All Forum Posts by: Michael Boyer

Probably the best person to finance your live in flip would be the bank.... just cleaner than bringing in another person. 

Sometimes you can find seller finance deals, but it may be because the property is not bank finance-able (with issues).

There are some sources for funds for flips but you may want to get more proven in that space before going there. It can be competitive and risky.

If you are looking to get into real estate investing in general, you may want to look at solidifying your financial foundation, and one of the most popular personalities on the planet for that purpose is in your state: Dave Ramsey. 

In the end, all energy and time you put into trying to draw up some partnership terms, find a partner, work with them, etc. might be better spent simply getting yourselves into a position to buy and have the means to access credit to execute your strategy. You may find you are closer than you think to getting your first live in flip. Then you both will be the team and fully empowered and in control.

Best of luck.

Indeed, just getting good people to show up can be a challenge. 

And I know the score as a small time landlord. I am not a big shot doling out a hundred grand for large scale projects.

 My jobs are more like $500 to $5,000....and the public projects (city/state) and large commercial and new developments have work worth many times that amount.. 

And many firms in my area (even some smaller ones) are chasing those larger jobs.  I can't compete. Some of the firms won't even call back (and probably don't need to)...

But I have had some luck finding the electrician or plumber that will do smaller residential service work (step one) then building some rapport with repeat business (step two). Then I try and stand out some (step three).

I try and follow up with a nice note, testimonial for their facebook and on a big job (like 5K-10K I may spring for lunch) so I hope to get  to know them some. I pay asap... every time.

I also try and clear the way for the contractor so the area is clear, the scope of work is clear, and they can get in and out (not wade through a tenant's junk or have to do a half dozen add on tasks). 

Then I seem to get calls back and can get on the schedule of most people I use. 

It takes some time to find a good fit and build relationships but it can be worthwhile with contractors that do good work on schedule.

Best of luck!

I try to keep it conversational, relevant (and, of course, nondiscriminatory) and find "where are you at now" to be useful in an initial contact to break the ice.

And then be quiet to let them tell the story--

If you know your area, the location can tell you alot. 

For example, if they are at a place with a management firm/landlord that you know screens thoroughly, then it may bode well (but also follow up with the why are you moving and, again, listen)... 

Or if they are from out of town but there for a new job, then you can segue into employment and may have a winner...

Sometimes, I have just asked "where are you at know" and that pushes the confessional button (like a meant metaphysically in life where are you at or something)... Then you find out alot.

More often, they offer all sorts of interesting information in addition to the location such as "I am living at x place but (look out for the but) I am not on the lease", or I am at home with my folks but only because I lost my job," or "I am at a nice house on xyz street but the uptight landlady won't let me keep my (derelict) car collection")..

And look out for the stories that are too complicated or don't make sense... Those are often a diversion and cloud some sort of tenant mischief.

Best of luck!

Hi John,

Think of where the dream car will be in value in ten years versus the starter home or a rental property. Visualize the car--with some wear and tear, an old model, needing repairs. Now see the house-- just pick a spot off I-5 there someplace in a decent neighborhood. 

Run the numbers. You might donate the car to charity rather than pay the expensive (insert pricey repair)... Meanwhile, the house or rental is up in value (maybe even 50-100K).... the rental maybe even paying you monthly...

You just got the basic lesson in appreciating assets.... buy them (the ones that put money in your pocket) not the ones that take money out every month.

The little place we sold in 2004 there in Stockon had tripled since the early 90's (granted it was the height of the bubble) but even modest appreciation will get you there...

Stay away from the quickly depreciating items (like nice cars) if you can early on in life. Maybe see if you can focus the dream towards the first rental or investment (like an index fund) or first home. 

Listen to the podcasts like BP, Dave Ramsey, and read books like the Millionaire Next Door (not so many fancy cars there.... I think a gently used F 150 was among the most popular among persistent accumulators of wealth)... Put the money where it will grow not go away... and you will be set for life.

Work at a college... still do.... You may find a flexible day job that lets you own a few rentals (they don't need to be watched all day). 

Then there are benefits and the steady income that are nice... I enjoy the day job but can envision eventually just doing rentals. 

I am actually looking at where I can do the most good (for me and society) and after about 13 years as a landlord, I think I may now be better as a landlord, turning around properties, selecting tenants, etc than teaching business topics (which a new instructor could take on).. 

That is, very few people have the capital/credit, skills, and moxie to provide housing to others. It requires you to be the ultimate generalist--able to do a bit of everything well.

And I think I may be near a tipping point--able to provide and manage more housing. This may be more vital to my community and possibly more fulfilling for me.

Best of luck!

My general observations are that (1) you seem like a very thoughtful and diligent landlord and (2) you need new tenants. 

These folks don't follow your rules and/or have some issues. 

The have demonstrated that they do not fully appreciate a thoughtful, diligent landlord. So they have to go. Sooner the better. Part ways now... One may even need more supervision and care than you can offer.

Do the appropriate notices for your state and never waiver or look back.

Good news: your inherited tenants will be your worst.

 I can tell you will thoroughly screen your future tenants. It will be so much easier to be a landlord with people who follow rules. You will not have bootleg/dangerous heating issues or pitbull problems to deal with. 

And don't be afraid to exercise that "no" muscle. 

Best of luck

It really depends on your market. Higher end, I may go with more bells and whistles...

But you had me at college students: get the most durable, with fewest features possible. 

Repairs and parts are expensive. They can eclipse the cost of an appliance. Dispensers are primary wear points, too.

Remember--they will treat it like a rental (and like a frig they did not pay for and will never see again when the lease ends). Many also have pricey filters now too (more cost and maintenance).

If I could get by with it, I would go just the ice maker (hot in Atlanta) but no dispenser of any kind. I might even go plain white, make your own ice cubes. Bullet proof. Done for a decade.

My decision may also vary if you have an existing water line for the ice maker attached.

I think you have multiple tenants and probably can expect active wear and tear.

Best of luck

I rather like your idea of running a unit or two before buying into 100+... 

Granted, you may be farming out management when scaled up, but the insights you gain from managing a couple of units could help you oversee management and have some insights in the ownership process (such as CAP EX, Tenant Quality, Turn Around Procedures, Policies, etc).

You may even get granular insights on flooring types, plumbing fixtures, security deposits, etc. Some of these you would have to only read about if you went straight into 100 units. And I am not sure you would know when your managers or contractors were using the best practice or product in a given situation. You would have to trust (alot)....

Moreover, you may find you don't like the real estate space or class of investment altogether. In that case, selling a duplex may be an easier process than exiting out of a 100 unit with other owners (sounds messy but never tried)...

You could use the small scale to see what the process is like. Dip a toes in the water. You can always jump in the pool later--it is not going anywhere soon that I am aware of.

And in the meantime maybe balance the podcast philosophies. For example, temper those in favor of large scale and high leverage with the more conservative and financial foundation based podcast like Dave Ramsey (anti-debt and likes real estate only when paid for!). Maybe the answer for you is some place in the middle (like a fourplex with 25%+ down).... To each his/her own...

Best of luck!

Great angle Andrew... 

I think the value in self-managing (maybe as valuable or more than the management fee you save) can be in learning about the process at the granular level.

Even if you find it is not for you (and go back to hiring it out) you will gain some insights about the process of getting a tenant or getting a unit turned around that could help you be an efficient owner or even scale up later. 

You might even gain detailed insights about your rental market (meeting potential tenants) and what components make a durable but desirable rental.

Nothing like on the job training. I think between BP resources, books, and some hustle you could make it work. Any edition of Leigh Robinson's Landlording, for example, has been a confidence boosting resource for decades (low cost or eve free at the library). 

Best of luck!

Good news. I think you learned a good lesson (we all do, in different ways). Tenants teach us.

With shots fired and weapons brandished, you definitely got one end of the spectrum (the bad end). It may never be worse in my opinion (can't get much worse than that)..

The tough part about landlording is that you end up absorbing some of the fallout from the deficits and issues in the tenants' personal management skills. 

Be it issues with rent, interpersonal relationships, communication, even violence or drugs and alcohol, their problems become yours for better or worse.

For me, with bricks flying, sirens wailing, guns firing in the first couple of weeks--I get out my check book and wish the wheelchair fellow all the best. Then I see if I can do the same with the other tenant. 

I think I would also say it is "not a fit" or working out and lay out a reasonable cash for keys arrangement (and maybe mention the alternative would be a for cause eviction on the bricks, sticks, and bullets)...

I would just call it tuition at bad tenant university.

That said, if you are going to willingly be in this gritty type tenant group that resolves disagreements with gun play, dodging bullets and such, then I would maybe up my life insurance, get a bullet proof vest (really, I would for late night visits about noise calls) and rent to the remaining tenant and hang tight for her next adventure or interesting co-habitant as you will have a front row seat for all the action.

Best of luck!