Skills

“You Manage Tenants Like a Girl!”

by Brandon · 8 comments

Today I am honored to have my favorite real estate investor and property manager in the entire world write for me… my wife! Heather has been my constant companion on my journey through real estate investing and the reason for my success so far. She is not only the best property manager I have ever known, but she knows the business of real estate investing inside and out and has a heart to help others as well.

 

As someone who entered the world of landlording at the ripe young age of 23, I have had my fair share of dealing with tenants who take one look at me, and use that as ammunition they tuck away for later use when they need someone to walk all over.  Sometimes, it’s written all over their face:

  • Inexperienced
  • Soft
  • Easy
  • Pushover

Great first impression, isn’t it? This is why over the last few years, I have developed a system that not only works for the fresh-faced beginner-landlord, but should be implemented by any and all landlords wishing to have a successful business relationship with their tenants.

 

It Starts with Being Knowledgeable.

 

The best ways to do this? Read. A lot. There are so many wonderful books out there on landlording that offer great ideas, strategies, and tools you can use in all sorts of situations you might suddenly find yourself in. I have three favorite books that I believe every landlord should read, highlighter in hand, at least at some point in their career:

“Landlording on AutoPilot” by Mike Butler

“The Unofficial Guide to Managing Rental Property” by Melissa Prandi

“How to Manage Residential Property for Maximum Cash Flow and Resale Value” by John T. Reed

Become familiar with your state’s landlord/tenant laws. I have my Landlord Tenant Act printed and tucked away nicely in a file for quick reference.

Also, the internet has a plethora of information from landlords of all shapes and sizes. The information and perspectives from BiggerPockets.com alone is enough to satisfy anyone looking for landlording advice.

Get together with other landlords. If there is one thing I’ve learned, landlords love talking about their experiences. Listen and learn!

The point is, don’t go through landlording blindfolded. Know what you’re getting yourself into, and have a solid foundation on which to build upon.

Have a Written Policy.

 

All that knowledge you learned? Personalize it to fit your business model and write it down. Cover everything. When a tenant has a question, instead of the answer coming from you, the landlord, it comes from the policy. Example: “My boyfriend got me a puppy for my birthday, can I keep it?” Answer: “I’m really sorry, but our policy states that no pets are allowed at that property.” Having the policy written down helps protect you from succumbing to your sensitive side that thinks on the spur of the moment, “Maybe just ONE puppy wouldn’t be so bad.”

Nope, it’s bad.

Your policy is there to protect you from yourself 🙂 Also, be sure to:

  • Be Up Front. Once you have your policy in place, don’t be coy, make sure your tenants know what those policies are. They should be in your Rental Agreement or Lease, which your tenants should have a copy of.
  • Be Consistent. The Rental Agreement I use with my tenants states that rent is due on the first and considered late after the fifth. On the sixth, if rent hasn’t been received, the tenant gets a $50.00 late fee and a 3-Day Pay or Vacate Notice per our policy and the terms in their Rental Agreement . The tenant is made aware of this when they move in, so it comes as no surprise when on the sixth they receive a late notice. When you are consistent, you are training your tenants to do things on your terms, which if you ask me, is a much wiser decision than doing things on theirs.

Follow Through.

 

This includes everything from completing tenant requested maintenance to enforcing your policies.

We once had a tenant in one of our 2-bedroom apartments that decided to get a young lab. Their Rental Agreement and our policy both stated that no pets were allowed on the premises. As soon as I was made aware of dog in the apartment (it’s difficult to hide a 60-pound dog in a 24-unit apartment complex!), I contacted the tenant by phone and reminded them of the strict “no-pet” policy and gave them a date by which the dog would have to be gone. When that date rolled around and the dog was still residing in the apartment, the tenant was given a 10-Day Notice to Comply with their Rental Agreement or immediately vacate the premises. On the tenth day, we did a thorough walk-thru of the home and confirmed the dog had been re-located.

Now, I wonder what would have happened if we hadn’t followed through? I can tell you: that apartment would still have one fluffy, yellow, 60-pound tenant.

Be Professional.

 

Landlording is a business, and as with any successful business, it’s important to always be on your best behavior. This includes the way you interact with your tenants, your appearance, written correspondence, returning phone calls promptly, etc. If you’ve been in the landlord role for any time at all, I’m sure you found out quickly that tenants can be the exact opposite. You can’t control them though, you can only control you. Set the precedent for your tenants that you are a professional business.

When my husband and I started out we essentially started our own property management company for our own rentals. We have a professional name, separate phone-line, operating hours (10-4 Monday thru Friday, with an emergency number for after-hours maintenance issues that can’t wait), logo, letterhead, standard forms, policies, maintenance crew, signs, etc. We answer the telephone with, “Thank you for calling (Company Name).” By doing this, it gave us the professional face we were looking for, and bonus, instantly gave us a higher authority to refer to.

Obviously not everyone needs to go so far as creating a company to run their business through, but the point is that you control how you appear to your tenants, and that appearance sets the precedent. If you want to be taken seriously, be professional in all situations, even when they’re not.

Offer a Quality Product.

 

Don’t be a slumlord. This doesn’t mean your rental has to look like it came straight out of Better Homes and Gardens, but give your tenants a clean home, something they can feel good in and show off to their friends. Also, generally the better product you offer, the better quality tenants you attract, and the better they will care of it while it’s in their possession.

Be Above Reproach.

 

Act with integrity. Don’t give your tenants a valid reason to complain.

Notice I said valid. Tenants complain, because unfortunately, in the tenants mind the landlord is the big, bad, rich guy taking advantage of everyone and their grandmother. But that doesn’t mean you have to be the stereotypical landlord. Do what you say you are going to do, when you say you’re going to do it. If your tenants have something to hold over you, trust me they will. So, why give them the opportunity? Doing this won’t stop the complaining or the stereotype, but you will always be one step ahead.

Final Thoughts

 

Obviously, these steps aren’t the magic formula for creating and maintaining a successful landlording career; however, they do set you up to have a tough time avoiding it. Simply know what you’re about, have a plan, and follow that plan. Whether you’re a beginner or seasoned, young or…wise (wink!), set yourself up to not only succeed, but exceed in this business.

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.

Mobile Home Investing: Not What You May Be Thinking

by Brandon · 0 comments

 

This is a post (the second in a three-part series) by John Fedro of MobileHomeInvesting.net. 

In my last post here at RealEstateInYourTwenties.com, I introduced myself, teased you with my simple cash-flow generating secret tool, then KAPOW!! – completely threw you a curve-ball by divulging my money-making strategy is investing in small, individual, easy-to-close mobile homes in and out of mobile home parks. I need to be brutally honest with you for the next minute…

Before we get into the meat of a cash-flow deal (next post) and talk about where all our money is made, you have to understand why sellers will sell you their unwanted mobile homes for such low prices; and conversely, why buyers will pay over retail prices for the same mobile homes. Much like any j.o.b. – you must understand your product, market, and all the players before you may truly thrive.

1. Understand Your Target Homes:

The mobile homes that will make you the most money are often times not the ones you would first believe. In a nutshell 3 bedrooms almost always outsell 2 bedrooms, and clean mobile homes always outsell mobile homes that need repairs. But what else… If you have been in real estate for any length of time you understand that it is not the cleanest or largest homes that make the most money but it is the more motivated sellers that you are truly after. The more motivated the seller, often times the more lucrative the deals end up becoming.

2. Understanding Your Buyers:

Approximately 80% of your end-buyers that call from your “Mobile Home For Sale” advertisements will not have the cash or approved credit to pay you all-cash for your mobile home. Another way to say this is that most mobile home buyers can make you a move-in payment and monthly payments for the sales price of the home. Understand that there is an ocean of buyers looking to buy a home with monthly payments instead of paying with all-cash.

What about buyers with all cash? These buyers are out there but in far less supply than buyers with some cash and great job history. Go where the demand is… payment buyers.

What about bank financing? Bank financing is very hard and restrictive to obtain especially concerning mobile homes on rented land such as inside a mobile home park.

There is a large segment of American society that are credit-conscious, hard-working and honest folks that would love to stop renting and finally own a mobile home of their own. If you choose to sell a home for all cash you are competing with all other sellers looking to sell their properties for all cash; driving home prices lower and lower. If you choose to accept monthly payments for your mobile home you can likely find tenant-buyers eager to pay over retail price for the value/opportunity to own a beautiful home.

3. Understanding Your Sellers:

My real estate investing business changed forever when I began to see my sellers for what they really are; fragile, scared, vulnerable, friendly, and selfish human beings. Let’s step outside the relationship that we typically have with mobile home and traditional real estate sellers and realize that each is a unique soul with his or her own set of skills, ambitions, loves, fears, and wants.

So what does all this mean for you: In a nutshell sellers are real people in real situations. Some sellers need to sell today, and others can wait weeks, months, or even years before becoming desperate to sell. Again some sellers are at the end of their ropes, while others have enough savings/income to ride out whatever situation is requiring/pushing them to sell. By being a mobile home investor in your area you may close deals and generate cash-flow by knowing your market and knowing what buyers will pay.

In my next post here at Realestateinyourtwenties.com you will discover an simple method to help ensure you underpay for every mobile home you purchase.

 

Impact a life daily,

John Fedro

John@mobilehomeinvesting.net

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.

eBook Now Available!

by Brandon · 12 comments

Hey everyone!

After many days of writing and editing, my first eBook has arrived and I’m giving it away for free! Yep, just as a gift for hanging out at Real Estate In Your Twenties.

And yes, you can still get the eBook free if you are thirty, forty, or a hundred years old!

Simply add your name and email to the box below!

Also, let me know your thoughts about the book!

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.

Five Huge Mistakes I’ve Made Investing In Real Estate

by Brandon · 7 comments

I once asked Seth Godin (marketing genius and internet blogger) via email what he would change if he could go back and do it again.  His response:

If I went back and changed something,

then things would be different and I wouldn’t be me.

But I like being me. So I’ll take this life

He makes a valid point. If we were to go back, it would change who we are. However, what about if we could help someone else learn from our mistakes?

People don’t like to dwell on mistakes.  Our pride likes to say “I’m awesome” but the reality is we make mistakes all the time.  While I’m sure it will hurt my image as an “expert,”  I am going to talk about the mistakes I’ve made because I want to save others from making the same ones. This article is designed to help you learn from those mistakes and hopefully avoid them yourself! Without further ado, my five biggest mistakes I’ve had in my investment career:

  1. Not Saving Enough – I have been lucky, but stupid. When I started investing in real estate, I had no money. I bought my first property with close to nothing down and was fortunate enough to sell it and made a decent profit. While I am completely in support of investing with no money down, I believe any investor needs to have at least some money in savings because the road to real estate riches is a bumpy one.
  2. Using Credit Cards – Building off number one, because I didn’t have solid financial resources, I often turned to credit cards to finance various things. I wish I had never used them.  When I first started, I bought into the “credit cards are a tool” mentality, which caused me to quickly max out several cards during rehabs. This is fine when the market is great and the proceeds from the flip can pay off the card, but when the market turned and I turned those rehabs into rentals, the credit cards didn’t get fully paid off. I have spent the past four years tackling them now.  As Dave Ramsey likes to say, debt is slavery.
  3. Renting To Family – I’d heard it said a thousand times but still fell into this trap. Do not rent to family. Ever.  I’m sure you can think of many reasons that this could turn out bad – and they are all true. As a landlord, you will always be seen as a “greedy” S.O.B. by your tenants, so it is best not to have one of those tenants be in your family.
  4. Renting to Friends- Similar to number four above, renting to friends is a mistake. I have rented to friends and it has turned out great, but the few times it has turned out bad it turned out REAL bad.  It simply isn’t worth it.
  5. Not Learning From A Mentor – Most of my mistakes could have been solved by simply listening to someone who had been there before. If I could go back, I’d have joined my local real estate investment club immediately, followed around the good investors until they were sick of me, worked for free on a flipping crew to see how it was done, and become a real estate expert before ever spending a dollar on investments.

That said, I know that if I were to go back and change things, I would not be where I am today and I like where I am. However, I believe strongly in the importance of learning from mistakes as to avoid future ones and help others avoid the same.

Are there things you wish you had known? What would you change if you could go back? What can you teach others from your mistakes?

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.

Four Reasons Why Partnerships Work In Real Estate Investing

by Brandon · 0 comments

What do Fred and Barney, Bert and Ernie, Abbott and Costello, and Starsky and Hutch all have in common?

Successful partnerships.

I am a big believer in partnerships.  I believe everyone is equipped with different skills, abilities, and positions in life and by finding the correct corresponding puzzle piece, you can achieve together much more than you can achieve apart.

In a recent post I suggested using a partner’s income and down payment to secure property. This is a technique I have used several times, with great success. I received an email recently asking how to overcome a potential partner’s objections to doing this.  The underlying question is

“why would a partner put down all the down payment plus their income and credit to get a 50/50 partnership when they could just do it by themselves?

This is an excellent question.  I am often asked this by others when I mention this strategy. The funny thing is – I have never been asked this by my partners. Why not? There are four reasons why this is not an issue and how to overcome those objections when they do arise:

  1. 50% is better than 0%.  The truth is, most people with good income, stable jobs, and perfect borrowing ability don’t invest. It’s not because of lack of resources, but rather a lack of knowledge and motivation.  The simple truth is that although they could buy a real estate investment on their own – they won’t.
  2. My 50% is worth it. It is important that a partner knows that although I am not putting any money into the deal it doesn’t mean I’m not putting anything into it. I am putting years of experience, knowledge, and deal-making ability into the deal.  In many cases, I am going to be running the day-to-day operations of the rehab (if needed) and managing the property for years to come.
  3. I’m selling a valuable product – When I seek out partnerships, I do not come “begging” for help. I am not looking for a favor. I am offering a solid return backed by years of experience and the probability of profit many times greater than the stock market. When I made this shift in my thinking, my investment world was transformed. I have the deal – I found it, put it together, ran the numbers, and got the property under contract. I have an amazing investment opportunity, and I am giving others the chance to be a part of it.
  4. The property is an amazing deal – I believe that if you have a great deal, the financing is the least of your concerns. If you are having difficulty finding financing or partnerships – you need to ask yourself: “Is this deal really that great of a deal?”  I only buy properties that cashflow extremely well and have great amounts of equity (its worth more than I owe) . I only buy incredible deals. If you do the same, you’ll find eager funding.

Will some partners still have problems with this? Yes.  They will say “Well, I could just do it myself.” However, when you find a killer deal and make it work, those same people will regret not working with you. They will see that they have done nothing while you made a killing. You can guess who will be first in line to be your 50% partner on your next deal.

 

 

 

 

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.

Don’t (Just) Invest for Retirement!

by Brandon · 0 comments

I recently had the honor of having John Fedro write the first of three posts here on RealEstateInYourTwenties.com.  If you haven’t checked out his site yet head over there!

While you are there, check out the article I wrote for him as well! I wrote a post on his blog titled “Don’t (Just) Invest For Retirement.”  Make sure you head over there to read my article!
(Click Here To Read It!)

 

Peace!

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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