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 The Rookie Landlording Mistake Most New Investors Make

So, you just bought a rental house or small multifamily property. Congratulations!

Now what?

Well, you need to probably fill that vacant unit with a nice family who is going to pay top dollar on time each month, never complain unnecessarily, and treat your property with respect.

***Special Note: If you are interested in more time-saving tips for new real estate investors, don’t miss this week’s free Webinar, “How to Invest in Real Estate While Working a Full-Time Job” here on BiggerPockets! Okay, back to your regularly scheduled blog post!***

So you place an ad on Craigslist, Zillow, or in the newspaper, or maybe you put up a sign in the yard. Quickly you begin receiving phone calls, and they typically look like this:

Landlord: Hello? 

Prospect: Hi, I’m calling about your property at 123 Main Street.

Landlord: Yes, it’s still available. 

Prospect: Great! Can I schedule a time to see it? 

Landlord: Sure thing. How does tomorrow at 6 p.m. work for you?

Prospect: That would be great. I’ll see you then! 

Landlord: Sounds good. Bye. 

Did you notice the rookie mistake in the conversation above? Here’s what it is:

(click to continue reading on BiggerPockets)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

 What to Do When Vacating Tenants Owe More Money Than Their Deposit Will Cover

The following is an excerpt from the upcoming title “The Book on Landlording” that I and BiggerPockets will be releasing soon… stay tuned for an official announcement in the next several months!

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My first thought was: there is a dead body in this refrigerator.

Of course, upon closer inspection there was no dead body, just rotting food, garbage, and other unknown objects. The smell was unlike anything I had ever experienced before.

I don’t make it a habit to inspect rental properties myself anymore, as I have built systems to handle that, but I happened to be in this part of town a few hours after a tenant packed up and left, so my wife and I thought we would swing by and see how the property looked.

I wish I hadn’t.

The unit was left with garbage covering nearly every square inch of the floor, holes in the walls, doors missing, crayon on nearly every surface and that smell that permeated every cubic foot of space. All in all, it took nearly $4,000 to get the unit fixed up and ready to re-rent, including the costs of lost rent.

Luckily, when the tenant moved in, we had collected a double security deposit due to a minor red flag when performing her tenant screening. But as any third-grader can tell you, having a deposit for $1,000 and a bill for $4,000 means one thing: we were in the hole $3,000.

So what now?

I wanted to write this post because this is not an uncommon occurrence, especially among low-income tenants.

(Click to read on BiggerPockets…)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

4 Tips for Workaholic Entrepreneurs to Avoid a Crumbling Marriage

I wrote this article originally for Entrepreneur.com, and they’ve graciously allowed us to repost it here. Enjoy! Also, be sure to sign up for this week’s Webinar here on BiggerPockets! Click here to learn what this week’s live show is all about! And now, let’s get to the post.

I’m recently took a six-week road trip around the U.S. with my wife, and I’ve had the same question asked multiple times on this trip:

How do you spend that much time with each other without killing one another?

Simple: We’ve worked hard at creating an incredibly strong marriage that can withhold a lot more than six weeks in a Prius!

In a similar way, we’ve also worked hard at creating a marriage that can withstand, and benefit from, my obsession with entrepreneurship. The following are four tips that I’ve used to make sure my marriage stays solid while my business grows.

1. Get Your Priorities in Order.

Businesses will come and go, and I’ll fail at some, succeed at others. But my wife is here for life, so my priority will always be her above all else.

(Click to read on BiggerPockets…)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

What Kind of Property Makes the Best Rental?

In 2006, NASA admitted they had accidentally taped over the original recording of the first lunar landing.

In 1962, Decca Records had a choice to sign one of two bands. They chose Brian Poole and the Tremeloes. The band they rejected? The Beatles.

In 1788 the Austrian army accidentally attacked itself and lost 10,000 men.

Clearly, mistakes happen. The same will be true for your real estate business, though hopefully to a lesser extent than the examples mentioned above.

However, one mistake that can be deadly to your real estate business is this: choosing the wrong property.

Making the mistake of picking the wrong property is a lot like picking the wrong spouse. It can be incredibly stressful, expensive to get rid of and detrimental to your well being!

But how do you know what the right property is? After all, there are a lot of properties out there.

  • What should you buy?
  • What should you avoid?
  • Are four bedrooms better or worse than two bedrooms?
  • What about garages?
  • What about neighbors?
  • Color? Age? Size?

These are important questions you should be asking if you want to buy the right deal and have the most success as a landlord, so let’s dig in on several things that I look for when shopping for a rental property.

Keep in mind, all of this depends heavily on the trends in your location. Furthermore, the following list is not a bunch of rules you must follow, but rather pieces of wisdom that I’ve picked up on and have served me well. So let’s get to it.

(Click to read on BiggerPockets…)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

Can You Invest in Real Estate With Bad Credit? (Maybe… Here Are 5 Ways to Do It)

One of the most common questions I am asked each week on the live BiggerPockets Webinar is simply, “Can I invest in real estate with bad credit?

It’s a great question, considering twenty-five percent of Americans have a credit score of less than 600, according to the Wall Street Journal. That’s a huge chunk of individuals who are unable to obtain a mortgage, thus making real estate investing a difficult task.

So, can you invest in real estate with bad credit?

Well, I have good news, and I have bad news:

  • The good news is YES; you can invest with bad credit. Later, I’ll explain five ways to do it.
  • The bad news is you probably shouldn’t. Unless… (We’ll get to that. But first…)

Why Do You Have Bad Credit?

Bad credit can happen for a variety of reasons. Perhaps medical bills caused the issue, or maybe identity theft. Maybe a person lost their job and had to miss some payments. The economic recession that started in 2007 led millions of Americans into financial difficulties, destroying millions of credit scores in the process.

But also, sometimes bad credit is caused by good ole fashioned stupidity and ignorance. A credit card here, a credit account there. Vacations, new clothes and other “need-it-now” luxuries have caused thousands of people to lose their good credit score and wind up in a rough spot.

No matter what reason you have for having low credit, it doesn’t matter anymore. It’s done. You have bad credit. But the real question is:

(click to continue reading on BiggerPockets)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

 The Surprisingly Simple Reason Why You Feel Stressed

“The tree that never had to fight
For sun and sky and air and light,
But stood out in the open plain
And always got its share of rain,
Never became a forest king
But lived and died a scrubby thing.”

-Douglas Malloch

Many years ago, researchers in Illinois planted a number of small trees inside a greenhouse, dividing the trees into three groups.

  • The first group was supported firmly by a wooden stake to help it grow tall and straight.
  • The second group was not staked at all, but left to grow free.
  • The third group, like the second, was unstaked, but the tree was manually shaken back and forth for several minutes every day.

After several months, the researchers looked at the three groups of trees and saw the inevitable: the trees in the first group that were staked were tall but weak. The trees in the second group were of medium height, but also fairly weak. The third group, which has been shaken daily, had developed strong roots and a thick trunk that would help it grow up tall and strong, though perhaps slower than the other two groups.

The analogy should not be lost on you: strength comes from adversity. No doubt you have seen this in other areas of your life. Problems will arise, and it’s how you deal with them that will define your future. But how do you handle problems without being frustrated, stressed, irritated and unhappy?

On a recent project, I think I discovered the surprisingly simple answer.

Where Does Stress Come From?

 (click to continue reading on BiggerPockets)

P.S. looking for hard money loans in California? Be sure to check out my friends over at northcoastfinancialinc.com. They have very competitive rates, can fund within a week and specialize in fix and flip loans and other hard money loans.

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