All Forum Posts by: Steve Smith

First of all, you NEVER make any money doing handyman work, and like most folks said, hire that done. You make MUCH more money doing deals, buying, renting up property, selling and managing.

However, there IS an argument to know what maintenance costs. And you should know where good material costs are and if some worker is not doing a good job.

Personally, when I was younger, I did a fair amount of handy work, but not much on my rentals, just on stuff I lived in or flipped. But didn't take long before it was easier to just manage it. A lot of good investors have their "go to" list of workers and have learned what they do and don't do, and what it costs, even before you call them.

Now, on bigger projects, like remodeling, I could argue to have a very specific scope of work, even down to the skew numbers and detailed drawings. I still do that today, because I enjoy it. Mistakes on big stuff can get pricey.

Now, little stuff like putting in a mail box post.... It really doesn't take 10 minutes. If often takes a LOT longer. Go look at property, go pick up materials, organize your equipment (yes, you need tools), go back to property and do work, go home and clean up. Most of us will not work for only $800 a day to do that stuff, and my handymen don't make anywhere near that much. Heck, I can get skilled plumbers and electricians at that number, like I think most of us can.

Devon,

Unless you're one heck of an unusual and experienced investor that wants to mess with apartments I could argue to stick with a single family home. Now, I'm not an expert on the investing in Canada, but have enough Canadian friend to know it's similar to the US.

And if you had a million dollars you'd be MUCH better off with houses, for a number of reasons.

However, if you're just putting this deal together, selling the purchase contract and can take a small percentage like 2 or 3% and never do another thing, great. And very commendable if you can do that... certainly possible.

Keep us posted.

James,

I could call you names, too, but certainly NOT appropriate for this forum.
You might do some research from the INVESTORS side, prior to making comments that are not necessarily correct. And a lot of investors are NOT in business, and no business licensing or real estate licensing is required. We are investors, and this forum is about investors.

As a princlpal in a deal, there is NO requirement for being licensed. I could be the lessor and the lessee in a sandwich deal, done ALL the time. I could manage for a part of the pie, ie, option, and the option could be for most anything. I cannot manage for a fee without a license, nor am I interested in that business. I also do not sell property for a commission, I sell it for a profit, and it could be YOUR property. I have several deals going exactly like this right now, and bet there's millions of these done with other investors around the country.

You might want to take some investing courses to broaden your perspective. BTW, you'll make a LOT more money....and it will be honest.

Now, perhaps we could share some good ideas for investors to help them make some dollars.

If you're on the starting side, I could argue to use it to purchase another house. If the current properties are rented with good tenants paying the rent, there's no reason to rehab those properties. (but you might save that project for down the road).

Another house should bring in more income... again to save for another house. And, yes, you need a bit of a cushion should a tenant vacate or you do have some major maintenance like a roof, AC unit, etc.

Now, if you have other income (job or whatever) you can cut your reserves down a lot an work on another house.

Originally posted by @James Wise:

Originally posted by @Steve Smith:

Your property manager should pay you on the day the rent is due, and either get his commission from that or the next rental period, or better yet from you (set up auto pay IF he performs).
Now, he should respond to you within a few hours, if nothing more than, I'll call you xxxx, certainly within a day or so.
And, you really should be managing your own. STRONG argument for that.... even if you have several hundred properties.

I'm guessing you don't have much real world experience dealing with management companies. Your expectations are not anywhere near how it works in the real world. There is no legitimate management company out there of any size that is going to be able to logistically pay out owners on the date rent is due. In addition management companies rip their fees from the rent money and trust account money. Nobody does any of this hope to get paid later nonsense.

James,

Good comments, but an investor should do what works best for him. I really don't want my rents coming in after the due date, and yes, some management companies provide for this. Some management companies will work for performance (getting the job done) and some work for commissions. Most don't know how to manage or get the rent on time to the landlord or just do a good job of qualifying tenants and maintenance.... and the reason I don't use them. If you're in the management world, you know exactly what I'm talking about.

However, on the management side (when I manage for others), I will not manage for a percentage of the rent. I'll only manage for part of the ownership down the road, often an option. That works well as I have a real incentive to do a good job, and it works well for the investor. And, I'll take either side of this, and do.

Is he selling a note with seller financing? Doesn't make sense, unless he's selling a partial but you wouldn't call it seller financing.

If it's a home and the numbers work, go for it. If he's an intelligent investor, he may be reluctant to give you personal info, other that perhap DL and introducing himself. I'd certainly not divulge my assets to ANYONE.

I do a fair amount of seller financing.... as a buyer and as a seller. I've never once been asked for ANY identification ever. And I've never had a bad deal or a pixx off customer. Yes, I"ve passed on a few, they all don't work.

Talk to the guy, get to know him, look at the property, look at the numbers. If you're uncomfortable with him, pass, regardless if it's good or not. There ARE people out there that you just don't want to deal with.

However, he could be a great guy that you might end up doing several deals with him, so check it out.

I really don't dislike quads, I adamantly HATE them. They have ALL of the lousy characteristics you don't want, and very few of the good traits.

With rare exception, they typically:
Attract lousy tenants
Hard to buy/sell. You buying and selling with investors, not end users. 
Harder to finance.
Less appreciation.
Tenants that talk to easy other.
Higher maintenance.
Higher turnover.
And you have 4 rents to collect, and most likely one will be late.
Yes, you can get a bit better rent per price than you can with SFH, IF you can collect it.

And not sure what a C neighborhood is, but not good enough.

BTDT, gave my last one away..... years ago. And my rent ratio was a tad better than yours, and the building was new.

@Andy Mirza:

Most were lease options, done before any foreclosure issues, some after the foreclosure with the hope of salvaging it without the  commitment to do so. Done often and it can be risky. Nothing illegal or unethical about it. I will argue to never cross that line. In almost all cases I went right to the lender to negotiate with them.

It's so hard to just invest in neighboring states, I can't imagine going international. However, BP could easily expand, but I'd bet a specific site other out of the US areas might be appropriate. I've got very good real estate investor friends in Hong Kong and Australia and a few up in Alaska (not really foreign, but different). Had some in Canada.

Overall, there's lots of similarities. But they seem similar to the US in that they are very localized. The market in Sydney is different that Brisbane, and Stanley Beach is different than the Jade market area. Probably not much different that the differences of California and Iowa. But big local differences, so there's an argument to market to specific areas. And, we already have foreign real estate web sites that cater to the US and Panama... see Cash Flow Depot.

Would be interesting.

There's plenty of GOOD seminar speakers out there, but there seems to be a lot more questionable ones in the recent years.
You can qualify your seminar speaker.
First, there's no reason that a good seminar should run much more than $200 to $400 per day for attendance.
Second, there should NEVER be a "coaching" deal that gets up in the 1000s, especially 5 and 10K. Stupid expensive
Third, there are tape/cd courses out there on specific subjects (management, trusts, finding deals, creative financing, often in the $200 range that have a lot of value. There's also a few in the $1000 to $2000 that have good value, but are a bit overpriced.
Fourth, there's a LOT of GOOD books out there on investing, in the $20 to $50 range.

Now most important: Look at the guru you're buying from. Is he doing what you want to do? Does he have experience (at least 15 years, 30 is better). What are his references and reviews. Check for lawsuits (you'd be surprised how many gurus spend more time in court that real estate. Is there a satisfaction guarantee?

There is no get rich quick scheme. There are no guarantees in life. But it really doesn't take hard work to make it in real estate. It takes KNOWLEDGE.

Now, you can get your real estate education one of two ways. You can learn from experts, buy their books and seminars, or you can learn by yourself with trial and error. The only disadvantage of learning by yourself is that the final exam comes before the learning and that can be expensive! A lot of us have already been there. BUT GET A GOOD GURU TO FOLLOW, NOT A SCAM ARTIST. Most of the good ones are older! They've been around long enough to know what to do, but they are still buying and managing their properties.

For starting, don't try to re-invent the wheel. Keep It Simple Stupid. Get some education and buy a good basic rental house in a good neighborhood, close to you. That first year of ownership will be priceless. You won't make a killing, but you'll learn as time goes on to do quite well.

One more comment..... Too many folks want to get filthy rich in real estate, but most of us just don't need that.

A quick Goggle on Than Merril will tell you all you need to know.

Now, for starters, here's a web site that will give you TONs of good info and education:

assets101.com

Dyches is an attorney that teaches classes and is a full time real estate investor. Good guy and reasonable. AND HERE'S THE BIGGIE: Look at his "resources" page and you'll find other good gurus. AND go to their web sites and look at their resources and you'll find more. Plenty of GREAT resources, books, courses and seminars.

(hope this post does not violate any of the BP rules, checked and couldn't find any limitations on recommending a guru. If so, I'll delete it.)