how do you manage multiple properties?

Question

I just heard some dude on here bought like 22 properties last year alone.  How on earth do you all do this?  That is a TON of tenants to take care of, yeah??  In addition, doesn't it scare you when each one brings in only $100 a month each or so, and there are 22 possibilities of pipes, a/c's and roofs being broken?

Alex W · Answer

Mike is spot on! I too come across deals by interacting with people on a regular basis.

I was at a jewelry store the other day looking at watches and the sales lady asked me what I do for a living. I told her I was an RE investor. She immediately opened up about her home and that she is in pre-foreclosure. They were having a hard time paying for their mortgage and is looking for a way out. They have some equity in their property and I will see if we can make this a win-win for both of us.

I don't knock on doors either. I hate that. I just interact with people and let them know what I do. Once people see you are an honest person that can solve problems, deals come to you. It's the same thing with any business. Your reputation goes a long way.

John Chan · Answer

What does the term "subject-to" mean?

Stephen Leblanc · Answer

just do a search on this site.  I think it has been talked about quite a bit.

Michael Rossi · Answer

I get most of my deals from talking to people.  I'm not talking about door knocking, cold calling, or any of that other guru nonsense.  I'm talking about talking to real people that you meet in everyday life.  As an example, last week, I was waiting for my paint to be mixed at Walmart.  Another lady was standing there waiting to be helped.  She asked me some silly question about paint and I asked her what she was painting.  She said it was a rental.  We proceeded to have a lengthy conversation about rentals, tenants, etc.  It was clear to me that she was disgruntled, but not yet ready to throw in the towel.  I invited her to our next REIA meeting.

I can't tell you how many people I've talked to about rentals while standing in line at Lowes.  In other words, I just talk about rentals.  It's completely natural when you meet people to ask what they do and tell them what you do.

Of course, when you do find a great deal, you've got to be able to buy it.  Once you're known as someone who will buy houses, you'd be amazed at the calls you receive.

I bought a house a couple of weeks ago for $20K.  An almost identical house right across the street recently sold for $52,065.  The seller went to church with my sister-in-law.  She told my sister-in-law that she desperately wanted to get rid of this house she inherited.  My sister-in-law suggested that she call me, which she did.  Simple!  I got this one at 38% of market value.

The one before that I got from talking to the neighbor of one of my apartment buildings.  I got that for 13% of market value.  At the same time, I bought two others for 50% of market value from an investor at my local REIA.

Mike

Matt DuSold · Answer

Mike,

I am very intrigued about how you find these properties at 50% and especially that "the properties find you".  Again this just all sounds to great.  I am sure that you have a huge list of people looking to you to buy properties, but what kinds of properties do you usually find? REO's?

I don't know if 1 minute to rental property riches talks about this, I am getting it next time out to Barnes & Noble and am very excited.

Aly W. · Answer

Haha! You're too funny. The discriminatory comment was from a friend who has had rentals for about 15 years. She said to be very cautious about ad content.

I'll let her know to contact me when she has the voucher. Thanks.

Michael Rossi · Answer

Just tell her to call you when she actually has the voucher in her hands.  I don't show properties to someone who MIGHT have a voucher in the future.  Tenants are fickle and often irresponsible (that's the reason they are tenants and on public assistance).  Most of these people don't have an attention span longer than the next 5 minutes, let alone 3 weeks.  Better yet, just don't e-mail her back.  6 minutes from now, she won't even remember that she e-mailed you anything!!!

Who told you it was discriminatory to advertise anything about pets.  Pets are not a protected class (even in lefto land).

The real question is whether you really want to eliminate these people from consideration.   Once she actually has the voucher, I would screen these people.  Three teenagers and 2 dogs could be ok.  At least teenagers shouldn't use their crayons on the walls!  Don't get me wrong, it would be nice to have an elderly, retired couple with perfect credit in every rental, but that's just not reality.

Good Luck,

Mike

Jason Hanson · Answer

You eliminate 99% of tenant hassles up front when you properly screen them. Also, if you purchase properties subject-to, you can buy as many houses a year as you wish.

Aly W. · Answer

Speaking of carefully screening tenants....

I'm screening tenants right now for my first rental house. A Section 8 applicant emailed asking if I would allow her 2 small dogs (Shih Tzus), licensed/neutered/friendly. I said I would consider it along with other factors. I asked about her voucher allowance for a 3 bedroom house. She replied that she expects to have the voucher in two weeks and that it would cover 3 bedrooms because she and her husband have 3 teenagers. A family of 5 with 2 dogs?? I see big problems.

Can I decline showing her the property based on her not actually having the Section 8 voucher yet? Tell her I decided no more than 1 dog? Or simply not reply at all?

My rental ad no longer says No Pets because I want to deal with pets on a case by case basis if someone asks. I was told that it's discriminatory to advertise "1 small cat/dog under 10 pounds only". Discriminatory against who, the pet? My NJ Landlord Guide only addresses service animals which are not considered pets.

Thanks!

Michael Rossi · Answer

I'm not sure what you're asking.  I find properties at a huge discount to market value (the properties find me); I go the the bank and borrow the money; and I rent the property to tenants.  It's not that complicated or difficult.

No.  I don't take care of the tenants.  They are adults and take care of themselves.   Those that are problems are quickly evicted and then I find better tenants to replace them.

The $100 per unit per month is after all expenses and the debt.  In addition to this $100 per unit per month, I EARN another $100 per unit per month by doing the management and maintenance myself.  With several dozen rentals, that takes 3-4 hours per day, 3-4 days per week.  There's just not that much to do.

These are not possibilities.  It is an absolute certainty that all 22 of those rentals will have leaks, bad roofs, damage done by the tenants, etc.  However, that certainly won't happen all at once and the operating expenses already include money for all of this.

Good luck,

Mike