Newbie in Foggy California

[Jerome Kaidor]

Hello!

Welcome to the meeting of Landlords Anonymous....

"My name is Jerry Kaidor, and I'm a landlord"

( "Hi Jerry!" )

It started in 1996. I had a good job in Silicon Valley, and my wife decided that we needed a tax deduction. Yes, she dragged me in kicking & screaming. "But you can make 20% in a mutual fund, and nobody will call you for their upchucking toilet!" Of course she prevailed, and we bought a fourplex in San Mateo.

Five years later, the company stock was in the aforementioned toilet. Down from $96 to 48 cents. I couldn't help but feel that such a reduction would ultimately have some effect on my employment. That little fourplex meanwhile was looking pretty good. "Positive Cash Flow" good. I had also realized that I was not smart enough to make money on stocks. So I started cruising the web for more properties. Found a website with a bunch of them. Refinanced the 4plex, generating a down payment for 8 units in Hayward.

Then in 2003, we hit the big time. Refinanced the 4plex yet again, as well as our own house, and bought a 52-unit complex in Fresno. I thought I knew something about landlording - boy what a splash of cold water THAT place was. First hint - "Why aren't the rents coming in?" We closed on Tuesday and the maintenance phone calls started coming in on Thursday.

I stuck it out for six months. I'd get up around 5:00 every morning and do landlording stuff till 8:30. Then hightail it down to Silicon Valley and do software development till 6:00 or 7:00 - then home, eat, crash. Repeat the next day. And on the weekends we'd drive to Fresno.

Then I got zapped by the next big layoff. My company paid me for 6 months to do nothing. I sat down with spreadsheets, and figured out that my complex would start making a profit just about when the severance package ran out. And that's what it did!

The California central valley is a bit of a circus - kind of like the wild west. We kicked out drug dealers. Found out our manager was also dealing - out! Had to let go of our maintenance guy who was strung out on meth. We got a new manager, new maintenance crew - everybody understands that we do period random drug testing.

I had one lady who was running a party house. She was section 8 and her tenant portion was $7. When I evicted her for nonpayment of rent, she owed me $54. I had to make up a whole new 3day form just for her to get that many months into it - the normal form only does 3 months. No, it really wasn't about the money - but that's the easiest eviction.

Starting around 2005, I began to put a lot of time into writing software for my business. I coded ledger software for tracking tenant payments, then a module to organize up checking out prospectives - then a module for maintenance - then one for maintaining the Rent Rolls. Right now, I'm working on functions for Payroll & bank deposits, as well as refinements to the existing stuff. It's all done up as a secure website running on my own server - so I can manage my properties from anywhere in the world ( or mostly, everywhere in my house, cuz I don't go anywhere much :). The software easily generates 16-page rental agreements, 3day notices and invoices. I gave my managers passwords, and now THEY enter the incoming rents.

In 2006, we acquired 20 units in Stockton, CA - our "charity case". That sucker's only worth half what we paid for it. Occasional workorders read "Patched bullet holes". Stockton regularly appears on the Forbes list of "The ten worst places to live in the United States". I think it won first place a couple of times. I am trying to get it occupied - and somewhere in the general vicinity of breakeven - by lowering the rents way down.

- Jerry Kaidor