All Forum Posts by: Rick Bassett

The tenant may not install, erect or operate swimming pools without written permission.

The tenant may never install, erect or operate fire pits or trampolines

@Stephen S. - good point about managing the order in which Subs perform work.

My experience is that the Subs interests aren't aligned with my goals or the overall project. Their interest is to get in, make some money and get out as quick as possible.

Since the nature of what we do as rehabbers is to keep the costs of our projects as low as possible, we really don't leave a lot of 'meat on the bone' (profit) for them.

I've found that the best way to control their workflow (order things gets done) so that it's aligned with mine is to manage the flow of materials to the job site.

When I have lumber, doors, windows, drywall, roofing, siding, trim, flooring etc all onsite then the Subs pick and choose the jobs that they want to do regardless of what I want BUT when I roll the materials in just before they need them then the Subs have no choice but to focus on the things that I want done in the order that I want them done.

Managing the materials flow takes some skill but our projects always are done on time this way.

This is also part of the reason that I don't let the Subs buy my materials (there are other reasons as well).

They probably want to make sure that you're for real and not wasting their time (or tying up properties with no ability to close as previously mentioned).

Getting a Realtor to feed you good deals is tricky as there are a lot of RE investors and wannabes running around. Realtors will provide the best deals to those who have the ability to close quickly without drama/issue.

It's really a 2-way street and they will feel more comfortable with providing you deal opportunities after you prove yourself and do a deal or two with them.

It took me awhile but I've now got 4 or 5 Realtors that me first crack at deals when they come up.

Congrats Dan.

Contractor issues. I always act as the GC coordinating all of the subs and driving the schedule, it's a constant struggle as the subs need to take on other jobs but worth it. I am fair but very firm with them.

I generally use the same subs at each job (with an alternate for each trade to keep their prices competitive), occasionally I jettison an under performing sub off to the abyss which sends a clear message to the other subs that I'm not afraid to make changes mid-stream if needed.

I buy all materials, subs do not (except rough items by plumber and electrician). My contracts with the subs are generally 'labor only' and as such I do not have to provide any upfront money to them. My payment schedule is based on % completed in 25% increments, there is usually a bit of push and pull in this area but if you want full engagement it's important not to have payments ahead of the work.

Good comments. Having a purpose, a unique message and a good set of interested electronic contacts / friends / connections is key.

I blog about the community and international service activities of our Rotary Clubs (I am a Rotary District Governor in charge of 61 Rotary Clubs) and this blog generates excellent traffic with 500-1,000 views a day. Rotarians and their contacts like to see themselves and their friends in these posts. Since Rotary is an International organization I have readership all over the world. Blogging is a commitment and a real skill to find the right blend of material and the right frequency for your audience.

While I'm now highly skilled at blogging, I'm not sure that I could maintain a successful RE Blog that people would want to read or follow as there is so much excellent subject matter content out there (and here) already and I'd have little value to add.

It pretty much comes down to the goal of what you're trying to accomplish. For me it's about buying up poorly maintained SFH's in good areas, fixing them and renting them. Blogging isn't a good medium for me to reach these type of sellers or the tenants that I want to put into the properties.

We rent SFH's ($1500 - $1900 range) and typically the majority of our tenants have lost their home in the past and can't qualify for a mortgage anytime soon. Usually they land in an apartment or a multi-family for awhile, love the cost savings but hate that lifestyle and appreciate the freedom that a SFH affords them. These folks usually make pretty good tenants.

So a foreclosure in their past doesn't usually give us pause during the approval process but we received an application yesterday and upon doing some quick checking we discovered that our applicant was able to prolong their foreclosure for nearly 8 years.

My initial thought is that if they are this good at prolonging a foreclosure what will they be like (or how good will they be) at prolonging an eviction if we ever head down that road.

Comments?

@Joe Gore

I'm glad that I'm not in Dallas for at least 2 reasons.

Rick

I don't like walk throughs with the tenants as they are usually too quick to spot things that may be hidden or to ascertain the true cost of repairing/replacing.

My experience is that tenants tend to minimize their damage costs during the walk through. Recently we discovered that a tenant punched through one of the bedroom doors and claimed that it would cost $25 to replace when in reality it was a very difficult door to match with the rest of the hallway doors and it cost us nearly $300 for the door and the labor.

The downside of not doing walk throughs is they tend to leave stuff behind for us to dispose of (mattresses etc) and the places tend to be left dirtier.

So the compromise is do a walk through with them but refuse to agree on costs on the spot. Point out the obvious issues but let them know if hidden issues are discovered then they will be on the hook for them as well.

We only accept checks from our tenants and charge them $30 if the check bounces, it happens occasionally.

All payments (security deposits, fees and advance rent) must be paid at least 2 weeks prior to move-in via check but they don't get the keys or a lease signed by us until move-in day. We have never had a tenant bounce an advance check but we have had several pay with cash if they were inside the 2 week window.

Dumpster costs have become significant in the past year for us as most of the waste disposal companies in our area have consolidated leaving less competition. We now pay $600 - $900 per 30 yards (depending upon weight) where we were paying $450 - $650 in the past.