Ep 31: How to Start Microflipping: Focus On the Fundamentals

This is part 2 of our series on Microflipping real esate, and today we are going to get into the details of where to start.

And you start with the fundamentals. Do not overthink it. Be like the pro's and stay focused on the Fundamentals of investing.

Fundamentals on the type of house to choose, how to finance the investment, and where to start with contractors.

We will also go into your priorities once you start the process of remodeling, including the most important rooms, and where you'll spend most of your money.

This episode is packed with great information, so take some notes!

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Full Transcript

Tim Murphy 0:00

Let's start this episode off by reminding you what stage of the process we're focused on right now, the survival phase. For everyone out there listening to value driven investor podcast, just remind yourself that we're in the survival phase and that this podcast is a lifecycle. And we're starting at the beginning. And we're going to continue to grow as investors. And if you're an advanced investor, or a successful real estate agent, some of this might seem Elementary to you, and Bob, and I get it. I mean, some of this is elementary if you're advanced. I remember when I played baseball back in high school, and every once in a while, I would be in a hitting slump, and my varsity coach would come to me and say, focus on the fundamentals and stop overthinking it, Murph. And right now, in the survival stage of the value of an investor podcast lifecycle, if you're a successful agent, or advanced real estate investor, and you're listening to this podcast, I'm saying to you focus on the fundamentals, because based on my calculations, the bottom of the real estate market was in 2011. From that point, we have seen nothing but an upward trend. Well, real estate trends usually last around 12 years. Now, this is not an exact number, it's an estimate. It's something I learned from a mentor of mine who invested in real estate for over 30 years, he told me this rule of thumb when I was 25, and just had graduated college, I was so excited about getting in real estate investing, I just couldn't stay out of it, I just I had to get in. And he said, Hey, kid, just keep waiting. And based on this rule of thumb, he literally predicted the 2008 crash was going to happen. Now, he wasn't sure exactly how the correction was gonna happen. But he knew that somewhere around 2008, give or take a year or two, it was going to happen. And that blew my mind, it's something I'll never forget. And if that holds true, we should start paying attention to the fundamentals again, because at any moment, there could be a shift in the real estate trend. We could see a pullback. Now, Robert, and I were talking just before this podcast, and we really don't see a reason why that's going to happen here in the next probably 12 months. But it's the fact that if you focus on the fundamentals, the fundamentals of every 12 years, pretty accurately, there can be a shift in the market, the trend, maybe goes down instead of continues to go up. It doesn't mean that crashes every single time. And that's where we come to micro flipping, micro flipping is a fundamental strategy. It's a strategy that any successful agent, or any successful and advanced real estate investor can use on a regular basis. So where do we start? When we start micro flipping, and that's what we're gonna talk about today. And the first thing is, is we want to start with a personal residence because this is fundamental. And if you're in the survival phase, or you're just trying to get started as a real estate investor, obviously, you can tell that Robert and I keep talking about using a personal residence in a multitude of different ways, using it as a short term rental, using it as a micro flip. And Robert, as always, buddy, I'm glad to have you on and I know that you when you first literally said real estate, something I'm interested in, I want to do. You did a micro flip on your own personal residence. Right?

Bob Grand 3:35

Yeah. Yeah, man. That's exactly how I got started. I just wish back then I could have micro flipped into an Airbnb or something. You know, I was thinking about that. I mean, we have talked about two things there. But yeah, it was it 2002 When I was first doing that, and I would just go from house to house, you know, every couple of years, take my cash tax free, you know, you get you lived at two out of five years. I think it's up to 500,000 for a married couple up to like one 250 for a single person, I'm not quite sure exactly. But you take that money, cash free, and you roll it to the next house. I mean, I rolled it from property to property to property until I built my own house, which was really, really cool. And I had a huge amount of cash equity in that house when I did it. And you know, it's it was just such a great process to go through to give me the fundamentals. But I risked my risk factor was so low, because if something went wrong, I still had a house to live in, you know, and I think most people like the glamour and the glitz of being an investor and saying, I'm a real estate investor, but it's those little micro steps you take to get to the bigger level are the most important. And that's why I think starting out with your own residence is what you should definitely do this versus just go jump out there and try to buy some other home when maybe your home's lacking at home and you can just clean it up and make it look good and applies

Tim Murphy 4:49

to you. You started your first house and then like how many different houses did you actually do these micro flips fix it before you built that last house? What was the span of time?

Bob Grand 4:58

I'm just curious how many 1002 I did let me see 123. And then 2008, I built a house. So yeah, about every two years, I did that one, maybe there was a fourth house in there. In the same neighborhood, I found another house, I sold something in there. But it was like three or four houses. But it was roughly every two years that I that I that I did that in, you know, worked out great. So

Tim Murphy 5:24

I would say from my perspective, I never really did that turning and burning on houses. But what I did do is I've never sold the house that I originally bought my first house. Yeah, and I just kept it. And then I did do the micro flipping strategy to improve it. And then I was able to get a maximum rent, kind of like the burr method. And now today, I mean, the house, I think I bought it for like 210,000. It's worth like 345,000. And I'm getting it like, I think it's 1900 a month in rent, and like I barely owe anything on it. So it's, you know what, the MicroStrategy can use two different ways because you can call it a micro flip. And you can do what Bob did every two years tax deferred, flip that house and then eventually get into that bigger house. And keep going if you want. Or you can also do the micro flip strategy where it's like, just take advantage of those improvements, maximize that property and keep it from a cash flow perspective. I mean, yeah, we call it micro flipping, but the micro flipping is probably just a cool buzzword for the fact of how do you make these micro into incremental improvements to the property to increase its value, so you can increase the value that it delivers to you. So Grando you know, one of the things I want to talk about is like, if if you're gonna do this, like let's say, okay, alright guys, I'm survival phase. I just bought my first house or I'm even thinking about buying my first house. I'm sitting in an apartment, I'm trying to paint a picture for everybody here. I'm sitting in an apartment right now. I've got money, some money saved up, I got my 5% down my 3% down my 10% down my 20% down whatever the strategy is, but I know I can get a house. Like, what house should I buy? Like, let's start there. Like what house should I buy? What you buy mentality be if I'm like, Okay, guys, I'm all in on this micro flipping strategy. What house should I buy?

Bob Grand 7:15

Well, for the West Coast, I know the house but I don't know for the Midwest isn't that but it might be the same house. But for on the west coast, the classic home that you want to do that too, as the 19, late 60s through probably 80s. Even if you could get one in the early 90s. Home single family ranchers are the best like that one house that you like everybody grew up in as a kid, where you walk in, and you've got the living room, you got the kitchen in the back, you got a hallway that goes to the bedrooms, those are the best houses to do it with. Because, well, a thinking about, you know, historically, when was it built, you don't have to deal with a lot of infrastructure problems when a house was built in the 70s. Usually it has 70s Excuse me, it usually has like copper pipes, it usually has upgraded electrical, or at least you know better electrical than what was done in the 40s 50s and 60s. So that's one of the best ways to start is get one in that timeframe. But also those homes also were not as compartmentalized as some of the early era homes like the 40s and 50 homes were really compartmentalize. But in the 70s, they start opening them up, but they saw the kitchen closed off. And so that's why I say with micro flipping the one thing you can do is, is still I would count as a micro flip is taking that wall down between the kitchen and living room. Because you can go in, you know, open up that living room to kitchen, that one wall that's there, even if you have to get a beam stuffed up in the ceiling, and they usually can just span that that opening you know to get it done. And then you're able to open up the kitchen the living room put an island and and now you've just taken a 70 style rancher home and micro flipped it and given it that modern look that everybody wants to deal with concept. Right concept, right. So that's what I love, you know about micro flips and, and I love the 70s ranchers 70s 80s If you could score one in the 90s that's just like bread and butter, you know, amazing, because some stuff was still compartmentalized in the 90s. But they're starting to get out of that. Usually the 90 ones might be compartmentalized, but they have vaults. You know, it's kind of what I've seen a lot in those ranchers in the 90s. Like the living room might be bolted. But you still have that wall for some reason between the kitchen, you know, in the in the in the living room. So those are the homes I like single family ranchers, you can go bigger, you know, I've done bigger homes. But if I were to pick, that's the first one and and the main reason be like I think that is because when people are going to buy their first homes, they tend to like be nostalgic about those single family ranches because a lot of people grew up in single family ranchers. And so I think that they see those and if they see one that's updated, like oh, they're kind of minds blown, but it still kind of has that warm and fuzzy feeling as the house they grew up in as a kid. And for the first home, they got to be flexible anyways, you know, so

Tim Murphy 9:46

yeah, I would agree with the single family ranchers and I definitely agree with you on the era of the 70s and 80s, and maybe their early 90s depending on obviously location and that's the biggest thing I want to add is that the number one thing you need to think about is like oh Okay, what house do I buy? It's not what house do I buy? It's what location do I buy in, and a lot of people buy because they get emotional, especially if it's your first house, you get emotional about maybe your location to work or your location to family, or your location to a girlfriend or whatever, or your location to entertainment. Because you're young, and you want to have fun and you want to be in the right spot. Well make sure that that location is good for the real estate market, do your homework. Now, if that in and I bring that up, because sometimes you don't see that rancher in the exact location, that's going to be the best location to do a micro flip. So I would start off with what Robert said. And I say, if you can find a rancher in that awesome location where you're seeing the houses be turned over, you're seeing, it's obvious, the ways that you can add value. And it's obvious that that value when it's added is is the result is there. Like that is the number one thing I would look for is find that location. And then if you can find that rancher especially or, or a 70s house, because exactly what Robert just said, those are easy to repair, they're easy to add value to without coming into these big issues that you can get into with remodels. I think then boom, you got the you got the house you're looking for. And then you just got to find that location that you're looking for. So let's say okay, man, all right. I know exactly like, let's say that you can visualize exactly where that is. And whatever market you're at right now. What, okay, I'm gonna go grab it. So what should I do? Obviously, Robert and I are big fans of find a real estate agent that understands how to guide you in the different nuances of remodeling that you can do to bring value into that property. Robert, go into that because I know you're super passionate about this, as a real estate agent and an investor.

Bob Grand 11:49

Yeah, you've got to have an agent isn't just going to walk in and tell you every house is good. I mean, that's what a lot of agents will do. You got to have an agent that maybe has got a little bit of investing experience on their own. And when you talk to him and say, hey, I want to employ this strategy where I go move into my house, fix it up over two years, and then resell it, you know, they should be really in key with that. If they're kind of like, oh, okay, yeah. And like, huh, and they're not really quite sure exactly what that would be. That's a red flag, you know, that the ones that know it? They're like, Oh, yeah, you want to go in there, do cosmetic updates, you want to clean it all up. And then you know, capture that equity, sell it move down the road, they start talking like that like, which is how I would talk. If you're working with me as an agent, I'm like, yeah, we can find those houses, then the next step with that agent is what type of houses are they showing you? Are they now showing you new houses? Are they showing you houses that are outside your budget? Are they if they're doing those types of things? It's another red flag, you know, like, hey, they're not in tune with what you want. And you need to have a conversation with them, you know, if they're not doing that, but I think that if you spend a little bit of time hunting for an agent, or looking for the ones that you know, potentially interviewing some agents to ask them about their experience in real estate, and investing in and all that, and then do they own a new investment properties? Have they ever flipped their own house? Like those questions or the questions that you want to ask? Or do they work with flippers? Do they do that type? Do they work with investors? You know, and what are some examples of what you've done with them? You know, kind of all the questions that I would be asking to try to hunt down that right person, because they're all out there. So many investors are real estate agents and real estate agents for investors, vice versa, you know, but I think that if you just have that big conversation up front, then you can set the expectation of the type of house that you want. And you'll probably have a lot more success, but the real estate agents the most important for finding out let me let me let me throw

Tim Murphy 13:33

this out to you though. Yeah. Would you ever because I know how the young people are, would you ever go go out on your own and just try to figure it out on your own without an experience real estate? You

Bob Grand 13:44

know, like, a lot of people think that they can do that. But there's there's so many problems like, you know, it actually equates to like you know, Zillow, just jumping out of the ibuyer market, right? Oh, weird. What happened there? 25% down and all those things like they thought they could just buy houses using other people that aren't real estate investors because house buying so easy? No, it's not. I mean, if a professional company like Zillow is belling out of that process, and their whole going about it alone is basically what they did with that. I mean, would it make sense for you to do that?

Tim Murphy 14:14

No, no. And at the end of the day, you know, I want to talk about that for one second here. Because they're, everybody's talking about that right now. And the biggest reason why they're bailing is because they aren't bringing value there. They're all they're trying to do is buy a property at market value or in sometimes over market value, do nothing to create value within that property or that asset and then just throw it on the market and hope that the market through appreciation and supply and demand, provide them a dividend. Like that's about the highest risk thing you can do if you're not bringing value and you're overpaying.

Bob Grand 14:46

Yeah. Speculating if you went out did that yourself right? If you didn't have a professional phase one professionals real estate agent, they know the market they know that you could accidentally overpay on your first home by 25,000 Just because you think all this could be a great one to, you know, micro flip, you get into it, and it's a catastrophe, and you end up spending an extra 25,000. And you already overpaid. And then pretty soon all your equity is gone, because you're not going to make, you're not shooting to make hundreds of 1000s of dollars on these things shooting to make 50 75,000, maybe 100 And just keep rolling your money down the road. So that agents that the most important thing, you know,

Tim Murphy 15:22

Alright, so now we got our agent, I think I've done a bunch of homework, which you're gonna have to dig, I mean, you're gonna have to dig for the right agent, and you're gonna want to look for an agent that has experienced, like years of experience. And if you can find someone like Robert or myself that has, you know, multiple years experience, they're investing, they're doing their own deals, they have a crew, they have everything put together. Well, that's the value driven investor way that would be the perfect agent to talk to. Okay, so you got that agent, you found it. Let's say you found Robert. Okay. Now it's like, okay, Robert, this is what I want to do. Now, how do we go about doing it? And I think the financing piece again, we're gonna beat this drum a lot. The financing piece is just so important. Robert, if someone was working with you, and they said, Okay, what do I want to do with my financing? Because, you know, let's just paint again, a scenario like I've been sitting in a room with Mom and Dad, I've been doing all the right things, I save 20% down, like I can pretty much buy or use any kind of financing I want. What would you tell them as far as Okay, here's how you want to finance this micro flip, if you're going to be on your own personal

Bob Grand 16:26

residence? Well, I mean, so if you have 20% down, I would say keep 15% of that money in your pocket, but 5% down, so you have cash to be able to fix up the house. And that because that's what you want to do, it makes no sense to put 20% of your money into the property, when you're going to create equity with it by fixing it up,

Tim Murphy 16:42

you could see what reserves right, because like, one thing you know, is like it never goes exactly how you plan. So you better have some cash to make up the difference.

Bob Grand 16:50

Got to have some cash on hand. So if you have that cash there, then you can be able to exactly, bank it over to yours, have it ready to deploy, when you get good deals, like get good deal on appliances, Black Friday sale, go buy your appliances, right, you know, so just being thrifty, I think in a lot of that. And just being very smart to be able to walk through that process. But you know, there's also other options out there, you know, there's that FHA 203. k loan, if you are the type of person that can't live in something and fix it up, you could go the FHA 203 K route, I think that's what's called, work with a contractor, get your home, your whole home fixed up, and then live in it for two years, and then sell it. So there's a strategy there, you might not make as much, but at least you got the home cleaned up beforehand, you know, but most people like with this strategy, you should just focus on living in it and doing the small updates over time, and only putting 5% down and banking your money to be able to deploy it inside the house versus just give it to the bank to hold.

Tim Murphy 17:39

And, Robert, before we got on you, you were saying okay, well, so how do I finance remodeling costs? And you're like, Well, I am cash, right? And I think that that brings in the strategy of if you bought his little amount down on the purchase of the property, you have all this cash, you can then use this cash to buy the things that you need, or pay the contractor or buy the materials go over that, because that was the strategy that you use when you Yeah,

Bob Grand 18:03

yeah. And I actually, you know, so I got in with the least amount down, I didn't even have 20%. So I was just working, you know, overtime at the fire department and taking overtime money and put it into my house, it's pretty much what I was doing. So I got really creative, and I started using like, Best Buy Home Depot, Lowe's, all the local stores, I get their credit cards, where they would always do 1224, sometimes 36 months, no interest, I buy my appliances like that, but buy all my materials, you know, at Home Depot or Lowe's, for the house, like pretty much every one of those houses were probably built with Home Depot and Lowe's interior stuff, because they would give me that and I'd make the payment that I would have to make in order to probably get that thing paid off, you know, inside of the 24 months, or even like, at least the 12 months, you know, I'd be like, Okay, now I gotta pay this per month on it. So that way I could still be ahead, maybe get materials and then save my cash again, to actually use it for somebody else to do labor, I did a lot of labor. But there are certain things you just have to bring people in. You know, if you're not good at tile, probably shouldn't go and attempt to detail the first time. If you haven't had good experience with that you mean or if you're not handy, you know, don't do things that you're probably not really good at will

Tim Murphy 19:09

kill you that will kill you go to sell is if if an agent walks in and says oh my gosh, who's the rookie that did all this that is not going to be in your best. Your best you see all the time. But yeah,

Bob Grand 19:21

but if you're that type of person that can watch videos, do everything and you're super, you know, handy and you can figure it out and you can do a really good job because you got that attention to detail, which is kind of how I was I was able to do all that stuff. I could trim out my houses, do all that type of stuff, but I wasn't gonna paint it, you know, so that was the area where it's like, I don't have that level of detail. So I call the painter to come in and make sure that they paint everything I wasn't gonna do drywall. You know, like if I had to patch something, you know, cuz I tore out something I wasn't gonna do that myself. You know, so there's all those things, but I would go to Home Depot and tell them what materials do you need? You want drywall? I'll go get it. Patch what type of mud like what is it? You know? Tell me what to get so I could get it all there. Just break out and only pay labor costs.

Tim Murphy 20:01

And I like your strategy where you're leveraging credit, I just want everybody to know that as an investor, when you start leveraging or, or going too deep into leverage, that's when you can get burned. So you need to be very disciplined with your, with your funds. Because if you're leveraging $5,000 on a lowest credit card, you need to have a way to pay that off, because you don't want to be paying 23% interest, that's the game that they're playing is that they're hoping that you don't pay it off. So you pay 23% interest. So you need to be very fiscally responsible as far as like, if you're going to use leverage, know how to play the game and play it right, because you don't want to be caught in that endless black hole of interest. So okay, now I feel like we have a really good plan of how to finance it, I have a plan that I'm gonna put as little amount down as I possibly can. And then I'm going to keep as much cash as I can, I'm gonna try to use that cash very smart and wisely, use some leverage if I can, but just make sure that don't get overextend on the leverage. Now, what contractor am I going to use? Like, okay, yeah, maybe I can do a couple things. You know, I, I learned how to do tile because my uncle taught me Yeah, I learned how to trim because my, my uncle could do carpentry. And Shane taught me how to trim and use a chop sign and some simple things like that. But like, man, you know, most people, they're probably not that handy, right? How do I find a contractor and again, if you go back in the early episodes of the value, investor podcast, we go deep into contractors, so let's keep this a little bit of surface level. But Grando, I mean, finding a contractor, again, that's well, as important as finding an agent, I'd say they're pretty much hand in hand, if you screw those up, you could screw the whole thing.

Bob Grand 21:45

There's two levels of contractors, right? I mean, or maybe multiple levels of contractors, but the two that I kind of think about first is you gotta have yourself a really good handyman, right? Because like those handyman, guys can come in and do quick work for you. And they can kind of help you figure out those little things you need in your paint them hourly, and whatever, you pay them hourly, you know, it's 5075 bucks, maybe get off at 40, you know, but some of them are cheaper than others, but they're just making a living doing that those guys are money, because they have all that experience that you really, really want the really good ones, they've done a little bit of everything. So they're really great at helping you patch your house back together and do that. But it's a, it's just a little bit bigger, you know, a little bit bigger, like, you're gonna take that living room wall down between the kitchen, you know, in the living room, that contractor, you know, you need a general contractor, right, that maybe is running a small crew of people. But I always say it's like, you know, and I think I probably said it back in that episode, you don't want the most expensive high end, super high remodel contractor. And you know, the one that is like the lowest, cheapest guy of all, like that middle of the road guy, that you can start building a relationship and you tell them, hey, here's my game plan, I'm going to do this house and I'm going to sell this, I'm going to do another one, I'm gonna sell this, and eventually, I'm going to buy a house I don't live in and I'm gonna fix it up, it's a great way to build a relationship. And you might have to go through two or three of them, you might get burned a couple of times, you know, and like, didn't get the results that you exactly wanted. But I think it's one of those things, it's kind of trial and error for your area. And you just got to get connected in with the big one because they can make or break your equity, they can take all your equity right from you in just a few fail swoop. So you know, you get things out of control with them and, or them throwing some pie in the sky picture out there that like, oh, you should do this. And you should do this, and all this stuff, and this to be awesome. And like, and then you go with it. And then pretty soon, you're four months into something that you might not have even needed to have happen. But I think that

Tim Murphy 23:34

good. Yeah, yeah. I mean, well, I was just gonna say like, you transition perfectly into the last segment of the podcast here is like, whoa, okay, well, now I found the contractor, I have the agent. Now, what do I do to the house? And that was that exactly what I wanted to start with is? Well, number one is you need to triangulate. I mean everything. Whenever you're making decisions, you triangulate, and what do I mean by that? You have your thoughts on what you should? Do you have your real estate agents, thoughts and what you should do, and you have the builders thoughts. Now, another person that I think is very important to bring into that triangulation is potentially even a designer, because now if you're getting answers, and when I talk about triangulation, when you're throwing a question out there, to three different people in the industry, a real estate agent, a designer, and a builder, you want to get at least two of the same answers bouncing back because then you're like, Okay, that's kind of what I want. But if you throw it out there and all sudden, all three of them give you different answers. You got to be going, Okay, wait a minute, nobody's right here. I need to start like asking better questions. I need to stay dig deeper, do more homework. But if you throw an answer a question out there, and all three of them come back with the same answer, then you know, what odds are? I would bet on that answer, and I would go that route. And that would be my best advice as far as like, what should you do now? I think Bob and I can go into some details we can go into a little little list here of the top, probably five to seven things that we would do right away on a micro flip. The first thing that I think Bob's already nailed is, if you can find a house where you can reasonably take out one wall, which taking out a framed wall is not a big deal, and you can open up the house and have more of the open concept, then that is definitely a valuable decision to be made. Now if you have to go farther, where you have to put a header in now that's gonna cost you more money. But if the location can bear it, if the house can bear it, if your real estate agent feels like you can make it happen. And if your construction guy can say, hey, I can do this at a fair price, a reasonable price and all those numbers shake out, well then adding a header and making it more of an open concept. I would tell you right there, that's probably one of the best things you can do. And then after that, we want to go to a statics I wouldn't be thinking about anything like Oh, I'm gonna add gables or reframe it to curb appeal. Like literally reframe it. No, I wouldn't want to be doing like any like jacking something up to add ceiling height in the basement. No, I wouldn't want to be doing like this huge addition off the back like a sunroom or like just an addition. No, that's not a micro flip. Like those are all major major renovations, you don't want to be doing that. So Grando, let's go I gave I gave kind of like how to open up the concept which you done. But what are like the next 234 things that we can talk about to kind of hear? Well, you grow, flip and really bring value.

Bob Grand 26:34

Just just I mean, a lot of kitchen cabinets, you know, kitchen cabinets and countertops would be the next thing kitchen cabinets, countertops, and backsplash. Or the next thing that I would probably go after, because you're gonna live there for two years. So it's a great way to upgrade that you get the benefit out of living there with. And so the first thing you want to ask yourself is, can I paint these cabinets? And would they? Is the layout still great? You know, can I the next thing is can I take these doors off and get modern doors on these cabinets? And would that look good? And if you can't answer yes to those two questions, then you're considering like I need to change the layout and I need you know, modern cabinetry, then you take it out, you know and then you then you go down. And this is another thing you can do at Home Depot's and all these different places you can do basic cabinet layouts with them, and get your kitchen redesigned. And you'll get a whole new kitchen designed out of the whole thing. So

Tim Murphy 27:21

the one most important thing in a house I think you and I both agree is like where you're going to increase the biggest value is the kitchen

Bob Grand 27:28

100% 100%. So it's first thing on my list every time. So like, I'm going after the kitchen, I want it for myself and then I want it because I know it's gonna it needs to be done first. So that way you know if you run out of money at least you still have an awesome kitchen that you can present to somebody when you sell it. You know if for some reason you get rid of the home, you upgraded the kitchen.

Tim Murphy 27:47

What would be your number two, I know what my number two is when I go to the kitchen then my number two thing that I'm gonna spend money on above and beyond everything else is what's your

Bob Grand 27:56

mess. Master Bathroom? Yes, exactly.

Tim Murphy 27:59

The master bathroom like Exactly. That room every single day, like every day sets the tone for their day.

Bob Grand 28:06

Yep, exactly. Yeah, and I'm not talking like going crazy and just making it look clean. Maybe a little tile backsplash fancier, you know, a vanity. If you can get two sinks in it. That's always a huge win for a master. I'm always trying to figure out two sinks and a master even if I have to go tinier like a 48 inch vanity, I gotta go custom. I'll still get two sinks in it because that you know, I got a plan for that. And it's like, it's tight. It's gonna be tighter. I live in house right now with it. And I love having my own seat. You know, it's like, the side, your side, the sides. My side. Everybody. You're right, it starts your day off. So master bathroom is the key.

Tim Murphy 28:41

What? Okay, I want to go into a product thing because I think this is important. It's a debate that I have quite often. Yeah, how much more value do you think a tile like a real tile brings over an LVP an LVT product like do you think it even matters? Because obviously there's a cost benefit depending on exactly what you're going with. But do you think that there's a big value different and value proposition between the two products because those products I mean flooring is huge in value proposition that you're going to add to the market into your house.

Bob Grand 29:15

I mean, we both know it all comes down to the level of the home right like so that entry level home which I would argue that probably most people going to micro flip would want to be going after. Like a higher quality luxury vinyl plank probably is just as good. You don't need to spend the money on floor tile, I wouldn't be spending money on floor tile. I'll be spending my money on the tile backsplash but tile backsplash. You don't have to prep the walls like you do a floor you know when you when you're putting in tile on the floor. It's a multi phase process and it takes a lot longer to do where luxury vinyl plank can just go in and over it and it's indestructible. We've got we have been using Lowe's really a really good one from Lowe's. It's really thick and it's just like Man, this is such good quality stuff. It's got like a 30 year warranty. It's waterproof it's never going to go bad. It's always going to look good. You know we're tile has upkeep and stuff like that. But when you have a nicer, bigger house, that's expected, right? But in an entry level home, that would just be a bonus, not going to add a lot of value for it. But if the floor looks clean, it's got luxury vinyl plank throughout the whole place. I mean, that's something you can put in yourself. You know, most people can figure out how to cut that. But I think you cut it with a razor knife most in most circumstances. He's cut it and then pop it. It's crazy easy. So yeah, and so good. But yeah, yeah, I

Tim Murphy 30:24

think I think flooring. So if you go okay, what's my focus? Your focus is the kitchen. What's my next focus? The focus is the master bathroom. What's my next focus flooring? You know, flooring, and then I you know, it's a no brainer, Bob, and I agree with this one for sure. Yeah. Then after that, it's paint like, yeah, paint, paint, paint, paint paint, like, you're going to spend the most amount, you're gonna spend the most amount of money on paint, because paint is just freshens everything up. It can take something that looks old and Dungey and it can make it look hip and new. Like, I mean, what are your thoughts on paying Grando?

Bob Grand 30:58

Yeah, I mean, I'm with you. And you know, if you're not a good painter, be very careful about painting yourself, you know, people notice paint, if it's a really, really poorly, and there's a lot of good quality painters out there there at a fair price, that's one of the areas that I find that I can get a pretty decent price, across the board, you can spend really expensive, just like a general contractor. But you can also get the handy guy that's been painting for years, and just knows how to tape off a room and paint it all out and make it look awesome. I mean, so that's, that is the most important thing. Really, in the end, when you've got everything else done. Painting, you know, is definitely the key.

Tim Murphy 31:34

What is there one more thing that you would add to our list that people just you can't look past it? Yeah.

Bob Grand 31:41

So the other thing that I always put in there is how can what can you add to the master bedroom to kind of give it that extra pop? You know, and a lot of times, you know, it could be just a TV mounted on the wall, maybe something around that something cool, you know, a door to the outside might be something like if you have a window, you can have a handyman, put in a door, right? So in our area where we're at, you can always you're not reframing it, you're just taking the rest of what's already there and going right to the ground with it, putting a door inside that space that doesn't require a permit where we are. So any handyman can come in and do that. And then you can kind of set up a little outdoor area and kind of give that kind of its own little master retreat. So you're kind of setting that up. So that's a cool thing that you can potentially do, you know, if you have something like that, but if not, then it gets way more invasive to be able to do but anything you can do the master bedroom, like even if it's like a little bit of crown molding in the master bedroom that's painted out, it just gives it that pop, you know, inside there where they think, oh, man, this is gonna be awesome. I got my nice bathroom, I got my bedroom looks great. Maybe if you can't do any of that maybe it's a built in, you know, MDF built in that gets painted in the closet. So when the wife goes in there, and she has everything she can line out and isn't, you know, overcrowding the closet with everything you know. So it's just things like that little tiny touches throughout the house, I think are really

Tim Murphy 32:56

Yeah, and my last one that I'll give everyone is lighting, I would tell you lighting is the jewelry of the house. And if you really want to bring a new look to the house, you have now flooring you have now paint and you bring lighting because a light fixture. If you have an old dingy light fixture and you have all the rest of it. They're kind of like, oh, they forgot something here. I don't know what it is. But they forgot something. But also Yeah, if you have everything else, and your lighting is just poppin. And it's like, oh my god, this is cool. This is hip, like you set the mood. So I would tell you like lighting is a very integral, part two, really, the cheapest way you can add value is through lighting, because you can get some really cheap light fixtures at Lowe's or Home Depot that you're like, Wow, they look expensive, and they're not that expensive. So that would be my last tip is just really pay attention to your lighting and what you're picking. Because they can add a ton of value. So hopefully this step two in the MicroStrategy, how do I start or where do I start doing a Microsoft micro flip? Hopefully, we've bring in brought you guys a ton of value. And again, for everyone out there, focus on the fundamentals, because that's what the survival phase is all about. It's about the fundamentals. And at the end of the day, I don't care what phase you're in. If you focus on the fundamentals, that's what the pros do.

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