All Forum Posts by: John H.

This is exactly why I don't rent to pet owners, you probably should have expected this and calculated their deposit based on what it was to replace the carpet... when they were "begging" you to let them have their dog, politely let them know that it was a big possibility that the carpet will need to be replaced when they vacated the unit.

Pets can do a lot of damage, especially to careless tenants. You also have to be careful, tenants will lie and tell you they do not have pets when they do. Upon discovering pets are living on my property, I file for an immediate eviction based on lease violation. In my younger years I put up with it, but not now. There are also many good legal reasons not to allow pets; i.e if a tenant's pet bit someone on your property, you may be liable. Just not worth it, I like to sleep at night. I have my real estate attorney on speed dial, luckily she is a good friend or I'd have a large legal bill.

I agree with you for the most part... but it's also about building a reputation, especially in multi-unit buildings. If I were lenient and got the reputation as being lenient, then word would get out.... trust me. If my building gets the reputation as a no nonsense type of building, then I'm more inclined not to have problems. In my multi-units, I stick to my guns (actually I have a property manager now) and evict them at the first sign of trouble.... I have someone who can take their unit after the place is cleaned up. Their neighbors in the same building see this and soon realize that management does not put up with any foolishness.... they all talk amongst themselves. So I think it depends a lot of the type of investment you are dealing with: multi-family or single family homes. Personally, the strategy is much different in my apartment buildings than the single family homes. Apartment buildings can get a reputation fairly quickly as having "easy" landlords. Similar to the way everyone wanted the "easy" teacher in school. I don't want to be known as the easy landlord, word does get out. So basically, it is as much about having a reputation as it is doing what makes financial sense... but each case is different and they are related in many ways. It's the whole freakonomics concept, which I have found to be remarkably true.

Last time I was in the Miami-Fort Lauderdale area (about a year ago) I never had seen so many for sale signs in an area my entire life. It is definitely a buyers market there. I personally feel a beach community would have more potential if you were going to speculate than Las Vegas.

I'm curious John, where did you come up with the maximum 15K purchase price to become profitable at $370 month guaranteed rent for the first year?

Real estate agents (in my area anyway) are quick to discredit you if you mention owner financing... In the beginning I had a lot of trouble... I've spent a lot of time educating my current agent... he just does as I tell him. I used to get the same old line, "they won't do owner financing"... I wanted it in writing though along with my offer that they rejected it. A lot of times real estate agents aren't willing to present the seller with an owner financing offer, even though they are required to.

I agree, I personally have much more success with postcards than lengthy letters. I want to get them to call me then I can explain everything... I even use a postcard with local scenery.. that way they know I'm local and it gives a personal touch. They know it is a local postcard... so they are more inclined to look at it.

Research the forums and learn everything you can. Also, never assume your partners or whoever you are doing business with will have YOUR best interests in mind, very few people will actually look out for you, but you can always look out for yourself. I always do a thorough background check on anyone I am partners with or involved in a financial transaction with the person. I never assume anyone has my best interests in mind.

I never wanted to be a landlord either.. that is the very reason it is wise to work property management into your numbers when purchasing a piece of rental property. I have seen investors purchase a piece of property where they absolutely had to manage the property just to pay the mortgage, taxes, insurance, etc. It is not a good place to be in. I've been a landlord, I don't regret the experience. But now I want to focus on investing and not fixing toilets, collecting rent.

That is how I bought my first property... just be sure you do owner financing with someone who owns the property free of any encumbrances... If they decide not to pay their mortgage (for whatever reason) the bank is usually the senior lien holder and can foreclose leaving you and the other lien holders with nothing. I've seen this happen several times to people. It's best to play it safe and when doing owner financing, do it with someone who owns the property free of any liens. There are exceptions to this, if you want to take a risk and plan on refinancing it with a bank. I actually purchased two houses 2 years ago with owner financing and offered a payoff a couple weeks ago with an 8K discount. I will now go to the bank with these properties to give me more leverage. He accepted my offer to release the lien for the payoff.

Someone mentioned Craigslist... it is an excellent place to find motivated sellers as well as people wanting to buy homes, etc. I have trolled the listings and found several that were looking for land contract deals... it is quite the place.

It may depend on your area but I've always had success with direct mailings... I have bought 6 houses and 1 duplex using this method... you just have to sort through the garbage.