All Forum Posts by: Michael Rossi

You made 2 HUGE MISTAKES:

1. signing a lease longer than 1 month!

2. not doing a criminal background check!

If you've been managing apartments and houses for 9 years - you should know better. How many units could you have managed for 9 years and not know that a criminal background check is required?

At this point, I would give the guy a written notice of lease violation. It will be almost impossible to evict him for this one incident and I wouldn't waste your time and money taking this to court yet.

It's a total waste of time and money. Yes, you can get a judgment, but in the vast majority of cases, you'll never recover a penny.

My suggestion is to just move on with life!

If you can buy for $30K and get $1,000 per month in rent - WHY WOULD YOU EVER SELL? I would buy 50 more; quit your day job; and enjoy life!

Having said that, if you want to sell, then I certainly would NOT upgrade until you're ready to sell. If you've already got tenants paying market rents and they're staying 2 years, then why upgrade now. If you upgrade now, you'll just have to do it again before you sell (after the tenants tear up the upgrades). So, wait until you're ready to sell to do any upgrades/cosmetics.

With my next rent increase, I will be doing away with late fees in my lease. Instead I will be using the graduated lot rent lease. The residents can pick any day of the month to pay the rent, but depending on what day the rent gets paid the amount will differ:

On or before the first - $410
2nd to 5th - $425
6th to 10th - $440
11th to 20th - $475
After the 20th - $500

You better think long and hard about this scheme! A smart tenant will simply tell you that they'll pay on the 29th and they'll be able to rip you off for another entire month's rent before you even consider them late! This is a recipe for disaster.

If you're running a typical rental business with low to lower-middle income tenants, then it's pointless to have the rent late after the 1st. Government checks typically come in from the 1st to the 3rd and therefore tenants with government payees may not be able to pay until the 4th. Therefore, I make the rent due on the 1st, but not late until 5pm on the 4th. If I haven't received the rent IN FULL by 5pm on the 4th, then I post an eviction notice on the 5th. If they pay during the 3 day notice period, they must pay the rent plus a $50 late fee. I don't accept rent after that and they are evicted.

In my experience with this system, a few people will pay before the 1st; a BUNCH will pay on the 1st (including Section 8); several will pay on the 2nd and 3rd; a BUNCH will pay on the 4th; and a few will consistently pay during the 3 day notice period along with the $50 late fee (thank you very much).

So, the lesson to be learned here is NEVER LEAVE YOUR HOUSE WITHOUT YOUR GUN! I don't! You never know when you're going to need it.

You only have a duty to retreat IF YOU CAN DO SO SAFELY. Also, the castle doctrine in Ohio covers your house and car.

Here's what's going to happen: NOTHING! You will NOT be called to court to testify. These juvenile criminals will get a slap on the wrist. In a few years, the little scumbags will be big scumbags and will rob your local bank!

Ohio desperately needs to change our laws to allow law-abiding citizens to defend their property. It's absolutely ridiculous that some scumbag can steal your stuff without recourse.

It is not only possible to get properties that will cash flow with 100% financing, it is ABSOLUTELY ESSENTIAL if you plan to actually make money. These properties are located almost everywhere in the US, except the coasts - even in your home state of NY. Just get out of the city and head west!

The rent will be correct after you buy it, so it doesn't matter what they currently are. Also, no one has said that every property every time will cost 50% of the rent.

Over a large number of units and time, they average out to be 45-50%. Some individual properties will be higher, some lower. That's where due diligence comes in. Mike's point (I think) is that people want to pretend that their expenses won't be this high (over time) for some reason or another. He doesn't want people to make that mistake.

Exactly right!



In other words, market rents - EXACTLY RIGHT!



Exactly right! What Bryan doesn't seem to understand is that the majority of houses and small multis are owned by mom and pop landlords (many of them failed mom and pop landlords) and they don't have records of their expenses. So, what is a newbie supposed to do when there are no accurate numbers for a rental they're looking at?

If anyone doubts my claim that most mom and pop landlords don't know what their expenses are, all one has to do is read the archives in the landlording forum. You'll find literally hundreds of landlords there that have thought their expenses were RIDICULOUSLY low (often only insurance, taxes and insurance). Some of these people were even hocking their services as coaches, mentors, etc. In fact, with a little research, you'll also find that many of the national gurus preach this Rent - PITI + Cashflow B.S. I don't know whether they actually don't know anything about real estate or they're just scamming the newbies. That just shows how far this problem of misunderstanding the expenses goes and why such a high percentage of newbies fail! BTW, if you want to talk to one of these misinformed newbies in person, you'll have to go down to the local burger joint, where the failed landlords spend their time flipping burgers!

I use "Brownstone", which is a relatively dark brown. It's "floor paint" which is made specially for painting floors.

What IS the deal on that avatar Mike M? On second thought, I don't want to know!!! LOL!