All Forum Posts by: Anthony Napier

Congratulations, nice job in building your team, and moving forward to achieve your future successes. You have run the numbers; they tell the truth that this isn't your deal. Save yourself and family severe pain and sorrow. Listen to the cash flow evaluation as fact. Don't try to give CPR to a dead horse, that's futile and will lead to regret. Unfortunately, your first deal is where you stand to lose the most money and gain the most experience. Your first deal will make you or break you. Stay enthusiastic and drive forward with patience until the numbers make financial sense. My motto is, "Have patience...or become one!" 

So, it looks like you have your answer...Sitting on their hands. Good and even Great deals are not a function of fear in the marketplace. I have heard that fear can be seen as an acronym. False. Evidence. Appearing. Real. Yes, interest rates are high and going higher as per the Feds own plan to quell inflation. Fear to me is opportunity calling. It's time to be creative. It's time to think, how can I make this work, not when will I be able to continue with my old way of doing things. It's a call to growth in business. After serving 6 years in the Air Force, I took a sales job I wasn't qualified to do. A new sales consultant was hired by the dealership to help take sales to a higher level. It was the beginning of winter and snow was killing sales. At our first sales meeting Barry, the consultant, started by saying that, "We all know that the weather, i.e., snow is going to kill sales, don't we? Everyone in the boardroom agreed shaking their heads in agreement. Barry, standing at the front of the room, immediately slammed his hands down on the conference room tabletop and said, NO! He said, that's what every sales team in town thinks! We are going to be successful because we have no competition! We are going to treat everyone like a buyer desperate to find a salesperson so they can buy a vehicle. I made three times my normal income in December of 1986 and was awarded Top Salesperson for the entire city of 500,000 people. Fear and lack of belief in a successful mindset creates a group I'm not interested in joining. My hands are working. Not supporting CMA. Additionally, Boise Idaho inventories are growing rapidly. I'm lease optioning and doing long and short-term tenant leases. My option is subject to the current market value when exercised in 36 to 60 months. I'm making cashflow until prices settle down and the exodus begins. The Locusts always go back, HOME! Like a dog returning to their vomit!

Go FUR it! I include in my leases with Tenants who have a pet(s) agree to unit inspections every two months. I collect a $300 nonrefundable pet deposit per pet and a $25 per month per pet rent. If during an inspection any damages are found, then the Tenant will correct the issue(s) within 5 days or be billed for professional services to correct the same. I've found that if I didn't accept pets, I would miss out on additional income and deposits. And anyway, later I would find that tenants conveniently forgot to disclose that they just got a pet that they have had for 5 years!

Quote from @Erin Dreher:

Owners either like Section 8 or they don't. I always try to lay the pro's and cons of using it. There are definitely things you need to keep in mind like that most of the tenants do not have income coming in to pay for tenant caused damages. So when they move out you will most likely be paying for the all the work that has to be done. There also could be a potential for more wear and tear on the house. If someone is home all day that is just more flushes on a toilet and so on. There are also no repercussions for housing tenants if they trash a house, they can still stay on the program and move on to the next property. 

On the flip side. Rent comes EVERY month. Though it is a slow process to get going it is consistent. And I have had a small percentage of tenants on housing that took good care of the property and stay for many many years. 

I think I would base the decision on the location of your property. If the area is Class C or low income it may be best suited to use Section 8 so that you can get more in rent by using housing vouchers.

During the COVID-19 fiasco many renters were allowed to stay in my properties without paying rents. The Section 8 tenants paid on time the entire time. The rents were equivalent to market in Dayton and Springfield Ohio. More Sec 8 qualified landlords and properties are desperately needed. Those areas have many qualified tenant voucher holders that are not able to find safe, sanitary, and secure housing. I suffered financially not having more Sec 8 deposits coming in monthly during the Governments COVID-19 rental eviction moratorium. Moving forward I'm having a balanced mix to offset any future repeats. My business plan never accounted for the Government interference in my rental income business! When the moratorium was lifted, my nonpaying tenants vanished before I could take action to participate in the extremely slowly rolled out Emergency Rental Reimbursement Program. Section 8 Tenants properties are inspected frequently by my inhouse assistant. Tenants are given a payment plan to reimburse damages to the property they are responsible to repair. If they refuse to be responsible, I forward to them a notice that I will forward a damage report to the Housing Authority within 5 days if arrangements aren't made to rectify the situation. They respond 99% of the time and make payments and wake up to the reality that if they are denied future Sec 8 status they will have to reapply and go to the back of the three plus year waiting list to maybe be approved again for the program. Since 1986 I have experienced only one tenant going all the way refusing to make or reimburse for repairs. They were removed from the program. I've also had nonsubsidized tenants behave the same. You can do an extensive vetting of prospective renters and still find yourself in this situation. Remember, "If it was Easy...Everybody would be doing it!"

In 2006 my son in-law stationed at Nellis AFB purchased a townhome for $218,000. In 2009 he was transferred to Wright-Patterson AFB in Ohio. It sold as a short sale for $55,000 after the 2008 financial crisis destroyed the Las Vegas market. This current economy reminds me that markets go up and down. Your first deal should be walking hand and hand with a mentor in your area. Find a local real estate investment club and make your first experience is not your last.

Every situation is different when dealing with tenant issues. One thing is for sure, you teach your tenants how to treat you and your rental investment. I respond quickly when rents aren't paid on time by 10am the next morning. Tenants learn quickly that I mean business at every turn. I have an in-house assistant inspect each property frequently and bill tenants immediately for damages. I file small claims suits immediately if repairs are not made timely. I'm fair but to the point. Tenants come from different life situations sometimes creating a culture of mediocrity. That's not my standard. I or my representative makes it clear whatever their past landlord experiences have been that we are different. We are attentive to tenant repairs. We inspect often to maintain their rental in a safe, sanitary, and secure status. Property management is not for the faint of heart. 

Tenants should always be responsible for their use of utilities. In Springfield, Ohio owners are ultimately responsible for the water bills that tenants may not pay. I always request of the water department to forward a copy of all of my tenants' bills. In the alternative I have the tenant give me access to their online water bill account to verify bills are current. Either way, that saves me from a big water bill surprise!

Quote from @Bruce Woodruff:

Yes, I have. Two reasons....1) I was naturally drawn to high-end work and finishes, being a custom Contractor/Builder. So I overspent on time and money to make the house more beautiful than it really needed to be. Time turned out to be the killer. 2) Because of the time overrun, we missed the market....we got into October and showings and prices went down dramatically.

Ended up losing $9k from our projected break even......

In 1990 I was excited to start my first flip after attending a Dave Del Dotto seminar. I listened to all of the recorded materials on the 6-hour trip home. I located a triplex property within three days and met with the owner to walk through the property. I was a dump! Tenants behind on rents and I could see and hear why. There were extension cords strung all over because the outlets didn't work and when I walked down the hallway, I heard a buzzing sound coming from the circuit breaker panel! I walked outside with the owner, and I put my new knowledge to work. He accepted my offer and off to the races I went. After 12 weeks the project was remodeled and ready to put on the market. It sold within a month for full price! After closing, me and my new money partner sat down and divided up our profits from our first flip. After all expenses, including remodeling, we split $800! The next deal was $15,000 and continued to climb as we both learned our lesson. Cost controls!

In this situation, I would not put the buyer in title. Instead, I would lease the property to the buyer for 3 to 5 years with a separate option agreement. I would finance an option with monthly payments spread over 3 to 5 years to cover the 20% down they will need to finance your property in the future.  They buy their option over time and you, and your bank continue to have a happy relationship!

The first thing I was taught regarding how to find a deal was to look for a "Motivated Seller". That would be someone who needs to sell a property fast. These types of sellers are less money conscious. They are looking for someone to fix their stressful situation fast. Here are a few examples, divorce, job relocations, health issues, foreclosure pending, and a long list of issues that affect the emotional stresses of their lives. I would get a list of properties in default on their payments. You can now find this information online, title company or your local courthouse as well. A very wise man once told me that, I could succeed in any business venture, if I just helped enough other people get what they wanted! Go fix a seller's problem, then fix a property!