James Fitzgibbon of Ledge Buys Houses: “Positivity is another characteristic that helps in this industry”

Positivity is another characteristic that helps in this industry. When you start a project, there are a bunch of surprises and nasty situations you have to deal with. You have to maintain a positive attitude or else the grind that can be a rehab can bring your mood down. Shows like Flip or Flop and Fixer […]

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Positivity is another characteristic that helps in this industry. When you start a project, there are a bunch of surprises and nasty situations you have to deal with. You have to maintain a positive attitude or else the grind that can be a rehab can bring your mood down.

Shows like Flip or Flop and Fixer Upper with Chip and Joanna Gaines have really glamorized the creativity and enjoyment that comes with buying a rundown home, fixing it, and then selling it for a profit. Some amateurs have ventured into this industry and have made a lucrative career out of it. But others, particularly when a market is stagnant, have lost their shirts. As a part of my series about the‘5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties’, I had the pleasure of interviewing James Fitzgibbon.

James Fitzgibbon is a real estate broker and investor in Central Florida. He is a husband and father of two sets of twins. His company Ledge Real Estate Solutions specializes in rehabbing properties. He is passionate about family and helping people with difficult situations. He has been rehabbing homes for the past 19 years. He writes a blog, “Sell Your Home Central Florida” which gives advice on how to sell your home.

Thank you so much for doing this with us! Can you tell us the “backstory” about what brought you to the Real Estate industry?

I was looking for a side hustle that I could turn into my own business. I had always been interested in the construction industry and was trying to create a business of my own. My undergrad was in finance and I saw the house flipping business as a great way to blend my finance degree along with my construction interest in order to create a career I loved.

Can you share with our readers the most interesting or amusing story that occurred to you in your career so far? Can you share the lesson or take away you took out of that story?

When I bought my first real property 20 years ago, I was in a bit over my head. I wanted to try my hand at flipping properties and figured the best way was to buy a fixer upper and get to work. I bought the house from a wholesaler and quickly realized it was a bigger project than I anticipated. I called one of my college buddies who had recently done a rehab on his home and asked him for advice. When he was rehabbing his house he met a homeless alcoholic construction worker named Bob. This guy knew everything about construction since he used to own a construction company before the bottle got the better of him. The deal my buddy struck with him was that he could sleep in the house, receive $30 cash every day. In return, Bob worked alongside my buddy teaching him the various trades and techniques. I struck the same deal with Bob and over the next three months learned a lot about rehabbing a house. In the end, I didn’t make any money on the house, but I did learn a ton of valuable lessons and what it took to rehab houses.

I think the lesson I learned is that it is OK to take risks and try something new even though you do not know what you are doing. Figuring things out as you go is sometimes a fine path to take.

Do you have a favorite “life lesson quote”? Can you share a story or example of how that was relevant to you in your life?

My favorite life lesson is really the golden rule. To treat others the way you would want to be treated. With every deal I do, I try to treat the other party the way I would want to be treated. An example of this occurred last year. Because of the Covid pandemic, I actually allowed 2 people to get out of their sales contracts with me because it was causing stress in their lives and it was not the right thing for them to do at the time. It cost me two deals that would have been nice profits, but it was the right thing to do.

I had another client who was having an issue with his bank in which they were calling his mortgage. He wanted to sell the house to me but had enough equity to pay off his current loan. The right thing to do was to coach him on how to open a home equity line of credit and pay off his first mortgage and be able to stay in this house. That’s what I did.

Are you working on any exciting new projects now? How do you think that will help people?

We are always looking at new projects and trying to determine the best use of our capital. With any of our deals, we create win win situations so in essence, we are helping people.

What do you think makes your company stand out? Can you share a story?

I think our ability to garner such great reviews. One of our clients described his experience with the following review.

“Before I met Jim at Ledge, I had all but given up hope to sell my house. I had tried four different businesses and all I got was jerked around and disappointed.

Then with dwindling hope, I called Jim. Boy did I get surprised, Jim came right over and from the beginning to the end (which was quick) things couldn’t have gone better.”

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

For the first 10 years, I was rehabbing homes as a side hustle and it was not my full time gig. In the early 2010’s, I was getting tired of doing my full time job as well as my side hustle. I met with a career coach who helped me to clarify what my ideal business and career would be. It was owning my own real estate investment company which I am now doing.

You are a successful business leader. Which three character traits do you think were most instrumental to your success? Can you please share a story or example for each?

Risk taking is probably the most instrumental in my success. I shared earlier the story of my first flip in which I took the risk and jumped into the industry.

Positivity is another characteristic that helps in this industry. When you start a project, there are a bunch of surprises and nasty situations you have to deal with. You have to maintain a positive attitude or else the grind that can be a rehab can bring your mood down.

Focus is another characteristic that I find helps in this industry. I think my ability to stay focused on the task and project at hand is one of the reasons our jobs normally come in under budget and turn into awesome homes.

Ok. Thank you for all that. Let’s now jump to the main core of our interview. Can you share 3 things that most excite you about the Real Estate industry? If you can please share a story or example.

I really enjoy the project nature of the the industry. Each project has it’s own struggles and idiosyncrasies and I enjoy jumping into the project and figuring out what needs to be done.

I enjoy the fact that it is an industry that can make you significant amounts of money if you are careful and methodical in your investments and projects.

I also appreciate the fact that there are so many different niches and segments to the industry that can allow you to pivot your business and never get bored.

Can you share 3 things that most concern you about the industry? If you had the ability to implement 3 ways to reform or improve the industry, what would you suggest? Please share stories or examples if possible.

One thing that concerns me now is the appreciation in the home prices. The market is so hot right now that people are buying anything they can get their hands on at full price. This is pushing up prices to levels that I do not think are sustainable.

The new e-buyer services that are hitting the market are pushing the margins lower and lower. There is a mad grab in the industry for market share and this is hurting the business. These big wall street firms are losing money on their flipping business in order to grow their business. This hurts the small players who are trying to make money on every deal they do.

The real estate investor community does not have the best reputation. Many of the investors are practicing real estate without a license and this leads to investors taking advantage of many sellers. I would like to see the authorities crack down on investors who do not have a real estate license and thus a code of conduct they must adhere to. This would clean out many of the unethical and dishonest players in the industry.

What advice would you give to other real estate leaders to help their teams to thrive and to create a really fantastic work culture?

I have to go back to the golden rule to treat others how you would want to be treated.

Ok, wonderful. Here is the main question of our interview. Can you please share with our readers your “5 Things You Need To Know To Create A Successful Career Buying, Rehabbing, and Selling Properties”? If you can, please give a story or an example for each?

1. Learn How To Generate A Deal

The real secret to being a real estate investor is in finding the deal. If you can master a method for finding off market deals then it will be your golden goose. Forget about trying to find deals on the MLS or online auctions. There is too much competition there.

Understand this. Nobody is going to give you a really good deal. If it is a good deal, they are going to do it themselves. If you want to be in this game for the long haul you need to create your own deals. Get on BiggerPockets.com and learn about the various methods you can use to get a deal and start implementing them. If one works for you in your market, keep doing it. Grow your marketing expense over time with your profits and grow your business.

2. Know your numbers

I think the number one reason most new real estate investors fail is that they do not know their numbers. It is extremely important that you make a fair offer for the house and complete the renovations within your budget. Below is a simple plan to help you make better offers.

How we determine our offer price

Determine the After Repair Value (ARV)

Once you have found a house, you need to determine what you will sell it for once it is fixed up. I recommend averaging the prices on Trulia and Zillow. Use this average as your After Repair Value. This should be a fair price and if you do the renovations correctly, you should be able to sell the home for at least this price.

Determine the Cost of Repairs

Next you need to estimate the cost of the repairs to the house. This can be a challenge for new investors. You need to take the time to learn what it takes to renovate a house. I recommend getting on BiggerPockets.com and learning all you can. I highly recommend Jay Scott’s “The Book on Estimating Rehab Costs : The Investor’s Guide to Defining Your Renovation Plan, Building Your Budget, and Knowing Exactly How Much It All Costs”.

If you do not know your numbers you can get yourself in trouble. When planning your renovations, only do the updates that are necessary to sell the house.

On average, a whole property renovation could cost around $60,000. I put together a list of the average renovation costs in my hometown below.

Do the Math

As a new investor, I would recommend using a 30% margin. This will allow you some wiggle room in case you have unexpected expenses when renovating or the market value starts to go down when you are renovating the house. I will use an example of a typical house with a modest renovation budget as an example.

After repair value $ 300,000

Less 30% margin $ 90,000

Cost of Repairs $ 40,000

Offer amount $ 170,000

3. Don’t give all your money to gurus

One mistake I see new investors make is they spend all their money on the learning process. They spend thousands of dollars on guru courses and have none left over to actually purchase a house. Join your local real estate investor club and start learning what you need to know. Be careful with the guest speakers though. They are there to sell you a weekend learning package. Usually this is reasonably priced and you can get some good information from them. Just be careful you don’t get too enthusiastic that you drop $6,000 on their boot camp and don’t have any money left to buy a house. I have already mentioned BiggerPockets.com and I think you can get access to all you will need to know at a very reasonable price.

4. Don’t try to make your flip an HGTV show

I think a lot of real estate investors have spent too much time watching shows on HGTV and fall in love with the renovation process. Once you become a seasoned investor you realize they all become the same. I use the same tile, colors, cabinets, accessories, materials on each house. It makes my life easier and the contractors know exactly what to do. I avoid making significant changes to a house. I may rip out a wall to open up a kitchen, but major changes usually just increase the cost and might not bring in that much more profit. Try to keep your renovation budget to a minimum and remember you are trying to bring the house to retail quality at a reasonable price.

5. Protect your reputation at all costs

Real estate investors are not the most respected players in the real estate industry. Some see them as quick talking shysters trying to steal houses from unsuspecting sellers. Some buyers fear an investor flip thinking that the repairs were done at minimal cost. This does allow the good investors to shine. In order to make sure you are shining, always treat people the way you would want to be treated. When remodeling a house, don’t cut corners. Make sure your end product is something you can be proud of. Make sure every deal is a win win deal for all parties. If they can’t give you a 5 star google review and tell all their friends when you are done, then you have failed to protect your reputation. You may have to give up some profit to make sure you earn these feelings, but it will prove to be valuable. The shysters never last in the industry. The people who treat people right and respect their clients will win out in the end. If you protect your reputation like this you will find more deal coming to you in surprising ways.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the greatest amount of people, what would that be? You never know what your idea can trigger. 🙂

If I could inspire a movement, I would like to see personal finance taught to every high school student in the country. I went through 18 years of schooling with an undergrad in finance and an MBA in international business and never learned anything about personal finance. I think this is a shame. It recently inspired me to sponsor the Dave Ramsey course in personal finance for my son’s high school. I wish every school could offer this course to their students.

How can our readers further follow your work online?

I have a blog at https://sellyourhousecentralflorida.com. People can also reach me via the contact page at our company website at www.ledgebuyshouses.com

Thank you for your time, and your excellent insights! We wish you continued success.

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