RE?? Don't Do It!
UGH!!!
I just sat through a telephone conversation with someone who insisted on telling me that LO and/or being a landlord is too risky. Her father owns rental property, and they had a tenant in an apartment for over a year that did not pay rent and left $8,000 of damage to the property.
Don't worry, I was not scared off by this. Someone has a story about everything if you give them the chance to bring it up. Nevertheless, the only defense I could come up with was the comparison that I could walk into the office tomorrow and find out I've been laid off or the company has been sold. Been there, done that, got the T-shirt. At least this is a risk I have SOME control over.
Does anyone have a quick, intelligent answer that works in this situation? I'm not looking to debate with "non-believers", just something to let them know I am not an idiot.
How about "Boy, that is terrible. I guess not everybody has what it takes to be a good landlord"
"I'm not looking to debate with "non-believers"...GREAT. Listen to what they have to say and you'll know exactly what NOT to do if you ever got into a similar situation. Take their words with a grain of salt and learn HOW TO make it by doing the opposite of what they did.
Just shut up and listen.
Just do it! Do not let negative and broke people dictate your future. As the old saying goes misery loves company. All the non-believers will do is drag you down.
pointafter,
The trick is to not get into a debate in the first place. If someone wants to point out pitfalls in your investment plan, just say "Thank you for sharing that story with me. I'll make sure I take that problem/issue/situation into consideration." Change the subject and move on.
Try to learn from it, and just say "wow, thats bad"
Inside think "woohooo 1 more place for me to look into", or "1 less competitor"
Dave
"Does anyone have a quick, intelligent answer that works in this situation? I'm not looking to debate with "non-believers", just something to let them know I am not an idiot."
If a car crashes into a tree, it is rarely the car's fault, or the road's fault, or the tree's fault, or the law's fault....
Does this mean we shouldn't drive in cars?
JohnCl
Yeah some people don't want you in thier market, ha ha - fat chance of that. I think if the landlord would have done inspections like they could have had them criminally prosecuted and hauled off for the damage to private property - oh and at the same time handed them thier eviciton notice. That should have allowed them to take care of that tenant. This should have not been an issue to begin with since a background check would have been the right thing to do. Just learn from others mistakes.[ Edited by downpayit on Date 03/02/2004 ]
Usually when someone doesn't pay the rent we evict. That is what I would take from this conversation.
"Thanks for the advice, I guess we will start to evict before a year"
Then ask if her still ownes property to see if he has learned a lesson or not, or maybe they are just full of it. We all have bad stories but if they are still in the land lord business, it could not be all bad could it.
Sire
You may have found your first deal, see if that ladies father want's to sell. He may be motivated!! You do the rest.
Thanks, all. Perhaps what is important is what was NOT said to me:
1. I've known her for over a year, and while there were 2 or so passing remarks about annoying tenants, not once (including last night) was there any indication there is interest in selling the property. Like you said, it obviously is not that bad.
2. No help or constructive criticism was offered. Instead of asking me "Have you thought of this or that" it was simply "Don't do it! It's too risky!"
3. No opportunity for me to ask 1 or 2...or anything else for that matter. Just a long rant and a final word of caution. When the dust settled I quickly changed the subject.
Thanks for your input. For a brief moment in time it seemed I was the only one who'd heard that before.
I have run across this same argument from a lady who said "you'll never make money in real estate, we had 25 rental propreties and never broke even. We had 10 evictions that took over a year!" When I pressed her for details I found out she and her husband had bought homes in what would be called the war zone in our town. For full market value and 85 to 90% mortgages on all of them!
If you look around you, you can always find someone who can turn a silk purse into a sows ear. Inspect the properties, buy deals and know your locations and you will make a profit, expect a percentage of eviction/no pays and put it in the formula. Remember it's a business!
When I was young and in my prime, I used to buy properties all the time.
But now that I am old and gray,
I only buy just one each day.
In the early 60's I ended up with 1800 of the worst warzone properties in the world. I got them from investors who could not collect the rent, were afraid to go into the area and therefore they were all run down, the tenants annoyed and not paying.
We picked them up for paper and the prices were so far under the market that I found it hard to believe that they would just dump to get into paper and receive
a nice monthly check.
I was involved for over two years. I made many friends, solved a lot of problems and ended up forming corporations so that my tenants could buy the stock and become owners of the property and as such defensive as to the properties.
One of the most interesting times of my life. You name it I did it. Big time social worker in Watts and Wlloughby. At the hight of the riot, I just drove down and collected rents, watched the looting and the vandals. But none touched our units.
Many instances I was the only Whitey. I drove down Central Ave. Stopped at the light. They were looting a appliance store. Guy comes out with a handful of little portable radios. "Hay Bo." I yell. "Throw me one." He looks sees my white face recognizes and throws me a radio.
Everybody including my family considered me insane. Why do it? Why?
Very simple, I like the people and I liked changing a slum into a proper residential safe area. I did. I enjoyed it.
It was also profitable.
Thats your answer. If you like people and you want to do something for them just go do it. Good property management is liking it and the people and showing it. It also makes money.
Cheers Lucius
Lucious....another great story.
Name the industry or product and you will find people that have been wildly successful and others that have failed miserably.
One year without paying rent???? What was that landlord thinking??? I'm not to this point yet, but I want my tenants to KNOW that rent is due on the first, late on the 5th, and we evict on the 10th. As it is, sometimes I start the eviction when they're 30 days behind. Did the tenants keep telling them that they were about to win the lottery and would pay then???
Success will speak most loudly of all. I think that in the begining, if you fear criticism from others, then don't tell them what you're doing. I didn't mind the skepticism of others, and was amazed at the conversations that I'd get into with them when I told them that I was getting into RE. I met other people who had done it, were doing it, etc. We traded our stories and helped each other where we could. Now that I'm doing it, I don't get criticism from people.
Keep in mind, most people buy at FMV. If you're buying at 70% of FMV, it's a completly different game. Additionally, right now interest rates are so low. There was a day when interest rates were 18%. Try to find properties that cash flow with that kind of mortgage. Perhaps these people bought property then.
Just think of the day when you can pull up to your family party in the car that you've always wanted to drive, and see the looks on their faces because they don't have a clue where the money came from.
IF you do feel like debating it, you might go about it this way. Ask them how much their house is worth. They say $150K. Ask them if they think it would be a risky investment if you bought it for $100K? They'll tell you why it can't be done, but finally say "no, it wouldn't be very risky". Then say "What if I did that once every month? Just a thought. They'll most likely remain skeptical, but it may open their eyes. If you care much about their opinion, give them a copy of Rich dad poor dad. [ Edited by hibby76 on Date 03/03/2004 ]
Good Day to you:
For every bad story....there is a good one. I too have a bad story, but it out weighed by all the good ones. Like the single lady (tenant) that inherited when I bought the property. She had lived there for 3 yrs prior to my purchase and has since lived there for that last five yrs of my ownership. Her rent arrived 5 -6 days early, she asked to paint, so I said yes and offered to supply the paint. She just wanted to know what brand and type of paint and said that no re-imbursement was necessary. She did the same thing with a screen door. Got to love this story!
Good luck and make $$$
Tom
every landlord/property owner has a war story...that is part of the business...some are avoidable...some are simply not...you can buy well...in decent areas...check credit, etc...act in a timely fashion when rent is late and still end up on the wrong end of the $$$...what i don't understand is why so many people believe it is possible to make money overnight...it is possible, but not probably...not matter what the gurus say...it is the exception not the rule...too many people today believe that the great life they see in tv and in the magazines is theirs for little or no effort, little or no money or risk...not so...that is not reality...what you learned in the "boot camps" will not in any way shape or form prepare you for doing business in real estate...be vary wary people...learn it right and go in with both eyes open or not at all...still, despite my complete dissatisfaction with the infomercial i attended in san diego from the ron legrand organization, i would recommend real estate for one simple reason...i have known many wealthy people who had real estate...i have known many wealthy people who don't have real estate...i have known many poor people who don't own real estate but i have never known anyone who was truly poor who had real estate...that was the difference...real estate can make you well off...it is work...it is time and it is risky both financially and legally...get educated in the real world by real world experts, not gurus and enjoy the journey...
ciao, rdoc
I was looking for an old post and stumbled across this one I hadn't read yet. Just figured I'd give it a "bump" to the top because it is great encouragement! In moments of self doubt and questioning "why am I doing this?", it is good to see stories like these and get positive reinforcement. General thanks to all for all the wonderful info, stories, and advice.
Quote:
On 2004-03-03 10:51, tclifford10 wrote:
Good Day to you:
For every bad story....there is a good one. I too have a bad story, but it out weighed by all the good ones. Like the single lady (tenant) that inherited when I bought the property. She had lived there for 3 yrs prior to my purchase and has since lived there for that last five yrs of my ownership. Her rent arrived 5 -6 days early, she asked to paint, so I said yes and offered to supply the paint. She just wanted to know what brand and type of paint and said that no re-imbursement was necessary. She did the same thing with a screen door. Got to love this story!
Good luck and make $$$
Tom
I have got an idea for you if you haven't thought of this already. Ask this lady who is a great tenant is she wants to be a home buyer. She obviously loves the property enough to take care of it and takes pride in doing so. You could owner finance the deal, bump the interest rate a few points and tag on another 10,000 or 20,000 to the purchase price..depending on what your goals are. Its a win/win scenario because you are guaranteeing yourself a great tenant will live there a while to come. Why shop around for a buyer later when you have one already??
And repeating what has been said, Landlording isnt for everyone. Its all about setting rules Fair But Firm, early in the game. Not when "that" problem arises.... Set a goal for yourself on how many units you want to attain before you hire a property manager. Maybe just a part timer, or maybe a BIG guy (maybe even one of the "good" tenants) to collect rent with you.
Be the Bigger Man and show (dont tell and argue) people that they are wrong...
[ Edited by sKauGhTiEe on Date 03/19/2004 ]
Just remember that it is human nature to spread bad news. If somehting good happens most people will tell one person, if something bad happens they will tell ten. There is a reason why some people are successful and some people are failures and it has little to do with luck as the failures like to think.
I am glad you enjoyed the encouragement also. That is why I posted it, to benefit from all of you who have been here before me.
There's saying if you continue to do what you've always done you'l continue to receive what you've always had. Why sit around and wait to be downsized agan? Then I'd be the motivated seller looking for one of you guys to save me from foreclosure! How ironic would that be??
Quote:
On 2004-03-18 23:50, elf2588 wrote:
I was looking for an old post and stumbled across this one I hadn't read yet. Just figured I'd give it a "bump" to the top because it is great encouragement! In moments of self doubt and questioning "why am I doing this?", it is good to see stories like these and get positive reinforcement. General thanks to all for all the wonderful info, stories, and advice.
:-o :-o
I love realestate it has its ups and downs and even its sideways.
I'm a landlord jumped into it with both feet. Ive fallen for "what I thought was every trick in the book" but they always come up with new ones but I still wont give it up I love it Ive found my calling folks.
I started with no forknowledge no training no gurus that was probably a mistake but then I found this web sight.
The things Ive learned the incouragement I get from reading the art.& posts alls I can say is thanks GUYS & GIRLS.
Thanks again
ED
It's amazing how impressionable we tend to be. I've talked to a number of property owners who say "you really can't make any money in this business unless you do everything yourself". (refering to buy and hold real estate)
For a second I almost believe them...and then I take it upon myself to figure out what they're doing wrong. In most cases they buy FMV properties and depend on the profits for their living. However, if they would sacrifice 2/3rd's of their profits to management compannies, and buy 3 X's the properties they'd do little, if anything, to manage their properties, have more time to invest, and fewer headaches.
Look for successful people to model rather than failures and skeptics and then do exactly what they have done.
Sounds like that's one less re investor to compete with in your town. I agree with what was said above..... whats this landlords phone # ? Tell him Im interested...
JB
[addsig]
I would ask if her father wanted to get rid of the property that he is having so many problems with....
Quote:
On 2004-03-19 23:40, sanjosee wrote:
I would ask if her father wanted to get rid of the property that he is having so many problems with....
Nope! Pretty much sums it up, doesn't it? :-D
Hey, let them be negative about REI. That means less competition for us. Real estate is not for everyone. Why even argue? :-D