My self-imposed month off is now over. While I enjoyed the camping, motorcycling, and taking it easy, I'm ready to get back to work. That started today as I picked up my first 3 August rents early. All three of these rents were from my low income tenants, who like to give me their money as soon as they get their check each month.
My 3 bedroom house is ready to rent and I placed an add in the paper. I probably received at least 40 calls today. This is one part of the business that I didn't miss during my month off. In fact, I could probably be perfectly happy going through the next year without talking to a single tenant-applicant!
My next four days will be spent collecting rents and inspecting my rentals. I'm also going to try to post a new blog every day in August. So, stay tuned....
Tuesday, July 31, 2007
Monday, July 23, 2007
Painting Almost Done
I decided to head to town to do a little painting today. I worked about 3 hours and was able to finish painting the last room in my 3 bedroom house. Tomorrow morning, I am planning to paint the floors and then the painting will be finished. I had someone call that wants to look at the property tomorrow, and I'm hoping to have it rented for August 1st.
That was about it for today.
That was about it for today.
Sunday, July 22, 2007
Month Off!
As I said in my last post, I'm basically taking this month off. I have done a little painting the past few days and almost have my 3 bedroom house done. My big plan for tomorrow is to spend a couple of hours mowing a couple of apartment buildings. Then, I may do a little work on our motorhome. The furnace went out and I want to have it ready for our trip to Hilton Head this fall. Hopefully, it's something simple and I can fix it without having to call the heating and cooling guy.
Since I'm going to be off most of the week, I'm thinking about taking a camping trip later in the week.
Since I'm going to be off most of the week, I'm thinking about taking a camping trip later in the week.
Tuesday, July 17, 2007
Broke and Out of Work!
That got your attention, didn't it? Well, to tell the truth I am neither broke nor out of work. However, the headline does bring up the point I wanted to talk about - expanding your business. You may recall that I bought 12 rentals in May. That was a significant increase in my portfolio, which totals several dozen rentals. I have a full time rental property business, which means that I need my rental property business to generate income every month so that my family can eat, pay the house payment, go camping, etc. In other words, we depend on that money.
When you expand your business too rapidly, that eats away at your cash flow. That's what happened to me this month. During May and June, I spent a BUNCH of money rehabbing those 12 new rentals. I worked many long days and each day I made multiple trips to Lowes. It seems like I can't go to Lowes without spending at least $100, so all those trips really added up. To make matters worse, property taxes were due in July. That took many more thousands of dollars. On the bright side, my taxes weren't nearly as bad as another investor I know - $60,000. OUCH! When all was said and done, my cash flow was nearly gone for this month and therefore I'm basically out of work for the rest of the month. I have enough cash to deal with any maintenance that comes up, but I won't be doing much else until the beginning of August.
The point of this entire post is that you need to be careful as you expand. Being too aggressive can be just as bad as growing too slowly. Twelve new rentals in one month was just about my limit. In this case, fewer would have been even better!
When you expand your business too rapidly, that eats away at your cash flow. That's what happened to me this month. During May and June, I spent a BUNCH of money rehabbing those 12 new rentals. I worked many long days and each day I made multiple trips to Lowes. It seems like I can't go to Lowes without spending at least $100, so all those trips really added up. To make matters worse, property taxes were due in July. That took many more thousands of dollars. On the bright side, my taxes weren't nearly as bad as another investor I know - $60,000. OUCH! When all was said and done, my cash flow was nearly gone for this month and therefore I'm basically out of work for the rest of the month. I have enough cash to deal with any maintenance that comes up, but I won't be doing much else until the beginning of August.
The point of this entire post is that you need to be careful as you expand. Being too aggressive can be just as bad as growing too slowly. Twelve new rentals in one month was just about my limit. In this case, fewer would have been even better!
Friday, July 13, 2007
Seeing Clearly
I have a strict rule when it comes to windows: when windows reach their 172nd birthday, we replace them! Yes, you read that right, this apartment building was built in 1835, making it 172 years old. I must confess that I don't have anyway of knowing if these were the original windows, but they certainly appear to be. At any rate, the windows have now been replaced in two of the three upstairs apartments and I am planning to replace the windows in the third upstairs apartment by the end of the summer. My only problem may be finding more surplus windows of the correct size. I got the last 3 windows of this size at our local surplus store ($50 each), so I've got to find another source (or I'll have to pay retail). Retail and rentals don't go together!
FREE!
I'm about ready to start the rehab on the last of the 12 rental units I bought in May. It is half of a duplex and needs a significant amount of work. I have already trashed out the unit and have installed a new 125 amp electrical service. Now it's time to start all the cosmetic rehab.
The tenant, who was evicted by the previous owner as part of my purchase agreement, was a real scumbag. He was filthy and damaged/stole a lot of things in the unit. For example, all of the kitchen cabinets were stolen and the furnace was stolen from the other unit in this duplex (I converted that unit to electric baseboard heat). The previous landlord has filed a lawsuit against the tenant, but will probably never recover what she is owed.
In a stroke of good fortune, the previous owner knew of a business that had remodeled and they were giving away their "old" kitchen cabinets. Of course, when I get something for free, I don't expect too much. However, I was shocked when I picked up the free cabinets - they looked almost new. Recieving those cabinets will surely save me a bunch of money and I was very excited to have gotten them. Who says there is no free lunch?
I also picked up 3 windows for one of our apartments yesterday. I got the windows at a local builder's surplus store. These are 31" X 64" double pane, double hung vinyl replacement windows and I got them for $50 each. They are new but have been sitting outside for some time. With a little cleaning, they should be great!
The tenant, who was evicted by the previous owner as part of my purchase agreement, was a real scumbag. He was filthy and damaged/stole a lot of things in the unit. For example, all of the kitchen cabinets were stolen and the furnace was stolen from the other unit in this duplex (I converted that unit to electric baseboard heat). The previous landlord has filed a lawsuit against the tenant, but will probably never recover what she is owed.
In a stroke of good fortune, the previous owner knew of a business that had remodeled and they were giving away their "old" kitchen cabinets. Of course, when I get something for free, I don't expect too much. However, I was shocked when I picked up the free cabinets - they looked almost new. Recieving those cabinets will surely save me a bunch of money and I was very excited to have gotten them. Who says there is no free lunch?
I also picked up 3 windows for one of our apartments yesterday. I got the windows at a local builder's surplus store. These are 31" X 64" double pane, double hung vinyl replacement windows and I got them for $50 each. They are new but have been sitting outside for some time. With a little cleaning, they should be great!
Wednesday, July 11, 2007
BIg Dig!
I spent my 3 hours of work today filling in a hole in the backyard at one of our recently purchased houses. The hole was a large cistern which was certainly abandoned many years ago. The top of the cistern had a very heavy manhole cover lid over it, but I was still concerned that it could be a safety concern. Tenants can find a way to get hurt on just about anything and I certainly don't want to get a call that the tenant's kid is at the bottom of the cistern!
While I was doing safety related tasks, I also patched a small hole in the sidewalk that could have caused someone to trip.
After that, I returned home and spent about another hour paying bills. With dozens of rentals, there are ALWAYS bills to pay!
Tomorrow, I'm planning to paint at least one room in a rental that I'm rehabbing.
While I was doing safety related tasks, I also patched a small hole in the sidewalk that could have caused someone to trip.
After that, I returned home and spent about another hour paying bills. With dozens of rentals, there are ALWAYS bills to pay!
Tomorrow, I'm planning to paint at least one room in a rental that I'm rehabbing.
Tuesday, July 10, 2007
The Value of Intel
A couple of weeks ago, I posted about the freak that I had living in my duplex. To make a long story short, she complained about imaginary birds; she was bitten by invisible dust mites; and she wrote a bad check for the June rent. She was a FREAK! Needless to say, I filed for eviction. I also fully planned on filing criminal charges against her for writing a bad check. Unfortunately, our court date was scheduled for July 16th, which is the same day that my father is having major surgery. I needed to get her out before the eviction hearing, because I wouldn't be able to attend.
I learned a long time ago, that you should pay attention to what your tenants say and do. Everytime I see one of my tenants, I make it a point to engage them in conversation. You would be shocked at what tenants will tell you. This information (this intelligence you are gathering) can be valuable when you have a problem with the tenant.
When I evict someone, I make it a practice to drive by the property every day or two to see what's going on at the property. I noticed that this tenant was keeping a low profile and I didn't see her outside on any of my trips by the property. In addition, I noticed that the court officer had to leave a legal notice regarding the eviction on the doorknob, which meant that she wasn't answering the door. In Ohio, you have to give deadbeats a written 10 day notice if you intend to press bad check charges. I had sent her such a notice by certified mail and I saw that the postal worker had placed a note about this certified mail on top of her mailbox. She hadn't accepted it and therefore didn't know that I was pressing criminal charges. Therefore, I posted the 10 day notice about the bad check on the front door!
On one of my trips driving by the house, I saw the neighbor, from across the street, sitting outside. I noticed on one occassion that my Freak tenant was friends with this neighbor (an important piece of intelligence). I asked the neighbor if he had seen my tenant and he said that he had not seen her (almost certainly a lie). I told him that she was being evicted and that she had written us a bad check. He said that he had seen the police at her door. What he actually saw was the court officer trying to serve the eviction notice, but the neighbor assumed that the police were trying to arrest her over the bad check. This was the opportunity I was looking for. I said, "yeah? they must be after her - you know writing a bad check is a felony. I'm sure the police will be back. She deserves to be in jail". Then I left.
Two days later, the tenant was gone and she left the place in spotless condition (probably hoping not to antagonize me further).
Using the intelligence that I had gathered by talking to the tenant and observing her actions allowed me to avoid this eviction. Good deal!
I learned a long time ago, that you should pay attention to what your tenants say and do. Everytime I see one of my tenants, I make it a point to engage them in conversation. You would be shocked at what tenants will tell you. This information (this intelligence you are gathering) can be valuable when you have a problem with the tenant.
When I evict someone, I make it a practice to drive by the property every day or two to see what's going on at the property. I noticed that this tenant was keeping a low profile and I didn't see her outside on any of my trips by the property. In addition, I noticed that the court officer had to leave a legal notice regarding the eviction on the doorknob, which meant that she wasn't answering the door. In Ohio, you have to give deadbeats a written 10 day notice if you intend to press bad check charges. I had sent her such a notice by certified mail and I saw that the postal worker had placed a note about this certified mail on top of her mailbox. She hadn't accepted it and therefore didn't know that I was pressing criminal charges. Therefore, I posted the 10 day notice about the bad check on the front door!
On one of my trips driving by the house, I saw the neighbor, from across the street, sitting outside. I noticed on one occassion that my Freak tenant was friends with this neighbor (an important piece of intelligence). I asked the neighbor if he had seen my tenant and he said that he had not seen her (almost certainly a lie). I told him that she was being evicted and that she had written us a bad check. He said that he had seen the police at her door. What he actually saw was the court officer trying to serve the eviction notice, but the neighbor assumed that the police were trying to arrest her over the bad check. This was the opportunity I was looking for. I said, "yeah? they must be after her - you know writing a bad check is a felony. I'm sure the police will be back. She deserves to be in jail". Then I left.
Two days later, the tenant was gone and she left the place in spotless condition (probably hoping not to antagonize me further).
Using the intelligence that I had gathered by talking to the tenant and observing her actions allowed me to avoid this eviction. Good deal!
Wednesday, July 4, 2007
Camping!
I haven't posted much for the past few days because my wife and I are camping this week. We're camping about 30 miles from home and I am "working" during the first four days of July, collecting rents. That's actually a fun job because I'm riding my motorcycle from the campground to town to collect the rents! I've got about 5 more rents to collect this morning and then we have a party planned at the campground this afternoon.
I won't be back to my normal 3-4 hour per day work schedule in my rental business until next Monday.
Have a great 4th of July!
I won't be back to my normal 3-4 hour per day work schedule in my rental business until next Monday.
Have a great 4th of July!
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