S6 E18 | Pull dem Permits

Do you live in a thing and you want to make improvements to that thing? If that's the case, then this episode will probably save you tens of thousands of dollars. Heartache, Trials and tribulations. And it's free. Enjoy another episode of Broke to Awoke. All right, we talked about it. We're bringing up again.

Let's bring it up again.

What are the top real estate mistakes that people are making when they're investing?

Why would we want to.

How can we avoid them? Yeah.

Why would we want to study the mistakes, though?

I think we learn the most from mistakes.

Yeah.

I mean, I do. When I trade and position and investing, it's like that's where the gold is.

It is the gold. Yeah, it is. If you know where those mistakes are, we can avoid them. There's so many ways to win, but what are those mistakes? And there's definitely common denominators. You coach people, I coach people. And there's the same dang stuff every time. And I have done them all myself as well. But I can go down that list.

You have a list?

I have a list. Sponsored by Pain Suffering. We're here for you.

We actually do have a sponsor for the show, and that sponsor is Pain. We've learned so many lessons from pain.

I love that. All right, so number one, not necessarily in order. Not using contracts. Damn. Dumb. Oh, hey, hey.

Let's do this. This is. Yeah, it's gonna work out. Just.

Yeah, I'm his agreement. Well, I'm not a gentleman, so maybe that's why it didn't work out for me.

Don't work out just fine.

Did not. No, no. Nobody's gonna remember. Yeah, and then you're gonna have very convenient amnesia when it comes to holding up your side of the deal, buddy. So get everything in writing, and if you need a good excuse, then just say, hey, I have a lot of deals going on. I'm not gonna remember everything that we went back and forth on. So I just wanna make sure I keep my commitments to you so I can pay you on time. Let's get everything we just discussed in writing. And to go through it to get there so they're not just signing some paperwork that they didn't read. You keep it really simple, and then you make sure they understand. You sign it together. You take a picture that day about signing the contract. Seriously, you do that. It's a really big deal. I cannot tell you. It's such a litigious environment. It's crazy.

I love the fact that you literally gave people the verbiage you just gave me a vocabulary.

Say it.

No. And I do.

And I like you need an excuse to be professional but correct. People do.

But people do because they'll think like, oh, come on, don't you trust me? Like, that'll get brought up. It's like 100% like, I trust you so much.

I trust you.

But what if I get into a car accident, Trust me. And I hit my head, and I now have amnesia, and I don't remember who you are.

Hey, I got a lot going on.

I want to make sure that you get paid.

Make sure a lot going on.

So let's just get all this in writing.

People will sign what needs to get them paid.

Right? I love that verbiage. Thank you for sharing that.

The bank will not release the funds unless they have this contract. Come on, There needs to be a frequency. There needs to be an understanding. I got to make sure you get paid. And the truth is, I want to make sure they get paid. I'm pumped to pay my people 100% because that means they're actually doing the job.

I know. Exactly. No, I'm all for that.

House is progressing. Yeah, I'm all for all in writing. Every change. Oh, I don't like that floor. I want to get it in writing. The buyer wants to add an upgrade, it's in writing. Buyer wants to walk through and tell the builder stuff. Guess what the builder knows not to do. Listen to them unless it's in writing and signed by me. You're not just going to change stuff. Everything costs money. Oh, well, she told me to add copper. Everything. Well, guess what? Buyer just dropped out. You just added $60,000 to the budget. Not approved. I'm going to lean the house. Oh, I didn't approve it. You know, so you don't want to argue when you can keep the understanding of your relationship clear, clearly mapped out.

Yeah.

And frustration is born from missed expectation. And you can miss that expectation if it's up in your head or you had a conversation with 12 other people that day. You went back and forth. What did you actually decide? So he or she who is most organized wins when it comes to a lawsuit. And if you are disorganized mess, I'm just a messy person. Guess what?

You're gonna lose that.

Two lawsuits later, you become hyper organized. I actually had somebody pop on the G Force chat yesterday saying, hey, G Force, I'm my first lawsuit and I really need to know, how does Britney map out every single activity that happens in her life? Because it really matters. How organized you're at. So that's number one is people make the mistake of trying to make these friend deals with do or don't know and they don't use contracts. So that's dumb. Don't do it.

Got it.

Next. Not getting educated. Take the time to get educated. You could be listening to music or you could be listening to lessons like broke to awoke and studying these things. Listen to the books, listen to these whatever it is you want to learn. There's so much access to education unlike ever before in the history of mankind. Take that time. Especially in real estate, the swings of wins and losses can be hundreds of thousands of dollars. In the beginning it's going to be ten grand, but you start playing with islands, those are million dollar swings or misses. So you really need to know because that one t save you so much pain, so much heartache, so much time. And so I really want you to take the time to get educated. And I'll see people get in and they know a friend and they'll just throw money at them trusting that they know what they're doing. You really do need to learn yourself. You need to know what questions to ask. And a lot of times you ask those questions sponsored by pain. You learn to ask those questions, but you could also just learn before you learn through pain. So getting educated is a big deal. Believing people is number three. That sounds terrible, but I know it does sound. I'm gonna say it. I'm gonna say it because I feel like being real honest right now.

Yeah. Can you be honest with me?

I will.

Okay.

My number one real estate advice to everybody. It's gonna sound bad. Trust no one. Trust literally no one.

Not a single person.

It's not so bad. It's not like I don't trust you, but in the real estate business, I.

Don'T know what you're saying.

Trust no one. Don't think they're gonna show up on time.

They're not.

Don't think they're going to bring it not broken. Don't think they're not going to steal. Don't think they're not going to try to weasel out of the contract. Don't think that they actually don't have their rent. Don't like, don't. You cannot believe them because it's just not true. It sounds really mean. But if you go through and instead of just trying to believe people, you just get things in writing, you keep it professional, you keep moving forward, then you do your best, it's going to go better.

Yeah.

I see so many people get knocked out of the game. They get their hopes, their dreams up. They see how much money can be made in real estate, and they get knocked out on their very first deal because they believe everybody and they got eaten alive. Eaten alive. I am not a tough B word out there on the job site at all. I'm never a B word. Never. But you know, when I walk on that job site, you can't f with me. You know that like pretty quick. I ask the right questions. I speak with a firmness that, you know, you're going to show up to my job sites first. Not six weeks later. You show up six weeks later, you're not on the job and you're in trouble. So that tolerating bad behavior essence, you have got to develop that whole side of you that is just firm. And people know they have to show up because, oh, so bad. But we're being honest right now.

Yeah, we are.

We've had people actually tell my mom it was one of her tenants, she was like cleaning up after this tenant just destroyed our property. And they're like, ma', am, why do you keep putting up with it? She goes, well, I'm just trying to be nice. And this woman goes, nice is weak. And I was like, geez. I'm obviously a very nice person, super compassionate. I live my whole life to save babies. Huge giant heart. But what is the most loving thing you can do for people long term and with this specific breed? They need firmness, they need clarity, they need contracts, they need to be held accountable. And you can do it all very lovingly. But firm.

Yeah, yeah, absolutely.

Because the way in which nice and like, oh, when do you feel like showing up? Never.

Don't do that. Ever.

Yeah, don't ever ask that question. Don't ever ask. Yeah, this is the day you're going to show up. Tell them this is when it's going to happen. Oh, three of my. The families in my family lost homes in Hurricane Helene this last year. Three completely displaced.

Dang.

And the one house that's not done is the family member who's like, when do you think you could show up? It's been like six months.

Yeah.

Still not showing up.

Dang.

I know.

By the way, just check it.

Just checking in.

I mean, but really truthfully, what you're also describing and what I'm hearing, yes, this is obviously real estate, but this is probably ultimately very much applying to large entrepreneurship. Large business like this probably won't show up in a hundred thousand dollar businesses, but if you're doing businesses where you're doing millions, this shows up.

If you're remodeling your own kitchen for your personal home, bang. So it actually doesn't have to be that big.

Bang. Do it all.

It doesn't have to be that big. And especially ladies, again, I've never called names. You will never hear me yell. I'm not gonna cuss at you.

Yeah, you've never cussed me. What's up with that?

Not yet. Tonight.

Yeah.

No, you're not going to get to rattle my cage because to me, that's taking my power.

That's so cool.

Yeah. I'm not gonna give somebody my power that's winning. But you're also not going to get over on me because I've learned better and I know what questions to ask. So, yeah, there's a whole different. I call it construction Brittany. That comes out that can get stuff done and gets it done really efficiently and they end up liking it. I make them better contractors make them better subs and they make more money and they get through projects quicker and everybody's better. But again, you need to have the clarity to be able to be firm and hold people accountable. You need to navigate. You need to think of yourself as a leader. And this is somebody I actually sounds. Whatever. We're being real honest tonight. I don't even hang pictures on a wall. I'm, like, so insecure about hanging pictures on a wall. It's the weirdest thing. I ruined all the walls on my first house when I was 18. I, like, ruined them all. Jenny made fun of me because I hung them all the wrong height and I'm, like, nailing them in myself. And I didn't have the paint color, and so my walls were just forever and it bothered me forever. And so I've never actually hung a picture on a wall ever since I was 18.

Wow.

I'm super not handy. I look at a, like, engine of a truck, freak out. So, like, I'm just not handy. But I can tell you it's wrong. So don't feel like you have to have that skill to be able to lead.

Yeah, that's a great point, though.

Yeah.

Yeah, that's a great point. I've never hung a photo. I already know I can't do that.

Really?

Yeah. Let's pay someone.

Yeah. Well, hey, know your skills. I got one last one. Just a few pro tips right after.

Trust no one. Trust absolutely no one. Whatever. Next. Please tell me.

Pull the dang permits if permits are required. You don't want to do it. It costs money, costs a lot of time. But that's why I said red states, because it's just impossible. It's really hard to do it in blue states and keep moving forward. It's so dang bureaucratic. And so. Pull the permits.

Can that transfer from house owner to house owner. I'll give you a random hypothetical. Totally hypothetical. Just off the cuff.

Yeah, yeah.

Let's say you had a friend and they were living in a super blue state and they wanted to buy a house. They were considering buying a house, but they know the work of this house had been done by non permitted contractors and everything that was built had no permits. Would you buy that house?

Absolutely not.

Okay. And if you didn't, can that negligence transfer over to the new house owner or do you know? I don't know the answer to that.

I feel like it's America. You can sue for anything.

Okay, valid point. Yeah, valid point.

America.

Why wouldn't you buy that house?

Yeah. You know, even if it was a very skilled carpenter.

Purely hypothetical.

Yeah. Humans make mistakes.

Yeah.

And the nice thing about permits. And they're gonna miss stuff too. The nice thing about having a standard with the government is they're gonna check to make sure that things aren't a fire hazard or a mold hazard or a leak or a foundational issue. You use the right materials, you didn't cut corners. Because even if you're a really good contractor, use some subcontractor. Legal, illegal, doesn't matter. Like whatever. You use somebody.

Yeah.

Who may have shown up drunk or tired or not as experienced as this supervisor over him that wasn't on the job site. So like, it's like an insurance policy for you as the homeowner, as the builder, as the developer to know that my guys did the right thing and it's not going to come back and bite me later. My guys have made really bad mistakes. And guess who's the one that gets in trouble for it every time. Fricking me. Me. Every time. Oh, I had some guys back in like 2010, didn't. Oh. I'll tell you what they didn't do later. Hold on. These home buyers built two on one lot. And no matter what, every time it rained, the house leaked, leaked, leaked, leaked water coming through the lights. And I'm like, there's nothing more stressful than every time it rains and you're worried about your lungs. And so these poor people were like traumatized. And we did all this work trying to fix this house and it ends Up. They didn't flash the freaking windows. Something so simple, it just didn't flash. I ended up buying those houses back just because I knew these people couldn't live in those houses. I was like, you're too traumatized. Can I just buy them back from you? So I offered. And it ended up a really nice relationship thing. Something so simple that anybody should do, and it just got missed. So people make mistakes and you are the one that can get sued, put in jail, lose your reputation, everything because of some sub, some contractor hired that he's cousins with from somewhere. And so again, I appreciate permits. I really do. It does slow things down. It is annoying. Nothing in the government historically has worked smoothly or quickly.

No.

And that does inhibit your money making capacity. But it is a nice little insurance policy to know that that's been done.

I mean, how you might laugh at this. I've never pulled a permit in my life. Mostly because I've never done, you know, real estate. How long does that take? Like, what's the process?

Every city is different. Sure, every city's different. So you, you pull the permit, you submit, hey, please come check the house. And sometimes it's like on a rotation, they come out to that area once every two weeks. Okay. And if you fail, then it's another two weeks and you can't. Let's say it's plumbing.

If fail isn't like they didn't show up or they didn't pass.

No, they, they, they didn't pass. So let's say you don't have the right bow in your plumbing. Like, it's too sharp of a turn and it can't actually do what it needs to do. And so they fail you. You can't put drywall in for another two weeks. And then they find another error and it's another two weeks. And then it's another two weeks.

Wow.

Yeah. So you can have your whole project slowed down for, I mean, how often.

Would you pull permits then?

I mean, you pull it at different phases. Okay, so different, different sections of building projects have different permits to be interesting.

But you're just saying, like, hey, that definitely. It sounds like it just slows down the process.

It is. It definitely slows down. You're not really going to get away with it. In new construction, like, new construction, you have to. But in renovations, a lot of times you can cut corners and get away with not pulling permits. But again, I promise you, eventually it will catch you. And that catch is so painful and so scary. And then they'll go back on all your other houses and they will just threaten class action lawsuits. Those people go back to all your other buyers and say, oh, if he didn't pull permits on mine, maybe he didn't pull permits on yours. Then everybody's scared. And you're in the news and you have really hard to get over that article. It's just tough. So it's just worth it. It's going to slow you down. You're going to make less money than Frank or your friend who's just like giggling the day away that you're an idiot for pulling permits. You're not do it. Another one would be get builders risk insurance. Get builders risk insurance.

Never heard of this word in my life.

When you're renovating or when you are doing new construction, if something crazy goes on in the property, fire, theft, tree falls through the roof, anything, you're covered. And then it also helps you a lot. Even, even if somebody does go back to that time while you were doing construction on that house, they can make sure that you are covered. Anyway, it's an important thing. And it's not that much money. It's like a thousand dollars depending on the size of the house. So really? Yeah, it's not that much.

But the piece, is that a one time. Like you don't have to renew it.

Every year or just depends on how long your project's going.

Okay.

But on average it's about a thousand. I'd say up to $2,000 per house. Okay. And it's absolutely worth it. And again, I've used it several times when we've been robbed or tree falling on the house. We had a flood and God, I've never had. Well, I have had a fire, but not in a house. So very grateful for that. But there's so much that can go into the stress of running projects. And again, if you don't think this episode applies to you, if you have a thing that you live in and you ever want to enhance that thing and you want to use somebody else.

It applies to this, all of this.

Like I said, this is not for billion dollar companies. This is for renovating and painting your kitchen cabinets. It matters. It really does matter. I learned from Robin Thompson. She has a course. It sounds terrible, but her course is how do you control how to control your contractor Like a dog on a leash. That's literally the name of her course.

Nice Robin.

But she had in there some really great tips on just accountability and learning how to do. Especially if you're a woman or if you're not the right. If you're not the right gender or color or age that everybody else in your community that's doing projects, it's going to be harder for you. But don't whine about it. Just do excellent. Be excellent.

Do all the things be excellent. In our remaining few minutes, this podcast episode, you mentioned fire. Just a random fun story. If you've been to the island, you've probably seen the island video.

If you've been with me, if you've.

Been with Brittany, you've seen the video, like the story. And in that video there is a fire. And this is probably one of the few you're referring to just a moment ago. Do you know, can you tell us a story like, how did this fire start? Because like, you're like, why is there a fire? Like, that was the yelling, why is there a fire?

Oh yeah, how did this fire start? I think I'm gonna have to tell you in the next episode. We've heard your request and we've finally opened the door. If you have always wanted to come visit this amazing sacred island, we now have an option for you to book a room and make this your next vacation. Don't just vacation to beautiful places. Vacation to places that will help heal, elevate and transform form you so you can heal, elevate and transform the world. Go to arielbvi.com and book your next stay and hopefully I will see you there.