Tuesday, October 30, 2007

Skeletons In My Closet

What ‘skeletons’ do you have hidden away that may come out to haunt you? Sounds scary doesn’t it? And it could very well be….

I was recently negotiating on a fairly large character conversion/reno project for an associate of mine. He had considerable experience with rezoning and land utilization but not so much with actual conversation and restructure of the buildings. He was so ‘pumped up’ about the potential project that I wondered how much in depth research he had conducted, as there seemed to be some sizable obstacles to overcome before getting the project to the final stage.

I felt an icy hand on my shoulder and heard a deathly whisper in my ear ‘Do the due diligence now, run the costs and speak with your team, get the written quotes…’ What was going on? The voice was just my ‘friendly’ skeleton reminding me of the lessons learned 5 years ago.

See, I had been doing a sizable reno deal where the costs and time frame kept on extending. I had done the usual groundwork, quote gathering and cost analysis for the property, but it still was taking longer and costing more than planned. In the end the deal was completed and all went relatively well, but there had been a few months worth of stress and grey hairs from this seemingly simple deal. What happened next was I spent a period of about 6 months feeling rather reluctant to enter into another reno job.

My skeleton was keeping me out of the market. My repair job didn’t go exactly as planned, but still ended up being profitable, although not nearly as much as I had hoped. What I realized was that I needed a better system and a better team to rely on. I then went out and spoke with several of my colleagues that specialized in these sorts of projects. I then saw how I could ‘bomb proof’ my next deal, maximize my time, money and create more profit- all with fewer grey hairs.

The funny thing is how much my skeleton continues to teach me.

If I had chosen to ignore the initial ‘fear’ I had, I would have been reluctant to go on to other successful projects as I have. That kind of education is priceless and so is the use of a knowledgeable team to consult with.

As the details got clearer, my associate and I learned that this project was not as good as first anticipated, but this is what we did….

“I’ve had other skeletons that have been down right nasty. Skeletons that have tried to wreck my life. Do you have something unresolved, lurking in the back of your mind that keeps hurting you? It could be a financial kind of pain or a personal one.”

We sent in our surveyor to assess the best usage of the land and height restrictions on the Character conversion. We enlisted three separate contactors that we had a history with and asked for a lock in quote including materials (there is a big construction/labour shortage now so you need to get firm numbers.). We then rounded everything up by 12% and extended the project time frame by 6 weeks. We learned that due to inherent foundation flaws the project would cost much more time and money than initially thought. Our solution lay in the ability to scrap the conversion idea and turn the units into commercial storage space, and rent out making a better profit.

My point is that without first trying and failing on some levels I would never have been able to take the chance and learn what I needed to do.

We’ve all been held back by skeletons before. Until we learn from, and destroy them, they will keep dominating us. I’m sure that you’ve met people that are so afraid to make a choice for fear of being wrong or getting ‘burned again’. I cringe to think about all the other ‘little voices’, apprehensions and fears that we let hold us back.

I always try to examine any excuses I may have and check them for validity.

Move forward with knowledge and seize the opportunity.

1 comment:

Anonymous said...

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