Personal Finance Resources

If you are in the market to buy a home today, and have the credit scores to be able to procure a home loan, then you are probably in the best possible time, place, and position to get a phenomenal deal on a house. As more and more people’s credit scores plunge due to foreclosure, then number of available buyers out there is rapidly decreasing. What this means for you is that you have less competition fighting you to buy that house.

Ok, so what does it mean, not having much competition fighting you to buy a house?

Well, what it means is that the seller is not looking at 3 different offers from other potential buyers besides you. Ultimately, this means that you have the opportunity to buy the house at a discount - if you so choose. But if realtors are involved, watch out, because they are trained to get the highest possible price, and they may try to make you believe that the seller won’t go for your low ball offer.

I had to learn this the hard way. The first investment deal I offered on was a 2,600 square foot house in a nice area of Temple, TX. Now, I had a real estate partner (he was a lousy business man) who took the seller’s agent’s swaying and pushed the price up more than I wanted to spend. The seller’s agent said things like “I don’t think she will go for that, but I will put the offer in front of her.” So we ended up spending more than we should have on this property. Well, needless to say, I have closed any dealings with that partner, and I don’t accept any pricing advise from any realtors that are outside of the realty I work for.

So the short of it is this, think about a number, make your offer, and don’t do a lot of negotiation. Set a highest number you are willing to give before you even send the first offer, and then don’t go over your highest number. Let the seller sweat, instead you doing the worrying about the house. You may really, really want the house, but I promise you there are other houses out there, and if the seller says no to your highest offer, there is another seller out there ready to make a deal. Trust me, I have worked several real estate deals in my neck of the woods, and sellers WILL negotiate. Many of the deals I have bought into are $10,000-$30,000 off the original purchase price. No baloney, the house I am living in now - the asking price was about $70,000, I bought it for $40,000, and had the seller pay $1,200 towards my closing costs. It can be done, but you have to focus. (see more on the key to real estate investing)…

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Through the course of this whole fiasco, I have confirmed one thing. Screen, screen, screen your potential tenants. Now I knew that this was important in the beginning, but it has really been brought to life with the set of circumstances I am dealing with now. The nice thing is, all my tenants have caught up, and so I am in clear, with some extra income due to tenants paying late fees.

But not only do you need to screen your potential tenants, you still need to put some merit on your instincts. If someone has an excellent rental application, and what you are able to verify is true, but they just don’t feel right to you, it may be a good idea to steer away from them. One of the tenants that I am renting to had problems in the past, and I had a bad feeling. But I decided to give her a chance, and I now have to deal with late rent every month. Now she has come up with the money, so in the end I am doing better than expected due to being able to collect late fees, but it is still a hassle.

So take it from me, check the rental, credit and job history of your potential tenant, and then trust your instincts for the final decision. You will probably find yourself in a much better position in the long run…

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It has been tough, but the Lord is good. The two renters I mentioned in my post on Eviction Notices decided to pay their rent and fees. I got the full amount from both toward the end of the week last week, just before submitting the actual eviction notices. So getting an extra $300 or so in late fees really makes the picture look better when I look at the net effects for January.

As you may or may not know, eviction hurts everyone involved. There are no winners. The tenants lose their home, and the landlord loses rent, court fees (assuming they don’t move out when instructed) and advertising costs to find a new tenant — everybody loses. So it is safe to say that I was very relieved to see the money come in.

So now it is back to concentrating on getting 4 different properties that I am managing leased. I am getting many calls in on the different properties, just haven’t gotten anything closed. Most people I am running into have bad credit, and I really don’t want to work with people that can’t pay. The two renters that I have had problems with both had bad credit, however I do have another tenant with bad credit that has paid on time every month. Are there any tenants out there with good credit? Please step up, I have some quality properties to put you in to.

The latest 2 duplexes have really been a great investment. They are making far more than the 1% that the typical investor looks for. One duplex that we have, if the top rents for about as much as the bottom (they are identical so it should rent for about the same amount) then we will be making over 2% on the rent. So we will see what happens, I need to go now, I have a showing for that duplex at 10 AM. Please leave your feedback/questions at the bottom of the page.

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It has come to it. The last day for redemption. If my two renters in default do not come up with their required rent and late fees today, and eviction letter will come tomorrow. This is especially difficult for me as there are no winners in an eviction. The tenant loses their residence, and the landlord is left with no potential income. But letting them stay without paying is even worse for me as the landlord, so they will have to go.

Texas law says that I must give them 3 days notice to vacate the property (unless the lease contract specifically states otherwise), and even at the end of the three days, I still cannot force them out. If they refuse to move out, then I have to go to the Justice of the Peace, and file an eviction, as well as pay a $65 fee for the action. Just a side note, but where are my taxes going? I can’t think of anything that I don’t have to pay additional for, except for the public park that my wife and I take walks in.

On a better note, one of the duplexes we just bought has the new water meter installed. So now I will need to get with my plumber to do the switchover. At least this tenant is paying…

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Everyday it is the same thing…no money. I just don’t understand people. To me, paying your rent/mortgage should be at the very top of your priority list (except for tithes and offerings). I have gone hungry and would do it again if it came between paying bills and eating. In college I had a part time job and just about no money. I just barely had enough to cover the rent and bills. So what I did was bought 59 cent bread, 49 cent lunch meat, slice cheese and a little mayo and rationed it out as long as possible. On occasion I would buy the frozen burritos, and ration them as well. Long story short, I lost about 20 pounds between graduating college and getting my first career position.

But most people these days don’t do that. They put there cable, internet, phone and a host of other bills ahead of their rent. I know I am just venting here, but it really doesn’t make sense to me to see a tenant that has other non-essential bills that they are paying when they cannot maintain their rent. Am I crazy?

Has any other investors out there been in my shoes? Please share your stories, to give a little encourage to the rest of us.

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Well I guess that I was mistaken, or perhaps mistaken in renting to single mothers with credit problems due to divorce. The renters that I have in my trailer and in my 2 bedroom, 1 bath house still have not paid for January’s rent. Each of these tenants have been late every month, but have successfully come up with the rent and all late charges. But February is getting oh so close, and I need to do something about it. I have never had to evict before, so this is going to be a tough one for me.

I was able to get a phone conversation with the tenant in my trailer, and she said they are waiting on getting a tax refund check in, that was supposed to be in last Friday. I am fully aware of how people will lie and deceitfully use others to get what they want, but I am going to hold off on the first notice letter until tomorrow, as they said that the money should be there today. We will find out…

Regarding the single mother in the 2 bedroom, 1 bath house, I guess I am just going to have to submit notice to them. I am no longer able to reach them by telephone (I guess they had their number disconnected) and I have driven by a couple of times, and there has been no one home. I really hate the concept of eviction notices, but I guess it is a part of being a landlord.

But as a word of encouragement to all the other real estate investors out there, keep your head up during these times. At the very least, I will be able to keep the deposit on the house, and the location of it merits a quick turnaround, so maybe I can get someone in there pretty soon.

Till next time…Sign up for my RSS feed, and get the latest updates automatically through a medium of your choice.

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In my latest acquisition, the investor that I represent as a property manager wanted to meet one of the tenants. So I said OK, and we have that scheduled for 11:00 AM this morning. This tenant is a good tenant, but is a little anxious, thinking that his rent may increase substantially with a new owner. This is very understandable, and is why I met with him myself last week just to calm his fears.

But, my investor wanted to meet him before I signed a new contract with the renter, so we will be going over there in a few minutes. I hope to get the lease contract completed and signed today, and get our first month’s rent in as the new landlord. From what I see and what I have been told, this renter is a good one. But as you may know, the old “Put your money where you mouth is” applies here. Once we get a couple of month’s rent on time from this renter, then I will become a believer.

The other new renters that we currently have are still in default. Friday I will be getting with them to collect the rent, and inform them of the contract penalties that will be applied next month if they are late again. I will report in tomorrow on what transpires today…

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Being a property manager isn’t as easy as you might think. In my most recent deal involving the acquisition of 4 units, the current renters were aware of the change in ownership/management. So one of the renters took the opportunity to be late with their rent payment. Under the existing contract, their rent is due on the 1st, with a grace period until the 3rd. Well, the renter told me that they will not be able to pay rent until Friday of this week, that’s the 11th of the month.

Ridiculous, huh? Yes it is. And they expect to not have any late charges either (I’m just guessing, but I don’t imagine they are going to step up and pay the late charges without me asking or demanding for them). This is the sorry thing about buying into a property that already has renters. If the renters have any clue about what is happening, they may try to use it to their advantage.

I have decided in this situation not to create a first impression of a “tyrannical landlord”. I am going to collect the rent on Friday, inform them of the are penalties outlined in the contract, and if the problem happens again next month, I will enforce all late fees, etc that the contract allows. It just stinks as a new owner that there are people out there that will take advantage of every inkling of an advantage. Anybody else have any good rent stories? (You can post them at the bottom of the page).

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Ok, so now we have the 4 units. But now comes the hard part, getting the repairs done and getting settled in with the new renters, or should I say, getting the existing renters settled in with a new landlord. Today, I got a call from one of my renters, concerned that the rent would increase, and wanting to talk to me about it. I had previously talked with my investor, and he did not want to increase the rent.

However, the previous owner was paying for the gas, and we intend to change the 2 units where this renter lives to all electric. So I informed him today that the rent would not be increasing, but the electricity would probably go up some when we change over to all electric. Our inspectors told us that it is a safety hazard to have a gas water heater in the bedroom closet, and that switching it to an electric water heater would solve the problem.

So for us the advantage will be that we will not have to pay for gas anymore. The renter was fine with that, but requested that we paint the outside of the house. As there are some other repairs that need to be done (and he would be ok with putting them off if we paint the exterior), I think it will be a good idea to comply with his request.

So now I will need to get in contact with my repair guys, and get some firm bids established to complete the work. The original numbers that I put together include some $15,000 in repairs, which I hope will be more than enough to cover the cost of the repairs. I already have a couple of estimates in, and it doesn’t look like it will top the estimated amount.

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Well, on New Year’s Eve, we closed on our 4 unit duplex deal. So now we have the title, and will begin collecting the rent. This was a good deal, but even so, you need to read your closing documents. The lawyer, the banker, the seller and my buyer all missed an important detail - that the cost of the survey should have been paid by the seller. Luckily, I broke off from my family to come back home and be there for the closing.

This error would have cost my investor over $600. Not much money in the long run, but $600 is $600. Unfortunately, the hard work is not over. One of the renters is a section 8, so we will need to push through the paper work to get the transfer of ownership so that we can start collecting the government guaranteed payment. Further, there are some repairs that still have to be done, and the previous owner has to complete the installation of the new water meter, which is scheduled to be completed next week.

Overall, I am pretty happy with how this deal has turned out. If you are diligent, and follow through on your deals, you can make things happen. Get on my RSS list to get free, automatic updates to all the great information here at Personal Finance Resources.

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