All Forum Posts by: Bob Gardner

My 2 cents.   Forget the lawsuit.  Instead work on your process.  Lawsuit pays once.  Process pays forever.

 What you just bought with the $1000 is a lesson:  Never let them use the damage deposit for the last months rent.  

Tenants often ask to skip last month- then at move out time, they are very busy, frazzled and they have zero reason to clean or even remove their old furniture.  So they don't 

Here is what I do.  It's pretty good I think.  (But any advice to make better would be appreciated.)

NEVER let them use the deposit as last months rent.  - 50% pay if you just demand it

Charge them a late fee on the 5th - 20% will see your serious and pay now 

Send eviction letter on 10th.  - 20% will call and pay now

File on them on the 15th. - Last 10%  or less are just difficult.  

This is the standard process for us in MN.

Then you have a case backed with letters and legal servings to go after them for the eviction costs and late fee and you have the threat of a UD backing you.  

Spend your time honing your business process going forward so this does not happen again. 

I now have 46 units and am running out of time to show and lease them all.  I have 5 turnovers this month.  I would like to start a property management company and hire someone to lease and show the properties.  I have heard they need to be realtors in the state of MN. Is this true?  Where can I look to hire a leasing agent?  ( I don't want to pay them 1 months rent.  That seems high.  I would rather hire an employee.  Any ideas.

Thanks 

Did you have a lawyer draw up the syndication agreement? Can you briefly walk me through the legal paperwork steps and what did this paperwork cost , how much time does setting up the syndication take?

My duplexes cash flow like crazy and have a 75% LTV first on them. I have 3 so there is some equity there. How do I tap into this?

Please give me name of lender that will fund based on cash flow, excellent credit.

Dave Ramsey is great for getting people from kindergarten to say 5th grade in terms of financial literacy.  ( and many adults are still in kindergarten when it comes to money.) 

He has great concepts regarding living within your means and "bad debt".   But he, to keep it simple, does not even discuss "good debt".  If I can get a 7% cap rate on a property and finance it with a 30 year fixed mortgage at 4.5% I WILL DO THAT ALL DAY, EVERY DAY! I will admit, that if there is a sudden change in population and I cannot rent the property, this will be risker than no leverage.  But I am willing to take that bet. for the 20% tax free return I will get once you consider inflation.  ( Trust me the math works) 

Get out of the 5th grade Dave Ramsey approach, and graduate to the level where you use leverage safely and smartly.   Now is a unique point in time where you can get 30 fixed mortgages for 3% less than the property cap rates.  That is an awesome deal.  It will make you wealthy when used properly.

Hi Joey, I feel your pain.  Stay the course and trust your self. 

 I'll tell you a little about my history , I'm 47 and kind of went through what you are experiencing.  I became a landlord when I was about 22.  I bought a duplex in college, rented one side and lived in the other.  Then I bought another.   Then well I graduated with an engineering degree and my family talked me out of the rental business.  So... I sold them.  Huge mistake.  That took me 10 years to realize...  I spent the next 10 years working in a good but ultimately dead end job.  - While my younger sister got rich in rental realestate - She was the only one in my family who thought rental income sounded great.  So I helped her pick out a duplex 10 years earlier.  She continued to grow her business.   10 years after I got out , my sister had 25 rental units and was making more a month passively than I was at work.  Also, I kept tabs on the guy I sold my duplexes to.  Today, he owns 500+ units.  I knew this guy! I was better at parts of the business than him!  I know I could have done what he did.  Then, 7 years ago I got back in and now own 46 units. I still have my day job but I make MUCH more in rentals. If I lost my day job tomorrow I would still be set for life. Lessons I have learned the hard way:

• Frankly people who are against it wont listen to reason.  So talk about football or something else with them... The will never get it.
• Search out and find people like us who understand and appreciate it and talk to us about it.
• Keep working smartly toward your dream, you will get there

In the investment business you will always be in need of cash for your next deal.  The more cash the bigger deal.  So, I'm not a fan of 15 year mortgages.  The reduced cash flow may in fact make it harder for you to qualify for your next deal.   Banks look at your monthly obligations count that against your income.  Right now, 30 year fixed rates are historically low.  Buy a house with a cap rate of 8% and finance it at 4.5% for 30 years.  Now that's a solid, low risk, long term investment with very good cash flow.

Related.  I do think it is good to pay down one property and get a line of credit on it.  A 50 to 100 k line of credit on your primary residence works great to stash money for your next deal.

Hi My name is Bob Gardner, while I'm not a new investor. I am new to BP.

Would love to find help finding good cap rates on 12 to 48 unit apartment buildings in western twin cities.  Thanks in advance.