All Forum Posts by: Ben Riechmann

We sort of joke on here about everyone looking for contractors.  How about full time maintenance people to hire when you have over 50 plus rentals.  Where they will sometimes have to have the emergency phone?  Two part question really.  1. If you have looked for these type of people where have you had the most success?  2. As everyone likes to hear these, hiring horror stories?

That's why I ask.  For example, some people used to find Criagslist was enough, but now find it does not help at all and get leads from other places.  Some people get a lot of leads from Facebook, but I often hear the quality of leads is not the same as in other places.  Some used to like Apartments.com but now prefer Facebook.  Sort of heard many different stories from many different people, so was hoping to hear the experiences of different investors.

Welcome to Cleveland.  Good to network with people on here.  There are Cleveland Investor Groups on Facebook.  It is a great way to meet new people and there are some deals that are good if you have a crew ready to work on them.  Property shark has some listings for those that want to look for places to fix up to flip or buy and hold.  

The important thing to do when in a new area is to find some people in the area that can tell you where the A, B and C class neighboorhoods are.  If you decide you are going to invest in a particular area of Cleveland, don't depend on one source to rely on.  The more input and more legwork you do to learn about an area, the more likely you will be when you make a move on a deal that it is the right one.  I love the guys that have given you advice above, but rely on more than just realtors when scoping an area.  Definatly ask them as well, but know that not all realtors are created equal.  If you can, find one that also invests and really knows what its like to be buying as an investor vs. and regular homebuyer.  I have walked away from realtors that told me I could buy a property for the same interest rate as a homebuyer when I was not going to occupy the property or that a place could get way more for rent than I knew the area rents were going for.  Due diligence is very important.

James Wise has a handy Cleveland neighborhood download, but it is from 2016.  So you will still want to do a little legwork to see how some areas have changed since then.  It is a awesome place to start though and a handy thing to have.  PM if you have any specific questions.   Happy investing!

1. Can you find out what other investors are renting their places for near you and are you on the high side, so they may go for something more in their price range.  Can you offer a more competive rent, as tenant turnover is one of the highest costs for landlords.  If you can do things to have a tenant stay longer that helps your bottom line a lot.  One landlord friend of mine, could not do a montly discount so he offered that if they paid on time every month and kept the property in good condition throughout the year, he would offer a nice discount in december.  This meant he was only doing it one month a year, it gave his tenants something to work towards.  They felt like it was more a holiday thing so it made them feel more like he was treating them like a friend or family member and not just a tenant.  It also helped them out the most as they tended to stress a lot at that time over christmas or other holiday gifts and a discount in rent at that time made really happy tenants.

2. What is the demographic of the people that usually rent your place?  Are they students so they are likely to leave?  Are they older but many are in a similar profession? Some investors I have found have trouble when the area many of there tenants come to live and work is not as desired as they hoped and so move elsewhere to work somewhere better.   If you can advertise in a place that might attract empty nest tenants, they tend to stay longer and take care of places better.  There is a trend now where they are down sizing and moving to urban areas.  If you can market your place to this demograhic, you could get a tenant that is interested in staying in one place for a longer period of time.

3. Do you increase rent during a lease period.  Sometimes a landlord may not have a choice, but if a tenant feels they have been a very good occupant of a home and then the rent gets raised while they still live there, they see this often as a penalty no matter how good your explanation.  I try not to raise rents on current tenants unless they have been there many years and costs have changed a lot.  Doesn't sound like they are staying enough for this to happen, but throwing this out there in case this happens.

4. Can you offer some kind of bonus for every year they stay?  Sometimes outside the box ideas can go a long way.  Like if you have a friend that owns a local business and you can get them a discount for being your tenant as one example.  Helps your friend get some loyal customers and helps the tenants see extra benefit from renting from you.  A benefit they are likely to tell others which also will create word of mouth for your friends business and any rentals you own.  Meaning it will be easier to rent places quicker as you offer more than just a roof over their heads.  My first business was settting up fusion deals like this, just never got the chance to do it for any real estate investors.

Lol.  Frustrated Landlords that did not have good systems in place or are not going to take the time to learn from those mistakes is where you are going to find some deals!  In this hot market, and you always want to be looking for deals, you will find some under these sort of of circomstances.  Chances are these are more motivated sellers and you can go for a better price as you can negotiate that way.  It can be that landlord just did not screen well before letting those tenants move in.  If totally vacant, unless you are going to owner occupy, you negotiate in the circomstance that there are no current rents coming in.  They can give you all the pie in the sky numbers they want, doesn't mean much for now.  I would not be afraid to buy a place that has tenants moving out or empty as hopefully you are researching the area before you buy any place.  How good are the schools?  How far away from good jobs is the property.  is the property in A, B, or C class neighborhoods?  The nice thing is you can get a lot more information online than you used to be able to, but I would still do the old fashioned leg work of talking to people in the area to get the real scoop.  Shop around nearby areas to see what rents are and call like you are looking for a place to rent and see how other places treat renters in that area.  See what your competition is going to be like.  The more due diligence you do in the begining for an area, the more confident you can be when you come across a deal if it is good or not.

If it is investors wanting to just get out of investing and have not taken the time to really make it their business to invest in real estate, there are often great deals to be had.  They often leave blaming their problems all on tenants when they never learned to build good systems.  You may have a really good deal there, but find out if where the property is is good and if so, negotiate for a good deal.  I no longer have some of my workers as I taught them how to do this, but I figure that is good karma that will come back my way.  They are now very happy investors.

I would strongly note that that ratio is only one factor we look at or should look at.  Especially when there are so many screening services that make it easy to look at credit score, criminal background and evicition records.  I had a person that made way more than 3 times the rent but had been evicted from more than one rental previously.  The more legwork you do in the screening process, the less likely you are to have headaches later.  The landlords that I find that bow out and hate renting, when I see what business systems they have in place, I almost always find they are really weak in this area.  You do want them to make three times rent gross as a starting point, but that is just a basic starting point.  If people are low on credit scores or a little more risk and you want to rent to them, I would sugget having them do a co-signer or putting up another months rent.  No matter what you do with tenants, make sure you do it with all tenants across the board.  So you probably want to write down a manual for how you will screen and treat all tenants so if an questions how you do it, you can point back to it to prove you always go through the same set of steps for everyone.

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The nice thing now adays are there are there are many sites to find out how much crime is in an area.  If you are going to be renting to families, how safe it is for kids and how good the schools are rated.  If you are going to aim more toward students, you can see what kind of schools are in the area that they would be interested in attending and places for them to work while they go to school.  If empty nesters, which are down sizing and going to more urban areas, you can look for social spots that they are more interested in that you may want to market your place to.  I mention online first just due to theses covid days.  

"Farming" for areas is probably not to much different than looking for the areas for the non-profits.  Talk to locals a diners can tell you a lot.  Talking to local police can tell you a lot.  You want them to be bored a lot.  I like to look for properties that are in the ballpark of what I might want to invest in and see how they have done in the last 6 months.  Call around to find out what rents go for in a neighboorhood.  As renters how they like living in a certain area.  Covid makes this harder, but I do this a lot before I invest in an area.

I would also have them consider an umbrella policy as with that change they are taking on extra risk.  That doesn't cost a whole lot more and covers a whole lot of possible issues that could go wrong with the house hack.  

Well I am a investor that does not consider a house your best investment.  So let me start off with that piece of how I look at things to see how my advice is shaded.  Right now we are in one of the hottest, and sort of crazy, real estate markets we have had in a long time.  In areas where people often do not offer above asking price, they have been doing that all over the country.  That seemed to be more last year than this year, but it still seems pretty hot.  I would look for more ways to close different deals around where you are before going out of state.  This may require some more networking than just realtors.  

There are many places to find the deal you are looking for in your area you may not have looked yet. Loopnet is a good place to look for multifamlies that investors put online and realtors put online. It is a investor go to marketplace. I didn't realize when I first came on here that there were investors selling properties on here that you can look for in you area. You can call local proerty managers and ssee if any of their clients are selling any properties, and you may find a property and a management team all in one. I like when I go into a town to stop into a diner or hardware store in a nearby town find out who owns a lot of properties in town, and then call and talk to that person. See if they are interested in selling any or if they know of anyone. Let them know I am not a vulture capitalist but will give real fair offers. Title companes won't directly give you names, but after talking to some clients they may pass on your name as someone that would buy some or one their properties. Go to REI meetings and see if any investors want to get out of the game and want to sell their properties. If there are any local auctioneers that sell any houses, ask about any investors they see come to their auctions a lot, and maybe go to one of their auctions to me him or her to ask about places.

You know most about the area you are in.  When you invest out of state you need to develop a whole new team and learn a whole new landscape.  I recommend really farming the area you are now before going to that.  Even in this market there are deals to be had.  If you decide to invest out of state, I have helped people that have done so, and can give you some advice on that.  If you end up doing it in Ohio I can help even more.  I would first learn how to find different kinds of deals in your area.  How to finance different ones as well in different non conventional ways.  That is what I suggest first before trying out of state.