Be sure you're building a business

[Paul Sweetman]

First and foremost this is your livelihood and at this time I'm self managing 64 doors.

How I got into real estate is a totally different story but one probably not unlike many others.

I made a very bad business agreement with a couple of very smart talking business types and we started a remodeling company (siding ,windows ,kitchens and baths). Well I caught them skimming the books and they fled the state leaving me holding the bag. I came home to find the Feds had put locks on my doors.

So with no business and no place to live I found a boarded up 3 family in a less than awesome neighborhood. Worked out a land contract deal with the owner and I was a real estate mogul. I lived in the front an old grocery store I converted into a loft style 2 bedroom apartment. I then started a small remodeling business to make money to live week to week. I then met my soon to be wife. So where I lived is now rentable and we now have a 3 family totally rentable in a less than awesome neighborhood. We then bought another property a single family in a better neighborhood but declining not growing in value. (what did we know?) all along working our regular 8-5 jobs. 

When a tenant was late on their rent or had a situation we felt compelled to help them after all they were struggling. so we took money from our jobs to pay what was necessary to keep these houses going after all we had mortgages, taxes, and insurance bills. but very erratic income. We struggled like this for years and even bought 3 single family homes a hour and a half away from where we lived needless to say we bought 3 more headaches.

THEN we had kids and they brought added expenses and we just couldn't keep subsidizing these other families lives. So out of pure embarrassment I started to learn what it meant to run a real estate business.

These thing are the best things I learned. 

1. 1) I'm doing this to improve my life and the lives of others
2. 2) These people are my clients not my family or my friends
3. 3) If I don't quit loosing money get out and leave it to others.
4. 4) This is way too easy to be hard.

My first situation was rent collection. driving hours every month to collect rent, sometime 2 and 3 times just to find no one home. My answer just quite picking up rent. I made my lease state they had to get the money to me. This has evolved over the years and this is now. Direct deposit into 1 of a couple checking accounts or google pay. No cash and I don't want to hear the checks in the mail, it never was.

My lease does not have a late fee, I give everyone a discount for paying on time. Regular rent $850 discounted to $800 if paid on or before the 5th, people will jump through hoops to get a discount but argue like heck about paying a late fee. This fixed it flat out. 2ndly I prepare a 3 day notice in advance so on the 6th I deliver it via a photo in a text and then to their door. In most cases I get the non- discounted rent that day with an apology. 

Never leave your office without a blank 3 day notice you just need to let your non-respectful tenants know you don't need them, there are plenty of great people who want a great place to live. (Be kind)

I keep all my places as if I or someone I loved would be living there. Be on top of your maintenance if your tenants know you care about your property they tend to care to and vise versa.   

Always be kind but not soft be firm. If you are angry sit in your car until you've come to grips with your emotions and can be kind but firm. Remember, how would you like to be treated if the rolls were reversed.

Have all your paperwork ready and organized for immediate use. With computers this is so easy you just have to do it once. Make as many PDF forms or use BP forms as you can but have them filled out and in a folder for each tenant so you are ready to act. You see if you are ready to act you will if not you will procrastinate and that will cost you dearly. 

Take photos and video of your uncomfortable situation, your phone is always with you.  

WORK ON WHATS GOING WELL/RIGHT compliment your tenants a healthy dose of appreciation sure makes problems go away.  Don't let things start to go wrong.

You must work your business so you can enjoy the fruits of your labor.