All Forum Posts by: Alan Pederson

I would definitely keep their deposit until this is resolved.

Need more details. I know when me and my wife started doing this, she didn't want anything to do with it. She said she would show up and sign whatever paperwork that was needed for us to buy the first rental but she wouldn't do anything else. She didn't like the idea but she allowed me to move forward and pursue it. It took me a couple of years to get her to this point. We bought the first one in 2015 and I spent a couple of weeks fixing it up and getting it ready. I found some good tenants (still there going on 4 years) and things went really smooth. My wife saw how smoothly things went and started to come around to my way of thinking. A year later, the house next to us was going to go up for sale. She TOLD me to hurry up and make an offer so we could get it. I contacted the owner and we worked out a deal prior to it going on the market. My wife helped me clean, paint, yard work, etc... to get this house ready to rent. In 2017 we bought our third one and she's now 100% on board. She helps with just about everything. If i'm working on a house, she brings me lunch and finds out if there is anything she can do to help. It's amazing how quickly her mindset changed once she saw how serious I was about making this work.

You're lucky because your wife is already on board. You just need to work out the details. We did single family homes located close to our home because it's convenient for me to go work on them that way. I would like to branch out to multifamily or small apartment complexes some day and I will probably have another challenge on my hands getting my wife on board.

Her goal for the past several years has been to retire from teaching. My goal has been to get us into a financial position so she can retire from teaching, set us up long term so we can both fully retire in 8-10 years, have the money to buy a lake house, and help our kids and grandkids financially.

As soon as you said a single guy booked your place so he could visit friends I knew that might be trouble. I get the same feeling when I have a house for rent and a single mom and her teenage son are on my list of potential applicants.

When we hit the million dollar mark my wife asked me what that meant. I told her if we sold everything and cashed out our retirement we would have over a million dollars. She said we're not doing that so what changed? I could only tell her "nothing", other than being able to say we're millionaire's now. It doesn't change the way we spend money, save money, pay for vacations, or alter where we go for dinner on Friday nights. I still drive my same old paint pealing truck and still go to work at my same old job working graveyard shift just like I've been doing for the past 30+ years. I think of it as an interesting footnote in time on our way to 2 million and beyond. Three years ago we were only at $500,000 so I think we're heading in the right direction with a good plan in place.

I contacted my finance person today and told her we needed to get the ball rolling to get pre-approved because we finally have enough saved up to buy the next rental.

I work with a few guys that think if they had a million dollars that they would retire. I keep trying to tell them that they wouldn't be able to retire for very long on that amount. Between me and my wife I figure we need about $100k a year to live on. A million would only last 10 years at the most. We could be retired for 30 years so a million isn't even close to what we would need. I figure we would need in the 3-5 mil range or have enough passive income to go along with our 401k, social security, and pension to put us in the $100-150k range when we retire. If we had 2 more houses, it would get us real close to that mark so we keep living our lives like normal until we get there. My plan is to buy about 6-7 more houses before I retire so we will have a large cushion between what we need to live on and what we bring in so we can spend a little crazy at times.

I hope you have documentation for all of this so when you go to court you can prove you tried to fix stuff.

Of the 3 houses I have purchased so far, we spend $3,000 on the first house just doing small stuff like light fixtures, ceiling fans, smoke detectors, and various minor repairs. The second house we spent $10,000 remodeling both bathrooms and the third house we spent about $17,000. The third one has been an ongoing battle trying to get all of the stuff the previous owner fixed, actually fixed the right way. The first house was in pretty good shape, the second one just needed the bathrooms done, and the third one is killing me... New fans, new duct work, new dryer vent, new flooring, some new cabinets, electrical work, mold damage, sheetrock and texturing, sewage pipe broke in front yard from tree root (replaced pipe), leaking faucets (replaced), etc... Every time I get a text from those tenants I cringe a little before I read it. We make good money on that house but it seems like the problems just never end.

I wouldn't say having a garbage disposal makes your dishwasher work better. I would say that having a disposal might stop people from just putting dishes in the dishwasher with lots of crud of them.

Garbage disposals are cheaper than dishwashers. I would install one.

As far as questions to ask. I have a minimum income that they will have to make to qualify so I ask them their income (combined if a couple), they must show paycheck stubs to prove income, I ask them about kids, pets, vehicles, tell them what the rent and deposit is, they most provide a credit report, and I tell them I do a criminal and eviction check as well. There is also an application fee and I will be calling their employer and other references that are on their application to verify employment and calling previous landlords to see how things went when they lived there. Are you going to allow pets? What about aquariums or hot tubs? Do they have to take care of the lawn? You need to decide what kind of tenant you want and write it down on paper so when someone does call, you have it handy to answer their questions. If you have the same criteria for everyone, their is no reason someone should accuse you of discriminating against them. I also tell them what I expect from them and what they can expect from me. I expect them to keep things neat and clean. If something needs to be repaired I expect them to promptly contact me so I can get it fixed. I take good care of my properties and tenants so both will be around as long as possible.

I bought a cd at staples that had all of the paperwork I needed on it. Applications, lease, move in checklist, etc... You can also edit the documents. It was like $20. I print out about 20 applications and include a sheet that shows a picture of the house and some details about it just like realtors do when they put a house up for sale. Price, room sizes, any new appliances, updates, etc...   

I also signed up with Cozy and posted pictures. I haven't had much luck getting responses using that service so I have resorted to more creative ways to market my rentals. The first house I bought backs up to a busy street. I got on bannersonthecheap.com and purchased a 3'x5' vinyl banner that says For Rent, the house size, 3-2-2, and my phone number. I placed the banner on the back fence and started getting 5-7 calls a day. I made a separate banner for each house. Do not put a price on it because rents will change over time and there's no need to have a new banner made every time. When people call, I direct them to realtor.com where they can see photos of the house and read details about the house. If they're interested, I tell them to call or text me back.