After having a great week and weekend, this week didn't start with a lot of fun.
It is almost always bad news to get a call from a low-income tenant before noon. Why? Because the reality is that most low income tenants don't work and many sleep-in until late in the morning. In fact, I almost never get calls from tenants in the morning.
This morning I received a call from one of my tenants at about 8 am. The tenant said that someone threw a brick through the picture window of her daughter's apartment. The daughter is another of my tenants. It seems that the daughter had kicked out one of her many shack-up boyfriends and he decided to retaliate by throwing a brick through the window. The boyfriend was arrested. The tenant had her mother call so that I wouldn't drive by and discover the broken window (which would not have been pleasant for the tenant).
My lease says that the tenant is responsible for all glass breakage, so she will either fix it or be evicted.
I spent the rest of the day working on taxes. I do all my own bookkeeping, so I must put everything into Quickbooks before I visit the accountant. My properties are divided into different companies. I finally got all but one of the companies done. I will do whatever it takes to finish that company tomorrow as I am scheduled to see the accountant Wednesday morning.
Although I really like the freedom that the rental property business provides, not everyday is sunshine. Today was a little cloudy!
Monday, March 12, 2007
Sunday, March 11, 2007
Great Weekend!
We had a great weekend! I started the weekend yesterday by steam-cleaning the carpets in one of my 3 bedroom houses for the second time. I am always surprised at the amount of dirt and filth some tenants cause. This carpet is only a couple of years old, but really looks bad. Even though I have now steam-cleaned this twice, the waste water is still coming out black. Fortunately, the carpet is looking better and I think that one more steam cleaning may well do the job.
After cleaning the carpets, my wife and I took a bicycle ride on a local bike path.
Today, we started the day by going snowboarding (for the last time this year). It was a beautiful day for spring skiing. The skies were sunny and the temperature was nearly 60 degrees. The resort was almost deserted and we enjoyed having the place to ourselves.
I only recently learned to snowboard. I had two goals for my snowboarding this year. The first goal was to learn to snowboard "goofy", which means boarding with the non-dominate foot first. My second goal was to learn to do basic jumps in the terrain park. I was very happy to have achieved both goals this year.
To end the weekend, my wife and I rode my new motorcycle to Church this evening for our small group meeting. One of the other members of our small group is a biker and I am looking forward to doing some short trips with my friend.
All in all, it was nearly a perfect weekend!
After cleaning the carpets, my wife and I took a bicycle ride on a local bike path.
Today, we started the day by going snowboarding (for the last time this year). It was a beautiful day for spring skiing. The skies were sunny and the temperature was nearly 60 degrees. The resort was almost deserted and we enjoyed having the place to ourselves.
I only recently learned to snowboard. I had two goals for my snowboarding this year. The first goal was to learn to snowboard "goofy", which means boarding with the non-dominate foot first. My second goal was to learn to do basic jumps in the terrain park. I was very happy to have achieved both goals this year.
To end the weekend, my wife and I rode my new motorcycle to Church this evening for our small group meeting. One of the other members of our small group is a biker and I am looking forward to doing some short trips with my friend.
All in all, it was nearly a perfect weekend!
Saturday, March 10, 2007
What I Like About the Rental Business!
I am often asked what I like about the rental property business. Of course, I like receiving the monthly cash flow and building wealth. However the number one thing I like about the rental property business is FREEDOM! The Freedom to be free from a 9-5 job. The Freedom to set my own schedule. The Freedom to make as much money as I desire (if I want more money, I simply need more rentals). Freedom is very important to me.
To see what I mean, here is a synopsis of my week:
Monday, I went to a real estate auction and then worked all afternoon fixing a clogged main sewer line in one of our single family houses. That is the glamorous part of real estate investing!
Tuesday, I worked about 3 hours on one of our apartments.
Wednesday, I attended the Sheriff's Sale/Tax Sale in the morning. Didn't buy a single property at either auction because all 10 of the properties sold at a higher price than I would pay. Just after the sale, I got a return call from a guy that was selling his motorcycle. I had seen his ad on the internet the day before and thought this was an absolute steal. I took the rest of the day off on Wednesday to go buy the motorcycle.
Thursday morning, I spent about 3 hours steam cleaning the carpets in one of our houses and meeting potential tenants at the same house. Four college kids came to look at it and did rent it. I took the afternoon off to go play with my new toy (motorcycle).
Friday was the first day of spring in Ohio. After several weeks of TERRIBLE weather, it was sunny and 61 degrees!!! I took the entire day off. My wife and I rode our bicycles in the morning and then spent the entire afternoon riding my new motorcycle. What a GREAT DAY!
Today, Saturday, I'm planning to spend about 3 hours this afternoon working on one of our rentals. If it doesn't rain, I'm going to work on overgrown brush in the back yard. If it does rain, I need to do a second steam cleaning of the carpets.
Next week, my wife and I are planning to go camping 3 days, weather permitting. My plan is to work 3-4 hours on maintenance and cleaning projects four days next week. Then, we'll take the 3 days off for our camping trip.
The rental business really boils down to this: the tenants tear up the rentals and the landlord fixes them up. With several dozen rentals, it takes me about 12 to 16 hours each week to keep up with the maintenance/cleanup/painting, etc. Obviously, this is work that must be done. However, when I do the work is up to me. I could work two 6-8 hour days and take the other 5 days off. I could work six 2-3 hour days and take the vast majority of every day off, or I could choose to work four 3-4 hour days each week (which is what I normally do). I could also choose to work four 6-8 hour days one week and take the next 10 days off. It is my choice!
Do you see what I love about the rental property business?
To see what I mean, here is a synopsis of my week:
Monday, I went to a real estate auction and then worked all afternoon fixing a clogged main sewer line in one of our single family houses. That is the glamorous part of real estate investing!
Tuesday, I worked about 3 hours on one of our apartments.
Wednesday, I attended the Sheriff's Sale/Tax Sale in the morning. Didn't buy a single property at either auction because all 10 of the properties sold at a higher price than I would pay. Just after the sale, I got a return call from a guy that was selling his motorcycle. I had seen his ad on the internet the day before and thought this was an absolute steal. I took the rest of the day off on Wednesday to go buy the motorcycle.
Thursday morning, I spent about 3 hours steam cleaning the carpets in one of our houses and meeting potential tenants at the same house. Four college kids came to look at it and did rent it. I took the afternoon off to go play with my new toy (motorcycle).
Friday was the first day of spring in Ohio. After several weeks of TERRIBLE weather, it was sunny and 61 degrees!!! I took the entire day off. My wife and I rode our bicycles in the morning and then spent the entire afternoon riding my new motorcycle. What a GREAT DAY!
Today, Saturday, I'm planning to spend about 3 hours this afternoon working on one of our rentals. If it doesn't rain, I'm going to work on overgrown brush in the back yard. If it does rain, I need to do a second steam cleaning of the carpets.
Next week, my wife and I are planning to go camping 3 days, weather permitting. My plan is to work 3-4 hours on maintenance and cleaning projects four days next week. Then, we'll take the 3 days off for our camping trip.
The rental business really boils down to this: the tenants tear up the rentals and the landlord fixes them up. With several dozen rentals, it takes me about 12 to 16 hours each week to keep up with the maintenance/cleanup/painting, etc. Obviously, this is work that must be done. However, when I do the work is up to me. I could work two 6-8 hour days and take the other 5 days off. I could work six 2-3 hour days and take the vast majority of every day off, or I could choose to work four 3-4 hour days each week (which is what I normally do). I could also choose to work four 6-8 hour days one week and take the next 10 days off. It is my choice!
Do you see what I love about the rental property business?
Thursday, March 8, 2007
New Ride Relates to Investing!
Well, first the bad news. I attended the Sheriff Sales Auction yesterday where I was interested in buying five of the properties, four of which were tax sale properties. Since tax sales are not normally part of the Sheriff Sale Process, this auction attracted a LOT of attention. Unfortunately, all of these auction attendees bid up the prices far beyond anything that I would pay. Therefore, between the auctions on Monday and yesterday, I am batting zero!
I am still considering the mobile home on a nice lot for $20,000. It will make a great rental, but will require cash. I hate to spend so much cash on a single deal, so I'm still considering it.
Now, for the exciting news (with a real estate lesson). I learned to ride a motorcycle last summer. At that time, I bought a 1979 Honda CX500. It is a great bike for learning to ride, but wasn't really what I wanted. Like many others, I wanted a HARLEY! Recently, I decided to buy a new bike for this year and started looking. I looked at all the new motorcycles, especially the Harleys. However, after looking at all of the bikes, I decided that I thought the Yamaha VStar was the best looking bike. The good news about that is the price BRAND NEW is only about $7,000 for the 650cc. model. I was about ready to buy a new one, but decided to apply the same technique that I use for real estate purchases to look for a bike. I looked and looked and finally found a 2000 model year VStar with only 3,900 miles for only $3,500! Best of all, it had many extras and looks "showroom" new. The moral of the story is that patience and hard work pay off, whether looking for motorcycles or buying rental property! Her she is... (click to enlarge)
I am still considering the mobile home on a nice lot for $20,000. It will make a great rental, but will require cash. I hate to spend so much cash on a single deal, so I'm still considering it.
Now, for the exciting news (with a real estate lesson). I learned to ride a motorcycle last summer. At that time, I bought a 1979 Honda CX500. It is a great bike for learning to ride, but wasn't really what I wanted. Like many others, I wanted a HARLEY! Recently, I decided to buy a new bike for this year and started looking. I looked at all the new motorcycles, especially the Harleys. However, after looking at all of the bikes, I decided that I thought the Yamaha VStar was the best looking bike. The good news about that is the price BRAND NEW is only about $7,000 for the 650cc. model. I was about ready to buy a new one, but decided to apply the same technique that I use for real estate purchases to look for a bike. I looked and looked and finally found a 2000 model year VStar with only 3,900 miles for only $3,500! Best of all, it had many extras and looks "showroom" new. The moral of the story is that patience and hard work pay off, whether looking for motorcycles or buying rental property! Her she is... (click to enlarge)
Monday, March 5, 2007
Shutout!
Well, I went to the auction today hoping to get a good deal on some properties. Five different properties were auctioned off, and every one of them went for more than I was willing to pay. Sometimes you win and sometimes you don't. However, in this case I won because I did not overpay for a property. I would rather not own a property than to own a rental that loses money! I still have 6 more properties that we're looking at this week and I should know about all of them by Wednesday. I'll keep you posted.
After the auction, I went to finish working on the wet basement issue from yesterday. As it turned out, the main sewer line was clogged. I tried using a hand operated snake to no avail. In the past, everytime this happens, I have called a plumber to fix it. However, I'm getting tired of spending $120 to $175 to have these clogged lines fixed. Therefore, I decided to buy a powered snake. I looked at the local plumbing supply store and at Lowes. Lowes had a 100 foot powered snake for $397, which was about the same price as the 50 foot snake at the plumbing supply house. I was surprised at the weight of this machine. It must weigh 60 or 70 pounds.
I had a little bit of luck at Lowes today. As turned out, today was commercial customer appreciation day. That means that commercial customers get a 10% discount when using thier Lowes card. Good Deal!
After the auction, I went to finish working on the wet basement issue from yesterday. As it turned out, the main sewer line was clogged. I tried using a hand operated snake to no avail. In the past, everytime this happens, I have called a plumber to fix it. However, I'm getting tired of spending $120 to $175 to have these clogged lines fixed. Therefore, I decided to buy a powered snake. I looked at the local plumbing supply store and at Lowes. Lowes had a 100 foot powered snake for $397, which was about the same price as the 50 foot snake at the plumbing supply house. I was surprised at the weight of this machine. It must weigh 60 or 70 pounds.
I had a little bit of luck at Lowes today. As turned out, today was commercial customer appreciation day. That means that commercial customers get a 10% discount when using thier Lowes card. Good Deal!
Sunday, March 4, 2007
Busy Weekend!
I have been so busy the last 2 days that I simply haven't had time to post a blog. I've been looking at (and doing our due diligence on) the 11 properties that we will be considering in the next 3 days. Tomorrow is the auction for the 1st five properties. This is an absolute auction, so the results will simply depend on who shows up. Obviously, I'm hoping that I will be the only one to show up. If so, I'll be the proud owner of all 5 properties for a total of FIVE DOLLARS! Dream on! At any rate, we'll either get them dirt cheap or we won't buy them! I'll give you the details and the results tomorrow night.
In addition to looking at all of these properties, I have also finished collecting the rent! Did I mention that I like collecting the rent? I DO! In fact, I look forward to the first of every month because that's PAYDAY when you're a rental property owner. Everybody paid this month with no late fees and no evictions. It was a good month.
I did a little rare maintenance today. My rule is not to work on Sunday but today I didn't really have a choice. After church, I received a call from a tenant who had about 3 inches of water in the basement. I pumped the water out and looked into the problem. Apparently, the main sewer line is partially plugged which is causing a backup when a lot of water is used. I did a temporary repair today and will have to finish the job after the auction tomorrow.
That's about it for today. I'm looking forward to tomorrow! Hoping to buy a couple of properties tomorrow!
In addition to looking at all of these properties, I have also finished collecting the rent! Did I mention that I like collecting the rent? I DO! In fact, I look forward to the first of every month because that's PAYDAY when you're a rental property owner. Everybody paid this month with no late fees and no evictions. It was a good month.
I did a little rare maintenance today. My rule is not to work on Sunday but today I didn't really have a choice. After church, I received a call from a tenant who had about 3 inches of water in the basement. I pumped the water out and looked into the problem. Apparently, the main sewer line is partially plugged which is causing a backup when a lot of water is used. I did a temporary repair today and will have to finish the job after the auction tomorrow.
That's about it for today. I'm looking forward to tomorrow! Hoping to buy a couple of properties tomorrow!
Thursday, March 1, 2007
11 Deals Pending! WOW!
Things have absolutely exploded around here! I am now looking at 11 total properties, and that's in addition to the 4 apartment buildings that we're acquiring at the end of the month. That's the way it seems to work with real estate investing. All of a sudden, a bunch of potential deals fall in your lap that weren't there yesterday. Even though all of these deals could be great deals, I don't yet know whether any or all of these deals will occur. The good news is that I'll know about all of them by next Wednesday.
However, I do know that I can't do all of these deals simultaneously. Because of that, I've already called a relative who is also an investor. This relative has a bigger rental operation than I do and could take some of these deals if several look good.
This is the greatest number of serious deals that I've had on the line at one time. About a year ago, I had 5 deals all come together at once. They were simply too much for me to do at the same time, and I ended up wholesaling two of them to other investors. If more than 2 or 3 of these deals actually occur, we'll probably wholesale some of them this time also. That would be great for me, because it would provide some extra cash for the deals that we do keep.
Not only was there a lot of excitement today with all these deals, but today was one of my favorite days - RENT DAY. Starting today, and for the next 3 days, I will be collecting the rents and making several trips to the bank. About half of my portfolio are low income tenants who pay with cash. I try not to carry a lot of cash around, so I make a trip to the bank at least once each day.
Tomorrow, more rent will be collected and I'll also be looking at more of those 11 deals. I will be taking pictures of each property to e-mail to my relative so that we can come up with a strategy for all of these properties. I'll keep you posted on our progress!
However, I do know that I can't do all of these deals simultaneously. Because of that, I've already called a relative who is also an investor. This relative has a bigger rental operation than I do and could take some of these deals if several look good.
This is the greatest number of serious deals that I've had on the line at one time. About a year ago, I had 5 deals all come together at once. They were simply too much for me to do at the same time, and I ended up wholesaling two of them to other investors. If more than 2 or 3 of these deals actually occur, we'll probably wholesale some of them this time also. That would be great for me, because it would provide some extra cash for the deals that we do keep.
Not only was there a lot of excitement today with all these deals, but today was one of my favorite days - RENT DAY. Starting today, and for the next 3 days, I will be collecting the rents and making several trips to the bank. About half of my portfolio are low income tenants who pay with cash. I try not to carry a lot of cash around, so I make a trip to the bank at least once each day.
Tomorrow, more rent will be collected and I'll also be looking at more of those 11 deals. I will be taking pictures of each property to e-mail to my relative so that we can come up with a strategy for all of these properties. I'll keep you posted on our progress!
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