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July 17, 2022

105. Vetting your Contractors and Yourself with Van Sturgeon

105. Vetting your Contractors and Yourself with Van Sturgeon

Join Mike Cavaggioni with Van Sturgeon on the 105th episode of the Average Joe Finances Podcast to discuss how to vet contractors. Van is a real estate investor who started as a contractor in the 90s and eventually transitioned to property management. He shares his journey in real estate. 

In this episode, you’ll learn:

  • From general contractor to property management
  • Passion for real estate
  • How to get the right contractor – Van’s vetting process
  • Budget talks: how to set caps on deals
  • Keep everyone on the same page with a detailed scope of work
  • And much more!

About Van Sturgeon:
Van Sturgeon is a real estate investor who has successfully created several businesses. To date, Van has amassed over 1,000 properties across North America and is passionate about educating new real estate investors on the importance of goal setting, dedication,  and taking that first step to investing in real estate. Over 90% of today’s millionaires are created through real estate. If you are looking for financial freedom through real estate, then this is the place to learn all the information and strategies needed to succeed.

Find Van Sturgeon on:
Website: https://vansturgeon.com/

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Transcript
Average Joe Finances:

Hey, how's it going everybody. Welcome back to the average Joe finances podcast. I'm your host, Mike Cavaggioni and today's guest is Van Sturgeon. I'm really excited to have this conversation with van. I'll give you a little bit about him. He started off as a general contractor in Chicago, started real estate investing back in the nineties and he started off by doing flipping and he transitioned into buy and hold. And. Further transition more into property management, and we're gonna, we're gonna touch on all this stuff today. I'm really excited to have him on, Hey Van, welcome to the show.

Van Sturgeon:

Thank you very much for having me out, Mike. I've been looking forward to this, conversation. I'm a fan of yours and, I'm looking to learn more about that Hawaii. Like I, I like, I've been always, I'm jealous. I'm jealous though. I'm sure. A lot of, a lot of the us average Joes would like to learn more about that too.

Average Joe Finances:

yeah. There's nothing to be jealous about. It's all good. I was fortunate enough to get out here thanks to the Navy. So my job moved me out here. Kind of transplanted me. I don't think if I was not in the Navy, I don't know if I. Wound up out here. So I'm, I'm very fortunate for that and I'm very, humbled by this experience. But yeah, it's been awesome van, I appreciate that. And I appreciate you. So the first thing I'd like to ask is I gave like that small little tidbit about who you are, but if you could, can you share with the audience, more about yourself and your story? Like, how did you get started? Why real estate, how did you become a general contractor? I know it's a lot, but we wanna know it.

Van Sturgeon:

Sure, no problem. Mike, I'm, I was born and raised in Chicago. I'm a product of the, sixties. And, I was living with my immigrant parents and a younger brother in a one bedroom apartment on the north side of Chicago. And every, like most folks I would imagine, my parents were out there busting their hump, trying to save as much money as they could, to be able to put it down toward, down payment to purchase their dream. And as they're working waste, squirrel away money, they, I don't know how, but they were able to find out that the apartment building that we were living in. Had gone up for sale. So instead of actually going ahead and trying to buy that dream home, they put all their money together. They borrowed money, some, some money from family and they put a down payment and purchased this apartment building. And so they became landlords and that happened in the late seventies. And when they purchased the building, it was a fully occupied, no problems, no issues. And then all of a sudden the, late seventies started to kick in things like, the Iran hostage situation. Interest rates were up at 18/20, some odd percent. The economy was miserable. Unemployment rate was bad. Just, it was just a general malaise in the, in a country. It was wayward. And at, during that time, there was that migration out of the city into the suburbs. And all of a sudden this fully occupied building was suffering through vacancies of 40, 50, 60%. And because of that, a lot of landlords in our area. And I think you could find that across, during that time, you could find that across the USA, a lot of, a lot of landlords couldn't hold. And they got to the point where they were actually literally torturing their buildings was set 'em on fire to collect insurance money. As I remember walking through in my, my, my neighborhood, and even to this day, I look at some of these buildings. You can notice a scarring of some of the, some of these buildings that they're already been renovated. And now they're, fully occupied, but you can see some of the remnants of these fires from. 30 40 years ago. Anyway. So during this time that, this happened and my, my, my family, we couldn't afford, this is our livelihood. This was it. Like we couldn't afford at the same time, we couldn't afford hiring electricians and plumbers and painters. So as a family, we buckled down and we did all the work ourselves. And, we just been, we just hung onto for dear life. We were able to get, we were able to, hang on and then that led into the 70, to the eighties, Where I went off to school. I graduated. And then I, I had some ambitions being a lawyer. My parents especially were pushing me in that direction. And then I just decided, even though it got accepted to law school, I decided that it wasn't meant for it wasn't meant for me. And I disappointed them. They had these illusions of, having a baby boy with a three piece suit and alligator shoes and that kind of, I crushed their dreams, but I told them that I really, I couldn't see myself doing that. I really enjoyed this whole general contracting stuff. And that's when I started my company and I got out there in Chicago in the late eighties and started knocking on doors and trying to create relationships on the hustle. And I CA and I started to grow a business. And as that as time went on, I kept running into the same cats, same these same people, these real estate investors who would buy these properties would hire me sometimes and renovate them and turn on and sell 'em flip 'em. And then there's someone who would do the buy and hold thing. And that's what it that's really where. The whole renovation. I'm sorry, the whole real estate, vesting, I was got exposed to, and as I was building and developing this general contracting business, I started dabbling and flipping and eventually led that led into buy and hold. And I've been really blessed in my life, Mike, I've there been a number of instances where I could have taken a wrong D wrong direction or, wrong road. And I was able to navigate. During, over the last 30 years and I've been able to parlay, this general contract. I still do that, but also now I have property management. I also have a restoration company that has extensive capital improvements on commercial, properties. I've done, I've built homes and subdivisions. Like I've done it all. Like everything that walks and calls are real estate I've done. And then I'm really thankful for that. I've hit a stage right now in my life where I'm I'm semiretired, I've got some really great people running things and I'm, I really, I enjoy doing these things, like meeting out, reaching out to folks that, are interested in learning more about real estate investing and what are things to do and not do, especially on that renovation side. That's where right now is where my calling is. That's my, yeah, this is what I do. I enjoy doing right now in my life.

Average Joe Finances:

Van that's an awesome story. That's an amazing story. Just from your entire background, I'm sitting here taking notes as you were going, to the point where, your family was living the typical, American dream back in the sixties, where it was, you save up you're in an apartment. You guys work really hard. Save your money for that down payment for that dream house. But then it shifted when they realized, Hey, we can buy the apartment that we live in and still live here and now become landlords. And it's almost like a whole career shift, so that's pretty awesome. And then unfortunately with the way things, happened and changed in the seventies. The whole family had to buckle down and come together. And I'm gonna say it's pretty safe to assume that's probably where your love for being a general contractor was born. When you were sitting here doing all these different projects with the family, I can't imagine, what that must have been like, especially, it's you're barely, at this point, being able to put food on the table now the family's Hey, we need to do this together. And. Fix these different items. We can't afford to hire other people for this. Just a lot of life changing things happening with, within a decade, right? Just that small period of time now. You go and, you have this passion in the back of your head, you love the whole being a general contractor. You love doing the work right. And, get accepted to law school and it's looking like that might be the route, but , you brought it back to do something that you're passionate about, but not only that you turn that passion into something that helped you build your wealth even more and grow a little further, a lot of times you hear people say, especially in the real estate, industry where, they're like, Hey yeah, I built my team. I got this great general contractor. I have a great realtor. I have this, I have that. They always talk about how they build their team. As you're going around to do these different jobs for people and they're doing flips and everything, you're like, it's the same people calling me all the time, the same people, I'm going to do these projects for them. And, you build that relationship. But then you saw what they were doing and got into that yourself. So I just, I just wanted to touch on that because I just think that's awesome that you followed your passion and turned it into something very lucrative for yourself. And it's grown to what it's grown into today. So that's awesome, man. That's awesome.

Van Sturgeon:

know what Mike, and as you're telling, as I'm listening to you, I realized for the first time, like what my parents actually did was like what some people do this thing called house hacking where, you get into did it with an apartment. You know what I mean? But that's what we actually, I guess that's and this is the first time I've, I really thought about it that. Yeah, that's what I did. That's what we did. We, they, we did the house hacking thing. Yeah. And another thing that is, you brought up also something to think about. Like I like to talk about is I've been blessed in that I was able to identify what really makes me, what I really enjoy, what I, I was passionate about it. I loved it. And I think that I tell the young people all the time when they're wayward and trying to figure out what it is they're looking to do in their. It's to really, to identify that thing that makes you happy. I think, all across all, everyone has a gift has this has a special op a special thing about them. And it's just a matter of identifying what that is and ex and indulging themselves and exploiting that, some of us are really good singers. Some was a really good baker. Artists and painters, you have to find, we're all blessed with that special with that gift. We just have to use, I identify it and go out there and enjoy it. And by virtue of that money and all that good stuff will come. So I, early on. Discover that I really did, even to this day, I enjoy looking at property like buildings and how they're built together and how to repair them and the problem solving that's associated with that. I still to this day enjoy it. And, and that's my skillset. That's what I, that's my gift.

Average Joe Finances:

I love it because when you're doing, I've talked about this on the podcast several times, but if you're doing something that you truly enjoy, can you really consider that work? You're doing something that, that you just, you generally love to do. And when you get enjoyment out of your job, it's just so much more satisfying when you do a good job, when you get the job done. I know so many people right now are out there struggling, and they're nine to five jobs. They, they're sitting in their cubicles and they're just like, man, this. This sucks. It's oh, I gotta work overtime. Or I gotta work this weekend because blah, blah, blah. We got this project going on and they just don't enjoy it. You took something that you loved and you ran with it and you turned it into a successful business. You took something that you really enjoyed that you were passionate about, right? And you turned it into something that you were able to run with and grow into the business that you grew today. Now, when was. That you decided you want to actually start doing the flips yourself? How often did you like meet up with these same, people that were hiring your company to do this work? When did that switch flip for you?

Van Sturgeon:

It was in the early a, I'm sorry, in the late eighties when I got started. And, my first flip was in 1991. I found a property in Chicago for 40, some odd thousand dollars. And, it was through a relationship that I had with a real estate agent who hadn't put the property up for sale. It was an off market deal and, I spent $17,000. Remember that specific number. When it's all said and done after about five months of, buying it, renovating it, then turning around and selling it. I was able to make $30,000, which at that time was a King's ransom. It was pretty much an average salary of a good, good, a good salary, $30,000 in 19 nine. One was a lot of money and that's was really when I, I was. It really opened my eyes to the opportunities of real estate. And, that's when I started to aggressively, keep doing that and identifying properties and exploiting that it's starting to scale. But at the same time I was working and, I was being, I was successful in growing my general contracting business and it got to the point where, these two started, I was burning the candles on both ends and I was over, I became, I was overwhelmed. Got to a point where I was sleeping on job sites. So there's one particular job site I was sleeping at. I was literally staring up. I woke up in this cold sweat in the middle of the night and I, all these emotions started racing through my head about the guy who was supposed to show up the plumber was supposed to show up and to fix this, he didn't show up the kitchen manufacturer was, was delayed. And I was, I got to the point where I was about to have a nervous breakdown. And I was, at that time, I was struggling to figure. Figure out a way to manage all of this. And I was able to just, find a general, a real estate investor who was, who had it all, who was an older gentleman who had this beautiful portfolio of properties who was fit 10. He seemed like he had it all. I reached out to him for help. And he was able to. To mentor me, coach me. I paid them. I paid them a lot of money at the time, but was able to sharpen me through the process of understanding systems and processes I needed to implement in my business. And it was the best investment ever made. And I was able to grow my, I was able to get away from that micromanaging. Because that was a mindset that I went into when I got involved in, the real estate side. And even in general co my general contracting business because of the mindset I had with my family of having to do everything yourself. And there's only so much you can accomplish with your two hands. And that's what I realized, through this gentleman that I had to work, not work in the business, but work on the business. And I've been that yeah, a huge prop. I've been a huge proponent of coaching mentorship. I've spent hundreds of thousands of dollars throughout the, over the last 30 years. From weekly, week seminars, books, coaching mentors, and all of them have been able to, I've been able to draw some fundamental piece out of that, that I can incorporate in my life. It's I kinded to Mike, to somebody who wants to learn how to play, the guitar or piano. Now you can go and buy that instrument to sit there and pound away at it. And maybe eventually you'll learn how to play a. Or you can go on YouTube and watch videos and you can, yeah, it may be, after a couple of years you might figure it out or you can just hire a guitar teacher or a piano teacher they'll sit right next, right beside you. And we'll show you how to go hold that guitar. How to, if you make a mistake, they're going to correct. To you and isn't that a much better way to learn. So I'm a huge advocate. If you really want get, from, if you really want to get somewhere in life, go find somebody and copy, copy from somebody. And if you can have somebody, that person just sit next to you and guide you to, the pitfalls and then navigate you through that whole process. Isn't that a much better experience. It gets you from point a to point B. Yes, it costs money, but if you were to learn that system, it's pins can comparison to which you can accomplish. Then once you've got that me, once you've got that processes in place, be able to carry for in, in the future.

Average Joe Finances:

I love that. That's fantastic. the fact that, so early on you hired a coach to help you, get yourself in that right mindset and really focus on building your business instead of being so involved in your business. It sounded like they got you to step back a little bit and realize like you can outsource certain things. You don't have to do everything yourself. I find a lot of people get stuck in. That whole thing about, it needs to be me. It needs to be my hands on this project. I need to be the one doing this part of it and this part of it. And this part of it. I found myself doing that with this podcast too. Once I started outsourcing certain things, it. It made the podcast so much for me so much better, at least cuz it was a lot less that I didn't have to worry about anymore. And I can just focus on doing the fun stuff, like interview, awesome people like you, and it's little things like that. And I'm a big advocate for, Coaching, going to different meetups and seminars and conventions and paying for those things because it's going to help you grow and scale because just like you said, that was a perfect example. And no one's actually ever given it like that kind of example before, but that's exactly right. If you're gonna, if you wanna go learn to play an instrument, you could say you could go buy. You can go on YouTube and watch the videos or listen to a couple things and maybe eventually figure it out. Might take you a couple years or you go hire that instructor. And, in a couple weeks you're playing a song because they're showing you exactly what to do, and that's the same thing you're gonna get out of a quality coach, right? You're gonna get somebody that's gonna be able to, not hand walk you and say, okay, here we go. Let's learn to walk. No, but they can assist you. They can help you take those first steps. They can help you when you start running. And show you the steps and showed you what worked for them and what worked for them might not work for you. Because I've talked about this before in the show where, you know, I encourage people to go to real estate meetups, as much as you can go meet people, go see what they're doing, shadow somebody. But. You can't go up to the guy that's been doing this for 20, 30 years and say, Hey, show me what you did. How did you get started? Because that was 20 or 30 years ago for them. You wanna go talk to the person that just started maybe 1, 2, 3 years ago and ask them what they did because it's a little more relevant, right? Things change. Programs change, investment strategies change the way you can get money changes. So yeah, there's a lot to be had with the value of a good coach. So I think that's awesome and spot on and I appreciate you bringing that up.

Van Sturgeon:

No problem. Hey, listen, Mike, I also, at the same time, if you screw up, trying to figure out or learn a musical instrument that, the cost is a couple hundred dollars, but in real estate, You don't get any do overs. Somebody you were talking about hundreds of thousands of dollars at stake. And if you make the wrong move on, on renovation, if you over renovate, or if you hire the wrong contractor and they take your deposit, run away. If you don't have, if you don't understand or know how to handle all that. And if, you can get, and I've seen it, I've seen people get devastated. They ha they get a great deal. But that great deal ends up souring pretty quickly because of, a contractor that's, that's using, that's taking advantage of them.

Average Joe Finances:

That's a great point. And that's why relationships are so important and, building, good relationships, having good rapport with your entire team, everybody that you bring on. And that's why it's important to also vet people too. You wanna make sure you understand who it is you're bringing into the fold and not just hiring some random person because they, their price is better or they seem a little bit cheaper. There's a reason why, you know, You get what you pay for, right? So you can have somebody come out here and do a quality job, or you could say, oh, this guy said, he'll do it for $20 an hour cheaper. So I'm gonna go with that guy. And then he takes your deposit and runs. So you never know. And that's why it's important to vet people. It's important to build these relationships and all of that. But speaking of Finding a contractor. This is actually a question I wanted to ask you is, especially because you've been doing this for a long time as a, GC, so how does somebody find the quote unquote right contractor? What do you do for your vetting process?

Van Sturgeon:

I literally have done thousands of renovations from apartments to houses to apartment buildings and medical buildings and that kind of stuff. And there's a process that I've learned. I don't wanna, specifically identifier talk about a contractor, but I just. Just wanna look at the totality of the whole renovation value, add process. It, there is a series of steps that you need to take in order to be successful at it. Oftentimes one step isn't done well enough. And as a result, the whole thing blows up and creates animosity between a contractor. That sometimes, it isn't a contractor's fault. It's you? You, the principal is the one that's causing all of these issues and acrimony. So really when I engage with folks and I walk 'em through the process, I encourage them to first. Identify the goal. What is the purpose of behind what it is that we're looking to accomplish with this renovation or value add on the multi-family space? What are we looking to do? So if we're looking to flip a house as an example, and we're looking to generate $30,000 in profit, Great. Write it down, say, okay, I'm looking to generate $30,000 a profit. If I'm looking to rent a house or an apartment, and you're looking to rent it to $1,200 as an example, wonderful. It's a goal. Write it down. And then once you have a clear understanding what it is that you're looking to accomplish with this renovation thing that you do rehab, then you gotta go out in the marketplace and validate. What that means is they gotta reach out to folks like, real estate agents, but more importantly, I think you need to go yourself and go visit properties and see what is, what is a house that's been flipped. Or going to be flipped or is in that general price range, what does it have that your does not? Or if you're looking at an apartment, you're looking at renting an apartment for $1,200, go on the marketplace, identify those that are out there, that aren't $1,200 to see what it is exactly that they have. Do they have porcelain tile, ceramic tile? Do they have a back splash at granite countertops? Do they have new light fixtures? Do they. Variety. There's so many different variables, so many different things that they have a swimming pool in that particular complex, yours doesn't does your house, have a double driveway, not, bunch of things you gotta be able to really on a granular level, be able to identify what it is that those properties have that yours does not. Because during this process, during this validation process, it is conceivable that your goal isn't cons it's not reachable. Because you might want to flip a house for, make $30,000. But the reality is that the amount of money that you paid for it, plus the amount of renovation is that's gonna cost. You're not able to make that. So it's really a opportunity to really get raw, get real and identify crystallize exactly what it is we're looking to accomplish. Cuz often I find new real estate investors in particular, I just walk into something like that sort of housing. I just no definite plan. They just wanna go and there's fix it up. As part of this whole Hollywood experience, the DIY crowd in 30 minutes, so house gets renovated and everybody makes lots of money and. Smiles at the end of the show. And a lot of people walk into that, but that isn't the case. When you knock down a wall, it doesn't miraculously pick itself up and get thrown into a dumpster. It turns into a million pieces that you gotta pick up and throw, right? So there's a lot of stiff, that Hollywood likes to gloss over. But unfortunately if you've ever gone in and done it to work yourself, you'll know what I mean. Like it's not, just, it's not. And I, and that's one of my, when I, what I find with a lot of folks is. New real estate investors. So on their first project or first property, they'll go in and do the whole DIY thing. And so two, three month flip or something along those lines, or re a buy and hold kind of thing turns into being eight because of the length of time that it takes to do renovation all, by yourself. And, you gotta take the week you're working, you got a full time job, right? So you gotta do it on the weekends. You gotta do it on, in the evenings. You gotta take vacation time. That first experience as wonderful. It is. And lots of money that you might save. A lot of folks say, you know what? Once is enough and they don't wanna do it. So then the second flip or second opportunity, they go out and hire general contractor, but then they realize that the general contractor is, over by is gonna require a lot more money. Can't control quality. And then all of a sudden they disappear and reappear and there's a whole bunch of issues and factors. And then that experience isn't fun either. So now, so people are in limbo now, what is it that, what can we do? And that's one of the things I talk about in this process that I've developed is that if you follow through on this process, that whether you like to do it, the DIY or you like to hire a general higher general contractor, you'll be in full control over your project. But also the same time, you're going to be efficient and you're gonna hit your goals and target. So part of that whole goal validation process is one thing. And then you move on to. Identifying like a budget, what it is that we're looking to accomplish. And oftentimes, it could be monies that we have to set aside. It could be lines of credit. There's a whole bunch of things that you can do. The reason why I talk about budget is that we need to know what the number is that we're gonna put. We can't loosey goosey wing it and, just keep reaching into our pocket. There has to be a finite dollar amount that's put toward this project so that we work everything associated with it to stay under that dollar. So if we don't have a dollar amount, it naturally will just grow. So that $50,000 budget will turn into 16 and 70 and 80 and long. All of a sudden whatever goal you had about this profit wise evaporates. Right?

Average Joe Finances:

I wrote down some, a lot of notes while you were talking, because this was golden stuff Van, absolutely awesome. So one, you need to identify the goal, right? The next thing you need to do is validate the goal. And I think this is probably the most important piece that you talked about that, we I've talked about goal setting on my show several times. I've had several people come on and talk about goal setting, and it's always been about the goal. But man, I think you're the first person to say, go validate that goal. And by validating it, go out and look at what other people did go look at the properties in the area. What kind of flooring do they have? What kind of countertops do they have? And then when you have that, is it real? Is it realistic? Is it attainable, right? Do you have the right budget to fit that? And that's the other part of it too, is actually setting that budget, setting that number. Now I do wanna ask you, so when you are looking at these projects and you go and you set that budget, you set that cap, do you set it to the point where it's a, if you were to go over a little bit, you're still gonna be okay. Or is it like no crap. If I, if I. Go over this number. It's a done deal. Like how do you set that up,

Van Sturgeon:

Mike, even to this day, as many, even though I've got, a wealth of experience and I've gone through this, I will, I'm still learning as my myself. So you go into, a renovation with the expectation that is gonna hit your target and everything is under control, but there's always gonna be situations. Whereas when you tear out a wall of a sudden, you realize termites are behind it. You have no way until you rip a wall apart to see that, or, there's load bearing, points, on the actual structure that need to be addressed because they're starting to weaken. There's a lot of things like that, that once you get in the midst of a renovation, you realize, if, a kitchen manufacturer goes bankrupt, then all of a sudden the Bo the deposit money that you left to you put toward that evaporate. That's one of those things that every good budget should have a contingency fund, a anywhere between 10 to 15%, maybe even more, but somewhere within that range so that you have somewhere about cushy Joan, but you need to have established a dollar value of what that budget, what that budget is. Another thing. One of the things that I find also that a lot of new real estate investors miss out on, there's a real, there's a lot of opportunities out there for government, programs and subsidies and assistance programs. So many times I've taken advantage of, a, initiative where they want. Everyone to upgrade all of their lighting within the property to L E D. And so the government's out there giving out free money. If you went out and did all those, retrofits. So I would take that. I would go out there and I would, I would hire the electrician. And then once I paid him and took care of that, I would give invoice to the government agency. And shortly thereafter, they'd cut me a check. So those are a lot of there's opportunities, a. That folks need to look into in their specific areas where they live or where this property is. You'd be surprised at how many different things from, there's low income like zones, where you can take advantage of some really great, phenomenal either, deferments, property taxes, or also on actual loans, like really low interest loans. So these are the types of things you need to look into when you establish that budgetary number. Then when you then after that, as in, in the process of planning and managing this whole renovation, being successful at it, then I tell people to get into the creation of a needs and wants list. And what that is that you go around the perimeter of the property, exterior to interior, and you look, and based on the information, the remarket research that you did, when that gold validation phase. Based on the condition of your property. You start to pull out the items that you believe you think you'd like to address. But they need to be put on different sides of the column. So these are things that need to be done. So if you have a hole in a pot, you got a hole in a driveway, a pothole, that's a trip hazard. That's something that you need to address. If you got a hole in the roof, that's something that you need to address. If you got a broken window and it's all allowing the elements, that's a. So those are the items you put that no matter, all the money in our budget will go first to address those items. Then on the one side are things that are subjective. Those are, the replacement of windows as an example, oftentimes people, new real estate investors in particular rush to replace windows because they're 30, 40 years old. And I say not that's not a need, that's a want in if there's an event, if that is, if there's money in the budget to be able to address that we will. But if not, then we are going to, we're gonna look after other things and because there's a limited amount of money, we all have to live within a budget. And you got on a wants list would be that, lime blue, lime green kind of carpet from the 1980s. It's ugly and hideous to look at, but nevertheless, still functional. That might be, that's an item you would put under the wants column. So that in the event, if you have money in the budget to do their renovation, you go in and you replace

Average Joe Finances:

that. I don't know, man, that might be a need. I'm just saying those, some of those carpets are pretty rough.

Van Sturgeon:

They are rough. But at the end of the day, it's all a matter of how much money we have in the kitty to be able to put to them. And sometimes we gotta suck it up and, or we gotta find more money somewhere from somewhere.

Average Joe Finances:

That's a great point. That's a great point. I wrote that down too, like having your needs first wants list because there's a lot of times you'll go in there and you're looking at a project you're looking at what you wanna do, the changes you wanna make. And you're, the idea is formulating your head and you're associating some type of price with it. But until you actually go and really crunch those numbers and really realize that, Hey, putting the, you. The flooring in over here and ripping out the carpet, you know what we wanna change it to, you might have a number associated with it, but in reality it might be a little more expensive. And that's why you have to sit down and actually really make this effective budget. So that's awesome. And you said somewhere between 10 to 15%, right? Give yourself a little bit of that wiggle room, right? Yeah, it might be great to go into something saying, Hey, I know that, here's the number, but maybe take it down like another 15% just to give yourself that, that grace. So that, if you do go over you're still in a pretty good spot because there are things that happen all the time. Like you said, where you take down a wall and all of a sudden you see there's all this termite damage, especially if it's on. A load bearing, beam, like you were saying that can really start costing a lot of money when you have to start, changing some of that stuff out. When you just thought you were just gonna replace some drywall, or just knock down a wall and open up a space. And, then you realize, you're in a much different world at that point. Yeah. Fantastic.

Van Sturgeon:

Once you have that list and you've got a good understanding of what, what your property needs and , then you, you move on to what I call, a detail scope of work. Okay. And that is an actual document that will identify every single nuance that's associated with your renovation. And so that goes to the extent of identifying the paint, the hardwood floor, that you're going to replace the appliances, all of the kind of stuff that you would wanna get done. So like I come from the residential and the commercial side of, for re construction. And there isn't on the commercial side. Any project out there that doesn't have a detailed scope work that goes into that, identifying that. And unfortunately, on the residential side there isn't that very rarely do I come across somebody who sat down and put a document like that and hopefully. You can, people can realize that how important it is to have a document like that. Not only to the extent of identifying the paint color and the pain manufacturer and the quality of paint, but even I strongly recommend the actual processes of, of what you wanna see accomplished before, during the whole paint process. Again, there's a situation I had a client in, In Cincinnati. I think it was who had a 10 unit apartment building. This was before I got involved with them, they had hired a painter to go through all the apartments and painted them. And then six months, eight months later, our property manager comes back to them and says, Hey, we got a problem here. We got the paint that, this newly, this paint is chipping it's scaring, the strip. Like it would come off the wall in sheets. It was after the fact, they realized that this painter that they had hired had used the, the worst quality paint that they could, he could find. And also at the same time, there was no wall prepped done whatsoever. He just painted over every dust ball, every grease spot, anything that he just painted because Hey, at the end of the day, there was nothing written in the contract that. Or the engagement that you as the principal, you, the buyer says, Hey, this is what I want done. And if you don't have that, what do you expect? What do you expect a general contractor or a painter or a electrician or whoever they're gonna cut a corner at the end of the day, this is about making money. They're not doing, they're not there to perform a perform for you out of as the goodness of their heart. They want to, this is if they can cut a corner and save time, which means they can go somewhere else and work and make more money. They're gonna do that. So please, one of the, there should be a lot of takeaways from this, but one of the bigger takeaways should be that get into the process of creating a detailed scope of work so that you know exactly what it is. You're getting outta this renovation and also the general contractor or the trade people that you're dealing with also know what's involved.

Average Joe Finances:

Yeah. Word words, matter details matter. And that's the key thing with what you're saying too, not just a scope of work, but a detailed scope of work. So that everyone's on the same page. And it's not just you saying, okay, this is what I want, like in your head, you know what you really want, but that's not, what's on, that's not, what's on paper. That's not what everybody else is expecting. So you set your expectations at some certain level. but not everyone has the same expectations as you, like you said, if somebody can cut a corner and save a little money on paint and save some more time so they can go get to that next job, they're gonna do it. If you don't tell them exactly what you want. Yeah, that's huge. That definitely is one of the key takeaways for.

Van Sturgeon:

Yep. And so then after you have that document, then you move on to actually the whole contractor now finding that contractor tradesperson and, there's, unfortunately this overheated real estate market that we're in there seems to be, a problem. I, I come across in folks that I talk to clients that I talk to and they're struggling and trying to identify. Good quality people to do work on their projects. And, I've, I tell everybody that, first of all, wherever you, wherever areas that you're working in, you should be creating power teams. So you should have, a real estate agents. You should have mortgage brokers. You should have wholesalers. You should have, property managers. These are people that you should have working relationships with as part of your team. These are people that are helping you identify deals, structuring the financing insurance, and managing all that stuff. So each one of these people are part of your team should have references of individual specific in that area of contractors and trace people that you should first tap into. There's nothing better than having a reference of somebody. From somebody that says, Hey, yeah, this guy has done work for, so and so has done work for me. He's a good guy. You should talk to him. So that's where you start the whole process of finding somebody often. I don't see that, that I don't see that with folks in, when they're trying to go through identify those individuals. And first of all, that's what you gotta do. And then once. Once you've exhausted that the next layer is, these areas like the real estate investment association, meetup groups, those are the areas where you might, hopefully you've established some relationships with people. Again, fellow real estate investors, I find are pretty helpful people. Like I'm a, I live, I have a mindset of abundance. I wanna help people because I've done very well for. So those are the people you should reach out and say, Hey, do you know anybody that can help me out? Cuz I need electrician or I need a John contractor. And again, they will provide you with that. The next level beyond past that is these, social media. There's, there's Facebook groups that are so many different opportunities. Like I'm talking as an old fogie. When I got started, man, though, if you're looking for a contractor, you'd be going to the yellow pages. There's a big old book and you sit there and you go through thousands of pages, identify people and call 'em up. And that's where that's the background I've got nowadays. It's so easy on your phone. You can identify, you can do a search or go join a Facebook group and you can post a comment and say, Hey, I'm looking for a contractor. Now. Those are the areas that you should exhaust. And you shouldn't be going to places like, Craigslist or K Gigi. Like those are areas that you're not going to, there's no references. Those are just, that's not the place to go because oftentimes, we, it's just motu a flame. We get drawn to that. The cheapest price, the guys that's gonna give you a great deal, but oftentimes what happens to that moth when it hits that. That's what happens, that it's always like that. And we're always, it

Average Joe Finances:

gets burned just like you will.

Van Sturgeon:

That's right. And it's, we're always drawn by it and we're business people. Yeah. Like we wanna get the best bang for our buck, but try to avoid that temptation, use the references, use individuals, those groups that I mentioned to you, for sure, we should find somebody, a number of people that are there. And one of the great things about this detail scope of work, when you put everything together. One of the common themes I'm hearing again with this overheated real estate in market is that people are so busy. These contractors or trace people are so busy by virtue of having a detailed scope of work, where you got diagrams, specifications, drawings, everything put together to the extent that the general contractor or trace person doesn't even have to visit your job site, you are, by virtue of that, you've turned yourself into a magnet. For good quality contractors to trace people to wanna work with you because you on your, because you are a professional, you got everything. I'll figure it out. You don't have to, they don't have to sit there. Hold your hand. There's that whole process of determining what it is that you wanna accomplish with that wall or what the color of the paint or the type of hardwood you got it all figured out. And oftentimes. People. And my first gauge was often with clients is, I asked them like what they, what are their experiences that they've gone through prior to me dealing with them or getting involved with them? One of the things I con constantly hear out is, oh, I call 20 some odd guys. Nobody re very few people return my phone call. Six people return my phone call only four showed. Three of them gave me a quote and all three quotes are all over the place. One's 20,000 other. One's 40,000, 60,000. And he scratched your head. Wondering why is it that these prices are all over the place? And nobody wants to quote, and I'm telling you the reason why is because you don't have a detailed scope of work where you can get people, compare apples to apples quotes. So that's why you have quotes all over the place. And then also you're attracting the bottom of the barrel because me as a good quality contractor, I'm not gonna quote on your job if you don't have your act together, cuz I'm busy. I got other, like I got, I don't need, I don't need the aggravation. So if you get your stuff in order and you come to me and you knock on my door, I'm gonna, I'm gonna talk to you. And I might very well slide you in somehow in my schedule because I see merit in it. Cuz most people. Are not set up that way. So I strongly encourage you again. One of the takeaways of, all you folks out there listening, you wanna get into successfully planning and managing a renovation on your income property, your residential home. I don't know. You gotta follow the steps I've provided to you. And you'll be, Le light years ahead of your, of the average person out there. Because oftentimes us contractors and trades people have to deal with people where you gotta spoon feed them, or you gotta hang, hold their hand and figure out everything.

Average Joe Finances:

I love that Van that you really hit to the important parts of why it's so important to have that description of what you want, that, that detailed scope of work, that is huge. And when you talk about going to the different real estate meetups and meeting these people, as you build your network, you're gonna, you're gonna find people. Have great general contractors that can help you, but don't be the guy that burns that bridge because somebody referred their buddy over to you and they show up and you don't have that detailed scope of work. And you're like, they show up and they don't. They're like, what do you want? What are you really trying to accomplish here? And you don't have your stuff set up. So I think that's another key, thing that's important as well. The other thing too, as. You had mentioned too, back in the day, when you first started, you had to go look in the yellow pages, when you were trying to find people to do different jobs and everything, where now, you know, with, in the age of social media, it's just, you have it right there at your fingertips. You just do a couple Clipy claps of your keyboard and you're gonna find something. And then on top of that, there's reviews, there's different ratings. You can see what other people are saying about their work and what they're doing. You don't have. You didn't have that back in the nineties when you started, you had just the yellow pages and just does this person give off a good vibe when I talk to them, when I meet them and we go over everything. So that's huge. So many different resources right. At your fingertips, it's just a matter of utilizing them and util utilizing them the right way. I love it. Van love it. I want to go into, something that I just started recently, not too long ago with the show and it's. It's called the final round. And I want to ask you some four kind of hard hitting questions, before we kind of wrap things up. So if you're ready, we'll get that party started because we talked about some awesome stuff, man. And it's, this is gonna be good. I think.

Van Sturgeon:

Cool. Great. I'm

Average Joe Finances:

ready. Awesome. Let's do it. Okay. So first question for you because, and this is gonna be a doozy, especially with all of your experience. And you've touched on every aspect of the real estate industry. So I'm really excited to, to hear what you say to this one. Okay. What's the biggest mistake you've ever made.

Van Sturgeon:

The biggest mistake that I've ever made. Ooh, that's a really, that's a deep one. Mike, that's a deep one. I will say that the biggest mistake that I have made is that I. In the beginning was so driven and focused on success. And I worked 1820 hours a day, sleeping on job sites. I even got to the extent of even, delayed my honeymoon. I got married. I delayed my honeymoon a whole year because I had just acquired a property that if I had to do it over again, and my biggest regret or mistake is that I would've spent more time with my loved ones because. He, at my age right now, I'm not, I don't operate the same way as I would've 30 years ago. So that's my biggest regret. The biggest mistake.

Average Joe Finances:

Okay. No, that's a great answer. Great takeaway from that too. Okay. What is something that you've learned that you wish you knew when you first started?

Van Sturgeon:

I wish that I was more aware of the whole aspect of hiring or being involved with coaches, mentors that side, because I'm such a huge proponent of it. I've seen so much value from it. It's enriched my life. And I wish that I had seen that I had known about that early on in my life. And because definitely if I had, I would've fast forward my, my, or I would avoid a certain. Certain pitfalls along the way. If I had that tutelage, that guidance from somebody who's already gone through that process before.

Average Joe Finances:

Wow. That's really good. That's really good. I appreciate that. Okay. Now, for somebody who is just getting started today, do you have any tips or tricks that you would recommend to someone that is just starting this off?

Van Sturgeon:

I'm gonna say that everybody listening, that we are surrounded by opportunity. There are next door to you down the street, cross town. There are opportunities. There are deals there's opportunities around us, but we have to get into the proper mindset and we have to go out there and do the work. Incrementally step by step every single day to, to encounter, to be blessed by those opportunities. There are the deals out there, and I oftentimes find a lot of frustration with new real estate investors who go out there and naturally go to the MLS. And they think that's where you're gonna find deals. But folks. It's rare that you find those is cuz there's millions of other eyeballs looking at those same opportunities. Also you need to do you need to network with real estate agents, wholesalers, mortgage brokers, property managers. Those are the people that have the insights or the fingers on the pulse of their communities, where you can find great deals. And it's from those great deals is where you start to form, a real estate portfolio or being able to be create success within real estate.

Average Joe Finances:

Yeah, I love it. Love it. Okay. Awesome. All right. Last question. Do you have a favorite business investing or real estate related book or podcast or both?

Van Sturgeon:

I think that think and grow rich by Napoleon hill is a tremendous book. And because it's all comes back to mindset and I'm a strong proponent of, it's amazing. If you have, you've changed your mindset. If it's a positive mindset, if it's a mindset of abundance that it's, you are, you just look at things differently. Everything is possible. And it's such a huge hurdle to overcome if you're able to just change that, things look differently when you do so it's a book that pushes that, that line. And, I strongly suggest people read it.

Average Joe Finances:

That's great. Cuz mindset is huge. We talked about that a lot. We talked about that a lot today, just in our conversation. So that's absolutely awesome. Okay. So that was the final round. Those were the four questions I wanna ask you, but I do have one more question for you van, and this is probably the most important question of all, because there's, there are a lot of takeaways from, this interview and I think you shared some very powerful information and for my listeners that wanna know more about you and, Just, Hey, I wanna know more about what Van's doing. I wanna learn, does he have any type of programs I could look at? So where can people find more information about you? Do you have a website, social media, anything like that you could share with us?

Van Sturgeon:

Sure. I'm, I'm on social media, Facebook and Instagram. You can search by name, Van Sturgeon I'll pop up. I'm also have a website I'm really into I'm really, passionate about helping people. I enjoy the engagement. And so folks that are struggling with are trying to. Figure out a value, add renovation and why to want the tutelage and the guidance to be able to take them to navigate 'em past those treacherous waters into success. First go like I would go to my website. There's a lot of information over there. And also if you wanna contact me, you could do that through social media, as well as through my website.

Average Joe Finances:

All right. Fantastic. Appreciate that van. Hey guys, I'm gonna make it easy for all of you. I'm gonna have all of his links in the show notes and, just all you gotta do is copy and paste or click, and you'll be able to find out more about van, see what he's doing and get connected with him. And, yeah. Hey van, this was absolutely amazing. I, I. I'm really humbled and appreciate the fact that you took some time to talk with me on a Saturday of all days today. Especially in the chilly air of Toronto so I appreciate that.

Van Sturgeon:

No, it was my pleasure. I was looking forward to this, to this podcast interview. I've been a great fan of yours and continued success, preaching the good word and, again, it was a pleasure meeting with you today. Awesome.

Average Joe Finances:

Hey, I appreciate your kind words and Aloha from Hawaii.