhere and had to get all the neighbours permission (based on the fact the reno woudl take 12 hours).
4. Labour + materials cost $20k (approx)
5. They are not selling the property and are using the equity to further purchase.
6. They increased the rental by $110 / week which is IMO better than a $40k increase in value.
7. For the 12 hour make over they did 2 weeks full time planning months in advance (they said 72 hours of planning all up).
8. The sunt was more a publicity stunt to show off the Reno Kings and so they could show that it was technically possible. They did say (as above) they would normally take at least 4 weeks to perform this kind of reno.I thought it was a good show. It demonstrated to me that the success of execution is 80% planning and 20% luck not the other way around. 2 weeks full time planning for a 12 hour execution… struck home to me.
1. They didn’t finish it in 12 hours anyway?
2. The tradesman were definately not happy, they weren’t even ready for them when they turned up?Robo
I don’t think anyone would be happy trying to squeeze all they did into a 12 hour window.
What can I do in 12 hours to increase value?
1. Mow the lawn, trim the edges (3 hours)
2. Replace a door (2 hours)
3. Re-tile the bathroom (7 hours)That’s probably about it really. Now if someone asked me to do that while 20 other people were all doing stuff too and a camera crew were snooping around… yeah I’d get cranky and demand a beer.
As with any property strategy, this type of thing might work for some people – but will be a disaster for others. Some people are simply not renovation minded, and will end up wasting their time and money.
Biggest renovation problem in the area I’ve been investing in is that it is incredibly difficult to get tradespeople to a) answer your calls, b) give you a quote within a reasonable time frame, c)turn up when they’re supposed to, and d) give you a reasonable price for the job.
Simply sourcing quotes can take weeks, much less getting everything to co-ordinate together – as tradespeople tend to juggle several jobs at once so each individual job is spread over a longer time frame. There is also a skills shortage in most trades – not enough people to do all the work.
BTW, I say this and my partner works in the construction industry (carpenter by trade). Even with his contacts and experience, renovation has a tendancy to blow out.
Doesn’t mean you shouldn’t renovate for profit, just always allow a huge margin for time/money blow outs and make sure it will be worth it.
cheeeeesy!
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John – 0419 198 856
Good post …
Additional points,
How many people out there actually have the abality to complete a reno makeover.
If u don’t know the fundermentals of building u should never attempt to a reno makeover.
What about employing a licienced project manager.
In this market the best way to profit in a reno is to strip all plants and trees off the block, do a complete replant and a lick of paint. Revalue rent the property out and hold for the long term.
resiwealth
got to agree.. quality work takes time and skill and money. Hey the reno Kings Seem to be harmless and well intentioned. Great for people who have got absolutely no clue when it comes to the hands on stuff. A kind forum member sent me some stuff the reno kings did on the radio. At least they are entertaining to listen to. Very up beat.
.
CheersDon Nicolussi | Mortgage Broker - Home Loan Warehouse
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I’ve just come from Sydney presenting at the Reno King’s workshop (Steve McKnight was there also)
Paul and Geoff are great guys and in their seminars give all the warnings. They don’t expect people to renovate like this.
They wouldn’t or couldn’t do it normally either.
But if a TV station asked YOUto pull off a publicity stunt like that what would you do????
Michael Yardney
METROPOLE PROPERTIES
Author of Australia’s leading property e-magazine.
Join over 10,000 readers each month.
FREE subscription http://www.metropole.com.auI’ve never been to one of their pricey intensive seminars but I have watched their entertaining hijinks with interest..
Personally I don’t believe in fronting up at the door of elderly owners ( a particularly vulnerable section of our society open to duress and pressure) and trying to pick up the house at a reduced price (as I saw on one ACA show) is a way I can do business but I am not that naive to believe it doesn’t happen every day.
I will confine my comments to two points.
1. Are these people registered with the BSA.? Are they covered by BSA insurance for defective work?
2. It seemed that rather than fix the ceiling on the subject property they just put in a lower frame, a few inches under the new one. The essence seems to be on covering up problems not fixing them. ( shortsheeting Galv roofs, airless spraygun makeover etc etc). I would like to see a show where they revisit the handiwork 3-4 yrs after and see how it has held up.
Personally I saw it all done better and cheaper by a self taught bloke called Luke in Ipswich in the mid 90’s. Now he was a character………….
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