How to Get Started Investing

What we are going to talk about today is we always get investors asking us how to get started in investing. And no one really knows what that first step is. I can tell you my recommendation would be is the first thing you want to do is you want to create a plan. You want to make sure that you have a plan, you have it written down and documented from beginning to end or the best you can. It’s not to say that you may not change it as time goes on, but you want to make sure that whatever that plan is you’re going to stick with it. That’s the most important thing, write it down, and stick to that plan. If you do this your are 98% ahead of the rest of people, a plan not written down is just a dream.

The next thing you want to do is in that plan you want to make sure that you are going to be complying with all government local agency laws. These laws include Texas Real Estate Commission, IRS laws, Fair Housing Laws, Discrimination Laws, and Fair Credit Reporting Act Laws. There’s just a lot of things you want to make sure that you know what you can and cannot say, can and cannot do. My recommendation is you want to surround yourself with a very good team, meaning you want to get Real Estate Agents that know what they are doing that can help you find the deals. Establish relationships with contractors, inspectors and anyone else you may think you could need in your immediate investing future. Make sure that they realize that you are serious and that you are going to do what you say. Last thing a contractor wants is somebody picking their brain all the time and never does business with them. Establish all the roles that you are going need filled and then during that time you want to establish relationships with them. Try to find three Real Estate Agents that seem like they could be a good fit. Sit down and talk with them and let them your plan, you may find one that you really like and want to do business with, same thing with contractors. Just get a good team on your side. Best thing you could do is leverage other people. You only have so many hours in a day and if you have a team of five people obviously you can do a lot more with that.

I think as an investor your best bet is focusing on finding deals and making that decision financially whether or not it’s a good deal or a bad deal. Have the inspector go out and tell you if you need a new roof, or have a contractor who will tell you how much the make ready bid will cost. And with that information you can plug in your numbers and as a true investor you can tell you whether or not it is or it’s not a good deal. Have the agent find rental comps for you and that’s how you will know if it’s going to make money for you or not.

That is what leverage is all about. The best thing you could do is get the team, create a business plan, and sit down to talk to people. We have a lot of investors that would come and talk to us and just ask us questions even if we don’t manage their properties we still help them by answering questions here and there. What kind of people do you want on your team, what constitutes a good team member. Those kinds of things you should be asking yourself.

How to Deal with Man’s Best Friend

What we are going to talk about today are pets. We do get a lot of owners that ask us a lot about pets and how to handle them. First thing I’ll tell you is you definitely want to make sure that you have the proper forms. We use a standard TREC agreement, Texas Real Estate Commission and we always have the addendum for the pet. You always have in writing, the size of the dog, how many dogs, it’s very, very important. One of the reasons that it is so important is your insurance. Your insurance will drop you if the animal is on the dangerous breeds list and we’ve seen a lot more insurance companies that are actually doing spot checks, going to the property and actually wanting access or looking over the fence to see how many animals are in the house and what kind of animals there are. So you want to make sure you have the right animal in the house based on what the tenant told you, some owners require a picture of the pet every quarter to make sure it is still the same animal, this way when we our inspections we make sure the pet matches all the pictures.

Another thing is the pet deposit or the pet fee. No one really knows the best way to handle that. We suggest taking a non refudable pet fee. No matter what anybody says about fluffy the cat or the dog you will always have damage done to the house and if there is a pet fee they don’t get that back. Animals are going to damage the house statistically, so we always suggest getting a pet fee. There have been many instances that when the property is turned back over to the owner nothing appears wrong, but things pop up after. Fleas and Ticks are always a big problem and can be expensive if gone untreated for long periods of time.

Sometimes if a person has two animals, the best practice is to take a full pet fee on the first animal and then you can take a smaller fee on the second animal. Sometimes you can take a pet fee on the first animal and then just take a smaller deposit on the second animal. Always keep in mind bigger dogs are going create more damage than smaller dogs. The bigger the animal, I would say the bigger the fee. Even if they tell you that it’s an outside dog, it doesn’t matter. There is going be issues and you always want to take a pet fee and you also want to periodically inspect the property. You want to make sure, look at the dog food bowls, look at the water bowls. See how many there are. If they have five dog food bowls, probably its more than one little chihuahua living in the house.