Another Day in Court!

I am actually off today as I have been for most of the past week or so. However, I had to make an appearance in court today for a lawsuit I have against a previous tenant. This lawsuit was originally scheduled earlier in the month, but my attorney had a sick child and the court proceedings were rescheduled.

I normally don't sue tenants for damages after we evict them, but these tenants made me angry. Therefore, I'm suing them just to make their lives miserable. They spread tacks and nails throughout the house to make cleaning the carpet difficult and the intentionally made a BIG mess of the place. The straw that broke the camel's back was that they abandoned a little kitten outside in freezing temperatures. Fortunately, I found it in time to save it, but these tenants were just real scumbags and I wanted to make a point.

The tenants didn't show up in court today and I received a judgement for almost $3,000. I probably won't collect it, but I will try to make their lives miserable for the next few years. In addition, they will have a judgement on their credit report and an eviction on their record. That should make it impossible for them to buy a house and make it difficult to find places to rent.

Happy New Year!

Busy Christmas Week!

This has been a busy Christmas week. I've never been to so many Christmas parties in my life. We had company much of the week and are just now beginning to relax.

I did a little work the past two days. The appraiser came to look at the properties that I'm buying and the one that I'm refinancing. In addition, I showed my 2 bedroom house to an applicant and she rented the house. This was the house that I previously wrote about the gas furnace with the cracked heat exchanger. Here in Ohio, people want all electric houses. Houses with gas heat are very hard to rent. Therefore, I spent about 4 hours yesterday and 2 hours today installing electric baseboard heat in the house.

On Monday, I have a court hearing (previously continued) for the last deadbeat that we evicted in November. I'm suing the deadbeat for the damage they caused to the house. I just found out today that their water had be shut off in July and they had broken into the meter and turned it back on. The water company sent me a bill for this, which I will not pay. However, on Monday I will be visiting the police to file a report about this criminal activity.

Tomorrow, we will be going snowboarding, weather permitting. Only a couple of weeks to our first big snowboarding trip in New York (Holiday Valley).

Break-in

I spent about 2 hours working today (if you could call it work). Today started out with me inspecting the new roof that I had put on one of my apartment building. This was the most difficult part of the day as that roof is WAY UP THERE and the contractor's ladder was very flimsy. At any rate, since I paid $2,000 to have the roof redone, I felt compelled to get my courage up and climb that rickety ladder and take a look. The job looked good and I wrote the contractor a check for the work he did.

I then went over to one of our apartments that had been involved in a break-in on the evening of the 22nd. The tenant called me yesterday to inform me that his apartment had been broken into. I always ask if the tenant called the police and if the police caught the criminals - they had. The criminal was in jail and has been charged with felony aggravated burglary and criminal tresspassing. I then asked if he knew the criminal - he did! In almost every case in which one of my tenants has been the victim of a crime, it is their fault. They hang around with scum and then are victimized by the scum. That is exactly what happened in this case. My tenant was friends with this criminal, who was a local tattoo artist, and the criminal broke in to steal his prescription medication and other things. This is very typical with low income tenants. They have a lot of problems and they are all self-inflicted!!!

The criminal kicked in the lower panel of a side door and broke the door jam. I screwed the door shut (with 3 inch screws) and made a wood panel to replace the broken panel. That was it for today!

Have a Merry Christmas!

Great Weekend!

We're back after taking yesterday and today off to go snowboarding. The weather was quite warm for late December, with today getting into the 50's. However, the snow conditions were quite good and there was almost no crowd either yesterday or today. We had a lot of fun, starting out just snowboarding and then heading over to the terrain park for some jumps and tables. Lots of fun.

Even though I was off yesterday, I did do one work related thing before we left. That work was to do the paper work for a new LLC for my new rentals. I also got an EIN (employer identification number) for the new LLC. I will need the new LLC and the EIN to close the loan with the bank.

That's it for today. All that snowboarding wore me out!

End of the Week!

Today was the end of the week for me! I took Monday off to go snowboarding and I'm taking tomorrow (and Saturday) off to go snowboarding again. I did a little work today (for about 2 hours) on one of my rentals, but my mind wasn't really in the work. Christmas is getting close and I'm ready for snowboarding and Christmas activities - not work.

This freedom to do what I want to do is my favorite part of my rental business. I'm not anticipating much work happening between now and the end of the year!

Loan Approved!

I got some good news from the bank today. They say that they will fund my latest purchase of 10 rental units in 4 buildings. This includes 2 single family houses, a duplex, and a 6 unit apartment building. This is the first loan I have done since all the sub-prime fiasco; credit crunch, etc. No problem!

In addition to talking to the bank, I also had to do a little credit repair work on my own credit score. When I was talking to my bank about the loan, they told me that my credit score had dropped a BUNCH because the other local bank I use had turned in several late payments to the credit bureau. Since I've never made a late payment on anything, I knew immediately what the problem was. Here's the story: I use two small local banks for all my real estate purchases. At one of the banks, I have a line of credit. Commercial lines of credit usually run for a year and then must be renewed. Normally, this renewal only takes a signature and it's done. However, the paperwork apparently wasn't right on my line of credit and the bank needed to redo it from square one. For whatever reason, this took them 3 or 4 months. During this 3 or 4 month period, the line of credit was technically in default because it had become due and payable when it expired. I received a statement during each of those months saying that I owed the entire amount plus a late fee. When I received the first one, I called the bank President and told him about the statements I was receiving. He told me to continue to make the payment and disregard the notices, which I did. Well, apparently, someone at the bank didn't get the memo and turned the loan into the credit bureau. UGH! So, today, I called the President of the bank again and he asked me to bring a copy of my credit report to the bank. I subscribe to FreeCreditReport.com and so I printed a copy off of that and took it to the bank. He explained that he wanted the credit report because the bank needed to determine where they screwed up and that they would remove the items from my credit report.

After this, I did a little more Christmas shopping and then finally went into town to work on my 2 bedroom house. Today, I replaced 2 broken windows with plexiglass (thanks to vandals); replaced several missing lightbulbs (stolen by the tenant); replaced a broken toilet seat; and checked on the bat that I assisted yesterday. I expected to find the bat dead, but he was gone! Maybe he survived after all.

Finally, I showed a rental to a potential tenant. That was about it! I'm going to work a few hours tomorrow and then take Friday off to go snowboarding.

Dr. Doolittle

I got back to work today - well if you can call two hours work! I fixed a lock on one of the tenants doors and replaced a broken window. I then replaced all the mini-blinds on a 2 bedroom house that I'm getting rent-ready. While I was replacing the mini-blinds in the kitchen, I noticed a small bat that had gotten its wing caught in a small corner of the kitchen where the drywall didn't quite meet. Somehow, the bat managed to get his wing wedged in this small crack. There was some blood on the wall where the bat had been injured. When I first saw it, I thought it was dead. I touched it and it immediately began to screech. It was obviously not only alive, but in distress. I put on some gloves and tried to gently slide the bat's wing out of the crack. Unfortunately, that didn't work and the bat was still really stuck. I next tried to pry the two sheets of drywall a little farther apart to open up the crack. Again, no dice! Finally, I used a screwdriver to gently put a hole in the wall just above the bat's wing. With a little work, I was finally able to free the bat. The bat had a small hole in his wing, but I didn't see any obvious serious injuries. Therefore, I took the bat outside and put him in a stack of logs. I doubt if he'll survive, but I did my best to help him out.

After helping the bat and putting up all the miniblinds, I called it quits and headed to the mall to do some Christmas Shopping.

Tomorrow, I'm going to call the bank about my loan for the rentals that I'm buying. I'd like to get these properties closed by the end of the year, if possible.

More Snowboarding Today!

I took another day off today to go snowboarding. The weather was excellent for a day at the mountain. We had a significant snow fall over the weekend and they were making snow today also. They have more than 2 feet of base and all the runs were open. Since today was Monday, there were very few people there. I didn't stand in line for a lift even a single time. I can't even count how many runs I made, but it was a BUNCH. I feel like I am getting close to meeting my goal of being proficient at snowboarding "goofy" (wrong foot forward). One or two more days will probably make me very comfortable boarding both ways. Next, I will need to start jumping "goofy". That should be a challenge!

You might think that I've completely forgotten about my rental business. I have not. I will be doing a little maintenance tomorrow and will probably do a little work Wednesday and Thursday as well (unless someone wants to go snowboarding one of those days). I also need to finish my Christmas shopping tomorrow.

Starting Friday, I'm planning to take off until after Christmas. We're going snowboarding over the weekend and then of course Christmas is on Tuesday. That's about it for today!

SNOWBOARDING!

The best part of owning a rental property business is being able to take off whenever I want. Today was just such a day. Our local ski resort opened today at 4pm (after being closed all week) and therefore I took the day off so that I could be there when they opened. This was Friday and therefore most people had to work today. Therefore, I had the mountain almost to myself for the first hour. In fact, I literally snowboarded a full 45 minutes before I even saw another skier. IT WAS GREAT!

My priority this year is to be able to board "goofy", meaning that I am learning to board with my non-dominant foot forward. It is essential to learn to board both ways so that I can do 180s during jumps. I got a very good start toward that goal today, making many runs "goofy". Now, I just need enough repetition to feel comfortable at higher speeds and jumping. Weather permitting, I may go again Sunday or Monday. Again, Monday would be better as it will be less crowded with most people working.

Christmas Deals!

Christmas came early this year in the form of a 6 unit apartment building. On December 1st, I reported on my blog about a landlord who offered to sell his building to me for $30,000. I finally went to look at the building yesterday and signed a contract right there on the spot.

Today, I went to the bank to talk to them about getting the money for this deal and the four other rentals that we already have under contract. The bank didn't seem to think it would be a problem, and I am hoping to close on all 10 units by the end of the month.

The big issue in this process is that the electric service in the apartment building is only 60 amps. It is very difficult to get insurance on rentals with 60 amp electric, but my insurance agent did find a company that will write this policy for me while I upgrade the electric.

That's about it. A pretty exciting end to the year!

Four for 95

We now have a contract on the last four rentals that we'll probably buy this year. These 2 single family houses and a duplex (with 3 garages) are on a street where I already own several properties. I will be buying all four for $95,000, which is a very good deal. Gross rents will be about $2,300 per month.

I'll be going to the bank on Wednesday to try to obtain the financing for this purchase. I'm anxious to see what changes there have been since all this sub-prime fiasco and credit crunch has occurred. I'll report back on that when I find out. I'd like to close this by the end of the month.

Tomorrow, I have another day in court. I am suing the tenant we recently evicted for damages, mainly because I'm angry that they intentionally damaged the house and because they abandoned a small kitten on the property. That makes them SCUM in my book and I'm going to do everything possible to make their life miserable. That will ruin their credit for several years and will make obtaining a home loan next to impossible. I think it's important that responsible landlords let the deadbeats know that we aren't going to accept this type of behavior.

Rain Halts Snowboarding Day

Well, I had planned to take yesterday off to go snowboarding on opening day at Mad River Mountain. Unfortunately, the weather did not cooperate. We had nearly constant drizzle and light rain, and it clearly wasn't a good day for snowboarding.

With the snowboarding day cancelled, I headed into town to work on one of my rentals. This rental is the 3 bedroom house that we recently took back after an eviction. The tenant intentionally clogged up the main drain, probably with rags and opened the cleanout in the basement so that sewage would come out in the basement. The sewage was all dried up yesterday and I spent about 10 minutes shoveling it up. Next, I used my professional, $400 power snake to try to unclog the line. I thought that would take about 10 minutes. After more than 2 hours and making a big mess, I gave up and called my plumber. He has a VERY EXPENSIVE water jet machine. The water spray is so powerful that it will actually cut tree roots! It only took him 10 minutes to clear the blockage. Unfortunately, it costs me about $160 to have them come with their expensive machine, but it had to be done. That was the last thing that needed to be done to this house and the new tenant is moving in this weekend.

Snow Day!

We got our first significant snow of the year today, with about 4 inches of snow on the ground by early afternoon. The roads were quite slippery and my wife had a couple of routine medical tests that needed to be done today. Therefore, I took the day off to drive my wife to her appointment and then we went to Walmart to get new tires for my truck. This freedom to set my own schedule is the thing I like most about the rental property business. I have no boss that I must ask for a day off and I never need to plan a day off in advance.

Speaking of days off, our local ski resort will be opening Friday afternoon. I've been waiting for this day for a month! If the weather looks good Friday, I'm taking the day off to go snowboarding. I'm also taking Monday off to go snowboarding. It doesn't get any better than that!

Inspection - Passed!

Today was the Section 8 inspection on the apartment that I just got back from the previous tenant THIS MORNING. At the beginning of November, I had a tenant move out of one of my two bedroom apartments. The tenants in the adjacent one bedroom apartment wanted the two bedroom apartment. A new Section 8 tenant wanted the one bedroom apartment that was being vacated. I've only had this building since the spring and the two bedroom apartment was in its original condition. It needed new carpet; a complete paint job; and other cosmetic work. I finished the rehab on Friday and the tenants moved their stuff from their apartment to the new one over the weekend. They finished moving and cleaning their apartment last night and I got in there about noon today to prepare for the 3pm Section 8 inspection. Of course, I had rehabbed the 1 bedroom before the current tenant moved in last May and so I was quite confident that very little work needed to be done. Fortunately, that was a correct assumption and by 3pm I had everything ready to go. The apartment passed the inspection and I can move the new Section 8 tenant in later this week.

The fourth of each month is the last day that I collect rents without a late fee. Unfortunately, one tenant didn't pay her rent today and instead informed me that she was leaving immediately. This is the same tenant that I have written about in previous blogs. To recap, she allowed her boyfriend to move in (against the lease) and then discovered that he was a convicted felon and had a LENGTHY CRIMINAL RECORD including felony drug convictions; felony carrying a concealed weapon; and a BUNCH of misdemeanors. She kicked him out and he has been stalking her every since. In the past couple of weeks, he has slashed her tires twice; thrown a brick at her car windshield while she was in the car; shot a pellet gun at her car; and continuously stalked her. She now has a restraining order and the local domestic violence group is helping her leave.

She assured me that she will be out tomorrow and I will not post a 3-day notice tomorrow. However, if she doesn't leave tomorrow as promised, I will post a 3-day eviction notice on Thursday. Four days later, I will file an eviction in court if she isn't gone. As a landlord, I won't allow a non-paying tenant to stay rent-free. This may seem harsh, but remember that her poor judgement is what caused her problems. If she had been more diligent in picking a boyfriend, she wouldn't be stalked by a dangerous felon! In my experience, low income tenants have a LOT of drama in their lives, almost all of it self-inflicted.

One bright spot is that I got my last 3 bedroom house rented today. As of today, I am completely out of 1 bedroom and 3 bedroom rentals. I still have three 2 bedroom rentals open.

Rent Day!

I spent the day collecting rents. With it being December and the holidays rapidly approaching, I didn't get many rents on the 1st and 2nd. So, everybody was calling today. Tomorrow morning, I'll divide the money into the respective companies and test all the cash with a conterfeit pen. When I receive the rent, I mark each pile of cash with the name of the tenant I received it from (so that I know who gave me each bill). Then, I will make up deposit slips and take it to the bank. COLLECTING RENT IS MY FAVORITE PART OF THE JOB!

They're blowing snow at Mad River Mountain, our local ski resort. The weather was bitter cold today and more cold is expected all week. Did I mention that I'm ready for some serious snowboarding?

Collected One Rent

Today is Sunday and therefore I didn't work today. I did make a quick trip into town to pickup one rent, but that was about it. This afternoon, I spend a couple of hours fighting the battle in the pacific on my new Play Station 2. I don't play video games very often, but really enjoyed playing it on a very rainy day today.

This evening, my wife and I went to our small group meeting at church. That is always one of the highlights of my week.

Last year, the local ski resort opened on December 9th. I'm hoping for that again this year, but today's warm, 56 degree temperature isn't helping. C'mon cold weather. I've got my new snowboarding jacket and pants ready to go and I'm beginning to dream of riding the snowboard!

How to Find a Great Deal

New investors often tell me that they can't find properties that will cash flow. When I ask them what they have been doing to find great deals, their answer is almost always that they've been looking on the MLS. In my experience, very few good deals are found on the MLS.

I get the majority of my deals by meeting and knowing people. Take a look at what happened to me yesterday:

One of my buildings is a 6-unit apartment building. I was at the building picking up a couple of rents and fixing a light. One section of my building needs to have the shingles replaced and I will be using a contractor to do that job (due to the height of the roof). I thought I had a contractor lined up, but he has suddenly disappeared. As I was leaving my building, there was a roofing contractor working on the house next door. I went over to talk to the contractor about my roof and the homeowner was also there. We began talking about tenants because the contractor also had a rental. I made a comment about the building across the street that has had some terrible tenants in it recently. As it turns out, the homeowner knew the owner of that building and she said that he tried to sell the building to her for $30,000. THIS IS A SIX UNIT BUILDING and should have rents of about $2,300 per month! When I got home, I called the owner and he does want to sell it for $30,000. He has had a string of TERRIBLE tenants. His daughter got involved in drugs and he spent a bunch of money trying to help her get straight. He is depressed about the whole situation and just wants to get rid of it. He will show it to me at the beginning of the week and I will probably buy it on the spot! The retail value of this building is about $220,000! A great deal would be $100,000. For $30,000 IT IS A STEAL! This is how I get most of my deals - by getting out of the house and talking to people. I buy a lot of properties from disgruntled landlords. Unless you MEET a lot of people, you'll never even hear about these deals. My advice: GET OUT OF THE HOUSE AND TALK TO PEOPLE!