Posted by Alicia Sell
Ever since the show Fixer Upper came on TV, Randall and I have become obsessed with the idea of buying and flipping properties. We love doing renovation work and the idea of improving houses that are on their last legs is very appealing. It seems too risky, too scary for ordinary people like us to ever make something like that a success. But, one thing I have discovered in the 30+ years of life is that it is never too late to pursue dreams and look for inspiration from those around you.
One of my big inspirations has come from a high school friend that I feel fortunate to have reconnected with through Facebook, Lisa D’Alessandro (or Lisa Shappert for all of you Crestwood High School readers out there). If you don’t know Lisa, she was always a little quiet until you got to know her, and then she was hilarious. She is single-handedly working to bring fanny packs back into fashion, hot pink ones and all. And let me tell you, she is working it!
Lisa and her husband, Joe D’Alessandro, are inspiring to me because they left the safety of their day jobs to pursue their dream of starting a home buying/selling/rental business. Their company, D’Alessandro House Buyers, is very successful. They dreamed big and made it happen, all while raising a young family.
One of the things I like best about their projects is that she and her husband are focusing on specific neighborhoods in Rochester, New York that they can help revitalize, which not only improves a single home, but helps improve an entire community. The before and afters for some of their projects are pretty impressive.
Beach Terrace Property – Before
Beach Terrace Property – After
Lisa was kind enough to take a few minutes to tell me more about her business so we could share it with our Button Jar readers.
Interview with Lisa D’Alessandro
Thanks for taking time to speak with me today. I wanted to start by finding out how you and your husband got started in your business? What led you to this opportunity?
When Joe and I met he had just started in real estate full time. He had been in stocks but left that career to pursue his hobby of renovating buildings. I was going to school to be a teacher and I had the summers off, so I would hang out/help him here and there. I found it interesting and exciting. After a while I realized I wanted to work together full time and we put a plan in place to get the business to a place where we could generate enough for me to leave my teaching position.
Do you and your husband both have real estate licenses?
No. Neither one of us have a real estate licenses. When we sell a property we typically work with a realtor.
What are some things you look for in a property that would make it a good candidate for renovating or reselling? I noticed you are focusing on the Brooks Landing and PLEX areas. Is there a reason for focusing on these neighborhoods?
The numbers! The worse it looks and smells…the better.
We make a list of repairs with the associated costs and add in our profit, holding and closing costs. Then subtract that from the after repaired value (ARV) and determine if the deal is worth doing.
There was a time when we would take on a project anywhere in the city or suburbs of Rochester. That was when we were doing more rehabbing and selling than rehabbing and renting. We started buying in the Brooks Landing area because we were transitioning the business to more rentals and it made more sense to have the properties geographically close for the purposes of showings, maintenance, snow plowing etc. That particular area was in transition and we wanted to make a difference in the community. By concentrating our efforts to this area, we were able to make a more significant change happen, and in a shorter period of time.
I notice that you sell some of your properties and you rent some of your properties. What are the pros and cons of selling vs. renting?
Yes, we do both. The biggest pro of selling is you get that cash infusion quickly. The con is that you may be able to generate more profit over time by collecting rent on a property. Additionally, the property will typically appreciate over time and your equity in the property will increase over time. Renting, you have to manage the residents and potential issues that occur with the property over time. Also you could experience lost revenue based on vacancies. The decision to sell verse rent is very dependent on your current financial circumstance, your long term goals and the market you are in. So we will continue to incorporate both into our business plan. We use the occasional sale of a property to help provide the necessary capital to grow our rental portfolio.
Do you do all (or most) of the construction work yourselves or do you hire contractors to help you?
NO! We used to. Well, mostly Joe used to. We have a couple great teams of contractors that we work with to do the rehabs. Once the properties are renovated and rented, we have a maintenance teams that handles repairs, turnovers, lawn care, etc.
Do you have any helpful tips or resources for finding good and reliable contractors?
This is something we struggle with. It’s hard. We have some great people in place, but when our volume picks up at a particular time and we attempt to incorporate new contractors we have had issues. We are currently working on a strategy to break jobs down into very small pieces to head off issues with deadlines not being met. But this continues to be a work in progress.
Do you have a favorite part of the renovation process? A least favorite part?
I love the design and planning. Deciding where to keep or move the kitchen, bathroom, etc. Figuring out the colors and materials and staging, when we do that. I also love working with my husband. I’m sure there are a lot of people who couldn’t do it, or think we are crazy for doing it. But we couldn’t imagine not.
My least favorite part is the financial stress of running your own business. We are still growing and there’s fluctuation of the income based on a house we are rehabbing, where money is only going out or lost rent from a vacancy.
I love the pictures of the Beach Terrace and Aberdeen properties. Do you do all of the decorating and staging? Do you have some favorite stores that you shop at for your projects.
Those were two properties that we renovated and sold. When we are selling a property we incorporate a few different features compared to our rental properties, where we try to be consistent with colors and materials to increase efficiency. Joe and I work together to pick out the materials. The staging, I mostly handle with his feedback on my choices. The majority of the materials, cabinets, flooring, paint, light fixtures we get at Home Depot. We often buy lighting fixtures at Lowes. For staging furniture, I love Tuesday Morning! I also grab some things at Target and Marshall’s. I tend to belabor over color choices. The guys all tease me because I show up to a house sometimes with 8-10 samples and paint squares all over the house. Then I stand there staring, take pictures, come back later.
Do you try to incorporate some rehabbed materials as well as new materials in your projects?
We try to save where we can. If the wood floors are savable we will sand and refinish them. If the cabinets are in good shape but we don’t like the color we will paint them. Often times it depends on the location, obviously the condition (whether or not it is savable) and our end strategy. Are we selling or renting. Will saving this create an ongoing maintenance issue?
How long is the typical turnaround time for one of your projects?
Depends on the size of the project. We have renovated everything from a 2 bedroom single family house to a 16 unit apartment building. Also, depends on the condition of the property. Generally a 3-4 bedroom single family house that we are going to sell, might take 5 weeks.
Do you have any helpful tips or resources for people wanting to start this type of business? Any lessons learned you want to share?
Write down all the numbers. When you walk into a property and take a look around, it’s easy to ball park some repairs and think it’s not too bad. Once you start buying materials and paying contractors those numbers add up quickly. Also, don’t forget to include holding and closing costs. Often times, people will see the shows on HGTV or Bravo and they don’t tell you out of their profit they paid $5000 in interest to their private mortgage holder, the attorneys, gas & electric, insurance.
Thank you, Lisa for sharing this information with our readers! If you have a chance, check out their website to learn more about Lisa and Joe’s projects. And remember to dream big!
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