Managing Your Own or Your Clients’ Rentals
Introduction
No Pain, No Gain
Exercising your anxiety threshold
I believe every beginning investor must go through some trying experiences in order to really test their mettle and push through their perceived barriers of stress and anxiety. I was no exception and I have a pretty high tolerance to stress. The third property I bought was 49 Grant Street in Etna. Over the years this property was a real cash cow. To this day I can’t understand why. The lady I bought it from said the same thing.
I was in for a rough ride from the day of closing (actually before). The seller delayed the closing once so she could collect unpaid rents. This should have been my first warning. Fortunately, I poured over all of the property documentation including the leases, where I discovered she had collected the last month’s rent up front. No one else knew this and she didn’t disclose it.
So what would have happened is that I would have not been credited with that at the closing had I not discovered it, and when the tenants’ leases were up they would not have paid the last month’s rent – properly pointing to their leases. She, of course, had conveniently forgotten this little tid bit of information. This should have been my second warning.
When we went to close for the second time, the title company had information from the municipality that there were outstanding water and sewage charges. The seller insisted she had paid them. She convinced the title officer but not me. The title officer insisted on closing which meant I would have been breech had I not closed. The time of this second closing, as required by the seller, was at 5:30 in the afternoon (after the municipality had closed for the day). How convenient for the seller. This should have been my third clue.
As it turned out I fought the title company for nearly a year to clean up the delinquent and unpaid water and sewage. For those of you who are new to investing in Real Estate, water and sewage are typically lien-able items, which means they don’t care who owns the house or who used the water, if it’s not paid they place a lien on the house, so whoever owns it at the time wins the prize and inherits the problem.
I know, we are entrepreneurs and we don’t have problems, we have challenges. I’m telling you this was a problem!
This was all just the beginning. It turns out the nice little man on the 1st floor who was the single parent of the cute little girl in kindergarten, was a professional deadbeat and tenant from hell. His cute little niece and her fiancé lived on the second floor. But that’s OK, because I had a crackhead on the third floor. He was a social guy so he shared some of his crack with the cute young lady on the second floor who quickly became what is known as a Crack Ho. I didn’t know what the H@#$ crack was or how bad that could be. I would a few years later. Anyhow, back to Mr. Wonderful on the 1st floor.
Trying to get rent out of this guy was like trying to extract a molar from a bull by going through his ass. It was difficult and messy. Oh, I’m stubborn. I got my rent but not without a lot of work. This was my first experience of course and I learned a lot of lessons from it. I must have had this guy in court 3 or more times. Each time he would come up with the money at the last possible moment. I finally beat him but not without him causing me a lot of extra work and getting me so agitated with his games I nearly resorted to violence.
In the meantime, because the second floor girl was spiraling downward into the dark world of crack addiction. She lost her job and while her fiancé was still working trying to make ends meet, she resorted to having sex with crack dealers in order to get her fix. Her fiancé eventually found out and kicked her out and moved out him. At one point I went over to the property to make a repair and assumed she was home. I knocked and yelled but to no avail. I eventually let myself in and when I got close to the bedroom I thought someone might be in bed. So I yelled again. This time the girl, buck naked, jumped up from her near coma sleep and screamed. I screamed too and got the heck out of there. Luckily, I didn’t get in trouble for that and I learned a valuable lesson. Never enter an apartment on your own if you suspect someone is there and no one answers your calls – especially if you are of the opposite gender.
The third difficult requirement was to rid myself of the zombie on the third floor. This at first appeared to be difficult but ultimately I got a lucky break. The guy got hit by a car in front of the house.
One evening I went over to the property to see the third floor tenant after making arrangements and leaving a reminder notice on his apartment door. When I arrived at his apartment I knocked and yelled numerous times. I knew he was there and so I eventually opened the door and walked in. Sure enough, about three of them were there. None of them were moving. Lights were on and so was the television. I tried to wake the ring leader up but he wouldn’t budge. He wasn’t dead and he wasn’t asleep. He simply believed that he could either: A – fool me into believing he was dead, B – fool me into believing he was in a non-waking form of sleep, or C – believe he could make himself invisible.
He and his two genius cohorts eventually opened their eyes. They finally realized I wasn’t giving up. I had him sign an agreement that stated he was to vacate the apartment by the weekend if he could not make good on his rent. He signed it and moved out the following weekend. In the process he got hit by a car in front of the house. He refused medical attention and we never saw him again. Halleluiah!.
Now, as the new Sherriff in town I was able to clean house and refill it with nice young female tenants complete with jobs and checking accounts. The next several years were good times for this property and profitable for me. But not without a cost to myself.
While all of the aforementioned circumstances were taking place, I hit my own wall. It was my first real test dealing with tenants and I eventually prevailed. However, one fine day in October as the leaves were changing colors I had to get out of there. I don’t mean the location where I was at the time but rather the state of mind I was in. I was either having a nervous breakdown or an anxiety attack. I told Susan we had to go somewhere, anywhere. It was beautiful outside and I wanted us all to go together: Susan, me, Annie and Andrew. We hopped in the car and I just started driving. We eventually found our way to Squaw Run Park, near where we lived. We got out and started walking down a path – any old path would do. Annie and Andrew kept looking at me and Susan, not understanding what we were doing. Quite frankly neither did I. They kept asking what we were doing there when they could get at least one more swim day in at the neighbor’s pool before the weather turned too cold. I don’t even know if I answered them. I was numb. It all seemed surreal. I knew they were there but I was not engaged with them or anyone or anything.
While walking I spotted a rock and just sat down on it and melted into it. I remember faintly hearing Andrew asking Susan “What’s wrong with Daddy? “ I don’t remember what Susan said but no matter. I was having my moment. And it worked. I eventually came out of the fog and we went back home. From that moment on I was able to handle whatever ridiculous tenant problem (challenge) that came my way. I was always able to keep things in perspective and I kept my cool for a lot of years.
Oh, I eventually grew tired of outsmarting deadbeat tenants and found myself lowering myself to their standards of uncivil language and treatment. That’s about the time I realized I needed professional property management. But that’s another story for another time. For the moment, I was determined to profit from my real estate–my way. I had to learn a lot the hard way. There was plenty of ways to learn how to buy rental property but not much was available to guide me once I owned it. I eventually got so good that I started my own Property Management Company and named it “Win Rental Management”. I also started teaching and coaching fellow investors how to realize the pleasure of Rental Profits Without The Pain.
For more information on this 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 and Turning Problems Into Profits. Would you like to learn from my lessons without having to repeat them yourself? Good. You should also take the training courses for Rental Profits Without The Pain and Turning Problems Into Profits.
Written by Gary Wilson, June 25, 2014
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