I had to laugh.  Right before the Hard Money Lender spoke to us at the Chicago Field Trip, I had covered The 5 Styles of Contractors.  He showed up and said the 5 styles in Chicago are:

1. bad
2. bad
3. bad
4. bad
5. worse

What a great guy.  He totally understands the challenges we’ve had with our rehabs.  I have to tell you that NOT ALL CONTRACTORS are alike.  You know that if you’ve followed this blog there are personality styles that most contractors fit and once you can identify their style, you will know if and how you can work with them.

The First Intensive Training Day

This was the first field trip where I added an intensive training day.  The host I invited is a project manager aligned with a real working business, handling multiple projects at a time.  He exposed us into his business system; how he manages multiple rehabs and uses multiple contractors for his jobs, and the insight into contractors, their working styles and his advice on how to educate the contractor was incredible.  Here are some of my “Aha’s”.

• Contractors get lazy on about the 4th job they do with you
• Contractors do not have the entrepreneurial thought process we have – they are still looking for Friday and the weekend.
• Always get at least 2 bids, even though you have a favorite contractor
• Establish a scope of work
• Withhold a significant payment draw as a final payment
• Enforce contractual penalties

Southside vs. North Chicago

For those that stayed through the intensive, we were able to get a snapshot of the entire city, close to downtown, the infamous south-side, and the suburbs.  One message rang loud and clear; the profit potentials are there at every price point if can get the project done quickly.

Hard Money

Yes, hard money is expensive in Illinois.  Hard Money is cheap in California.  There are big profit spreads in Illinois.  Small profit spreads in California.  Remember, if you find large profit spreads, you need to expect to share the wealth.

Landlording

I’m tempted to invest in rentals in Illinois because of the cash flow possibilities, but am somewhat apprehensive due to the tenant friendly laws in the state.  I am spoiled by living in Texas, as evictions can occur in 30 days, and if that’s not fast enough, the use of a “Landlord’s Lien” allows the landlord to enter the property and remove non-essential items from the home, such as flat screen TV’s to secure the rental payments.

Chicago Field Trip – Success!

Given I had investors with varying levels of experience, I was a little nervous about the information I covered.   The feedback I got from the experienced investors pointed out the subjects they didn’t need covered, but understood where a newbie investor would need that advice.  The new investors left even more confident about the opportunities throughout the country and armed with the tools necessary to forage on their own in the city of their choice.  Some left with new rehab projects!