All Forum Posts by: Leland Barrow

The key to unbiased advice is the search button. The kind of info that most investors need does not age and has been discussed many times. Assume that 40% of the people on here are inexperienced, need help, or misrepresent themselves. Assume 40% are looking for leads to sell you something. The remaining 20% are people that want to help and can help based on their experience in REI, Finance, or general business experience. It is easy to research people on here, LinkedIn, Facebook etc. I ditched LinkedIn because of sales people wanting a lead, it happens with all social media. Your best bet is to get to know specific people. Look at the people that you want to emulate and reach out to them. If they give you the time of day then try to develop a relationship. Their are two categories of people when you network those that add value and those that suck value from you. An eager and intelligent protege is a great person to add to a network because you never know what horse in a stable will become a champion. An old grey beard that has seen it and done it is a great person to learn from. Successful peers are great network adds. Sales people and wannabes suck value (time) from you.

My two part answer for your question....

When everyone is attracted to real estate including lazy people then it may be time to evaluate the market. I don't know that your question is the root issue. I would assume that the root issue is why are so many inexperienced investors attracted to real estate?

The second answer is why wouldn't they be? Who is more intelligent the guy that is paving a road in golden bricks one sweaty brick at a time, or the guy skipping behind him on a nice new path of golden bricks? The inherent issue with developing a successful path in life is that others are going to come behind you and contribute far less work for the same reward. BP throws the gates wide open and welcomes all down that path, while gurus and the like see value in controlling who skips down their path of golden bricks. If you throw the gates wide open then you will get people that will ask you to keep making that path easy for them.

Do you think about the guys who built the bridge that you drive over...probably not, most likely you just wonder why they didn't make the bridge wider. It is just nature for one monkey to see another monkey being successful at fishing ants out of hill with a stick and then emulating that behavior. I doubt the first monkey ever got credit for such a revolutionary idea as fishing ants out of hole with a stick.

I think that you mean you stop along the way to look at a house to eat dinner. Semantics is everything. I am old fashioned and keep a log book in the vehicle. If a 100% of your travel is business related then it is business related. As long as you have a record to back it up.

Buying on the way down is better than buying at the top. Predicting when the market will bottom is a game for thieves and prophets. I think there is a simple rule if the price today is less than last year and also less than what it will be five years from now then it is fine to invest there. The big energy players know the market and they will know when to ramp up labor. The lag will be minimal when production kicks in again. There will be a lot of money changing hands once the glut of oil inventory is consumed and demand spikes. This was an opportunity to shed expensive labor and trim operational fat, while cutting some competition. When production kicks in again energy will be stronger than ever. Besides the elections are going to boost all markets including energy recovery. Especially if King Narcissist gets elected.

@Elizabeth Colegrove I am not sure what behave means. From my perspective it is just a business exchange of goods/services for money. If behave means that the tenant pays the agreed upon amount of rent on time, takes care of the property, and that they are respectful of my time then I fully agree, they should behave. If behave means something else then I wouldn't know. As for being a tenant being a job, I wouldn't know about that either. I don't do section 8, that is the only tenants that their job might being a tenant, so I usually choose tenants that already have a job and need a place live. I think customer service and understanding selling a product is important in any business. The OP's comment was that he preferred to have kept that tenant and instead was misguided by his PM. I would take a lifelong tenant that never calls me, takes care of the property, and accepts small increases in rent all of the time. In fact that is my ideal tenant!  How many times are you going to find an ideal tenant? Every-time that you place a tenant you are taking a chance, gambling that they are level headed people. If you get an ideal tenant you may have to apply a bit of customer service, sales ability, and a bit of appreciation from time to time to keep those tenants. I would spend $1 all day long to get $2 in return. Most landlords fail because they do not run rentals like a business. They have to use a PM because they cant understand how to make a series of transactions on a personal level that benefit both parties. Then the PMs that they choose just suck at running rentals as a business also, so they are stuck in a cycle of neurotic business practices.

I think it is all about the approach. Tenants just like employees use equity theory. Getting what you want and not over balancing the tenants idea of equity is tough. My suggestion would be to raise rents gradually and offset them by giving the tenant a nice card with a gift card for Starbucks or similar. If you raise their rent $75 dollars a month but send them a Starbucks gift card for $100. It is an easier pill to swallow. What does it cost you to place a tenant? If it costs a $1,000 to place a tenant then raising the rent and giving the tenant $500 in gift cards for a signed lease is a win win situation. Add in nice card that thanks them for being great tenants and explains the rental increase is a nice touch. I would only do that for a really good tenant. It shows that you care and they can justify paying the extra rent to a landlord that cares. Do you give gift cards every-time a good tenant resigns a lease? Here is a trick let a good tenant go month to month until December. In December offer to give them a $150 gift card if they sign another one year lease. December is a great month to keep a tenant resigning a lease in exchange for a gift card. Things get tight in December for many families. A $150 can make a big difference for them while saving you the vacancy expense. All you are really doing is buying more money. Make sure you word things appropriately and legally. 

I would check case history in the local area. Sometimes if an easement has been used for so long then it becomes a legal easement. Here in Texas if an easement has been used for so many years without the other land owner saying anything then it can be a legal easement. I would research as far back as you can get records and make sure it is not in any of the previous deeds. I would not bring it up to the neighbor until that is the last option. I am not  lawyer but I believe easement laws tend to side with historical use and not necessarily property ownership. You can also check if there are any utility easements on either property. Utility easements can be used in some situations. I purchased a landlocked property and used a utility easement to get official egress/regress. Your situiation is different.

For me The best preparation is to be prepared to buy. I think investing now is fine as long as people are not over leveraging. If the housing market corrects then there will be a drop in demand, over supply, and over leveraged properties will default. When everyone else is selling that is the time to buy. When everyone else is buying then that is the time to sell. Now is a great time to sell properties that are over performing and take that equity out so that it can be reinvested in a correction. When the news is talking about everyone buying real estate as an investment tool then it is a sell market if you are using that strategy. The stock market is terrible for some investors right now. We are heading into an election year with D Trump as a candidate. If he gets elected stocks will temp go crazy at the thought of a business man of his acumen becoming President. If I had to guess, after that settles real estate will correct. The short flurry of investing after the elections will be a great time to move money around. Anyone that moves to a SDIRA or SOLO401K right now is probably going to miss a huge spike in investment value. Wait until the peak after the elections and move funds to prepare to buy RE. All the money that has been flooding RE will start chasing stocks. Take my advice for what it is, lame advice.

You shouldn't be a landlord, being a landlord is not for everyone. I don't mean to be rude but if you are struggling with the idea of having someone give you their social in exchange for your property that costs thousands or hundreds of thousands of dollars then it may not be for you.

Taxes are a bad idea to invest into, Texas on the other hand is great. What part of Texas you want to invest in depends in the investor. What are your goals and resources as an investor? If you have a lot of resources then Austin will continue to be a great market. If you want rehabs then SA and Houston work. If you want a consistency then the Dallas area is a no brainer. If you want a sub market without heavy competition then El Paso is a great choice. Other sub markets are Killeen, Waco, San Angelo, Odessa etc.