Wrestling a project like this to the ground takes time.

We entered escrow with high hopes and not a small amount trepidation.

Geography

Morro Bay is a cozy inlet in the San Luis Obispo coastal communities.

Tips For Renovation

There are a sequence of risk factors in any restoration or renovation project:

1. Due diligence and underwriting

2. Partnerships and capital

3. Renovation Proper

4. Marketing and positioning

There are certainly environmental or market conditions we can’t control:

• Interest rates for hard money loans
• Average expected returns from investors and capital partners
• Availability of local top realtors
• Expectations and demands from sellers
• Market conditions upon completion of project

Success comes from accepting these factors as constraints and working within them to reduce or eliminate risk factors we can control. For example:

• Underwriting. Our underwriting process begins with consersative assumptions informed by our years of experience and the input of trusted partners in related industries such as appraisal, mortgage lending, other investors, and contractors.

• DD. We visited the property and saw the “shock factor” of the existing scaffolding. We explored inside and out and consulted with contractors, engineers, realtors, and neighbors before even putting in an offer. Would this project fly? And if so, at what price? We studied the MLS data of current listings and recently sold: how does a home with an ocean vista and another without one compare? What is the average price per square foot? How does proximity to the sand factor in (compared to elevation and coast visability)? What is the premium on nicer, modern finishes vs. a “quaint” but dated home?

• Partnerships. We began sharing the opportunity with our large network of potential capital partners, contractors, interior designers, and met with new folks with high resolution local knowledge of Morro Bay.

• Realtor. We connected with a local EXP realtor with serious hustle. (EXP is a brokerage which rewards entrepreneurial effort.) Not only did she advise us in one and then two offers, but she has offered invaluable process guidance along the way.

• Relationships. We want to solve the seller’s problem. They have a big, monthly expense and they’re staring down the barrell of an even bigger one-time expense to get this project completed. Although the due diligence period was extremely complex, and took time, we tried to reassure the seller that we are the guys for the job. We also shook hands and spent time with a variety of neighbors. They all are rooting for us, wanting us to succeed.