fliprent

I still believe that this is the best time to get into the real estate investing business.  However, the strategy used in this market may be the key to your success.  I’m not so sure that all of the creative strategies taught buy the self proclaimed gurus will work in this current market.  The differences in the strategies can make or break you as an investor.  For example, if you are looking for short term investments in which you control or own the property for less than 4 months, i.e. house flipping, this market should scare you some.  No one knows where the bottom is, including the gurus and even at a 20 percent discount (in today’s market) you could still be over priced in three months.  Wholesaling (house flipping on speed) may be a safer route to take since in most cases, you only control the property for a very short time frame.  The down side is you run the risk of not finding a buyer and potentially loosing deposits or down payments.  Don’t get me wrong I am still a proponent of house flipping, however only as one car in your freight train to wealth.

Read the rest of this entry »

Owning an apartment building or rental units can be less time consuming when you don’t have to deal with the daily property management yourself.  Hiring a company to manage your properties eases the responsibilities of the owner.   This means no longer dealing with collections, vacancies, maintenance, repairs, complaints, budgets and many other items by yourself.  This doesn’t mean you are hands off as the owner.  Your property manager should provide you with comprehensive monthly reports outlining the daily operations.  These monthly reports should include information pertaining to rent roll, disbursements, operating statements, vacancies, market surveys, and an annual budget.

Read the rest of this entry »

My contractors are all pretty good, so they don’t need me watching over them all day.  When I’m not flipping houses, I’m usually looking for the next flip or rental to add to the portfolio.  Well, actually I should say when I’m not physically at any of the properties…   Of the houses I saw today, this property looks like a decent deal.  The asking price was $69,900 and has been reduced to $53,900 in just under a month!  The details are as follows:

• Legally zoned for Two Units
• Each unit currently rented for $650/month
• Separate entrances
• Separate meters for Gas and Electric
• Both renters are subsidized by the city
• They are both 2 year tenants
• Needs new roof
• Rat problem
• Possible termite problem
• Needs new flooring
• Needs new deck
• Needs new bathroom fixtures (both units)
• Needs new kitchen sink and fixtures (both units)
• Walls need to be cleaned and painted

Read the rest of this entry »

I have a tenant that pays his rent late every single month.  In fact he doesn’t even bother mailing it anymore.  I usually meet him somewhere depending upon my location.  He pays with cash because we no longer accept checks from him.  This is one compromise that landlords cannot afford to make.  Too many bounced checks are never a good thing to your bank.   He doesn’t want to get a money order because it costs too much.  For tax reasons, cash is not the best way to conduct business.  However, I would prefer to be paid then not.  Did I mention he pays a late fee every month as well?  This would be a serious problem if all tenants paid this way, so make sure word doesn’t spread to your other renters.

 Compromise is what I’m getting at in this article.  I make a little more every month but have to wait (sometimes weeks) to get it.  Renting can be a hassle at times but there is no better way to own a house after 10-20-30 years and have someone else pay for it.   That is a sacrifice I am willing to make.   There are some scenarios however that compromise is not an option.  My parents still own the first house they ever purchased.  The current tenant has family members that are destroying the property.  In fact they and are not supposed to be living in the house at all.  This property is no longer generating positive cash flow not to mention the tenant’s breach of contract.  It’s going to cost more to repair the property than what it grossed in two years.   An eviction is not always necessary but if the tenant does not cooperate, it may be the only option.

Work with your tenants to come to an agreement that you both can live with.   If you have a renter that takes care of your property and treats it like a home, you should be willing to work with them.  We all go through financial difficulties and your tenants are no different.