All Forum Posts by: Joey English

Heigh ho, heigh ho, it’s off to court we go

So your tenant didn’t pay and you sent them a letter of demand stating they had three days to either pay or move. They did neither and you filed for a dispossessory. The sheriff served the papers and seven days later you get a call from magistrate saying your tenant answered and you have to show up for court Monday morning at 9:30. You thank the nice lady, hang up the phone and then think, “Oh crud! What do I do now?”

At least that’s what went through my mind the first time I went through this process.

I called my attorney, and after a brief conversation, he assured me I could handle it myself. I wasn’t so convinced.

So my next call was to my main teacher and mentor Bill Cook. He calmed me down and told me how to prepare and what to expect on court day. His advice worked, and I’d like to share it with you so if you find yourself going to court, you’ll be better prepared.

First, I want you to remember something. Even if you’re not in this situation right now, from day one with a tenant, you’re preparing to go to court. That means all correspondences are done via mail, email or texts. If there’s a phone call or an in-person meeting, make sure you keep a log of what’s said. We’ve only had to go to court twice, but having these “property logs” has helped both times.

As you’re preparing, understand that the judge won’t have time read your entire lease. You’ve already stated in the affidavit of dispossessory what your grievances are. Now your job is to show the judge, in a concise manner, what the tenant agreed to and how they’re not doing what they promised.

To do this, take your contract and use a yellow highlighter to show what parts of the contract the tenant has violated. Then use a red sharpie to categorize each violation in number of importance. For example: 1. They aren’t paying on time. 2. They’re not taking care of the property, etc… Remember, you need to keep it concise, so only use the most important points.

Preparing in this way will give you a smooth-flowing case while giving the judge an overview of the contract.

Next, make yourself an outline using your red numbers as bullet points. Print out all the emails and texts that show how you talked to the tenant about each point and how the tenant responded. Once again, this will build your case in a smooth and concise way.

Finally, make sure you make three copies of everything: one for you, one for the judge and one for the tenant.

On the day of court, if at all possible, let the tenant go first. They’ll probably be emotional and have very little to stand on. (Remember, they’re the ones not paying.) After they are through, lay out your case point by point to the judge and answer any questions he has for you. Mainly, stay calm and stick to your points.

(Speaking of judges, I appeared before our newly elected Chief Magistrate Judge Pat Rasbury. I have to say I was impressed with him. (And just so you know, I didn’t get the judgment I was seeking.) He was thorough and asked frank questions of both parties. He also took extra time to think over the case before giving a judgment – a great quality in a judge. I respected that and felt he was fair and balanced.)

Once you’ve made your case, it’s in the judges hands. But if you did everything right, you should have the property back in couple of weeks.

Become a flea trainer

If you’ve never read Zig Ziglar’s book, “See you at the top,” I highly suggest it. Zig has a gift for helping motivate you, improve your self image and teach you how to set and attain goals. His book is full of parables and stories that embody the keys to make you a success.

He tells one story about how to become a flea trainer, and it goes something like this;

It’s very important that you learn to train fleas. If you don’t, you’ll never make it big. By big, I mean you will never achieve large amounts of success or happiness.

Now, the way you train fleas is you put them in a Mason jar and put the lid on it. The fleas will do what fleas love to do – jump. Once they start jumping, they’ll bump their heads on the jar top. They’ll continue to do this for some time, but after a while, you’ll notice the fleas are no longer bumping their heads. They’re still jumping, but just below the height of the lid.

Once this happens, you’ve successfully trained your fleas. You can now take off the lid, and the fleas won’t jump out. Actually, “won’t” isn’t the right word. The fleas can’t jump out.

They’ve conditioned themselves to jump just below the lid. The area past the lid is freedom, but now that the fleas have set a limitation in their minds, they can’t jump any higher and they never will.

In this parable, Zig is equating the fleas to our dreams and aspirations. For real estate investors, when we start jumping, we are reaching for freedom – financial freedom, that is.

We jump higher and higher until we bump our heads. To often, as soon as our heads start hurting, people tend to stop jumping and walk away. Others continue to jump but never make it out of the jar.

Zig goes on to say that in order to be successful, you have to train your own fleas. You see, the trainer sets the height at which the flea will jump. It’s your responsibility to stay in control of where that boundary is set. If you don’t, you’ll limit yourself as to how high you’ll jump, and the goal of financial freedom will be left in someone else’s hands.

I have to say, last year I let someone else train my fleas. I started the year out going to some good seminars, but there were pervading feelings at these events of unease and uncertainty about what 2016 would look like economically due to the election.

I went to meetings and talked to other real estate professionals who said they noticed the markets slowing and that days on market were increasing for flips. At the beginning of the year, we noticed the same thing too. We also started getting dropped contracts, which meant we were holding houses longer. I started feeling uneasy and clammed up.

There’s an old saying: “You’re gonna find exactly what you’re looking for,” I bought into the notion we were in a bubble and it was about to pop. As a result, our business waned. It appears I found the gloomy market I was looking for.

But the problem was not the market; it was I who allowed the forecast to set the boundary on our business that kept us from jumping to the heights we should’ve reached. Long story short, my fleas were trained.

https://youtu.be/GlpjA-QgmQM

It’s imperative that you don’t allow someone else to dictate how high and how far you can go in life. Whether it’s investing, becoming healthy or being a most fantastic lover of your spouse and family, you’re the one who’s in control of how successful you can be. Ignore the naysayers and take the lid off the Mason jar of life. Only then will you reach success and jump to the freedom you’re destined for.

Great input Gail. I work three countries: Gordon, Bartow and Cobb. Gordon is the most rural, Cobb is considered metro Atlanta and Bartow is in the middle. It is amazing the differences in the three. For instance, Gordon does not allow process servers either were as both Cobb and Bartow do. Thank you for sharing how things work in your neck of the woods. 

If you’re a landlord, chances are you’ll have to file for an eviction at some point. I’d like to walk you through what you should do when filing for dispossessory so you won’t feel as unprepared as I did the first time I had to.

Start by notifying your tenant that they haven’t paid by giving them a letter of demand. This letter informs your tenants how much they owe, any late fees they have incurred and how long they have to bring their account current before a dispossessory is filed on their behalf. Typically landlords allow tenants three days to pay.

After the third day, you’ll need to file the affidavit for dispossessory. You can do this online or in person at the courthouse.

I prefer to go to the courthouse for a multitude of reasons. First, the people there are awesome. I love the girls at the Gordon County Magistrate Court office. They have great personalities, they’re super nice and always very helpful. I spend more time at this office than in any other, but I’ve found the same to be true for the folks at the Bartow County Courthouse.

Next, let’s talk about the affidavit for dispossessory.

At the top, it asks for the plaintiff’s and defendant’s names and addresses. The Landlord is the plaintiff; the tenant is the defendant. If you can’t remember who’s who, ask the girls in the office.

Next, you have to cite the reason for your case. There will be several scenarios to choose from; the one you are looking for is almost always the section that states “Tenant fails to pay the rent which is now past due.” Then you choose what you’d like to have happen. Do you want the house back, or are you willing to let them pay in order to stay? In Georgia, you have to allow the tenant the opportunity to pay one time each calendar year before you demand the property.

The last section is where you detail what your tenants owe. Here you put their monthly rent rate, the past due amount (including late fees), court cost and finally the rent per day consistent with the lease. This becomes important when seeking a money judgment.

Finally, you’ll choose either to have a process server or the sheriff serve the dispossessory. When possible, use a process server. They’ll guarantee personal service which is needed should you want to pursue a garnishment.

After the affidavit is served, the tenants have seven days to answer it. If they don’t answer, then you automatically get a writ of possession– the legal document that gives you the house back.

If your tenants do not answer, and you filed personally at the courthouse, you should have your house back by the 17th of the month. If you filed online, however, it’s not so quick. Let me explain.

We decided to file online for a property in Cobb County since we live pretty far away from that courthouse. That was on the 20th of the month; the sheriff served it by the 24th and no one answered because the tenants had moved to Florida. I called the courthouse on the 10th of the following month to find out why we hadn’t received the writ of possession.

It turned out when you file online you have to apply for the writ of possession – which is something I had no idea about. Long story short, it took an entire month to get the writ of possession from when we filed. That equated to two months of no pay before we could do anything.

Take it from me, going to the courthouse works better. It gets you the house back faster and you’re less likely to make a mistake. But when you go, take some brownies for the girls behind the desk. They work hard and deserve a treat.

@Patti Robertson, I wished I would have meet him in person before  he died. I feel like I know him to a certain degree by reading his books. But I wish I could have let him know the impact his teachings had on my families financial success. Mobile home's represent about 2/3 of our portfolio. And because of Lonnie, I am financially free. He was a great man and I am very grateful for him. 

I want to tell you about one of my favorite deal structures: the Lonnie Deal. That’s when an investor buys a mobile home on a rented lot for cash and resells it, offering owner financing to the buyer.

The reason I love them so much is they fit into any investor’s portfolio at any experience level. They work especially well for beginning investors.

If you’re a beginner, there’s a high likelihood you don’t have a tremendous amount of money to invest. It’s just as likely you have very little experience with things like paperwork and managing property.

With Lonnie Deals, these things aren’t problematic. First, these deals cost very little to get into. The most expensive one we’ve ever purchased cost $5,000. We average around $2,500 on the purchase price, which is a pretty affordable investment.

Lonnie Deals are also easy in terms of paperwork; there’s only three pieces.

The first is a bill of sale. You need this when you buy the property or if you sell it for cash. If you need an example of what a bill of sale looks like, Google “DMV bill of sale form.”

Second, you need the title to the mobile home. My suggestion that you look for a DMV (Department of Motor Vehicle) bill of sale wasn’t random. Mobile homes are literally t
railers. They have tires, axles, tongues, and they even have odometer. And since they are mobile, they are governed by the DMV. As such, each one will have a title – just like a car.

The last piece of paperwork you’ll need is called an agreement for title and possession. This is an installment contract that details how your new buyer will pay you, how long they will pay you and what will happen if they don’t. It ends by saying that once they’ve made their final payment, you will give them the title to the mobile home.

So Lonnie Deals are cheap to get into, and they have relatively easy paperwork, but they also give a new investor the opportunity to practice the art of screening while searching for a new buyer. That last part is huge. Being able to find good people who will stay in your homes, pay on time and be good to work with is essential for being a successful investor. With Lonnie Deals, you get learn this skill without the pressure of a mortgage payment looming over you like in a traditional rental.

The best thing about Lonnie Deals, though, is they’re financial boomerangs – by that I mean you often time get them back.

This month we got three different homes back. Now, in other situations it would be easy to freak out – you’d be thinking about the fact that you now have three extra mortgage payments to make with no tenant in the homes.

On the contrary, we get excited when Lonnie Deals come back to us. That’s because we get to sell them again. This starts the payclock all over, and we get a new down payment. Cha Ching!

The reason Lonnie Deals come back so often is that peoples circumstances change. Take the three houses I just mentioned. Two of the owners got new jobs: one is Savannah and the other in Florida. The third owner was combining households to save up money to by a bricks-and-sticks house.

We’ve owned that last house three times now. Originally, we bought it for $3,500 and sold it for $10,000 cash in less than a month. Not too bad, huh? Later we acquired the same trailer for $2,500. We’re still $4,000 in the clear. We sold it with owner financing 10 months ago for $700 down with payments of $300 a month for three-and-a-half years. We’re about to start that process all over again, which is what makes Lonnie Deals financial boomerangs.

@Lynne Jacob Oh wow! The snow plow at the end was hilarious. Thanks for sharing. 

lol Tim. I wrote this last week when we had the "great blizzard of 2017". Only in Ga can we go from snow to wearing shorts again in a weeks time. 

Six degrees and six vacancies… Oh shazbot!

It’s six degrees outside. Well not exactly. Technically it’s in the teens, but with the wind chill, it feels like six degrees. Needless to say, this is not normal weather in Georgia. There’s ice and snow everywhere. And as I lay in bed this morning, all I could think about was all the ways this weather could affect the six vacant houses we have sitting unprotected.

By unprotected I mean no one is living in them and taking care of them.

Wouldn’t you agree that protecting the house is one of the main jobs of a tenant? Things will break and deteriorate faster in a vacant house than if someone is living there. A tenant who keeps the heat on, the pipes dripping and wards off the snow in six degree weather is, in fact, protecting the house. That’s why when a house becomes vacant, all your focus and energy should go toward getting it filled with a good quality tenant- fast!

We can’t simply install tenants in the aforementioned six houses, however. Two of them are flips we have on the market. We recently acquired another two and have yet to start the rehabs. The last two are Lonnie Deals that went vacant two days before New Year’s. Like I said, Shazbot!

I know the Northern folks smile at us Southerners as we scurry around with only two inches of snow on the ground, but this isn’t normal for us. When temps get low like this, funny things start happening down here – beside the mass decent on the grocery stores, I mean.

For one, it’ll heat up during the day just enough to cause the top layer of snow to melt. The resulting water will refreeze into a sheet of ice known as Black Death.

The pine trees will also freeze. This will cause them to get top heavy and they’ll either fall over because the root ball can’t handle the added weight, or they’ll just snap under the extra pressure.

All this I envisioned happening to the roofs and power lines around these vacant houses as I lay cuddled up in my warm bed.

Since we had no tenants, all we could do to protect these properties was get faucet covers on the spigots, make sure the heat was on and pray that a pine tree didn’t snap and cause the power to go out. Getting this done turned out to be more treacherous than one might think.

My road has hills on both sides. As Ashley and I eased out of our subdivision, the reality of how much ice we were going to encounter sank in. It was everywhere. It really got our attention when we topped that first hill and were on a 20-foot-long sheet of ice before we could hit the brakes. In that situation you just have to go with it and pray you don’t slide off into a ditch.

Let me also give you some landlording advice here: it pays to just buy a box of faucet covers each year. It’ll run about $50, but you’ll have them on hand when the weather strikes. I was thankful we’d done just that last year and still had enough on hand to take care of things.

When we made it to Georgia State Route 53, we were so grateful to see the fantastic job the road crews had done clearing things up over the night.

We had a few more slides on our way to Sonoraville and back. All in all, we got the properties protected unscathed, but I’m telling you, six vacancies in six degree weather is not fun in Northwest Georgia.

How to get started in real estate investing?

So what’s the best way to break into real estate investing? You may think you should start by getting approved for a loan. Maybe you think you should meet with contractors, realtors or even lawyers first. Perhaps you should buy one of those seminar packages who come with a mentor that will tell you exactly what to do next.

Here is a personal tip: please don’t do the latter. I’m all about the right kind of seminars but … well let me explain.

I met a wonderful couple; they were excited about getting into real estate investing. They’d purchased a program that was supposed to teach them the ins and outs of the business. This package came with an “expert” who’d mentor them one day a month for a year.

The problem I saw with this scenario was that the purchase price for this package was more than what it costs to buy a house.

Had they known better, they could’ve partnered with an investor for that same amount and been made part of a deal while being taught in the process. This would’ve given them some real-world education while making them some money. And that would have been a great jump start to their business.

As we were talking, this couple, desperate to get started, asked me what they should do first.

All the things I mentioned in the first paragraph are important, but they all hinge on one thing: you have to have a deal for any of them to matter. In order to have a deal, you have to get face to face with sellers.

This factor is very important. You see deals are created by asking the seller lots of questions so you can find out what they need and how you can give it to them.

In fact, Pete Fortunato’s famous question, “Why are you selling such a nice house as this?” should be the first thing you ask.

In mentioning Pete’s question, I’m reminded of a deal we created by using it. The seller needed to move because of heartache – they’d inherited the house from their grandmother who raised them. They thought living in the house and fixing it up would make them feel closer to the newly departed, but instead, it brought up memories that kept the wound of losing her fresh. Plus, once they moved in, they realized fixing it up was too big of a project for them.

When I asked them Pete’s question, they tearfully told me they felt they were letting their loved one down by not being able to fix the house up.

They’d started looking for a new place and found they’d be able to purchase a house they’d previously lived in – it was where they’d brought their first-born child home to. This opportunity had given them excitement, but they needed money to move.

We agreed that since the house needed so much work, we’d give them 10 percent of the purchase price as a down payment and they’d carry a note back for the remainder until we sold the house. This gave them the moving money they needed and got us started on a rehab for much less out of pocket than if we’d bought it outright.

By getting face to face, we saw cash wasn’t as important to this seller as the concept of doing right by grandma’s memory. Once we finished the renovation, we invited them back for a tour of the house. Hearing them say we made grandma proud really warmed my heart.

So if you’re interested in getting into real estate investing, go see some sellers and ask Pete’s question. Once you have a deal, all the other things like money, knowledge and a team of professional will fall into place.