January 2016

Landlords: The 6 Best Ways to Minimize Your Chances of a Lawsuit

(The following is an excerpt from the new book from BiggerPockets, The Book on Managing Rental Properties. If you are looking to earn more and have less stress with your rentals, pick up a copy today!)

In our litigious age, it’s impossible to keep yourself 100 percent free from a lawsuit.

As a landlord, the chance of getting sued actually increases. However, there are some actions you can take to decrease your chance of being hit with a lawsuit.

This post is not designed to scare you, but lawsuits are a real thing, hence the need for great insurance on your property. But besides insurance, let’s talk about six of the easiest ways to keep yourself free from lawsuits ever happening.

1. Provide Housing That is Habitable

As a landlord, it is your legal responsibility to provide housing that meets a certain level of cleanliness. If you rent properties that don’t meet basic standards, your risk of getting sued increases greatly. So don’t be a slumlord! Fix up your properties and make sure they are in good, livable condition for the tenant. Be sure to investigate and comply with federal, state, and local housing codes to ensure your property is in good enough condition to rent.

Related: 7 Tips to Keep Landlords Free From Costly Tenant Lawsuits

2. Provide Housing That is Reasonably Safe

If you fail to provide a reasonable level of security for your tenants, you could be sued. For example, if a tenant calls with complaints about their door lock not working, and before you can fix the problem someone breaks in and attacks the tenant, you could face a lawsuit. Therefore, make sure safety-related concerns are addressed promptly. And, of course, don’t rent to people who might hurt other people.

3. Get Repairs Taken Care of Quickly

If a tenant has an issue that must be fixed and you refuse to, you are opening yourself up to a lawsuit or at minimum the tenant legally being able to withhold the rent or using their own money to pay for the repairs. So don’t let things get to this point. Hire qualified people to repair your properties immediately.

(click to continue reading on BiggerPockets)

15 Things Every Newbie Needs to Know About Starting a Business

Starting a business is exciting — and scary.

I’ve started more businesses than I’d care to admit.

In my experience, it’s a bit like driving through a heavy fog where you are only able to see a few feet in front of the windshield — you don’t know what’s up ahead until it’s upon you.

However, the longer you are an entrepreneur, the better you can navigate through that fog.

As I’ve been driving through the fog for over a decade now, I thought I would take today’s post and boil down 15 of the biggest lessons I’ve learned over the past decade of building and growing businesses.

Consider these tips “stuff I wish I had known when I was young and stupid.” 

Let’s get to them.

1. Don’t listen to statistics.

People love to throw around the statistic that 95 percent of business fail. Don’t listen to that — it’s an excuse to make you feel comfortable about giving up. If that number is even correct, it’s because most people don’t commit, they don’t follow through to the end or they are stupid in how they manage their money.

2. Do something you like.

Don’t start something you won’t want to do in five years. Because if you are successful, you’ll still be doing this in five years.

3. You are not going to know everything.

In fact, you probably won’t know anything when you first start. Start anyway. When I first got into real estate investing, I had no idea how to buy a property, rent a house, or evict a tenant. I figured it all out “on the job.” You will too.

4. Finish what you start.

Nearly every entrepreneur I know suffers from the same curse: We like to start things more than we like to finish them. In other words, if you are a good entrepreneur, you’ll have a lot of great ideas. Most of them would probably work out well and make you a lot of money. However, that doesn’t mean you should pursue them. Pick one and go with it until it dies or it makes you rich enough to buy a private island.

Related: How Top Entrepreneurs Overcome the Dreaded Fear of Failure

5. Never partner with someone because it’s convenient.

Partner with someone because it makes you stronger. The wrong partner will drive you crazy, make you hate your work and end up causing more problems than they solve.

(click to continue reading on BiggerPockets)

Thinking About Buying a Multifamily? STOP! Wait Until You Read This!

(The following is an excerpt from the new book from BiggerPockets, The Book on Rental Property Investing. If you are looking to buy more rental properties this year,pick up a copy today!)

It’s no secret that I love multifamily properties.

I talk about them on the Podcast.

I talk about them in books.

I talk about them at local BiggerPockets meetups.

Heck, I’m even doing an entire LIVE webinar workshop this week on the topic of “Using Duplexes, Triplexes, and Fourplexes to Find Financial Freedom.” (Which you should really attend. It’s on Wednesday evening, and it’s going to be AMAZING! Click here to sign up.)

But are multifamily properties right for everyone?

No. 

Just because some guy on a blog/podcast/webinar says it’s great DOESN’T mean you should go out and buy one. There are pros and cons to multifamily investing over single family.

Therefore, today I thought I’d give you a quick summary of the pros/cons of multifamily investing to help you decide if it’s the right path for you. But first…

What is Multifamily Property Investing?

Multifamily properties are buildings with more than one unit.

A multifamily could be as small as two units in a duplex or as big as thousands of units in a large apartment complex. Few people ever buy a multifamily to live in (though I do love the strategy of “house hacking,” where an individual lives in one unit and rents the other units out), but instead, most multifamily properties are owned by real estate investors who rent the properties out to those who can’t — or won’t — buy a single-family home of their own.

Multifamily classification is generally split into two categories: small and large.

  • Small multifamily properties are any properties that contain two, three, or four units.
  • Large multifamily properties, therefore, are those with five or more units.

This is an important distinction because of the way these properties are valued and financed. Smaller multifamily properties are considered “residential” to most lenders and are thus seen as no different from an SFR. Large multifamily, however, is considered commercial real estate, and the rules change drastically.

(Click to read on BiggerPockets…)