Landlording by Leigh Robinson. pretty much acknowledged by everyone in the world as being the best property management book for the small timer.

Licensing is community dependent. Try to get the license if you can. If not, make sure that you understand the penalties for not being licensed. In my experience the penalties are not severe if there even are any.

spex, I left you a private message regarding a residential lease - not sure if you've gotten to it yet. If not, can you please contact me, I'd like to speak with you private.

Thanks

Spex, i'm an idiot 20 year old kid who luckboxed 50k in a tournament. More than I ever dreamed of making through poker and would like to do something productive with it. Stock market doesn't excite me that much at the moment and I was thinking real estate.

I've looked around and can probably buy a 2bed 2 bathroom place for 300-320k that will rent for 400-440 a week what are my odds of being approved for a loan with effectively no taxable income and assets? Solid plan or pipe dream?

Seems like a pipe dream. Are you trying to live there and rent the 2nd room? How do you plan on paying for the mortgage?

No intention of living there, using the rent to pay the mortgage. I currently have no living expenses etc I live in a house owned by my dad and don't pay for anything. I play poker for a disposable income. Poker winnings aren't taxable in Australia so it appears i make no money when in reality its maybe 25k a year. Effectively the question is will a bank approve a loan when my only 'income' will be the rent from the place i want a loan for?

Mortgage criteria is different based on what country you live in.

Australia - I guess I should just go talk to a bank?

IMO you need to read this thread more closely. The deal you describe is terrible unless you like losing money month after month.

Did you read the entire thread? Similar questions have been posted.

Going through the entire post will give you so much information to help you understand what specific questions to ask Spex. Unfortunately, asking the general questions might not get the answers you are looking for.

IMHO.

Spex,

by now many investor's have hopped on the mobile home market game. I'm 20 and dabbling in a few areas of real estate. I've heard the glory of mobile homes. But I have three major questions:

1. Say I bought and resold some mobile home and the people I sold it to end up being deadbeats and not paying (this just would seeeeem common for some reason, maybe I'm wrong.

2. How is the mobile home market RIGHT NOW as far as competition goes? Still fairly untapped? Or pro investors everywhere, all buying cheap homes from desperate sellers.

3. How is the mobile home market relative to all other markets (for example apartments, condos, and SFH's). Are mobile homes high in demand? High in demand for rental or for purchase?


thanks

You combat this by 1) screening, 2) taking down payments. If you find someone that won't pay, you repossess and sell it again. What are you afraid of?

Same as always. Lots of sellers, not too many buyers. No financing.

Mobile homes are the most affordable way to live. So they're always in demand. You don't want to rent out mobile homes. Just sell them.

A part of me would be a terrible landlord. I'm a nice guy, way too compassionate, and non-confrontational which kinda just sounds like lol if I want to be successful here. Earlier in the thread you or somebody mentioned that these people will find any excuse not to pay their month's rent. Does this happen often? It seems like such a pain in the ass dealing with that and even more of a pain dealing with repossessing the home

Thanks so much for answering all these questions, infinitely valuable to the noob investor.

Yeah, nonpay is going to happen all the time. You don't have to be confrontational. all you do is get the tenant/buyer on the phone and explain to them what the process is for moving out. Tenants are not in a position to argue with you. They owe you money.

Is it a pain in the ass? depends on what you compare it to. compared to losing 40% of your stock portfolio in the last two years, I'd say its a walk in the park. compared to sitting on your butt watching reruns of Friends on TBS, its probably pretty hard.

Spex, I've been doing some pretty heavy reading about a couple areas of real estate

How do these generalities stand?

Rentals- Good long term wealth, just get + cash flow

Apartments- Rentals on steroids but higher vacancy and less quality tenants

Short sales- ???

Flipping- High stress and needs lots of experience to do right. A little riskier, but can payoff huge.

Lonnie Scruggs mobile homes- fastest way to get cash, low investment.

And all of these make MOST of their money in a discounted purchase price. This is by far the biggest determining factor in the scheme of making money

spex, thanks very much for this excellent thread.

I am a real estate lawyer and occasional investor who would like to invest full time. I own 1 rental house and I have done 2 fix-and-flips (again, SFHs).

I would like to raise a significant amount of capital ($2MM or so) and invest in a midsize apartment complex as a value play. I have talked to a few possible investors and have some interest, but no firm commitments yet.

My advantage is that I've done the legal work for dozens of deals like this and I understand property valuation, financial analysis and all the mechanics of the deals. My disadvantage is that I've never directly owned or managed multifamily apartments before.

My question is:

What are your most successful methods of finding investors and raising capital? Would you rather work with people who already understand real estate and want to be actively involved, or passive investors who just want a return on their cash?

and the sub-question:

What terms do you give your investors? Debt, equity, or a combination? One developer I talked to says he usually gives his investors a 9% preferred return and then half of the profits on top of that.

Thanks again.

Many municipalities have this information online, so it is even more easily obtained.

You are right: due diligence is important in any business purchase.

you gotta raise the money from people who already know you and trust you. Its the only way that i'm aware of that works. Friends and family are a great resource, esp since your a lawyer and prob have some richish friends.

Secondly, it is of the utmost importance to sell your competence. Personally, I'd rather work with other RE investors because they understand the investments w/o a lot of education. However, I would not want investors to be actively involved at all. But with anyone, you gotta sell your expertise in what you're doing. you do that by putting together a professional quality investor packet, having a printing company print it up, then send it out to your investors.

One tip: if you want money, ask for advice. Take your top 3 to 5 potential investors, explain that you're working on a deal, and ask them to take a look at your proposal. Tell them that the proposal is in draft and you need them to critique it before you send it out. Of course, that proposal is going to be in air-tight final form before you ask for their edits.

[QUOTE
and the sub-question:

What terms do you give your investors? Debt, equity, or a combination? One developer I talked to says he usually gives his investors a 9% preferred return and then half of the profits on top of that.

Thanks again.[/QUOTE]

In my market, most money investors want half of the deal - cash flow and equity. this is not an issue that has a right answer. Basically, you give up the least you can and still attract investors. If you don't offer a great deal, you're not going to attract the money you want. If you make someone a pile of cash in one deal, you'll have money forever. So I'd be inclined to give away more on the first deal and less on subsequent deals.

Spex, any chance you would share copies of the landlord forms you use.
I am interested in seeing what your lease and application especially look like.

I'd be willing to pay something for them but I have no idea what the going rate is for shareing info.

So thought I would contribute my .02 and try to save someone else some money from the painful lesson I am learning about being a landlord.

When it comes to your property manager, you should consider them as your tenant when it comes to paying you the rent. Always have whoever your second choice was handy in case you need to fire them on short notice.

I have a 4plex in OK. I hired a property manager and they were great for the first year. Then the managing broker had health issues and needed to cut back on her work so she was getting out of the business and sold it off to another broker/lawyer. The actual contact person I dealt with remained, and was the same. Ok seems fine.

Now I had always had some small variability in recieving rents and reports. I got them on the 15th - 25th. The first month after I heard of this coming transfer things went alright. The month after that things just dropped off a cliff. Couldn't reach the person. And when I did it was that the reports were being done and going out that week for sure. I was too lenient since they had done fine for a year and I thought it was just working out the kinks using the new manager and the person had surgery in this time frame. (for real, not some excuse since I heard it from multiple different people including ones not involvedin the biz anymore) Then when I did decide to fire them I got screwed out of another months rent because I ended up trying to hire a new manager right at the end of the year around Christmas/New years and I couldn't get it in place until after the January rents were collected.

So now lawyers are involved and people are getting sued. Its an annoying situation too because it causes a bunch of tax return complications as well. My new manger is 100x better. For the last 4 months I have gotten my rents around the 9-12th every month so far. It's worth the 1% more I pay I think.

Now the goal is to cut my lesson tuition down as far as I can from the current 10k figure. Its even worse since I also have to sue them to get the deposits they held for my tenants and the maintenance reserve they held which adds almost another whole months rent. At this point I think the deposit thing probably bumps it over to a criminal issue.

So now I have to sue likely the old broker, the new broker, and office person. The worst part is the person who actually screwed me is the employee and has no license. So I have little leverage over them. The new broker has a law license too which is bad cause he can fight cheap, but good cause he has more to lose. Ie RE license and complaint with Bar. So mentally I just wrote off the entire 10k, and its a bonus what I can collect. The worst part is it means there goes the first 1-2 years profit on the investment.....

At this point the best I can realistically hope for is that the criminal thing gets me a few bucks from the employee, and the new manager cuts me a check to get me to go away.

So. If you are a landlord with a property manager. If you dont have one months rent by the time they collect another, DON'T let them collect a third. Even looking back I should have just told my tenants not to pay for January and collected it myself. Then worst case my tenants get a free month instead of the manager. At least that way I get some fringe benefit from my tenants being happy. But more likely I can just collect it late with the new manager.

I asked for this a couple times, but he's ignored me both times

Why

Yeah he is great with replies to everything, obviously doesn't want to sell any of his forms. His forms, he can do what he wants with them.

I'll take free insight and advice and be thrilled with it.

Go to landlording.com spex has cited that source a few times.

Hi Spex. I need advice keeping my tenants in line.

I own a 7 room lodging house, that I rent to student tenants.

I'm 22 and look like i'm 17 (i wear braces lol).

My tenants have a tendency to ignore what I say to them completely.

They don't take the garbage to the curb ever they just let it pile up outside. 7 people's garbage piled on the porch is pretty disgusting. I'm in Ontario Canada and can't ask for a damage deposit, which i could then threaten to keep.

Other problems I have with tenants. They waste utilities A LOT. Like last summer when I was in Europe and the toilet leaked for a month I found out after my hydro bill skyrocketed! By the time I got back they were moving out.

This year's tenants run the furnace in 16celsius (60 fahrenheit) weather when there is nobody at home. (i know this cuz i dropped by one day for a fire inspection at noon and the furnace was on)

They leave their air conditioners (window units) on when they aren't at home.

They never shovel the sidewalk and I end up getting fined $500 by the city if i don't do it.

I feel like my hands are tied when it comes to dealing with tenants. I estimate if i could cut down on their expenses I could make an extra 100 a month in cash flow.

Note I turned off their furnace 2 weeks ago then today they complained it was cold (it was temps dropped). I found out its against the law to turn off their heat.

Please give me some advice for dealing with tenants. How do I enforce rules upon tenants if there are no laws for them and I can't get a security deposit to withhold.

Sell it or start threatening eviction.


You have dead beat tenants inside.

You can't get tenants to respect utilities if they aren't individually metered.


If you write in the lease that they are responsible for snow shoveling / garbage removal than threaten to evict them if they don't comply.


I never allow tenants to have control over the furnace. You should personally or have someone else run around and turn furnace up or down.


You essentially have a slum property. There's only so much you can do to clear your headaches off. A slum property is a slum property.

I responded here
http://forumserver.twoplustwo.com/30...issues-466712/