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.
Monday, December 10, 2007
Saturday, December 8, 2007
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.
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.
Wednesday, December 5, 2007
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!
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!
Tuesday, December 4, 2007
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.
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.
Monday, December 3, 2007
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?
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?
Sunday, December 2, 2007
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!
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!
Saturday, December 1, 2007
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!
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!
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