All Forum Posts by: Account Closed

The following is not a joke!

Since our great governments have the ability to demand that private businesses give free rent, or tell the public they can live in your rental units and pay in 10 years through tax credits then I think our government should make restaurants give everyone free meals with no questions asked. It is not fair that landlords have to give free rent and restaurants don't have to give free food.

Then, all retail store should give people everything they demand and all they need to tell the retailers is they don't have a job and promise they will pay in 10 years through some payment program that will be devised by the government in the future.

I've been lucky and have only 1 tenant in Las Vegas that is not paying, but I know some landlords who are getting hit hard enough to bankrupt them. Today, I met a landlord who has a house renting for $5,000 per month and the tenant has not paid one penny in 6 months. California just extended the moratorium to something like December 31, 2020 with some sort of b.s. to collect back rents I don't understand.

There is a huge difference between renting houses and renting apartments that are smaller and I can probably name 50 things about apartments that will change your mind about the horror stories of renting.

Homes are usually 2 to 3 times larger than an apartment. You usually have large yards that can require thousands of dollars to clean and put back together. You usually have fences to repair, trees and shrubs to maintain and a 1 or 2 car garage. I own several homes and when a tenant lives in the home for only one year I often have to paint every wall inside the house, replace carpets, clean the garage, clean the yard, trim the trees and shrubs, clean the windows, repair plumbing and the cost is $6,000 to $12,000. For one house, just to do what was described took two worker 13 days working 14-hour days and the cost was $32,000 because in 3 years the tenants destroyed the kitchen cabinets, counter tops, carpets, linoleum, cracked 3 bathroom sink bowls, damaged the kitchen sink porcelain and destroyed the refrigerator and stove.

For apartments, the average cost to clean and paint is usually less then $2,000 and the work is completed in 3 to 5 days. There is no comparison between an apartment and a house when it comes to the amount of physical work and costs.

I've been in real estate 55+ years and I love dealing with tenants both good and bad. I enjoy taking tenants to court because defending small claims lawsuits makes me stay sharp because it keeps me up-to-date on laws and it forces me to make sure I have solid lease agreements and abide by the laws when dealing with tenants. 

When you finally learn what properties to stay away from, how to crunch the numbers and how to stretch out your numbers over a 10, 20 and 30-year period you have better insights as to how rich you will be vs. how miserable you are when dealing with tenants. I love to have problems with tenants because very time a tenant moves or gets evicted I make tens of thousands of dollars because I increase the rent and that increases the value of the property. 

Just yesterday, a tenant gave me a notice to move and I will raise the rent for the apartment from $1100 to $1500. That is a $4800 annual increase and $48,000 more I earn in 10 years. Add the Gross Multiplier $4800 per year x 13 Gross Multiplier and the value of my property increased by $62,400 + $48,000 in 10 years means when my tenant gave me a notice to move I just made $110,400 plus add 4% rent increases for the 1-year period and the Gross Multiplier kicks in plus the additional rental income and when the tenant gave me a notice to move I made about $250,000 in 10 years. CAN'T DO THAT WITH A HOUSE and it is no wonder I love bad tenants. When I take a tenant to court it is not because I want the back rents. It is because I want the $250,000.

Don't be short sighted, or you will be miserable!!! Stay away from large single-family homes unless the number indicate you will make huge profits and that is almost impossible unless the value of the house appreciates, significantly.

I agree! My post sounds morbid!  My stories about several people near the end of their life offering me their properties is 100% true. It is not my fault I run into people who offered me the properties for free. I've been a licensed contractor for 55 years and I worked for thousands of customers, both young and old. Every once in a while, I run into someone, or even a married couple, who want to give their property to someone because they don't have relatives and they don't want to leave their properties to the state. 

There are thousands of people who are dying and these people want to enjoy giving their propertyto someone they chose. It is what it is. I never said I roam hospitals looking for dying people, but you can bet everything you own there are thousands of people who seek properties through obituaries to try to get the properties after these people are dead and then it is too late because the properties are already subject to go to a probate trustee, or to relatives who the poor deceased did not want to give the properties to.

Would I purposely seek homes from people who are dying. I never did, but when you take a serious look at what most wholesalers and flippers are looking for is; property owners IN DESPERATION who are;

a) in debt and cannot afford to keep their properties, so they are willing to allow you  take advantage if their situation,

b) in foreclosure, so you get to take advantage of their misfortune and these people are alive and they get to watch you gloat over their situation as they move out of the home they loved and worked hard to get,

c) having to relocate to another city or state and they have to sell fast and cheap so you take advantage of their situation,

d) ignorant and don't know the value of their property and you don't educate them,

e) getting a divorce and are willing to sell below the market price and you take advantage of their misfortune, and

f) near death, would love to see someone they choose get their property and UNLIKE ALL THE HORRIBLE CHOICES ABOVE WHERE YOU TAKE ADVANTAGE OF PEOPLE'S MISFORTUNE these people actually want you to have their property.

Sorry!!! I have another story to tell. About one year ago, one of my employees told me about a woman who owned a 7-unit apartment building on the 1200 east block of Washington Street in Long Beach California. The property was worth about $275,000 per unit, or $1,925,000. The woman had terminal cancer and offered the property to my employee for $750,000. He told me about the property and I went there two days after he told me and she already sold it to someone else. Was I morbid for checking out this property owned by a terminally ill woman.

As for trying to structure deals to get properties with other people's money, this is also very possible, but it requires serious skills and knowledge about real estate, real estate laws, negotiating, salesmanship, enough experience to think on your feet and even most veteran real estate experts don't have what it takes. I would rather clean tables at Mc Donalds and save money for a good down payment.

Real estate is not the problem and neither is your wife. Only you are responsible for your happiness and financial future and no other person on this planet. You have a bad relationship and it is your fault because you didn't take time to know your wife and you made bad decisions. 

Women can come and go in your life at-will, but contrary to what most people will agree with, you need to make your career more-important than a woman who beats you down and will leave you, anyway.

I was married to a drug addict for 18 years. She constantly told me that if I would move to another state she would stop doing drugs. B.S.. If I gave up my business and moved I would have lost $millions and be broke today.

You need to read many self-help books and seek counseling for yourself. No man should every be unhappy with this woman. Dump her and stay single for many years. Then, when you have your act together you can start looking for a decent woman. Otherwise, what woman wants to be with a man who caves in like you. Be a man and do what is best and not what a loser wants.

It is possible, but very difficult. About 25 years ago, I was working for an owner of a beautiful four-plex. The owner had terminal cancer and he wanted me pay off the loan on the property that was about $100,000 with no other costs and he was going to give me $45,000 at the close of escrow. Like a fool, I turned the deal down because I was in the middle of a divorce at the time and not in the mood too deal with real estate.

On another job, the owners of a 6-unit property I was working on were both about to pass away any minute. They wanted to give me the property absolutely free. They asked me for all my information and they paid for an attorney to transfer the property. As luck would have it (not for them) the attorney was working on the transfer like all attorneys do, for about 6 months, and both owners passed away and the property went to probate court. I did not bothered to pursue it.

I had another customer who owned a home worth about $50k, but this owner never offered me is home. Instead, he owned me $8,000 he never paid. He went to the hospital and someone picked up the property on his deathbed for $60,000 and I think hospital beds is where a lot of real estate is traded.

I guess I missed the question. I would close the escrow and not worry. If I read correctly, you are going to withhold $500 in escrow for rent. If she is not out on-time then she will have to pay more rent and most seniors are honest and will pay. When I buy properties I always know in the back of my mind I may get a seller I have to evict and I am always mentally prepared to go through a 6-month eviction and a loss of rental income and lawsuit costs exceeding $9,000. It is an inevitable problem and cost for doing business. Since we know it is inevitable we don't get emotional and we don't get angry.

This happens all the time and while frustrating we have to look at it from the seller's view since I am sure she is nervous, worried about repercussions and maybe doesn't know what to do. If she is not out before the $500 is used up then just be nice and work out a deal where she pays rent until she leaves. It wouldn't be nice to put her on the street.

If I am reading your numbers correctly you are saying that you are cash flowing $876 annually for a $53,000 investment plus your time, risks and unknown expenses e.g. loss due to vacancy, cleaning after a tenant destroys the property, painting, carpets, utilities when it is vacant, new water heater, furnace, air conditioner, leak in the roof, broken or leaking drain pipe, sewer, water pipe, gas leak, or replace or repair leaking faucets, broken screens, repairing locks, trash removal, city sewer use fees and a lot more. All this for a ROI of 1.6% and not the 3.75% as shown in your chart since $876 / $53,000 = 1.6%

The only way you can make a profit with this property is if it appreciates, significantly. I would rather put my money in CD's at 1% or clean tables at Mc Donalds and make $400 per week and bank the cash vs. $18 per week and work so hard and take such a huge risk that the unknown will not make your life miserable.

Never listen to the advice of others when looking at properties because you get a lot of very bad advice. I would never consider a property that does not give me a good clean 8% ROI annually, but my real goal is to earn 50% to 100% with my investment capital every year and that is very possible when you make that your business model and philosophy. If you don't set such a goal then stick with your 1.6% model and that is what you will get.

The way you earn 50% to 100% annually is by buying properties for slight discounts where you can double your investment capital. Suppose you purchase this $200,000 properties and you get it for $180,000. If you put $40,000 down and the property is worth $200,000 then you made a 50% profit on your $40,000 down payment. 

If you are even a little sharper, you already know it is a buyer's market and with a little elbow grease and love you can turn this house into a $220,00 house in 12 months. Now, you easily made 100% on your money in 12 months because you put $40,000 down and you earned $40,000 by buying at the the right price.

How do you get a $20,000 discount on properties? Stop looking for homes that meet the 1% rule and look only for properties where the math gives you an annual return of 50% to 100%. Stop listening to real estate brokers b.s. when they tell you that every property they have to sell is a perfect match for you. Crunch the numbers for hundreds of houses and when you eventually you will be absolutely positive you found the house that will give you the 50% to 100% return. Don't be afraid to ask for a huge discount on every house you look at and don't listen to what your broker tells you because he is full of b.s. when he tells you a seller won't even look at your offer. If he won't make the low offer then tell the broker he is breaching any agreement you have with him to represent you and he is fired. Go online, find an offer form and make the offer yourself, or get another broker.

Believe me when I say I made millions of dollars by doing exactly what I preach when I say you cannot rely on brokers for good investment advice and you can make 50% to 100% on your money every year if you make that your business model and philosophy.

You will not even keep up with inflation if you buy properties with the philosophy that you are going to collect the rents and have tenants pay the mortgage. By the time the mortgage is paid you will pay tens of thousands of dollars for all the repairs listed in the first paragraph.

I am describing only my experienced I had in Cebu and I don't have the business savvy, education and experience like the pros. We had about 18 homes in Cebu and have been selling them slowly. I think we have about 11 left. Every business deal we do, whether buying or selling, always comes with a lot of problems we don't get in the United States. The rents are low and there are always problems with tenants bailing without paying rent. We've had crazy problems with neighbors like we had a neighbor park his boat in our driveway for about a year and we could not get the police or anyone to force them to move it. It is much easier to buy than to find a buyer with enough money.

Maybe, I am the problem, or maybe doing business is better in larger cities like Manila. 

I can see not having problems in Wyoming. In California, we have homeless and drug addicts on every street in the nicest neighborhoods and it is an expectation that someone will rip the copper wiring and pipes out if the walls.

We never had a problem with the people we find to watch our properties. Another small add-on to protect your property is a remote video camera that does not require any attached devices. There is a micro chip you insert into the camera and the camera records when it senses movement. You can get the cameras for $49 to $99 and it records for months. You can also connect the same camera to the internet and have it notify you on your cell phone every time there is movement if you want to pay a few dollars more.

The theft of construction materials and fixtures on jobs is one of the most-expensive problems we have. Cameras also help us confirm the number of hours hourly paid employees work and it helps to keep employees honest when reporting payroll.

There are also companies that set up cameras around the property that run on solar. The cameras are connected to the internet and these companies monitor the video 24/7 during the time frames you set. These companies guarantee they will pay you up to $10,000 if your property is robbed. But, the cost is $500 per month. There is one of these systems on the 25-unit apartment building being remodeled next door to my office. Maybe, they are watching me.

I hate to take the time to install cameras, but I'm also super happy when I have video footage and sound when I have to sue someone, or when I get sued and lawsuits are very frequent at my business.