All Forum Posts by: Michael Boyer

My favorite Casper story was from the late 1980's. A friend's family somehow had the contract (or subcontract) to mow all the lawns of foreclosed home (HUD or something) in the area.

We would drive across the state (from Evanston) and mow these dry lawns of literally hundreds of homes, day after day. Acres and acres of weeds and dead grass.

We were teens into sports and used to the high elevations but we literally mowed till we dropped.

So many nice older homes and in some cases almost entire new subdivision and streets just vacant.... Just beautiful houses sitting vacant in that bright Wyoming sun.

Baffling for a young person to see...

But the takeaway for me was that real estate in some areas is also a play on natural resources. 

To this day, I look at the real estate listings and the daily price of oil in my town (also an oil based economy--over 90% of state budget).

While it may be a more diversified economy today, keep up with what is going on in energy. It could be a reason for caution or could lead to opportunity. 

No matter how smart or savvy the investor, how well built the house, or how well flipped or staged--there may be larger market forces to keep in mind.

Best of luck!

A-okay! To each their own...

Everyone has their own style. I think I would stop by so they get the clue and connection (no rent in the mail means we get a Dominic visit--not an avoidable, agreed upon potential, possible some time in the future Dominic visit).

But keep in mind: it is your property. 

 Yes, you want proper notice to go inside but not show up at the door.

To just stop by you are within your rights to do that--there is not any tenant expectation they won't get a visit by the owner (especially if chronically late and playing hide and seek).

The tenant profile tells me they may just use your date/time appointment to be gone.... or unavailable. Again....

Your name is on the title, you pay the mortgage--so you can show up on the outside of the premises for a reasonable purpose. It is your right.... They have lease of the premises not a protective bubble to prevent you stopping by. 

 I am all for leaving great tenants alone for quiet enjoyment--but the catch is they have to meet their side of the deal (paying rent, following rules, responding, etc)... This seems not to be the case--hence you get to be a slightly more ubiquitous presence in their life until they follow the terms of the lease.

You could even  work  over there--and that may be a time to talk if they are around. 

But I think you have a classic series of failed promises by them (to pay rent on time) and may want to think about a Crucial Confrontation (not violent of course--just verbal) by the book of the same title-- or start the wheels turning on getting these professional tenants on the way out.  

You may have to exercise that "no muscle" some and set some expectations.

You might have a line of great tenants out there that pay on time and may wonder what took you so long when you say "bye" to these folks.

Honestly, if you are hesitant to stop by your own property without an appointment I might think about hiring out management. It may be you are more inclined to be an investor/owner (which is great) and it could be you profit from hiring the person that would already have these folks in line or long gone and getting you a worry free stream payments from your property.

Best of luck!

Hi Dominic, I think several landlord books mention when the rent is late (and this is a late rent discussion), you send a strong message when you show up (like at their door). 

So I agree with your idea of the in person meeting. I think you drop by. 

And next time they are late, you just post the official notice (like big on their door or certified mail) to pay rent or quit the premises (or whatever terminology and process you use in WV). 

A perennially late tenant that is being evasive may not even be one to retain. I would look at non-renewing the lease or giving notice if month to month (don't recall your exact facts from earlier). 

Best of luck

Interesting prompt.

I had not thought about this much before but I had a couple of ideas.

1) If I had reasonable doubts about fraud, I would probably not go forward with the deal (and that is not just related to tax forms but also other representations, documents, and disclosures). Like if the numbers on the form looked shady and there were red flags or gaps, I would probably walk.

2) Ask for more information and connect the dots. If you just want more assurance, maybe ask. For example, there should be actual bills or statements for all the Schedule E info (rental income, mortgage interest, insurance, utilities, repairs, maintenance). You can then match them up (or not) and make your own deductions. Or if the seller balks, that also gives you an answer.

That said, I would guess, if anything, less than honest actors may under report income and over-report expenses to the IRS. But it sounds like you may have doubts about the forms legitimacy (are they done by the owner? A CPA? Preparer? the latter two would give me more confidence for example).

I think it is Jay P. Decima that also wants actual bills and verification (like you call the vendor or renter). That may be another angle. The Schedule is not an ideal way to look at your cash flow. You might get thrown off by their auto expense (which may vary for you), depreciation (on their basis), or a black box like "other" (Line 19 last year I think). 

Perhaps you could pick a few topics (like income, management, repairs, cleaning and maintenance) and ask for actual statements to see if they match (so you don't get a huge stack but a representative sample).

Others who do a lot of transactions may have ideas, too.

Best of luck.

I would guess the late payer is doing this simply because they can.

Rent is not a priority for them. And it does not seem like getting it on time has been a high priority (or at least a communicated clearly to the tenant)...

It is one of those crucial confrontations (as the book title goes). They are breaking a promise monthly to you.

But, don't fret, I would not go strong arm them and start beating on the door. Instead, suggest a meeting.

Have a script. Have a clear message and angle. 

For example, I might say something like: I wanted to meet to let you know am moving from a flexible hobby landlord to a real business next month. It is the next level. I am excited about growing. And I would like to keep you as a tenant in the process, but I can no longer pay your rent every month (explain you are literally making the mortgage payment out of your own funds to keep a roof over their heads). With more rentals it will not be mathematically possible. Not possible. No wiggle room. Zero. So I will putting a notice to pay rent or quit the premises (move out) on the 3rd as a prerequisite to the eviction process (at this point their ears perk up). I want to keep you as a tenant (you are not evil after all) so I want you to know ahead of time. I am really hoping we can keep the arrangement working in my next level as a landlord but it will be entirely up to you. If they balk or drag their feet, then set a move out date(at end of lease or end of month if month-to-month).

Or you may have better script  or angle but since you have been taking the late rent you have a tougher task having rewarded the behavior some.

With the new tenant, make sure the timely rent payment policy is emphasized and enforced from the on-boarding process.

Best of luck!

I have put in a gently used coil top range in before a couple of time (because they last forever and fairly easy to move and install) but with a refrigerator or washer or dryer or dishwasher, I just get a new one. 

There can be quite a bit of work to get these into units, especially stacked washer dryers that fit in many apartments. And I get new ones delivered free or low cost (and the old one hauled away). 

So if you can keep a good new appliance in there ten years or more you have less wear and tear on the unit (and you!).

Then the hook ups can be some work to do well (and you will want to replace hoses/lines, clean the dryer vent, maybe test shut offs), so the less you have to do this the better.

Plus, in my area appliance repair can easily be 50% the cost of a new appliance so getting a used one that might not have the same life span or require more repairs can be penny wise and pound foolish. 

For example, it may cost $200 bucks to repair that $50 dollar refrigerator off Craigslist. And if you want to haul it off, that costs even more in my area to decommission and then take to the dump. 

When I add in my time and hassle, I often find the new one is the cheapest in the long term. 

Plus, you have added confidence in a new appliance and less risk (of a leaky washer or frig that dies and spoils all the tenant's food). I am frugal but not foolish...

Best of luck!

I told my tenants as soon as I got an offer (no sign and non MLS sale so I did not have a lot of signals before) and geared their expectations through the process. You need them on board and informed in my view to make the process smooth.

It was a good bit of communication (as they had pets, too, and these needed to be out of the way) but all the texts and emails were worth it for a smooth transition. Standard notice (24 hour, etc) for entry in your area/lease should work for the inspections and such.

My buyer communicated that he wanted to keep tenants in place (they were good payers/no problems) as long as possible (in a fourplex) so it was easier to let them know they were not plans to boot them out at the end of their lease. You may or may not be able to pass anything along. But that seemed to be the tenants concern (can we stay? should we plan to move?).

They will generally not know how the buyer steps into your place on the leases.

So I gave the buyer copies of all the leases and kept the tenants aware of the process (most renters are clueless about the whole sale process). You would think with HGTV they would know it chapter verse but some just think you get a bag of money and hand over the keys in an hour. 

It can be arduous--with inspections, repairs, re-inspections. Even the appraiser wanted some surfaces painted better (in winter--under a heated bubble--fun, fun)...

There is also some inconvenience on the inspection/re-inspection, appraisal, etc for the tenant. My process (closed on the 30th) went pretty smoothly but since we entered units like 4-5 times (more for crawl space and attic units) so I got them all a gift card for cooperating.

But I did see how having tenants onboard can be very helpful. Had one tenant left the barking dog in the house and botched an inspection or mentioned their affinity for cooking meth as a bad joke or something it could have mess up the deal or delayed it some.

Best of luck!

For a mid level rental, I would go with the plainest, most durable, white top load model I could find.

The fewer features and high tech bells and whistles the better.  

I would avoid anything higher end, higher tech (more to break) or front load unless I was in a very high end/luxury rental market (where a plain white durable top load would look out of place) or if I thought I might sell soon and then the aesthetics of a new matching appliances (front loads can look snazzy paired) might appeal to buyers.

Kolten! I would focus close to 100% on your human capital for now (dentistry)... If you end up like any of our dentists or orthodontists, you will be doing well (like really well) in a few years... Think: a good used car price for the braces....do a few hundred of those a year and you see the best investment right now is in Kolten (I would not even play any reckless sports where the deca-million dollar hands could get injured)

Your future earnings are where the big bucks are at in my view... 

So you could be picking up pennies (with wholesale deals) and passing large fat bars of gold (gained from going all in on dentistry).

But you can always read up and maybe buy a place to house another dental student for kicks and learning (as long as a maintenance issue or tenant problem won't keep you from passing root canal class or whatever)...

Then, once you are all established, you may want to be a real estate investor--with the assets and being more established in your career. It might be a fun and profitable side line. 

You might even buy your dental building and rent out parts of it to others in the medical field. 

Some of medical professionals in my city own residential and commercial buildings. Often a spouse or top notch property manager handles the day-to-day (again, because of opportunity costs for a medical professional--you don't want to pass up a few grand you could be billing on Tuesday painting a wall  or showing units).

Best of luck!

What worked for me and for many BP investors (according to a poll awhile back) was to rent out the place you live in now (if you own it & it cash flows ok).  

You have the financing in place, know the neighborhood, how to do the maintenance,and just need to educate yourself on landlording some.

Then move on to your next place-- lather, rinse, repeat. Maybe even try a 2-4 unit next.

If you are renting, look for getting into a 2-4 unit. 

For more info, check BP or the book Investing in Duplexes, Triplexes and Quads is an interesting and quick read (by a FL investor). 

Best of luck!