Home > Past Events
Rehabbers Club Meeting
Saturday, Feb. 15, 2003
9:30 - 11:30 a.m.
Rehabbers Club of Metropolis St. Louis
Featured speaker: Amrit Gill
Attendance: 60 people
Notes taken by Missy VanWinkle:
Never commit to more than you can do – as a matter of fact, commit to less and then over-deliver.
Start small. You have to start small. Make your mistakes on the little ones (and you *will* make mistakes.)
Cultivate a relationship with a bank not a mortgage lender. They're much more flexible. Planters Union gave me my first chance and they have grown with me. On my early projects they would even send the disbursement guy out to the projects and he'd give me helpful advice.
After you have done a few, sit back and digest what you have learned. You have to remain in your comfort zone.
My father was known as the most ethical officer in the army. When my lawyers and accountants were telling me that I should incorporate offshore I asked them why and they said it was to avoid taxes, that it was entirely legal. I told them No! (I don't remember much more enough to quote but the feeling I got was that he believed he earned the money in this community and it wouldn't be right to deny the community the support it rightly earned. A "render unto Caesar..." sort of value expressed.)
How to get over your fears? Well, I think part of it may be personality. My father believed in education continuity so all of my brothers and I were sent to the same boarding school – when we turned 8 years old! I guess that will help make you adventurous. But my wife is much more conservative than I am so we kind of balance each other. She keeps me from running off half cocked.
I think outside of the box. And don't think I'm sitting up here saying I-Me-Myself; I have a great team who helps make this whole thing work, one of whom is here today.
Tax credits are very important to many of these projects and we are fighting right now to keep them because they are in jeopardy. These tax credits have been the make-or-break on being able to do some of these projects. Over and over they have proved to earn many times what they cost the state and they should be saved.
My early criteria: badly damaged, terrible condition, looks awful! LOL
We are a very multi-cultural company: Bosnian, Russian, Ukrainian, I'm from India, Mexican, straight, gay....
Now that we do have more to work with we can look at projects that may have less or even no margin. We are sometimes approached by community organizations to help out with a building and the criteria is: is the project important to the community? Sometimes, even if we don't make any money directly on the project, our other properties nearby will benefit by appreciating value just because the eyesore was removed.
We still live in the neighborhood. My kids go to school there (forgive me, I forgot which school he said. -Miss)
How did I escape my day job? I just took the leap! LOL
It was tough, it was hard for about 3 years. I think the smart thing I did was pay myself a paycheck, not take money out when I thought the business could afford it. It made me think more like a businessman about the work. Yes, my wife continued to work until last year (so that didn't hurt either.)
We put a lot of sweat equity into those early houses. First we bought a 3-family and rehabbed it. Once it was complete we were able to refinance it and take that equity money & go buy another 4-family. We just kept growing bigger.
On the big apartments we have made everything turnkey. Each apartment comes with high speed internet service, local phone service, and all the utilities are included. We just noticed that every August and every May, there were 7 AmerenUE technicians, 6 Laclede gas people, all the phone service folks, etc. coming at all different times and it was just really stressful. Moving is stressful already, and we thought that if we had it all in place that it would reduce the amount of anxiety and it really has.
We have waiting lists. No. we don't really have to advertise, oh maybe once in awhile, but more likely it's just a picture of the building to say, We Are Here.
Where is another area I think is ripe for rehab? Because of a non-disclosure agreement I've signed for a piece of property I can't give you details, but I think Benton Park is poised for a turn-around.
Failure is not an option!! When you give that to your employees they will give you all they've got to make the project work. They'll burn the midnight oil if they have to, just to bring the job in.
I don't take city money – I think it's more trouble than it is worth.
On the Coronado being a "no-brainer": They all said it couldn't be done. (I don't know the names of all the big outfits he listed but as I recall he named at least 3 large companies who looked at the project and said outright that it couldn't be done and should be torn down.) But it IS being done! LOL Yes, in retrospect a lot of people are saying it was a no-brainer, but nobody else would touch it.
The key I think is keeping construction costs down. We knew our company wasn't large enough to tackle it so we partnered with [BSI? Is that right?] You have to keep construction costs under control. If you don't have the ability to do it yourself, if you don't have the contacts in the industry it's going to be very difficult.
All of our companies are LLCs. We hold all of our properties in the LLC – you are just exposed to too much liability otherwise.
When you get to be a certain size, it's a different game.