Michael Rossi's Landlording Blog

We had a great time Saturday riding mountain bikes at Momba, in Dayton. What a beautiful mountain biking course it is! The trails were almost perfectly maintained and well marked. All of the bridges were absolutely beautiful and several of the bridges were actually curved. It is by far the best course I've ridden yet. We rode every inch of the course and it was just a little over 10 miles.

Today, I ran an application on a potential tenant for my six bedroom house. This married couple looked good and said all the right things. However, after only about 30 seconds of screening, I discovered that they had been evicted in 2005, which they lied about. That ended the screening and I wrote REJECTED on the application.

I did work about 3 hours on a rental today. Nothing exciting, just routine maintenance, including fixing a broken shower handle. I also did a little stock trading today, selling a covered call (option) on the Ford Stock that I bought. I'm expecting that the stock market will be going lower in the very near future. I'm afraid that all we've seen is a bear market rally.

This is going to be another short week. I'm taking another 4-day weekend to go camping, probably for the last time this year. We'll be gone Thursday through Sunday and will be riding two or three different mountain biking courses. Should be a lot of fun.

Tonight, I would like talk about something very serious - the financial crisis. You probably think that I'm talking about the credit crunch or the housing crash or the subprime fiasco. However, I believe that those are simply symptoms of the real problem. What could possibly be a bigger problem than the current financial crisis? The answer is quite simple - both as citizens and as a government - WE'RE BROKE!

For the past several decades, the United States has gotten away from the things that made us great. We are no longer a country of tough pioneers who work hard; innovate; and have a "can-do" attitude. We no longer are a manufacturing power, that produces things here and ships them around the globe. We have become a socialist country with a large percentage of the population who are too lazy to work and who are a drag on our society - both from an economic standpoint and from a moral standpoint. The rest of the population has become addicted to credit and we have lived far beyond our means - all on borrowed money. That is literally the cause of the economic symptoms that we are STARTING to see.

Our country is now approaching the point of collapse. We have reached a tipping point with the government promising everything to everyone AT A HUGE COST and a workforce of taxpayers that will soon be dramatically shrinking. The baby boomers are starting to retire at the same time that we have an ever-increasing population of lazy deadbeats whose only mission in life is to avoid work. While it is certainly politically incorrect to say this, I see it first hand in my rental business on a daily basis. The other astounding thing about this group of deadbeats is that they are breeding at a phenomenal rate and their children are the next (larger) generation of deadbeats who feel entitled to a handout. This is literally destroying the country.

What WILL happen in the near future is that our country will literally collapse. An ever-shrinking number of taxpayers simply can not afford to pay for an ever-increasing number of deadbeats, let alone pay for the hard-working, honest people who have been promised social security and medicare. The bottom line is that the ponzi scheme being perpetrated by the US Government is coming to an end.

Now that I've discussed the actual CAUSE of the real problem, let me discuss what I expect to happen. We WILL have a depression which will be unprecedented in scope. We will have panic as inflation runs away, thanks to the government printing trillions of dollars from thin air. We will have the public lose confidence in the dollar and start to barter with things other than paper money. Unemployment will reach record highs (in excess of 25%). Our economy will collapse and essentially cease to exist. None of this is brain surgery - it's just common sense and the absolutely inevitable result of the mismanagement of our government. It has happened over and over throughout history and will soon happen to us.

What will be the fallout of this collapse? Our country will dramatically change. All of our socialized programs must be drastically cut or eliminated. Social Security, Medicare, Medicaid, Food Stamps, and many other government programs will need to be drastically cut or eliminated. Many companies will fail and the retirements owed to their employees will disappear.

The point of all this is not to depress you. The point of this is to challenge you to think of ways to protect yourself. What I have predicted may not happen NOW, but it MUST happen in the near future - it's a mathematical certainty.

My first suggestion is to stock up on extra food and water. The goverment has spent millions of dollars over the past couple of years to try to spread this message. They have promoted this preparedness via commercials about terrorism, bird flu, and other issues but the advice is just as valid for times of economic collapse and civil unrest. In fact, I wouldn't be a bit surprised if they knew this was coming and were actually promoting preparedness for this emergency.

In addition to stocking up on needed supplies, I would argue that you might consider preparing for your own retirement. I don't believe that social security will be there for most Americans in the future and the same will almost surely be true of employer retirement plans and even 401K's. Also, you should realize by now that the advice to put your money in a diversified portfolio in the stock market for the long term has been nothing more than a marketing scam by the financial companies. If you invested in a diversified portfolio 10 years ago, your portfolio is now worth LESS than 10 years ago. SO MUCH FOR BUY AND HOLD in the stock market!

My solution to the problem has been to build a rental property business. People will always need a place to live and absent government stupidity, the rental property business SHOULD do well in (and after) the decline. However, this post is not an advertisement and I am not recommending that you start a rental property business. In fact, borrowing enough money to build a significant rental property business in today's market would be VERY CHALLENGING. It probably is too late for many people to start a rental property business at this point. What I am recommending it that you consider starting a business that will be needed in, and after, a collapse. Even if you only do this part time, at least you won't be completely dependent on the government or private industry to provide for your future. Essentially, what I'm saying is that you need to depend on YOURSELF, not a company and certainly not the government. My suggestion would be to consider what products and services are needed in any economy and consider starting a business to address that demand. As an alternative to starting your own business, certain types of employees will be needed in any economy and should be relatively crisis proof. Employees will always be needed in medicine, law enforcement, the food industry, and the clothing industry. In other words, people will always need to buy the basics of life - food, shelter, and medical care. It's your job to decide how you can fill a need in one of those areas.

I learned a valuable lesson while in the military that can be summed up as the 7 P's. Proper Prior Planning Prevents Piss Poor Performance. My suggestion is to PLAN NOW!

I spent yesterday morning watching the stock market and doing a little stock trading.  I have traded stocks for over 10 years, as a hobby.  I believe that we may get a short, but intense rally next week and therefore I bought some Ford stock at $2.10 with the intention of selling a covered call (option) on it.  I got the stock, but the didn't get the option due to the incompetence of the options specialist that was handling this option.  I wasn't happy about that, but couldn't do much about it.  Ameritrade's phone lines were absolutely jammed and it was hard to talk to one of their people.  It will probably work out fine anyway, because I'll just wait for the rally and then sell the covered call.  By waiting for the rally, the I'll get a higher option premium for selling the call.    

By 1pm, I was feeling guilty about not doing any real work, so I got in the truck and headed for town.  I finished rehabbing the two bedroom apartment that I have been working on and moved my tools and equipment out.  To finish the apartment, I put a second coat of paint on the cabinets and steam cleaned the carpet in the living room.

Next on the agenda was to steam clean the carpet in the living room and hallway at my six bedroom house.  The water is off at that house, so I had to take 5 gallons of hot water with me. 

Finally, I stopped at a 1 bedroom apartment to unclog a clogged tub drain.  That consisted of pouring some Glug pellets in to the drain followed by a cup of hot water.  That took less than 2 minutes.

I didn't want to miss the close of the stock market two days in a row, so I only worked about 2 hours yesterday.  When I arrived home at about 3:30, the market was up by about 120 points.  The fluctuations were wild and the market ended down another 120 points. 

I'm up bright and early this morning to go mountain biking.  A friend from Church is meeting me at 7:30 and we're going to Dayton to mountain bike at Momba.  I always look forward to mountain biking at a new course.  We're getting an early start so that we can be home for the 3:30 kickoff of the Ohio State vs. Purdue football game.

Have a good weekend!

  

 

 

They say that timing is everything. As of late, I have been absolutely fascinated by the wild stock market action and the attempts by the government to stabilize it. I've been trying to get home by 3pm each day, so that I can watch the final hour of stock market trading. I've been trading stocks on a small scale for over 10 years (for fun) and have been predicting a new short term low of 7,700 on the DOW for many months. As the market approaches that level, I will be SLOWLY buying.

My day started this morning with a trip to my accountant. There were a couple of last minute issues that she wanted to discuss as she was finishing up my tax returns for 2007. After clearing up these issues, I returned home to watch CNBC and fly my radio controlled helicopter. I stayed home through lunch and then headed into town to do a little work on my rentals. My first stop was at Lowes to buy carpet for 2 bedrooms and the hall at one of my apartments at the Pink Elephant. Within an hour after arriving at the apartment, I had both rooms of carpet installed. These were exceptionally easy rooms to carpet as they were relatively small and perfectly rectangular.

My next mission was to meet with a tenant at another apartment building. She moved in at the beginning of the month, but is handicapped. I initially signed the lease with her son because she couldn't be there when they moved in her belongings. So, today, I met with her and signed the lease with her so that the paperwork would be right.

Having gotten the paperwork straight, I moved on to the next apartment building where I needed to install a new lock on one of the doors. I completed that just prior to 3pm and started for home (to catch the last hour of the stock market). However, just as I was putting the truck in gear, the phone rang and my accountant said that she had my taxes done. Therefore, I drove to her office to pick up the taxes. We briefly discussed the various returns and also discussed the current economic crisis. She is just about as frustrated with our government officials as I am.

By the time I was on the way home, it was already 4pm. I heard on the radio in my pickup truck that the DOW was down over 600 points! Wow! That means that the DOW is down over 2,300 points in the last 7 days! That's a major drop. I don't know what I will do tomorrow yet, but I'm sure that something will come up.

The third time really is a charm and after having the last two days off, I got back to work on my rentals. In fact, I got a LOT done! I started out this morning making a couple of commercial loan payments and going to the post office for stamps. Next, I went to one of my apartments that has had a persistent roof leak, the idea being to check it during the rain. As luck would have it, even though it was raining, the roof wouldn't cooperate (and leak) while I was there.

My next project was to clean out the basement at one of my 2 bedroom houses that I just rented and wait for the gas company to show up to turn the gas on. The timing worked out great as I got the basement cleaned up just as the gas company tech arrived. The tech turned on the gas, but wouldn't light the furnace because he thought it needed to be inspected. He didn't red-tag it, but he just wouldn't light it. I am not a gas furnace expert, so I called the professional I use for HVAC and he arrived within a half-hour. He disassembled the burners, cleaned the unit, installed a new thermocouple, re-assembled everything, lit the furnace, and checked for carbon monoxide - all for $75! Money well spent.

The Pink Elephant was my next stop, where I painted both bedrooms; repaired and painted the kitchen cabinets; and measured the bedrooms for new carpet.

That was it for today! All in all, a very productive day.

I arrived home in time to watch the final hour of stock market trading, which once again ended down (189 points). Tomorrow's stock market should be interesting because the ban on short selling (of the financials) ends at midnight tonight! I think the market still has a long way to go and I'm hoping that the coming DEPRESSION will allow this country to reset the clock on capitalism. What no-one is talking about is that our entire country is broke. We've promised everything to everyone with all these silly entitlements and we simply can't afford it anymore. At some point, personal responsibility and sanity MUST return to our country and I'm hoping that the depression will allow that to occur. Housing is NOT a right. Healthcare is NOT a right. Success is NOT a right. Profitability is NOT a right. Once we realize this, maybe this country can get back on the right track. Freedom is a right - the freedom to succeed or fail based on how hard and smart you work!

 

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!

For the second day in a row, I had every intention today of doing a little work on my rentals. For the second day in a row, that didn't happen. My excuse today was that I needed to fix the motorhome after discovering last night that all the DC electric was inoperative. This is an issue that first occurred on our last camping trip. After that trip, I discovered that a DC Buss Bar had gotten hot and melted the plastic insulating material where the supply was connected. As a temporary fix, I jumped the supply wire to another post. It had apparently worked fine every since.

After our last trip, I contacted the manufacturer, Holiday Rambler, to get a replacement part. Unfortunately, the part is no longer in production and they didn't have a good idea for an alternate part. Motorhomes are basically built individually as they are ordered and no two are exactly the same. I hadn't gotten around to searching for another supplier of a similar part.

At any rate, this was a self-inflicted problem. When I started working on the unit today, I discovered that the battery was completely dead. My initial thought was that the converter had died, but as it turned out, it was still unplugged from where I worked on the problem last time. So, I recharged the battery and while that was occurring, I decided to fix the Buss Bar problem. I disassembled the buss bar and found that each individual terminal was contained in a separate fuse unit. Therefore, I moved the fuse unit that was at the damaged spot on the Buss Bar to another spot and reassembled the unit. Everything worked fine.

Next on my agenda was to make a trip to the bank and post office. I then returned home and watched CNBC as the market was crashing yet again. What could be more dramatic than watching the country heading into the 21st century version of the great depression? While watching the market tank, I paid a few bills.

After the stock market closed, I went for my daily bike ride. That was it for today and I'm looking forward to watching the Presidential debate tonight.

Now that I've been lazy the last two days, I am absolutely committed to doing some work on the rentals tomorrow. You know what they say - the third time's a charm!

 

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!