All Forum Posts by: George Azita

It seems like a selfish reason to want tenants to sign a new lease after the tenant has been in the rental more than one year. The reason landlords demand a 1-year lease is so the landlord does not have to manage his rentals like a hotel where tenants move in and out too frequently. The 1-year lease is to get the tenant to stay long enough to cover the cleaning costs and other costs for when a tenant moves. After one year those costs should be covered and the landlord should not be selfish and should not try to force the tenant to commit to another entire year.

We don't charge tenants more at the end of their lease when they go to month-to-month. That also seems like a greedy play. Especially, when you have a nice tenant who pays their rent on-time and takes care of the rental unit.

We don't want our tenants to commit to another full year because when tenants move it gives us the opportunity to rehab our properties, to increase the rents to the max the market will bare and to increase the value of the property.

We don't charge a different amount for rent because a tenant wants to stay on a month-to-month basis. We have tenant who have been in our properties for 40+ years and we charge every tenant as close to the same amount as possible when considering the same size units.

You are most-likely looking for trouble if you think you can find a mentor, or someone to shadow. Many people look like they are successful, but don't know one bit more that you with the exception they know what they can't do. I call what you are looking for, "The Blind Leading The Blind".

As stated in my most recent post, after reading and writing on BP and trying to help investors I am getting frustrated due to the crazy questions and insane advice. Investing is real estate is not difficult and anyone with a 5th grade education, or less should be able to invest with no personal help from others, but I definitely see where a high percent of people who want to invest treat the business like it is a hobby and not a business.

Don't listen to a people who claim they are successful and don't watch a few videos and don't read a few books and don't believe that nobody loses money and don't believe that so-called successful people are successful and don't believe they can walk on water. I've been investing in real estate 55+ years and still have the exact same fears you have every time I purchase a property, but the difference between myself and other investors is I don't treat the business like a hobby, I analyze a property 50 times (so-to-speak) before I make a purchase, I don't cross my fingers, don't pray to god for success, never make a decision based on another person's advice and I am 100% positive about the outcome before putting a property in escrow. YOU CAN NEVER EXPECT SOMEONE TO DO ALL THAT FOR YOU and everyone has their own agenda that usually does not align with your agenda.

The most important factor about investing in real estate is analyzing the property, doing the math and the ability to do realistic projections. Very few investors have those abilities and almost every investor lacks in doing the math. If you every think you have a mentor who can teach you the ropes in regards to analysis then you are most-likely 99.89% wrong because I deal with even professional and experienced brokers and they are almost always lacking and wrong.

Now the positive things to write about. Read a book called 'The Encyclopedia of Commercial Real Estate Advice' by Terry Painter. You can get it on Kindle or paper for $29 and it is the best book I ever read. Put it on Kindle so you can read it a little at a time wherever you are like when waiting at a doctor's office, at a coffee shop, or wherever. Don't focus on only the positive things because of the gold at the end of the rainbow. Pay special attention to what does not work. Read the book several times.

Wholesaling is much difficult and you could possible make a few dollars, but you won't get rich and I would never waste my time with it. Flipping is super difficult and very risky. I never met a person who made good money flipping and even the pros lose a lot of money on a percent of their flips. The big money is in multi-units with 4+ units. You will never understand how much you can earn when you ask the wrong people and when you don't focus on learning the math.

With no big head, I feel like I am one of the best real estate analysts you will ever meet because I don't charge money and I will do the math, extensively, turn over every rock and look under every leaf, for free, only for investors who don't treat the business like a hobby and for investors who don't want to be a shadow, but do want to work hard enough to really learn, understand the business and actually want to make their own smart and final decisions.

As for managing a single-family home, a duplex, or a 100-unit apartment building they all require the same amount of knowledge and while many people say that there is more risks when owning an apartment building those people are full of beans. The larger the number of units the less risk you have because if you own a duplex and two tenant move then you have zero income to pay your bills. When you own an apartment building multiple tenants can move at the same time and rather than being stressed like with your smaller properties you are actually ecstatic because the more vacancies you have the better for you because then you can increase your rents and when you increase your rents you automatically increase the sale value of the property, significantly. It is very difficult and risky to move tenants out of a single-family home or duplex so you can rehab the property to increase the rents when you have a mortgage.

On the 5th of every month at exactly 5 pm my wife and I jump into our van and make our rounds to collect our rents from several apartment buildings we own. Our tenants drop their rents into a locked box and we pick up close to $200k in rents in about 1-1/2 hours and it economical and good time-management when you can bunch your business into one or a few neat and convenient locations.

It doesn't make sense to start small and lose out on making many times more profit for a period of time and then lose out on a huge chunk of profit because you could have purchased units for less money in your early years and later you will have to pay higher prices per unit.

Buy the largest apartment building you can afford to buy with the money you have. Don't spend $50,000 of your money so you have reserves for repairs and other unknown expenses. This will be the best decision you ever made./

VERY FIRST!!! Learn to do the math, read many books on real estate and learn not to make decisions based purely on the advice of friends and professionals. Advice is great, but you need to have enough knowledge in your head so you can make your own decisions and so you have forsight.

Never hire a property management company because they manage properties totally different than hands-on owners because they defer maintenance to make you happy by generating more profit and they rent to tenants you would not rent to. While you may enjoy a property management company getting you decent profits the problem with that is the deferred maintenance will eventually get to the point where your will wish you would have taken care of issues in a better and more-feasible way throughout your ownership.

The best book I ever read is the 'Encyclopedia of Commercial Real Estate Investing' by Terry PaInter. You can get the book on Kindle or at a bookstore for about $29 and this book covers everything in detail that other books do not. This book covers the most important thing you need to know and that is 'the math' because if you don't know how to do the math you can't analyze properties to get the most bang for your buck, no real estate broker will do the math for you to suit your agenda, you will not know where you are going after you purchase a property and will not enjoy the real estate business and not enjoy dealing with tenants when you don't understand how much money you are making in addition to cashflow.

Go to bestline plumbing.com, scroll down to the link 'MS Access Software, download the free software and learn how to analyze properties before you get too excited and purchase the wrong property.

Dealing with tenant including the bad tenants is actually a lot of fun when you understand only a few simple things I don't have time to explain, but my wife and I manage several fairly large apartment buildings and properties in 4 states with no property management company and we never let tenants get us stressed nor emotional because we constantly do the math and we are on top of our game. Strangely, when we had a property management company we added more fuel to the fire and had additional problems rather than less because we had more problems with the management company than we ever had with our tenants and then we had to deal with both the property management and the tenants and then every property the management company managed was totally destroyed because the management companies don't have the time to and will not do period inspections like a hands-on owner.

I would love to see a syndicator post a complete sample, or an entire marketing package, entire proposal, or whatever you call it for a syndicated deal for today's market prices. I've communicated with several syndicators in the past few months and the only thing they furnished was the same marketing package provided for properties for sale.

 The most important thing is how the math pencils out. If you are buying add-value properties where you can fix up the properties, increase the rental income and increase the value of the property by increasing the rental income, then almost every property I purchase will be in the negative for the first 1 to 3 years, but when the numbers are correctly stretched out over a period of 10 years, then most of those properties (when the numbers are right before you purchase) are goldmines.

Example. I've been investing in real estate 55+ years and never gave a lot of consideration for properties under Los Angeles Rent Control where the rent increase is capped at a flat 3% and landlords have to pay tenants up to $22,500 to get them to vacate. Don't forget that Los Angeles has the highest prices in the country, but I just put a 6-unit property in escrow for $975,000 cash and the rental income is only $72,000 per year. The roof is currently leaking and needs to be replaced and everything in the units is what was installed in 1956. I figure it is going to cost me $200,000 to get the tenants out and rehab the units. I will increase the rents from $1000 per month per unit to $1650 plus a $40 increase every year. For the first 2 to 3 years I will be deeply in the red, but by the end of 10 years I will profit $1.5 to $1.8 million, or about $150,000 to $180,000 per year for a $975,000 + $200,000 investment.

I am 100% positive that the majority of real estate experts and so-called pros do not do the math, thoroughly nor correctly.

Go to bestlineplumbing.com, scroll down the home page until you see the link MS Access Software, download the free software and do your projections.

I am paying cash for the property, but my projections show that if I financed the property with 30% down my profit at the end of 10 years would be about $200k less, or $1.3 to $1.5 million. I  may seem to the experts that I could earn much better profits by using financing to purchase more properties, but the problem I have is I can't find enough properties with numbers that make sense, so it doesn't make sense to pay mortgage interest when I don't have to and I still have plenty of cash on-hand to purchase a fairly large apartment building.

 Direct mail is expensive, time-consuming and not effective. The problems you come across with foreclosures is a very high the foreclosure issues are resolved with new financing, personal loans and attorneys get the foreclosures stalled for several months to several years. Property owners are bombarded with telephone calls, direct mail, knocking on their doors and when you add up all the problems in the past sentences your chances of even getting someone to call from your letters is very slim and even when you do get a call your chances of closing a deal are very slim.

The best way to get foreclosures is to bang on their door.

I can't see where most property owners who don't own a roofing business have the ability to personally install a roof on a 4,000 sq ft house and maybe the total footage is 4500 sw ft. In California and probably many other states, it is illegal for a property owner to install a roof on a rental property without a roofing license and permits cannot be obtained without a contractor license for roofing.

You need to do the math calculations to see your projections with and without the tenant. An investments opportunity should not be swayed by whether or not a single tenant is good, bad, stays, or leaves. It one tenant matters that much then the entire deal must be crap.

Most sellers will not terminate an existing tenant's tenancy for the buyer because if the buyer backs out, or can't close escrow for some other reason then the seller loses both his tenant and rental income and is in a bad position.

If you buy the property and you inherit the tenant from hell then figure in your cost to give him the boot. All your concerns about the tenant appear to be trivial and an expectation when dealing with tenants.

I have a 6-unit property in escrow and have concerns much more serious like one unit was flooded from a roof leak, the tenant is supposed to move before the close of escrow, but may not move, the property is under Los Angeles Rent Control and if the tenant is a tenant from hell I could run into several legal issues that could cost thousands of dollars resolve, but since I will net about $1.5 million on this property in 10 years the problems with 1, 2, or 3 tenants is insignificant compared to the $150k, or $3,000 per week I will earn just for dealing with problems. Wouldn't this be a great world if everyone could make $3,000 per week and not have any problems to deal with. I always say, "the reason I am paid the high amount of money I earn is because I am being paid to deal with problems". I guess I am a professional problem solver!

Check your numbers and see if dealing with the issues is worth the money you will earn and not understanding the numbers and not understanding that you earn your money for dealing with business issues is the reason a super high percent of landlords hate the real estate business and the reason they hate their tenants with a passion.