Rookie Reply: How to Get 100% Financing for ALL of Your Real Estate Deals

Ashley:
This is Real Estate Rookie episode 302.

Tony:
There’s a few different types of lenders here. I love small local credit unions because they tend to have a little bit more flexibility than your larger national banks. And the credit union that I used, they allowed me to fund 100% of both the purchase price and the rehab. I think that it’s very much doable to find that person. You just got to spend the time to build those relationships and identify the right folks.

Ashley:
My name is Ashley Kehr and I’m here with my co-host, Tony Robinson.

Tony:
And welcome to the Real Estate Rookie Podcast where every week, twice a week, we bring you the inspiration, motivation, and stories you need to hear to kickstart your investing journey. And we are back today with another Rookie Reply episode, we’re going to answer some questions from the Rookie audience and we’ve got four really cool questions today. First, we talk about private money lending and we actually talk about lending in general, but then how private money lending plays a role in that and how you can fund 100% of your deals using other people’s capital. We talk a little bit about estimating rehab costs, which is one of the hardest things for a new real estate investor to do, and we give you some pretty simple tools and tactics for exploring how to estimate those costs.

Ashley:
Then we will go through red flags when hiring a property manager. So Daniel asked a couple questions of things that incurred while he was looking into hiring a property manager and we go through if these are red flags or green flags and if he should continue dating this property manager. Then the last thing we do is going over your lease agreements and stating what you should and shouldn’t include as the landlord, that is your responsibility to fix or repair during the length of the lease.
So, one thing that came up in the question as to how little or small of things are you going to fix for your tenant in their rental property. So if you are thinking of doing long-term rentals or you currently are right now, maybe you’ve had this situation where something comes up and you’re undecided, is this actually my responsibility or is this the tenant’s responsibility? So we kind of discuss your options there and one way to troubleshoot that.

Tony:
Now I want to give a shout out, because today’s episode, I’m going to read a review. It’s a little different of a review today. Usually I’m sitting here and I get to read all these five star glowing reviews of who we are and why people love us so much. But today, for the first time in a very long time, we got less than five stars in a review. Someone left us a two star review. So instead of hiding from this and digging our head in the sand, we’re going to read it.

Ashley:
Okay. First of all, let me just clarify. This review is not about Tony and that’s why he is okay with reading this review because he literally has nothing to do with it.

Tony:
That’s true because this person does say, “I’m only one episode in,” so I didn’t come on until episode like 38 or 39, so I had nothing to do with this, but they say, “I’m only one episode in and all I can hear them say is the word like over and over. I stopped counting at 45 likes. I can’t focus when that’s all I hear. Keep up the great work otherwise.”
But the last part, “Keep up the great work otherwise,” I feel like there’s something to build on there. So for all of our Rookies that are listening, help us out, we got to rebound from this two star review. If you can, leave us an honest rating and review on whatever platform you’re listening to, five stars help, two stars hurt a little bit. So maybe if you have a two star, keep it to yourself, but if you’ve got a five star, you can share it with the world.

Ashley:
And our producer even asked, is that review about you, Ashley, or your old co-host or the guest? And honestly, it probably was me, still is me. Now I’m going to be super conscious. I’m going to have to get a sticky note and stick it on my computer and put “like” and X it out so I make sure I’m not saying it a lot.

Tony:
I feel like I’ve never picked up on filler words like that. I don’t think I’ve heard you say over and over and over again. Who knows? Maybe it was just an episode one thing.

Ashley:
I have some kind of software implemented where it cuts it out.

Tony:
It just cuts it out. Yeah.

Ashley:
I’m pretty sure there is software like that now that cuts out filler words. So…

Tony:
Yeah, I’m sure. Just some boring banter really quickly, Ash. Do you watch Ted Lasso?

Ashley:
I started watching it when it first came out, but I never got super into it.

Tony:
Oh, man. So Sarah and I always have at least one TV show that we watch, and right now it was Ted Lasso and we’ve watched the third season just ended and we’ve watched all three seasons, but this was the end of the series, so it was the series finale. And I just really enjoyed that show. It was supposed to be a comedy kind of slapstick type thing, but as the seasons progressed, they explored some pretty deep topics in that show. So anyway, if you guys haven’t watched Ted Lasso, highly encourage everyone to watch it and you can now go back to Apple TV and watch all three seasons, binge watch them all.

Ashley:
And you know who else loves that show?

Tony:
Who?

Ashley:
Is Tyler Madden.

Tony:
Does he? I’m not surprised at that.

Ashley:
Yeah, yeah, so our good friend Tyler, who Tony and I are actually flying out tonight to see, that Tony RSVPed to, what? Yesterday did you text-

Tony:
Last night, yeah.

Ashley:
So we are headed to Denver tonight. We did a charity auction at the BiggerPockets Conference last year where someone could win a day with us and that day is tomorrow. So we are meeting up in Denver. We are also doing two podcast episodes live with guests. So that will be super exciting. We always love doing the in person. It actually was the, it aired two episodes before this, 300 and 301. So you guys can check out those two episodes and you’ll be able to see us all in person. We’re renting out a cool little studio, so if you guys want to watch on YouTube and see all the fun instead of just listening to it, you can check out the Real Estate Rookie YouTube.
Today’s first question is from Preston Garcia. Does anyone know how to get a private lender to cover all 100% of purchase price and rehab? It seems like all of them only cover 75% of the purchase and 100% of the rehab. I don’t have enough cash to cover the other 25%. I planned on refinancing afterwards to pay them back. So Tony, you’ve talked about this a couple times on the podcast as this is how you actually purchased your first couple long-term rentals and maybe talk about that experience and then now how to get the same thing.

Tony:
Yeah, so Preston, first, just for all of our listeners, there’s a few different types of lenders here. So you have private money lenders, which are typically just individuals who have capital that maybe is in their savings account or maybe is in some kind of a SDRIA or some kind of 401k where they’re taking loans out. So typically your “private money lenders” are individuals who have access to capital. After your private money lenders, there are hard money lenders who are legitimate businesses where their whole way of operating and making profits as a business is lending money to real estate investors for short-term debt situations. And then you have more institutional type lenders like credit unions and banks and things of that nature. So you’re going to get a different level of, I think, flexibility when it comes to down payment percentages with each type of lender.
Now I’ve used pretty much all of those I think in at least one deal or another. My first couple of long-term rentals were done through credit unions. And I love small, local credit unions because they tend to have a little bit more flexibility than your larger national banks. And the credit union that I used, they allowed me to fund 100% of both the purchase price and the rehab as long as I met certain criteria that they wanted me to meet in terms of, what am I buying it at and what will it appraise for after my rehab is done?
We’ve also used private money on a ton of deals. So pretty much every flip that I’ve done, I’ve used private money on those deals and our private money lenders typically fund 100% of the purchase and the rehab. I actually literally just sent a wire today repaying one of my private money lenders. So Preston, I think that it’s very much doable to find that person, you just got to spend the time to build those relationships and identify the right folks.

Ashley:
Yeah. So I guess the distinction was with the first properties, you went through the bank and then now you’re using private money because it is a lot harder to find a bank that is going to give you that type of loan that you were able to get on those first properties. So that is where going to private money lenders makes a lot of sense right now in today’s market. There may still be some credit union or other bank out there that does have that option available, but I haven’t found it yet as of right now. Tony, have you?

Tony:
Not recently. Honestly, I haven’t really looked as much, but I feel like we had a guest on recently where he said he found some credit union in Utah. Do you remember that? That was one of the guests we just recently interviewed and he said he got a really sick deal from one of those credit unions out there. But I would agree with you, Ashley, that most banks, I think, have kind of tightened things up a little bit. Especially after COVID, you just saw a lot of that stuff that they were doing before COVID go away.
But I think the private money opportunities are probably bigger now than they were a few years ago because for the folks that just had, say they had six figures maybe just sitting in a savings account, think about how much money those people have lost to inflation if they just left that money in the bank for the last couple of years. So there’s a really strong incentive for folks that are sitting on cash to try and put that money to work. And if you can give them a double-digit return backed by real estate, there’s a good chance they might want to work with you as opposed to just leaving their money sitting in their savings account.

Ashley:
Yeah, that’s a really good point, Tony, and that’s also one way to educate someone on why they would want to be a private lender too, is give them that reasoning, that advantage, that this is actually an opportunity for them to not lose their money to inflation.

Tony:
Can we talk a little bit too, Ash, about how to find these private money lenders? Because I know when I first started, that was always, where are all these people at? Where are all these private money lenders at? And the first thing that I’ll say is that when I first got started investing, I definitely had a limiting mindset around money and I had this scarcity mindset, I guess, is a better phrase around money where I thought that there just wasn’t a lot of money around to be shared in that way. But as I’ve matured as a real estate investor, I’ve come to realize that the opposite is true is that there’s an abundance of capital everywhere and it’s on you as the investor to put yourself in situations where you are meeting people who might have that capital.
And some of the best ways that I’ve found to meet people, going to your local meetups, hosting your own meetup, I think is one of the best things to do. We’ve seen a lot of benefits in our business and students in my coaching program that have their own meetups that are finding private money lenders, so hosting your own meetup I think is one of the best things you can do, even if you don’t have any kind of following whatsoever, just posting on the BiggerPockets forum and posting on meetup.com and Eventbrite and all these other places, but going to local meetups or hosting your own is a great way to do it.
Going to local conferences. You’ll notice it as you start to attend a lot of the bigger conferences that you see the same people at a lot of these events. So as you start to make your rounds from one event to the next, you start to build relationships with the folks because you’re seeing them over and over again. And if at these events you’re introducing yourself as, “Hey, my name’s Tony and I help people get double-digit returns backed by real estate,” that’s a great way to start building a name for yourself in terms of finding private money lenders. So, going to meetups, hosting local meetups, going to conferences.
Networking online I think is a really great benefit as well. So we’ve got the BiggerPockets forums, we’ve got the BiggerPockets Facebook groups, and you’ll see in the forums for all of our Rookies that are listening, that if you go through, you’ll see some folks whose names pop up over and over and over again in the forums and they’re doing that obviously because they want to help and they want to give value to other people, but they’re also doing that because they’re building a name for themselves in that platform.
I remember it was, I think Ben Leibovich was his name, and Ben’s a big time syndicator and before I even knew who he was, I just always saw him posting on the forums in BiggerPockets and I was like, “Man, this guy is just the nicest guy ever, just always giving his time to people in the forums.” But on the backend of that, he was able to introduce a lot of people to his syndication business and that’s how he finds, I’m sure I would think, quite a few people to invest in his business. So Rookies, for all of you that are listening, there are so many ways to start building a name for yourself and building relationships with potential private money lenders. You just have to take the action and put yourself out there.

Ashley:
I think the last thing I would add to that that ties in is proof of concept. So having experience and showing that you’ve had a couple successful deals. And one way to do that is to share online. And somebody looks at you, you post that you’re successful, oh, you have a lot of followers, you have these nice before and after pictures, you have a picture of a check, you must be successful. So one thing that that’s not the way that someone should decide to lend their money to you is based on your social media presence, but that does really help gain some traction for you if you are sharing what you’re doing and you’re open about it on social media or in the BiggerPockets forums. In the forums there’s also the deal diaries where you can go through and kind of answer some questions on a deal you just did and share it almost as a case study.

Tony:
I just want to share two other resources, Ashley, for our Rookies. So first, BiggerPockets has a book by Matt Faircloth, Raising Private Capital, definitely go check out wherever you want to consume your books and pick up a copy of that. And then one of my good friends in real estate investing, her name is Amy Mahjoory, so if you look her up on Instagram, it’s Amy, A-M-Y, Mahjoory, M-A-H-J-O-O-R-Y. So that’s M-A-H-J-O-O-R-Y. And Amy runs a company called Raising Private Capital and she does just a phenomenal job of specifically teaching real estate investors how to raise private capital.
So if you go through her Instagram, she’s got so many little golden nuggets on techniques that she’s used to raise private capital in her business. And then Amy was also on a few episodes of the Real Estate podcast last year, so if you guys just look up Amy Mahjoory BiggerPockets, I’m sure you’ll find all her episodes as well, but she is a wealth of knowledge and I really highly encourage you guys to go check her out as well.

Ashley:
Okay, let’s go on to our next question from Dimitri. “When trying to figure out rehab costs for off-market deals, is it customary to have multiple contractors come through while you are still new and trying to pick someone to work with? I would imagine that for an off-market property, the seller might not appreciate that. Maybe I’m thinking about it the wrong way, but how do you figure out the rehab cost when making offers and you are new and don’t have a feel for what it could cost?”
Number one question a Rookie could have. And I think a really great one that could be addressed over and over again and there’s multiple ways to approach this. The first thing in here is how to educate yourself so that you do have that feel for what a rehab would cost. Also, how to handle and manage contractors when you don’t even own the property but you’re asking them to come and do walkthroughs. Then the third thing is how will the seller react having all of these contractors come through?
So maybe let’s start with the first thing on just educating yourself on rehab and construction costs, and also just the process of it. And one of the things you can do is, at the BiggerPockets bookstore, you can look at J. Scott’s book called Estimating Rehab Cost, and right here it’s going to give you almost every line item that you could have for a scope of work. This book is not going to tell you, “Okay, you can get flooring installed for $3.50 cents per square foot,” because as this varies from market to market as to what the actual cost is also as to the quality of the contractor, the cost will differ to. So you’re not going to find the cost in this book, but you’re at least going to know what you should be getting estimates on. So that is one great way to get started.
Then to actually find the cost of material and labor for material, you are going to go on Lowe’s, Home Depot, or wherever your hardware store is and you are going to look up every item that you would need. And if you don’t know those items, okay, you look at pictures of the bathroom, you see the bathroom needs to be remodeled, and you want to put in a tile floor, you are going to YouTube or Google, “What do I need to tile a floor? What materials?” You’re going to take those materials and pull them up from Lowe’s or Home Depot, even if it is not the exact toilet, the exact grout, it’s still going to give you an idea of what your material cost would be and you’re going to build that out.
And then for the labor costs, that’s where you’re going in and getting estimates. So start making phone calls and finding out if contractors have a set price per square foot or how much does it cost to have a toilet installed? What’s your price per square foot for painting? Considering there’s no cathedral ceilings or anything like that, what is your cost for laying flooring? What is your cost for cabinet install? Things like that and just try to get as rough of an estimate as you can over the phone for what these things are going to cost you. The next thing, if you are going to be doing walkthroughs through the property, is having the contractor come through is you can offer to pay them if you feel like you are going to be wasting their time, you can offer to pay them and if you get an estimate, ask for as detailed as possible.
One thing I learned from a contractor’s wife actually, she was in one of the Real Estate Rookie boot camps and she said, “My husband will just give you an estimate that’s just one price. He’s not going to break down line items because he is so busy and he has so much work already that it’s not worth the time for him to go through line by line.” So what she recommended people do is if they want a detailed estimate, they actually build out that scope of work themselves and then give it to the contractor and say, “Fill this in for me.” So building that scope of work and just practicing, practicing that. If you have a friends or family that are contractors or have experience with rehab, have them go through that scope of work. If you just Google scope of work, you can get a ton of templates and a ton of ideas.
The way I build out a scope of work is I go room by room. So I look at one room at a time, okay, the living room, what needs to be done here? Are we painting the walls? Are we doing new drywall? Do we need new windows? Are we putting down new flooring? Do we need new trim? What’s the heating source in that room? Do we need to do anything with that? The light fixture? And I take it one room at a time and for me that’s an easier pill to swallow than to be like, “Okay, where is all the flooring we need in the house?” So you can do it either way that works for you, from my brain, I need to go room by room when doing that scope of work.

Tony:
Yeah, so much good information there, Ashley, and I agree with you. When we’re putting our scopes of work together also, my brain just comprehends better going room by room, even though it might be easier on the execution side to go trade by trade because then you can say, “Hey, all the electrical, here’s this.” But anyway, you got to do what’s easier for you.

Ashley:
I think for the mechanics, that’s a good one, just general mechanics, that’s good to do by item, but breaking it down room by room for all the finishes I think is a lot easier. Yeah.

Tony:
We also have episode 165, we had James Dainard, he’s actually 165 and 166, I think it was back to back episodes, where James talked about, he gave a masterclass on a lot of things related to flipping homes and rehabbing, but he also talked about estimating rehab costs. So episode 165, if you guys are interested there. And I just want to talk about, because part of Dimitri’s question here was, how did he say it? I would imagine that for an off-market property, the seller might not appreciate having multiple contractors come through.
First thing I would say, Dimitri, is don’t assume that. If you’re buying this directly from the seller, then just let the seller know, “Hey, I’m going to have a few contractors come through. The purpose of this is for me to really make sure I understand the condition of your home and so I can give you the most fair offer possible, right?” You want to structure maybe these contractor visits in a way that also benefits them.
We bought a property off market, gosh, I guess two years ago now, and initially the seller was giving us a really hard time of having, I think we had two contractors go through that property and we had a septic inspection. There was a few people that had to go through the property and he was giving us a hard time initially, but when we phrased it as like, “Hey, this is what we need to do to be able to close on this property and pay you out,” they immediately kind of changed their tune.
So I think if you can structure it or phrase these contractor visits in a way that helps the seller understand that it’s beneficial for them as well, you’re able to get a little bit more buy-in that way. But yeah, I think everything else you said, Ashley, is spot on. I probably don’t have much to add to that.

Ashley:
Yeah, I would say that in my experience it’s actually been easier to get contractors through an off-market property than it has been an MLS property and on-market property. As to you’re contacting through agents, usually you have a middleman and trying to get back into the property and especially in how competitive the market has been, we’ve had spots of cooling off, but I still have seen that if you’re putting in offers, you’re still having to be competitive. And part of that offer is maybe you’re doing your inspection, but then after that you’re under contract, they don’t care, they don’t want you back in the property until you close on it. And I think for off market it’s a little more flexible because you’re talking directly to the seller, there’s not any middleman and you’re able to negotiate, and you can even put that into your contract too.
So when you’re making your offer, put in your offer that you are able to bring contractors through. So even if you’re doing an inspection, you’re not doing inspection, even after that due diligence is done, so say you know you need the new HVAC system replaced and that’s part of the deal and you’re getting it at a certain price because of that, you could still work into your contract saying that you will have access to the property two more times before closing to bring contractors through. So this could just be, so you’re bringing the contractor through, they’re getting their estimate, but then they’re also scheduling you for around the time you’re closing too, so that you’re able to look at all your bids, maybe you have three contractors walk through that day, you get to look through all your bids, you get to select one, and then you have them lined up ready to go right when you close on the property.

Tony:
Ashley, that’s a great point about including those things into your contract. I feel like a lot of Rookies don’t, I guess, understand how much flexibility or leeway or freedom, creativity you have in your contracts. So like I said, that first off-market deal that we did, we had a hard time convincing the seller to give us access to the property. So on our second direct-to-seller deal that we did, we actually put in the contract with that seller that we were able to put our own lockbox on the property. That way we didn’t have to ask the seller like, “Hey, can we get in? Can we do this?” We literally bought our own lockbox, got the keys from the seller, put it on the property, and then that allowed our team to go in and out as needed. So, you can put whatever makes sense for you and what you can get the seller to agree to in your purchase agreement.

Ashley:
Okay. Our next question is from Daniel. “Hello, my first post over here.” So this question must come from Facebook. If you guys have a question for us, you can leave it on the Real Estate Rookie Facebook page, you can send a DM to Tony or I on Instagram, or you can also go to biggerpockets.com/reply. So Daniel’s question is, “Does the property manager normally share copy of lease agreements? I’m moving for work and I plan to rent my house. I want to hire a property manager and this guy came to my property and he asked how much I pay for mortgage, and I told him. After that I have been thinking, why would he care how much I pay? Then I asked him to send me a copy of the lease agreement he made with tenants to verify monthly rent and security deposit and he refused. Does this sound like a red flag?” To me, yes. This is confusing almost to me.

Tony:
Yeah, this 100% sounds like a red flag to me, right? If you’re looking for a property manager, one of the things that they should very happily and readily have available for you to view, as a prospective client, is a copy of what their typical lease agreement looks like. That way you can look through it, you can see what’s in there, they shouldn’t be, I think, withholding that information. So if they’re, Daniel, not willing to give that to you, I would really, really question why.

Ashley:
Yeah, I agree. One thing you could also ask for is the management agreement. So when you are hiring a property manager, they should supply you with almost an operating agreement as your property manager, so management agreement it’s called, and this would state the terms of the arrangement of them overseeing and managing your property. So if you want to ask this property manager for a copy of that too and see what their response is there, because that they definitely have to give you. So, the only thing I can think of to go on the other side of things is that maybe because you haven’t hired them yet, it doesn’t appear, that he doesn’t want to give out the lease agreement that he or his company uses because he doesn’t want somebody to copy it or something like that. But if you did hire him and he did write up a lease agreement for your tenants, yes, you 100% should have access to that.
And where’s the money going to? You want to make sure you know where the security deposit is held. Check your state and local laws too, because on some states for the security deposit, you have to keep it in an escrow account that is interest bearing and your tenants are incurring interest on it and you should too, as the owner of the property, to cover admin costs is what they call it in New York state here. But yeah, I would say yes, this is a red flag unless it is just the property manager not wanting to send you a copy of their lease thinking that maybe you are just going to take that lease and use it yourself and not hire them.
And then as far as asking how much you pay for mortgage, that could just be out of curiosity as to like, “Well, maybe you should be charging $1,000 for rent instead of the $900 you want,” or something like that. So there could be some reasoning as to why they’re saying that so they can best advise you as to how much rent to charge.

Tony:
But you would hope that if the property manager did refuse to supply the lease agreement, that they would at least have a legitimate reason as to why they wouldn’t want to. So they just said no and with no explanation, Daniel, yeah, I feel like it’d give me a little pause about moving forward with that person.

Ashley:
We got time for one more question. So this one is from Jada Lee. “What is the smallest thing you should be fixing for your tenants? We are currently renting our home by the room while we occupy a small apartment separated from the property. One of our tenants texted us about her closet door being off the tracks. My husband and I are in disagreement about whether we should fix it ourself, creating a precedent where the tenants are going to come for us for the most inconsequential thing. FYI, we are currently out of state for a few days so it would take time for us to come back and do it for her? Or if we should just tell her it’s her responsibility since it was working properly when she started her lease. So we are here asking you guys with a little more experience. So the question is, what is the basic rule? What’s the smallest thing you should fix? What are your reasons for this rule? What are the pros and cons? By the way, this is our first property.”
Well Jada, first of all, congratulations on your first property. Yay.

Tony:
Yeah, that’s amazing. And so close on Christmas too, that’s amazing. Ashley, you’re the expert when it comes to long-term rental property management. So I’m going to say my little piece and then I’m going to shut up and let you take the reins here. I think my advice to Jada would be, whenever you’re entering into any kind of agreement really, but whenever you’re entering into an agreement, I don’t think it’s as important to say, “Hey, what should I do or what shouldn’t I do?” What’s more important is that there’s clarity at the onset about where those responsibilities fall. Whatever level of involvement you’re comfortable with is where you should draw that line. And if you personally feel that fixing closet doors that fall off the track is not what you want to do with your time, that’s totally fine as long as you set that expectation clearly upfront with your tenants.
So as we eventually venture back into the long-term rental space, the way that I would approach that is saying, “Here’s everything that I’m comfortable doing as the landlord.” And maybe that’s a dollar value, maybe it’s a time, effort value, whatever it is, but here’s everything I’m willing to do. And then when my tenants sign that lease, they will have clarity on if a light bulb goes out, they need to fix the light bulb. If the closet doors come off the track, they need to fix the closet doors. Everything outside of my list is what you need to handle. So, just my two cents, Ashley, and now I’ll let you take it from there.

Ashley:
Yeah, the hard part about that is you can never know exactly everything that’s going to happen or go wrong to kind of itemize that. So what we currently do is we will fix it the first time for you. We’ll fix it once and we will let you know that we’ve fixed it, it is in working order, we have a copy of the work order. We state in the notes of the work order that this repair has been made. We’ve let the resident know that if it does happen again, that is their responsibility to repair it.
So in this one apartment complex years ago, this was a very common thing that happened were the tracks coming off the closet doors and it was because there was no, almost like a track at the bottom, just a little metal clasp almost to keep the bottom of the door. So the doors were kind of just hanging there from the top. And so what we did do when they would fall off the tracks, we would install these clips that helped prevent them from falling off. So the first thing I would say is assess the situation as to if there is something that can be done to prevent this from happening again, as to, maybe that’s something you missed when you purchased the property and something that really isn’t a huge deal, but you could install this $5 clip, take 20 minutes to screw it into the floor to prevent the door from falling off again.
Or it is your right to say that it’s the tenant’s responsibility, but the problem that happens right there is now you’re kind of creating this animosity against each other as to the tenant’s going to be like, “Well, I pay rent, blah, blah, blah,” and now you’re off on a bad track together. So what we do is we do, in good faith is we will fix it once. If it is something like that where it borders the line of, is this the tenant’s responsibility or is this the landlord’s responsibility? So we will come in and take care of it.
We do have certain things that are in our lease agreement, like clogs. I think it’s after, I can’t remember if it’s 30 or 60 days, might even be 45 days in the lease agreements, if you have a clog in your drain between the time you move in and that 45 days, we will take care of it. After that amount of time, if there is a clog that happens, that is most likely from whatever you’re putting down the drain, your hair or whatever that may be, and that is your responsibility to take care of.
Another thing is pest control. So the same thing, within so many days. We just had an instance where someone had ants. So we had an exterminator come, took care of it, and let them know, “Per the lease agreement, if this happens again or the ants come back, it is, per the lease agreement, your responsibility to take care of,” because we had the situation taken care of and a lot of time pests are coming because of something on the property.

Tony:
Something inside the house. Right.

Ashley:
Yeah. So that’s kind of the way we handle it. And because there is no way, you can think of so many things and put that into your lease agreement, even just as an addendum, writing out, like Tony said, “Resident in charge of replacing light bulbs. Resident in charge of smoke detector batteries. Resident in charge of whatever your toilet paper holder,” things like that. If your toilet paper holder falls off, it’s probably because you ripped it off or pulled it off or something. So making a list of those things is a great idea, and then just continuously updating it as these little things happen. Like, “Oh, the closet door fell off the track. You know what? Let’s start adding this to our list that we send out with the lease agreement at each renewal that it is the tenant’s responsibility to fix that.”
But I think little things like that that you can be a good landlord and take care of those little things, and as far as setting the precedent that you’ll always run and take care of little things, there’s definitely that fine line that you have to walk on, and that’s where I think it’s important to say, “We’ll take care of it this one time, but going forward, just so you know, it’ll be your responsibility to take care of it.” And if you’re out of state for a couple days and you’re coming back, I would try and hire somebody off, what are those little handyman services? I tried to look at one the other day, but they don’t serve us Buffalo at all. Is that Thumbtack or-

Tony:
Yeah. Yeah, that’s one of them. Yeah, TaskRabbit’s another one where you can hire people for random little things. Yeah.

Ashley:
And we are out of time today for our Rookie Replies. Thank you guys so much for submitting them. As a reminder, you can go to biggerpockets.com/reply and submit your question for us. Tony, do you want to refresh our social media shout out today? We did a little one for Amy earlier, so I think we should use her today.

Tony:
Yeah, absolutely. Like we said, one of our earlier questions was about raising private capital and Amy Mahjoory is all about teaching people how to do that. So she’s got a lot of wonderful information on her Instagram, so if you head over to @AmyMahjoory. The last name is M-A-H-J-O-O-R-Y. Like I said, you guys will learn tons and tons from Amy on raising private capital for your deals.

Ashley:
Thank you guys so much for listening. If you haven’t already, make sure you get your tickets to BP Con in October 2023 so we can see you there. Go to biggerpockets.com and you’ll be able to get a ticket and we will see you there.
I’m Ashley, @WealthFromRentals, and he’s Tony, @TonyJRobinson, and we’ll be back on Wednesday with a guest.