OfflineWhen I started out I had such high hopes for my real estate investing. I was suffering under no illusions I knew it would be hard work just like any other endevor that is worth while. I read two of Dean's books along with several other's by other authors and participated in his coaching program and was successful to the point where I received the full costs of the tuition back. Unlike some others I'm not in a dead end job that I don't like. My job pays me a nice six figure salary with lots of vacation time and I get to work exclusively from home. So my real estate investing goals were to build wealth by buying properties to hold and rent. I was able to do this and purchased 6 properties with little or no money down and at deep discounts. Yes one can purchase little to know money down and at a deep discount particularly before the REITS and Hedge Funds got into the game of purchasing single family homes and holding them for rental units. I also had what I thought was a pretty good cash reserve at $33,000. However, little by little over time I have been hit by one expense after expense, tenents who disappear overnight, thefts of AC units and pipe sets, constant rent ready costs, eviction costs when tenents didn't pay rent, water pipes breaking and flooding the entire first floor, and on on. So much so that now all my cash reserves are wiped out. Don't get me wrong I know that what happened to me is not typical. I meet follow investors all the time at the REIAs I attend and in swapping stories they are pretty much astounded at the streak of misfortune I've run into. As I type this I lost 4 of my 6 renters all in the last 45 days so now wondering how in the word I'm going to cover all the mortgages next month. I would so much love be saying how well real estate investing has worked out for me but unfortuantely that has not been the case. I'm not knocking Dean at all his techniques do work. I'm sure my experience is atypical but wanted to share it.
Tony
Tony,
It sounds like you have hit a rough patch. Sorry to hear it and it does make life difficult. I understand as I started this industry 11/12 in SoCal when the market started busting out and all of the Gurus books were outdated and ineffective, including Deans, for the SoCal Marketplace. But I have hung in there Listened, learned and adjusted and now I have surpassed minimum wage and I am about even with the national average annual income and I now it will continue to grow. So persistence, persevered. It sound like you have had a run of tenet issues. So my advice from a previous life is take a long look at your property management firm, it might be time to change as it sounds like you have had quite a run of tenet issues. Good Luck, and if you are looking to sell all your rental properties I'll bet I can find someone to assist you,
Jim
With your success in mind,
Jim McKinney
"With integrity, nothing else matters.
Without integrity, nothing else matters!"
I have currently a rental agreement that is "PLAIN JANE UP CLOSE AND PERSONAL GENTLY IN YOUR FACE SIGN IT IF YOU CAN MEET ALL THESE REQUIREMENTS" agreement. In my agreement to my renters.....i have stated...(btw if you were interested, i can send you my agreement as well to look at, and you can change things according to your liking)
"when you move in this is what the house/apt looks like and will stay looking like this. When you live here, and when you leave here, this place will look EXACTLY the same...EXACTLY the same. tenants pay for all damage caused while living here on their terms" so meaning......
If what you have stated in your "unfortunate disasters" if someone stole the AC, THE RENTERS REPLACE IT. It was there when they moved in, so therefore it needs to be there when they leave or are there currently. sure if they want to live with out an AC fine...HOWEVER...when they move out that cost is coming out of THE RENTERS budget....NOT YOURS! I also require a "referral" person or a "co-signer" to call when they don't perform. Like for example---college students are my favorite...why?? because of this---i ask for their parents information and i call their parents and have them also put a credit card down as a co-signer. That way i can call their parents and say, "joe's rent 3days past due, he will be evicted in 5 days if he will not pay, or i will charge your card". Then from expierence, the parents usually get on their kids case and say "you better pay or im going to come and kick your butt, because i will not pay for your rent bla bla..whatever they say".
If the parents dont want to co-sign, which some co-signer is a requirement for living in my house, the tenants need to find a different co-signer. Then you make sure the co-signer is aware of the detailed information and when the tenants LEAVE OVERNIGHT.....your co-signer is charged for the rent and damages and whatever else that is needed! I think to myself--"go ahead and damage my house or leave without paying...i still can find you and i still will get what i need. You signed this agreement and now you will follow through....welcome to being an adult" (no matter what age my renters are.....you act like a respectful adult and we shall all be friends)
If they don't want to sign the agreement because they don't want to pay for damages THEY have done...they in my personal opinion....they aren't "qualified GOOD ENOUGH" tenants. My opening line is "we can do this the easy simple do drama no angry way, or we can do this the hard way not so friendly way, what do you want to choose because i really dont want to not be your friend, so lets be honest and how can we work this out?"
I also have a general contractor/handyman that i let my renters know that he will come at anytime and do anything for discount. That if they want to use him--very smart choice--if they want to use someone else, that is their call. Which then you require getting copies of all repair, so you know who has been in your house repairing things---so it can go back on that person of the "repairer's" are the ones that caused any damage. My Gen Contractor does all the repairs for "discount" so that when my tenants have a problem, i have a man that goes there and does there work for discount price from anyone around town. Making it all apart of the "family". I bring my handyman work all day long (because they have to pay him per his hr/rate, and he works all the time with my houses!)
I want to WORK WITH my renters....not against them. I am not an "a-hole" landlord that is a jerk and just wants there money. I have an "if anything goes wrong" contract set up as well that if they cant pay for the damaged expenses that we can negotiate a payment plan to meet THEIR needs. and then they sign that agreement as well! so either increasing the rent per month until its paid off....or a different way of working it off. maybe your renters are painters or someone that is in the contruction biz....you can negotiate weekend work for payoff. like for expample, if one of your houses needs to be painted, call your renter up that owes you money, and have him buy the paint and paint it for free in tern for the balance he/she owes you. win win! And then if they are fabulous painters and you are impressed...you can refer them to more! win win again!
Like i said.... you qualify the BEST tenants that wont screw you and you show that you wont screw them. That brings in renters that are willing to do a "long term" rental with you! Build character and relationships....and they will refer your name to someone as well! Such a great way to network yourself and your business.
So sorry about your crazy losses.....but KEEP IT UP AND YOULL BE BACK ON THE RIGHT SIDE OF THE SUN!!!!!!
hope this helps a little bit!!!!!! I was taught this from one of the mentor's on the website, and thus far...so far so GREAT because i know my tenants are willing to take care of what they live in!! win win for me and them!!!!!
Best Wishes!!!!!!
PUSH= "Persevere Until Something Happens" DeanGraziosi
"For I know the plans I have for you," declares the Lord, "plans to prosper you and not to harm you, plans to give you hope and a future." Jeremiah 29:11
"By humility and the fear of the LORD are riches and honor and life." Proverbs 22:4.
Melissa Palmer; Az REI
Incline Real Estate Investing, LLC
www.InclineREI.com
Do you have a property management company to look after these properties? If yes, they must be a poor rating company, putting any unqualified people under your property roof. Now, if you're the one managing the properties, I suggest you past them down for a well rated history type of property management company to handle that from here on out.
You have the money, you know how to do deals, so why give up over the obvious issue that could be fixed? Well rated Property Management Company is the way to go, who has history of success.