All Forum Posts by: Maurice Grant

I will take money with no brains any time. I find money damn hard to get even with brains.

He worked for the government all the time so what does he know. Nothing, when it comes to running a business. Anybody can succeed working for the government.

Average renter stays 2 years in an apartment 4 years in a house. Moving may have nothing to do with your property. Job change, buying their own home, needing a bigger place because of a blessed event etc.

A more important question is how long does it take to get a new quality tenant in? This goes back to how well you maintain your property, how desirable it is, how well managed, is it competitive in price and do you keep on top of management especially vacancies?

Tenants moving out and moving in is an important part of the business. You need to have systems in place to handle it well and make it a smooth routine.

The old rules no longer hold water the way they once did. This low interest rate environment means investors are accepting lower cap rates.

The most important factor to me is cash flow. Does the property produce a positive cash flow? If it does you can afford to hang onto it and you will end up OK. 

If you buy with negative cash flow expecting inflation to bail you out you are asking for trouble. I know there are areas where you have not been able to get positive cash flow in years, and that people have made money there. But the odds are against it.

If you went by this rule you would be buying with confidence at the bottom of the cycle and backing off when prices get nuts. You might miss out on the last 2 or 3 years of a boom but you won't get burned.

Will add that we seem to be entering a period of rising interest rates which means it is to your advantage to lock in your mortgage for as long as possible.

There are other reasons for not trusting your gut besides it being wrong most of the time.

You MUST have objective standards for who you rent to with NO exceptions. Any attempt to use judgement, make exceptions, or use your brains in any way will lead to accusations of prejudice and racism. You may be called on to prove that your decision of who to rent to, was entirely mechanical and the same for everyone or you get in trouble.

"I'll just hang on to her until she stops paying rent"

I'm really curious what you think will happen then.

Your gut has nothing to do with it. When an applicant lies you automatically know they are not trustworthy. What do you think they will be like once they are in your apartment? This is a business and business should be done in a businesslike way. What do you suppose would happen if you lied on a job application or credit application? You wouldn't get it, that is what would happen.

We have all trusted tenants, and we have all paid. When that no longer sounds mean or cynical you are on your way to wisdom.

ANY lie or falsehood or gap in an application and it goes straight in the garbage. You DO NOT want to chance letting a bad tenant in. They only get worse once they get the keys to your house.

Throw the damn application in the garbage and fire the realtor. You will probably have to learn to rent your own properties. It may be possible to find a good property manager but they are mighty scarce.

Listen to rich dad. It is a mystery to me why people listen to the advice of losers who don't know what they are talking about and don't listen to people who have actually done what they are purporting to teach.

Call up the rich dad guy and ask if you can talk to him about real estate investing. Most people love to talk about themselves (you heard it here first lol). Listen and LEARN what he has to say.

I have done lease option type deals and they worked out well. There is no reason for you to hand the place over to someone else to do this. You can do it yourself and reap the profit. It isn't hard.

In other words, I would not take this offer. If you want to do a lease option do it yourself, or just sell the place in the conventional way.