Michael Rossi's Landlording Blog

I've started my next project, which is the rehab of a 3 bedroom apartment. This apartment was in a building that I bought more than a year ago and I have never done anything with this apartment. In reality, this apartment is a little more complicated than that. When I took this building over, this upstairs had actually been illegally converted to 2 units and had two separate tenants that were sharing a single electric meter. Shortly after I took the building over, one tenant left voluntarily. The other tenant refused to pay the rent and I immediately evicted him. Both of these tenants were real scumbags and the apartment was a pigsty! There were mice and roaches all over the apartment(s) and dog feces was everywhere. The tenant that I evicted had 5 or 6 large dogs that he never took outside!!!

After kicking out the tenant, I cleaned up the mess and that was the last thing I did with this apartment, except for installing a new 200 amp electric service when we did the electric services for the other apartments. My rental property business has been expanding so fast, that I just put this apartment on hold for the time being.

Fast forward more than a year to today. The plan is to convert these two illegal apartments back into one. So, instead of having a 1-bedroom and a 2-bedroom apartment sharing an electric meter, I will have a 3 bedroom, 2 bath apartment that has its own electric meter. I started this process on Tuesday by ripping one of the kitchens out. This room will now be a bedroom. Wednesday (yesterday), I installed new glass (plexiglass) in several windows that had cracked or missing panes. My intention today is to begin patching the walls in preparation for painting. I'll take my time and plan on having this apartment ready to rent by Dec. 1st.

 

Michael Rossi is the author of 1 Minute to Rental Property Riches, which is the only book that tells the truth, the whole truth, and nothing but the truth about the rental property business. You won't find any guru motivational nonsense; unrealistic hype; or promises of instant riches without work in this book. What you will find is the critical information that you need to start, build, and operate a successful rental property business. And if you're wondering about the title of the book, 1 Minute to Rental Property Riches, it's a sarcasm of the silly guru infomercials that promise untold riches without work - which we all know is RIDICULOUS!

If you'd like to read more about the book, check it out at www.1MinuteToRentalPropertyRiches.com. When you're ready to buy, you'll get the best price and fastest delivery from the bookstore right here on BiggerPockets!

I had a meeting with my banker yesterday. The purpose of the meeting was to take a financial statement and tax returns to the bank, which is required each year when you have commercial loans. While I was there, I asked the banker a lot of questions about the banking industry in general, and this small local bank in particular.

Here's what I found out. My local bank keeps all their loans in their own portfolio, which means that they don't sell any loans on the secondary market. They have always required good credit of their customers and therefore do not have any exposure to subprime loans. They also have not invested in any of those mortgage derivatives that have recently been such a problem.

I asked him if the bank borrows money from the government and he replied that they normally do not. They have a strong deposit base and therefore usually don't need to borrow money for loans. In addition, with all the problems being publicized about the big banks, they have actually increased their deposits as people take their money out of troubled banks and put it in small local banks. He said that they have money to loan and their standards have not changed!!!

Finally, I asked him about foreclosures. He said that because they do not make subprime or other risky loans, that they have very few foreclosures, sometimes going an entire year without a foreclosure. At the present time, they only have two foreclosures. Both of these are rental properties owned by the same guy.

I had been curious about these issues and found the answers to be enlightening. The bottom line is that while the big banks have gotten themselves in a lot of trouble, there are many small local banks that have been doing things right and these banks are operating with business as usual.

 

Michael Rossi is the author of 1 Minute to Rental Property Riches, which is the only book that tells the truth, the whole truth, and nothing but the truth about the rental property business. You won't find any guru motivational nonsense; unrealistic hype; or promises of instant riches without work in this book. What you will find is the critical information that you need to start, build, and operate a successful rental property business. And if you're wondering about the title of the book, 1 Minute to Rental Property Riches, it's a sarcasm of the silly guru infomercials that promise untold riches without work - which we all know is RIDICULOUS!

If you'd like to read more about the book, check it out at www.1MinuteToRentalPropertyRiches.com. When you're ready to buy, you'll get the best price and fastest delivery from the bookstore right here on BiggerPockets!

After a relaxing 3 day weekend, I was back to work today. I started the morning with a trip to the 2 bedroom house to meet with the government contractor that is weatherizing my house (for free - thank you taxpayers)! They finished up this morning by blowing the insulation in the walls and doing some caulking around windows. I was extremely happy with the job they did and even happier with the price (FREE).

After that, I dropped off some additional paperwork at the bank, so they can get my line of credit renewal finished. After lunch at home, I went back into town to install a curved shower curtain rod (made of 1 1/4 inch PVC pipe) at one of my low income rentals. I also moved some of my supplies from an apartment building basement to the storefront at the pink elephant, which will be my new storage facility for all my real estate supplies.

I don't know what I will do tomorrow, but I'm planning to do something.

After my Brush with Socialism over the past couple of days, I needed a break!  Therefore, I took yesterday off to help my nephew get his car running.  The car is an interesting story and is actually real estate related, so it ties in well with this blog.

My sister and brother-in-law are also in the rental property business (in another city here in Ohio).  In fact, they operate a LARGE rental property business.  They recently bought another rental property at an estate sale.  It is a very large 4-bedroom house and they were the only bidders.  While at the auction, they saw a 1976 Jaguar XJ12 in the yard that was also being sold.  My nephew is just starting to drive and he wanted to buy the car.  The car had been the pride and joy of the owner, who had recently died - thereby necessitating the estate sale.  To make a long story short, they bought the car for only $500.  

The car is in good condition, but hadn't been run for about 4 years, since the previous owner became sick.  So, my father and I went up there yesterday to work on the car and try to get it running.  After a long day of working on it, we finally did get it running.  With a little more work, my nephew should be driving it very soon. 

I'm taking the rest of the week off!  Have a good weekend! 

 

 

 

I am generally not in favor of the government being involved in business and I'm certainly not in favor of socialism. In fact, I'm 100% against it. However, my experience today has shown me that "sharing the wealth" can be a good thing - at least when the taxpayers are sharing their wealth with me!!!

I had a personal experience with socialism today, when the government paid for an expensive energy efficiency upgrade of one of my 2 bedroom houses. In fact, they not only paid for the upgrade, they provided the contractor, the materials, EVERYTHING! Cost to me? NOTHING!

I mistakenly wrote in yesterday's post that this "weatherization" was from the CHIP program. After talking to the crew today, I discovered that these improvements were being made under an Ohio Department of Development program called the "Home Weatherization Assistance Program".

The crew that came out did an excellent job. They blew in about 12 inches of insulation in the attic today and they will blow insulation in the walls on Monday. In addition, they wrapped the water heater in an insulating blanket, wrapped all the water lines with insulation, installed a GREAT insulation package around the doors, and did other work. I'm sure that all this work is worth more than a thousand dollars! THANK YOU TAXPAYERS. I am grateful!

After discovering what a great deal this was, I went to the office where this program is administered and asked for weatherization applications for my other tenants. The lady in the office asked how many applications I wanted and I responded that I would take as many as they had. They only had SIX. I took them and asked if they would mind if I made several dozen copies - one for each of my tenants!!!

If they will do this weatherization on all my properties, I'm sure that will add value in the six figures! Maybe this socialism isn't so bad after all! I guess I just didn't understand what socialism was. I thought it was taking from the rich to give to the lazy. Now I know that socialism is taking from the taxpayers and giving to ME!!!

I spent yesterday installing baseboard heat in the 2-bedroom house that I purchased a few months ago. The total cost of the project (excluding my labor) was $242 and it took about 5 hours. The CHIP program will be arriving this morning to begin insulating the house and doing other things to make the house energy efficient. On an interesting note, the contractor for the CHIP program looked at the house yesterday and then called to let me know that they weren't allowed to drill the holes in the exterior walls (to blow in the insulation) because it has asbestos siding. However, I am allowed to volunteer to drill the holes. I did volunteer and will meet them at the house later this morning. They will mark the spots where the holes need to be drilled and will even provide the drill bit/hole saw.

I feel good about getting some of my tax money back through the CHIP Program and I'm going to see if I can get my other tenants to request that their rentals be made more energy efficient. In fact, I'm planning to stop by the Chip office today and pick up some applications to give to my tenants.

 

Michael Rossi is the author of 1 Minute to Rental Property Riches, which is the only book that tells the truth, the whole truth, and nothing but the truth about the rental property business. You won't find any guru motivational nonsense; unrealistic hype; or promises of instant riches without work in this book. What you will find is the critical information that you need to start, build, and operate a successful rental property business. And if you're wondering about the title of the book, 1 Minute to Rental Property Riches, it's a sarcasm of the silly guru infomercials that promise untold riches without work - which we all know is RIDICULOUS!

If you'd like to read more about the book, check it out at www.1MinuteToRentalPropertyRiches.com. When you're ready to buy, you'll get the best price and fastest delivery from the bookstore right here on BiggerPockets!

Several people commented on yesterday's blog entitled "New Scam" and everyone saw the same thing that I did. The tenant faked a gas leak and wanted me to hire her "uncle" to fix the leak. The purpose of this scam was to bill me for a non-existent gas leak and then she would use the money to have her gas turned back on (it was shut off for non-payment). The moral of this story is that you should NEVER trust anything a tenant says. I assume that everything a tenant says is suspect until proven otherwise and most of the time - I'm right!

Today, I had a meeting with the bank about renewing my line of credit. I had to take in a financial statement, rent roll, tax returns (both personal and business), and an updated business plan. The banker said that the line of credit should be renewed in the next couple of weeks.

After my meeting at the bank, I went to the Pink Elephant to install a new stainless steel sink. Very few projects ever go as planned, but this was one of them. Everything went smoothly! I guess there's a first time for everything.

Tomorrow, I'm installing electric baseboard heat in one of my two bedroom houses. The tenant applied for a grant to have the house made more energy efficient and that was approved. So, as soon as I install the electric baseboard heat, the local CHIP Program is going to insulate the house and do other things to make it more efficient. I had to sign a contract with this program that I would keep the property for 5 years and not raise the rent on the tenant because of the increased efficiency. DONE!!! What a deal!

Michael Rossi is the author of 1 Minute to Rental Property Riches, which is the only book that tells the truth, the whole truth, and nothing but the truth about the rental property business. You won't find any guru motivational nonsense; unrealistic hype; or promises of instant riches without work in this book. What you will find is the critical information that you need to start, build, and operate a successful rental property business. And if you're wondering about the title of the book, 1 Minute to Rental Property Riches, it's a sarcasm of the silly guru infomercials that promise untold riches without work - which we all know is RIDICULOUS!

If you'd like to read more about the book, check it out at www.1MinuteToRentalPropertyRiches.com. When you're ready to buy, you'll get the best price and fastest delivery from the bookstore right here on BiggerPockets!

 

This evening, I received a call from one of my tenants. She told me that the gas company had shut the gas off at her house because she smelled gas. She said that they left her a note saying that a certified plumber needed to inspect and repair the gas before they would turn it back on.

I was somewhat annoyed that she called the gas company instead of calling me, but I told her that I would call my plumber tomorrow to come and look at the situation. She said that her uncle was a plumber and that she wanted her uncle to look at it. I told her that we had our own plumber and that she could NOT use her uncle.

About an hour later, I received a second call from this tenant. She said that she had found the problem which was a loose gas line going to the stove. She said that she no longer needed our plumber to come work on the gas. I responded that the gas company would not turn her gas back on until it had been cleared by a licensed gas provider (plumber).

After a short pause, she said that the gas had been turned off on October 14th!!! After questioning, she said that it was shut off for non-payment and that she had paid the bill today.

Have you figured out what's going on here? Think about it and I'll give you the answer in tomorrow's blog. 

It was truly another great 4-day weekend! Once again, we went camping with friends from Church. During this trip, we went mountain biking at both Momba (near Dayton Ohio) and at John Bryan State Park near Yellow Springs, Ohio. For those of you that are mountain bikers, both courses are absolutely excellent. We rode 10 miles on Friday and 11 miles on Saturday. I especially enjoyed the ramps at John Bryan State Park!

While we were camping, I received 3 calls from tenants. The first call was from a tenant with a leaking shower. I will fix that today. The next call was from a tenant with a leaking sink. I'll fix that today also. The final call was from a tenant who wanted me to check her furnace and I'll also do that today. Three one-minute calls during my four day weekend - no big deal.

This was our last camping trip this year, so I'll be working a little more steadily on my rentals during the next six or seven weeks - until snowboarding season arrives!

 

Michael Rossi is the author of 1 Minute to Rental Property Riches, which is the only book that tells the truth, the whole truth, and nothing but the truth about the rental property business. You won't find any guru motivational nonsense; unrealistic hype; or promises of instant riches without work in this book. What you will find is the critical information that you need to start, build, and operate a successful rental property business. And if you're wondering about the title of the book, 1 Minute to Rental Property Riches, it's a sarcasm of the silly guru infomercials that promise untold riches without work - which we all know is RIDICULOUS!

If you'd like to read more about the book, check it out at www.1MinuteToRentalPropertyRiches.com. When you're ready to buy, you'll get the best price and fastest delivery from the bookstore right here on BiggerPockets!

Today was the last day of my workweek, because my wife and I are going camping tomorrow. I worked about 5 hours today and got a lot done. My mission for the day was to fix the recent storm damage to one of my nicest houses. The hurricane force winds of Ike here in Ohio blew the facia off the house, blew some of the siding from one end of the house, and damaged several shingles. I fixed all of that today and did some work on the sidewalk which consists of decorative 18 inch stones.

I also showed one of my vacant 2 bedroom apartments to a woman today. She was an attractive, well-dressed woman looking at one of my lowest rent apartments. She said that she will definitely take the apartment, but I don't have a good feeling about her. Something just doesn't add up with this woman and I'm betting that she'll turn out to be a druggie.

I'll be back Sunday evening and start posting again next week! Have a good weekend (in advance)!