In this video, I’m gonna share with you the 3 things you need to get in place before you give up your day job to renovate.
So, someone asked me this question the other day, “When should I give up my day job?” This is the answer I gave them and I think it’s something that a lot of you will benefit from.
If you’re gonna give up your day job there’s 3 things you need to get in place before you go to full-time renovator. If you don’t do this basically you get stuck between a rock and a hard place not able to move forward because you don’t have the capacity to do what you wanted to do. So, it’s really important to get these things in place.
Firstly, you need to setup a some sort of structure or legal structure to start operating in, to start generating an income so that you can demonstrate an income to get financed when you’re not working. So this means engaging your accountant to help you with the right legal structure and working also with your mortgage broker to address the requirements that a bank will have to be able to finance your renovations and then actually doing some renovations that structure so you start to build up some history. Because if you just pass on your day job then you’ve got no means of getting funding to do a project. And that can be incredible frustrating.
The second thing you need to do is build your renovating muscle. It’s like anything, it’s like cooking a cake. If you’ve got a recipe that was tested 150 times by the Women’s Weekly Kitchen and when you go to cook it, the first few times it’s not perfect. So it’s pretty good, but it’s not perfect. When you’re relying on your renovation profit as an income, you need to be absolutely nailing it. So you gotta build that muscle and do a few renos while you’re still working so that you’re not so dependent on the income and you can iron out the little bugs before you are absolutely dependent on it.
The third thing that you need to do is to develop a pipeline for projects. Now, if you’re looking for the projects yourself say you will maybe do a reno and then you’ll finish it and you’ll sell it and you’ve got to start looking for the next project. It can take 3, 4, 5 months to find a project – not every property on the market is a suitable reno. So you need to develop an effective pipeline for you know, keeping deal flow. So, if you’re a couple say you might be renovating as a couple, say one can be managing the renovating, the other one can be looking for the next project before that reno is finished. So by the time you need it it’s there ready to go.
But if you’re not renovating as a couple and you may not have time to look for it your self, it’s a good idea to find a buyer’s agent who can keep your deal flow up for you. And not any buyer’s agent will do, you need to get a buyer’s agent who is across the issues with renovators so a renovation buyer’s agents and if you do that then you’ll find that you would have consistency of income because you’ve got deals in the pipeline the whole time.
So, just to recap:
Firstly, don’t give up your day job until you’ve done the preparation to ensure that you can move forward. When you do it generally take around about 2 years as a minimum. Setup a legal structure by working with your accountant and your mortgage broker in which to renovate so you can build up an income history and the capacity to be able to get financed.
Secondly, you want to build your renovating muscle. So these things all go hand in hand. So do a few renovations so that you perfect the recipe, so you get really good at producing reliable income.
And thirdly, you have to create a pipeline of deals. So you will do that either by renovating with your partner or with someone else where one person’s doing the reno, the other person’s sourcing the next project so you’ve got projects coming on. Or using a renovation buyer’s agent so that you’ll always got a project coming up behind you when you’re finishing, so that you’ll have consistent reliable income.
I hope that’s been helpful. If you’re interested in knowing more about renovating or making a profit from renovating, why don’t you come along to one of our Free Trainings? So if you click the link on this page you’ll be taken to a page where you can register for one of our trainings and I’ll look forward to seeing you there!