The Lighter Side of Rental Properties

A Little Humor

The lighter side of rental properties

The lighter side of rental properties

MyInvestmentServices.com

 

Not all human drama stories are bad.

Some can be a little funny. About one year after I bought 205 S Ohio, I got a call from the second floor tenant complaining about the first floor tenant. I learned to usually ignore the first call from one tenant about another. They usually work it out themselves and whenever I did get involved I usually regretted it. For the record I don’t recall ever regretting having ignored the first phone call from one tenant complaining about another one. Please keep in mind that what I am referring to here has to do with my own tenants.

Anyhow, the next day the second floor tenant called again to complain about the first floor tenant. He sounded a little more serious this time and said that other neighbors were upset and was considering calling the police. I thought I should gather a little Intel on the situation at that point. I called the second floor tenant back and got his voicemail. I left a message and decided to call the local police to see if there had been any complaints filed against my building or my tenants. I was informed that a few of the neighbors had in fact called to complain about the guy on the first floor hanging around in the nude. I assumed they meant that he was in his apartment and just happened to have the shades up so people could see inside. I thought no big deal but I also thought I should do a drive-by to see if it was a real problem and perhaps instruct the first floor tenant to close the blinds or put some clothes on.

Well wouldn’t you know that as I approached the building my first floor tenant just happened to be sitting outside on the front steps leading up to the front porch. Good, this makes it easy for me to strike up an easy conversation about a somewhat awkward subject. As I approached John it was obvious there was a bigger problem. John was buck naked outside on the front steps.

Ok now. Do I deserve this? Is this some kind of a joke? I didn’t sign up for dealing with middle-aged nude people who look like what they’re wearing – nothing – needs to be ironed. Baseball cap on and smoking a cigarette. I asked John what the H@#$ he was doing sitting out front with no clothes on so that everyone could see? He answered by telling me that he had a right to do as he pleased and if others were offended that was their problem and not his. He wasn’t doing anything to anybody.

I kept my cool and refrained from laughing. I explained to him that he was sitting on the front steps – the only way to get to the building – and that other than very obvious laws about public nudity some people were just downright disgusted. He was actually in the way of anyone from the second or third floor being able to get to their apartments without having to pass right by him, thus being privy to his privates!

He rebutted by saying that his privates were kept between his legs and with his knees drawn together no one could see anything. Now I was going from amused to disturbed. I actually had to tell John that even though he had his knees drawn together that by passers had absolutely no problem observing his family jewels from the side! Of course this had never occurred to John. I told him that regardless of what he thought, I was prepared to file for eviction if I received a third complaint or the local police fined me as the property owner due to nuisance complaints. I never heard anything more on the subject.

I love crazy people. I had one elderly lady, 80+, who refused to cooperate on anything at any time. I actually grew to like her over time but boy she sure drove me nuts. She used to climb this big maple tree in our front yard in order to trim branches that were growing too close to the porch roof. The neighbors used to cringe every time they saw this. I used to tell her every time I saw her not to do it because I would have to ask her to leave if she did it again. She just said “You’re not going to get rid of me young man. I pay my rent on time.”

Darn it, the old girl had me right where she wanted me. She didn’t have a computer and she didn’t even have a phone. Whenever she called she would go to a local pay phone and call from there and leave a message. Normally, she would write these encrypted letters that she put together from words she cut out of old magazines that she got for free. She would tape them all onto a scrap piece of paper. The sentences took the form of old Western Union telegrams – something like “rent enclosed. STOP tenants upstairs noisy. STOP, faucet leaking. STOP, thinking of kicking me out? STOP !”. I remember the first time I went to meet her and raise her rent. She met me at the door with her old lease from the old owner which I did inherit but was exercising my right to raise rents. Her copy of the lease form totally butchered with all of her own cut and pasted words from magazines. It looked like a grade schooler’s project gone bad. The really funny thing is that her former landlord, the lady who I bought the house from, was an attorney. The tenant, Alex had simply worn her down with her incessant bantering about what the lawyer could and couldn’t do and the previous owner just gave up. Alex’s deceased husband was a professor at Carnegie Mellon and Alex herself was a very learned person. Alex’s husband may have been very smart academically, but he left Alex penniless. She had all of her worldly possessions, a whole household full, crammed into her apartment. By the way, I did not get my rent raise. Alex was “having none of that young man”, and I went away with my tail tucked between my legs. Before you judge me I must tell you that the next time I went to raise rent were with a pretty young lady named Dawn. I flirted with Dawn and Dawn flirted with me and I got my rent raise without any argument at all. Eat your heart out, guys.

I decided to finish this little blog with stories to leave you in a state of wonderment. I want you to assess who you are and where you are right now. Is what you are doing aligned with God’s intention for your life? Oh, it has nothing to do with what you do. It has everything to do with how you do it and more importantly, why you do it. I suggest looking at you in the mirror and asking some deep probing questions. Can you serve your fellow man in the activities you are currently engaged in?

As a result of my investing in Real Estate I have built a successful Real Estate Brokerage Company named Win Realty Advisors. I have built a successful Property Management Company named Win Rental Management. I have built a Title Company named Win Settlement Services. Through it all and as a result of my business ventures, I have started and shared in more friendships than I can count. I seek to serve first before being served and as a result I believe I am one of the most fortunate men in the world. As the Famous Zig Ziglar taught us, “Help as many people as you can to get what they want and as a result you will get plenty of what you want.”

I hope you can see now, after reading this, that you can do many things to improve your odds of experiencing the pleasure of profiting without pain from your rental properties. I will tell you that if this book puts a little fear or anxiety in you then remember you can do what I eventually did and turn the daily responsibilities over to a professional property manager. In fact I created my own property management company and started offering property management services to other investors just like you and me. I named it Win Rental Management because, with the policies and procedures I developed resulting in more deposits and more rents collected and reduced expenses, everybody wins.

For more information on this and more direct help in your effort to experience the pleasure of Rental Profits Without The Pain, please call me at 1-800-931-2605 or email Gary@WinReatyAdvisors.com. You can also learn more by visiting MyInvestmentServices.com and look for Rental Profits Without The Pain.

May God bless you, your family and friends and your business ventures in peace and prosperity?

Sincerely, Gary P. Wilson

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”

 

 

 

 

How Do You Get The Best Deal When Buying Real Estate?

Just Say No to Debt:

Use Cash

There are several ways to purchase real estate. If you have ever read any of Carlton Sheets material then you know there are at least 30+ ways to buy real estate. Some are very good and some are not so good, depending upon your circumstances. We teach a number of ways to get cash at MyInvestmentServices.com. The bottom line is that the more money you borrow to buy real estate the more you will be at risk. The absolute best way to buy real estate is to use cash, pure cash, and baby!

Oh, I can hear millions of you now shouting “never use your own money!” Yeah, I hear you; the problem with all the no-money-down gurus is that they never mention what happens when life happens. That would be too scary. The truth is that people die, people have babies, people get married, people get divorced, people get new jobs and people lose jobs. It happens. It’s not a matter of “if” but “when”. So you have to ask yourself what will happen to your highly leveraged empire if the economy turns sour. What if there is a real estate bust like what happened in 2008 – 2010? What happens if the pool of decent renters is raided by lenders who need to loan money so they relax their standards like they did beginning in the 1990’s with the Clinton administration and continued until 2007?

I’ll tell you what happens, all of your good renters become homeowners and you get left with unreliable tenants. That’s what happens and that more than anything else will cripple your real estate empire. If it doesn’t then it will certainly put you in a horrible position when the economy spins into a recession and your properties lose a lot of value. Then you’re stuck with all these bad tenants wrecking your properties and not paying you their rent. Then you can’t get another loan to keep things afloat because the banks won’t lend you money anymore. Get the picture?

I can show you mathematically how you can build a stronger, less risky, and more profitable real estate empire by using all cash and only cash. If you graph it out it will look like it takes a while to get going, because it does. However, when your mega cash cow starts to give milk, look out! You will be a juggernaut that can’t be stopped. You will absolutely make a lot of money. No one can stop you, and you will owe no one. Better yet, the next time there is a recession you will be the one everyone is running to buy their properties. You will be King of the world! Who’s Your Daddy Now? Go ahead; take your best shot you no-money-down gurus.

Sorry, I had to take a break and calm down. Now having said that, I know that because you can borrow money now at around 4% that a lot of you will do it. Go ahead, I did it too. I can promise you though that in the end you will regret it and you will see that it will take you longer to build your massive money producing monster. If you do borrow, promise me that you will put down at least 20%. I recommend 25% or more. This way you will get the best rates and terms. Remember, all you borrower’s out there, to keep your ratios in check. Never owe cumulatively more than 2/3 of what you own and never have debt payments more than 1/3 of your gross rents. If you manage to keep to these ratios the banks will always love you and unless you are a complete moron you should always be making money.

Before borrowing from commercial banks to buy real estate, if you have a 401K, you should check with your employer because you may be able to borrow against your 401k an amount up to 50% of its contents. It gets even better, because you aren’t borrowing from anyone else. You are borrowing from YOU Inc.! And guess what? The interest you pay on what you borrow is paid to YOU too! And guess what else? It isn’t taxed either. You know, maybe our government isn’t so bad after all. The reality though is that our government does suck, maybe not as bad as other governments but it still sucks. In fact I bet there is one good guy in our government who was an entrepreneur at one time and saw this amazing opportunity to do something really good for a lot of people. The cost of borrowing form a 401K is usually a small administration fee. No application fees, no appraisal fees, and no junk fees of any kind.

If you are just starting out and don’t have a lot of cash lying around like us seasoned veterans, take heart. You would be amazed at how easy it is to form a partnership with an individual who does have money lying around. Sometimes a veteran real estate investor will partner with one or more newbies to teach them the ropes, and more importantly have one or more “bird dogs” out there to do the hunting. When they find a suitable prey the investor puts up the money then he and his protégé split the profits. I have seen this work with doctors also. In fact, it could work with anyone who has more time and less money.

Another way to begin acquiring real estate when you are starting out and don’t have a lot of cash is to borrow from a private investor. They usually charge more in interest and fees than a bank but they are also more open-minded and creative. They usually understand the real estate investing game and aren’t interested in forming partnerships or teaching newbies. They will often finance up to 100%. They may also loan you money that you secure with other property you have. They are really not that hard to find either. Some mortgage bankers and brokers keep private investors in their back pockets to keep a deal moving forward rather than watch it die an agonizing death where nobody gets paid. Private investors can be tough, I have used them, but I don’t recommend it although I know some of you will just have to try because you want that sweet deal. I get it, I really do. I ended up being okay but it did cost me a lot of money in interest payments.

Still another way to acquire properties when you don’t have cash is to use hard money lenders. They call them hard money lenders for a reason. It is a hard way to do business. They charge exorbitant interest rates and exorbitant fees to get the money. They usually have a very quick term, sometimes referred to as a balloon payment. In other words, you have three to six months to use their money paying interest only, then at the end of the three or six-month term you have to pay back all of the principle you borrowed. If you can’t pay it back they will take your property, and they will, trust me. Sometimes people use this method to buy a rental property that needs work. They will borrow enough money from the hard money lender to buy the property and rehab it so they can rent it out, then go to a commercial bank to get a traditional mortgage on the property and pay back the hard money lender, and have excess cash from the traditional loan to line their pockets.

For years when money was easy I would pay cash for a property and for the remodeling then borrow from a bank in the form of a traditional first mortgage with easy terms and a low interest rate. This way I would continue to build my rental property empire while at the same time increase the amount of capital I had to work with. Keep in mind that it all has to be paid back and if you are a borrower you have to keep your ratios in check or you will get off and stop growing or borrow from private investors, or worse yet, hard money lenders.

In the end Cash is King. If you use any other method to acquire real estate then you are putting yourself at risk, sometimes grave risk. Life happens and when it does remember the old saying: “The man with the Gold makes the rules”. If you don’t owe the banks and other people you get to make the rules. If you owe the banks and other people they make the rules and they aren’t as nice to you as you are. Don’t be a sucker and fall for all that debt crap. Be a man and pay cash.

Visit MyInvestmentServices.com for information, tools and guidance when investing in Real Estate. Written by Gary Wilson, April 25, 2014.

 

Rental Profits Without The Pain
Rental Profits Without The Pain

How I Did 110 Transactions A Year With NO Assistants…And You Can Too… Get My Case Study Now>> https://www.myinvestmentservices.com/gift

“Guiding You to Massive New Wealth in Real Estate in 1 Year or Less Guaranteed!”