All Forum Posts by: Chris Sellers

Ladel,

Congratulations of finding a deal and jumping in.  I'd go for it if:

-You're sure it can rent for those numbers.

-You feel good about the area and chances for appreciation (no crystal balls, but if signs are there).

-You don't have serious rehab $s to get rent ready (you didn't mention).

-You have some cash saved to weather a possible 3 months of no renters (or worse, first renters don't pay and you have to evict).

Good Luck!

Chris

Mansi,

Congratulations on the first property!  You've done you homework, time to jump in.

I love to copy others.  Find a professionally listed place that looks great in your market.  Advertise like them.  If they're on Craigslist, Hotpads, Zillow and Rent.com; do the same.  Take pictures like theirs.  Use a yard sign like theirs.  Benefit from their knowledge (until you build you own preferences).  

Be ready to go with the application, lease agreement, etc.  You'll do great!

Good Luck!

Chris

Danny,

Interesting problem to solve.  I don't have experience in Chicago, but I did buy a duplex in one of the worst areas of Charlotte one time (cheap, of course).  Couldn't rent because people kept breaking  in to engage in drugs / prostitution and shooting the building from the outside.  The house across the street was party central for knuckleheads.  I too only checked out the property during the daylight hours (when the trouble makers were asleep).  Was really stressful.

To me, your dilemma is stopping the chaos while you can get rented.  Once you have some tenants there, they'll help you keep the chaos down.  This is always the case.

For my problem, I signed up for a police ride along in the area.  The cop I rode with was really cool and I told him about my problem.  He said I screwed up buying in that neighborhood (ha!) but suggested some things, and I did them:

-put up obvious security cameras

-light it up as much as possible (floods)

-put a key in a lockbox and allow the cops to use the place while it's empty (give them the code).

I did all these things.  The police wanted to watch the house across the street and they like to have a clean place to use the bathroom during their shift.  

This helped me to rent my place out, since the guys across the street left my place alone.  I got word that they knew I was "with the cops" somehow, so just avoided my place.  Once it was rented out, it was ok.

Luckily these guys were not real gang members, just idiot wanna be types (cop told me this).  If real gang members, it's a lot more dangerous.

Once you rent it out, it will be a lot less stressful for you (and the ally crack smokers won't annoy you as bad). 

Good Luck!

Chris

Anthony,

If you plan on being a landlord for a while, I’d be heavily involved in the process even if you hire someone.  Go the courthouse and try and get some free advice from a clerk.

Price compare an attorney vs a property management company to handle for you (the latter handles all the time, might be a lot cheaper).

Good Luck!

Anthony,

Welcome to the forum!  Sorry to hear about your eviction.  On the bright side, this will be a good learning experience.

My first real eviction (not counting ones where they just left when I said to leave) was in Charlotte, NC.  I found the people at the courthouse who handle these things very helpful for information (and they had the right forms).

Here's the basic process as of a few years ago (you can look up, my property manager handles now).

-After the rent is 5 days past due, you can present the tenant with a "pay rent or quit" form.  Use the right form.

-After the 10 days waiting required, file a Summary Ejectment at the courthouse (this will cost you about $70).

-You'll get a court date around 2-3 weeks after filing this paperwork.  

-If you win, there's a 10 day waiting period for the tenant to appeal.  If they appeal, it's another 7-14 day wait for the next court date.

-If you win again (or if there's no appeal), but the tenant didn't leave, you have to file a Writ of Possession (another fee, like $70).  After a few days, you'll get a notice from the Sheriff's Dept to meet them at the property at a specific time and date (usually 7 days out).

-You wait outside the property for the sheriff's deputy to arrive.  Go to the property with him and he evicts the tenant.  He'll wait a few minutes for you to change the locks, so you have your tools and new locks ready to go.  The tenant may be nearby and not happy with you, so I suggest only changing the deadbolts to save time.

-You're responsible to store the tenant's personal belongings and give them notice for how long they have to pick them up (about 10-30 days I think).  You can dispose of them after this time expires.

I calculated once that it takes like 45 days to get your property back if you're fully on top of it and the tenant appeals.  It's a pain, but better than most states.   Knowing this process, I've helped tenants out who know they have to leave (e.g. paying for 1 months' storage, paying for a couple of nights motel, actually helping them move with my truck).   When I make this deal, I always make them sign a document saying they are voluntarily vacating the property back to me, have no rights to the property and they have removed all their personal belongings.   All who signed the lease must sign this document.

Good Luck!

Chris

Michael,

I agree, this is a great way to get started.  I did this with a duplex starting out, then bought the duplex next door when it came up for sale.  This was a cheap way to get in, learn the property management ropes gently, since I lived on site.  I fully recommend it.  

This can also work with single families or even condos as a house hack.  I heard a BP podcast where a guy started out by doing this in a 3 br condo, renting out the other rooms to 2 college students for $400 per room.

Thanks!

Chris

Sam,

I heard a BP podcast recently that addressed this common advice people seem to be getting:  "start with wholesaling".  The guest and both hosts said this was crazy and none of them knew 1 successful person who started off this way.  I'm with them.  I love wholesalers, but think they've developed a skill set and network over time to get there. 

Flipping houses is a much more common way to break into the business. 

I'd suggest starting with 1 single family home.  Be real picky and buy something with some meat on the bone (needs rehab) and the numbers work (good cash flow).  Get a partner to learn from and can compliment skills or resources you don't have (if you have money but limited skills, partner with a flipper; if you have skills and no money, partner with a money guy).  If you don't have money or skills, go work for a property manager or become a realtor and learn the ropes while you save some cash.

Remember, real estate investing over the long term will create wealth for you and your family.  It's a proven method.  No need to rush in, take the long view.

Good Luck!

Chris

Chris,

I"m not in Utah, but I feel your pain.  I had a house with bed bugs a few years back.  Very frustrating.

Former tenants left in middle of the night from a rental house.  I did the normal rehab, (paint, cleaning, etc).  New family moves in and complains of bed bugs.  The treatment quotes I got seemed crazy ($1500, using dogs, heaters, chemicals).  I needed to understand this better.

I met an exterminator who handles bed bugs at the house.  He pointed out an actual bed bug on the ceiling (much larger than I expected).  We inspected the furniture, mattresses and looked behind outlet covers (hiding places).  He determined that the infestation was there prior to the new tenants, since their furniture wasn't infested but there were signs of activities behind the outlet covers and feces under the new paint.  After seeing this with my own eyes, I told the tenants it was my responsibility, not their bed bugs; and I would handle it.

I shopped around, negotiated and got a full treatment (chemicals, heating house up to kill, passing all furniture through a heater system) for $900 WITH a 90 guarantee of no bed bugs or money back (I insisted on this).  I offered to pay for a hotel for the tenants or knock off some rent since they had to vacate for a few days (they took the $).

All ended well.  Tenants were happy, stayed with me until I sold the property about 2 years later.

Good Luck!

Chris

Always pay cash. Used better than new. Never spend > 2 months salary (2 weeks is my target, wife gets closer to 2 months). Use cost of ownership and comfort as main drivers. Only carry liability insurance. Don’t pay over KBB private party price. Good Luck! Chris

Lance,

Sounds like a good high level plan to me.  I would advise you to get some cash together and pick a market in the USA to attack.  You really just need one market, unless you have tens of millions you need to invest right away.  This will be a lot easier.  There's tons of data out there, but you'll likely be in the center of the country where real estate hasn't already exploded.

After picking a market, I'd get some contacts in that market.  Realtors and property managers for sure.  3 of each would be good.  Have the realtors send you listings, put you on their auto distribution.  Study these markets.  Understand from a far the demographics, neighborhoods, $ / square foot, etc.  Study the municipality's property website (this shows you all the sales, tax values).

Next, take a trip.  Go spend a few months in this market.  Let lined up with financing (if needed).  Look at properties with your chosen realtor(s).  Buy some deals to hold and pick a property manager.

Move to the Caribbean, fly to your market now and then to check on things and buy more.  

Good Luck!

Chris