By Carole Hawkins, [email protected]
As he inspected a home midway through renovation, Cameron Gaskill delivered a verbal punch list to his team.
Place light switches here and here, repair the gap between the shower and the floor, pay attention to how items visually line up.
“Details matter,” he said. “If a homebuyer sees you’ve paid attention to details, they assume you’ve also paid attention to the major systems.”
Once, Gaskill started his sentences with “my dad always said” — the man whom Gaskill wouldn’t follow into the renovation business until after he died.
Because the property is in OakLeaf Plantation near new-home construction, Gaskill planned to include upgrades to make the house more competitive — marble counters, stainless appliances, tile floors, crown molding.
The owner of Suncoast Renovations, Gaskill has renovated more than 600 houses for investors.
But he’s always been an investor, too, and this project is his.
Renovations were the pathway that allowed Gaskill, a guy who “came from poor people,” to invest.
Since 2006 he’s gone from picking up three homes a year — the first, an auction rehab that he bought for $90,000 to live in — to three deals a week.
During the same period, his renovations business kept apace. Gaskill now rehabs for mom-and-pop customers as well as institutional investors, the biggest fish in the rehab pond.
The trajectory seems stunning. But Gaskill’s tenure in construction actually spans more than 20 years. He got his first lessons by helping his dad.
In a hurry to succeed
A native of Jacksonville Beach, Gaskill’s mom was a bartender and beautician. His father owned a renovation company. He saved as much as $30,000 at one point — a fortune it seemed to Gaskill at the time. But, when he died, his biggest asset –– his truck –– sold for just enough to pay the funeral expenses.
As a teen, Gaskill worked with his dad after school and during summers, but hated it.
Gaskill’s first job out of school was framing new homes — visually, a much bigger accomplishment than repairing a fireplace.
Always a young man in a hurry, Gaskill would prove to be a serial job quitter – initially “loving” and then growing bored with jobs across three states in construction and design.
His wife told him he didn’t work well with others. Gaskill said he just didn’t like glass ceilings.
“I’m actually an excellent employee as long as there is something to shoot for,” he said. “But when I hit a ceiling, I become a very bad employee.”
He expected to be laid off from his last job designing trusses for a Jacksonville construction company when the downturn began taking hold in 2006. By then, he was already investing.
Gaskill told his wife, he’d likely be first one out, since he was the last one hired.
His wife countered, “I think you’ll be laid off first because when you go take your lunch, you take two hours and you still come back with your lunch.”
He was out shopping houses, already emotionally on to the next big thing.
They were both right.
Gaskill was laid off first. The boss said he’d likely land on his feet because of his side career. It launched him into real estate investing full time.
Betting the farm
Gaskill had read books on real estate investing. But books, expensive seminars and even mentoring don’t anticipate every problem.
On his second deal, Gaskill almost lost everything.
With no credit, he bought two homes for $50,000 each.
He used $8,000 of his own money and borrowed $20,000 from his aunt to pay for repairs. For the purchase price, he turned to a hard-money loan — a short-term, high-interest loan secured by property.
“This is how bad it was — it was a 12-month loan and I reached 12 months,” Gaskill said. “And, I couldn’t sell them.”
He had dropped the price per house in stages from $99,000 to $69,000.
The lender wanted his money back.
The wholesalers Gaskill had purchased from suggested, since the houses were renovated, he refinance through a bank and rent them out. The bank offered to lend him $82,000 per house.
“A light bulb went off,” Gaskill said. The bank was going to give him more money than his final selling price. And, he’d still get to keep the houses and earn cash flow off of them.
He repaid his aunt $22,000, paid off the hard money loan plus interest and pocketed around $20,000.
“My whole strategy changed that day,” Gaskill said.
An empire
built on rehabs
Because of his background, Gaskill could do his own repairs, learn how to do them or hire someone out.
He never expected to become a renovation company. But then he started meeting other real estate investors who thought he did good work.
They’d ask Gaskill to take on projects like tiling a kitchen floor or hanging a few doors, things they didn’t want to do themselves.
After a while he needed a helper, and then another. Eventually he went after whole-house rehabs, instead of just odd jobs.
“It basically was me just hustling and doing some side work,” Gaskill said. “But then it seemed like I just woke up one day and I had two crews out there working.”
The company focused on delivering projects on time and on budget – things Gaskill knew from experience investors cared about.
Suncoast’s volume went to another level when Gaskill decided to go after rehab contracts from institutional investors.
The first one was Jacksonville Wealth Builders. Everybody warned him they didn’t pay enough. But Gaskill kept asking for work and after a few months he got his first house.
“They told me how much they would pay and it was ridiculous,” Gaskill said. “So I said I’ll do the first two houses with your numbers. And then we’ll sit down and have a talk.”
He lost money on the two houses and broke even on a third.
But he showed them he could turn out quality work and do it fast. The trick, he said, is keeping his business well capitalized with cash on hand, so projects run without interruption.
“We have zero debt. We pay our accounts up to three times a month,” he said.
Gaskill negotiated his price up, and other contracts from investors followed.
Gaskill still works with mom-and-pop customers, too. The smaller investors pay larger margins, he said.
The real estate downturn didn’t have the same effect on investors as it did on homeowners, he said.
“The price of houses went down and there were a lot of foreclosures,” he said. “But to investor that’s like, ‘yippie,’ you have a lot of inventory now and you can get it for really cheap.”
But one thing that did change was financing. If Gaskill were starting out in real estate today with the same low-cash strategy he had in 2006, he’d be hard pressed to swing a deal.
“Before the crash, getting a hard money loan to buy house and rehab it was very easy,” he said. “You could always get 100 percent financing. That’s unheard of now.”