All Forum Posts by: James DeRoest

Consider your exit strategy. 

I'll invest in lower areas if i'm presented with a bargain, but am under no illusion that when that property is sold in 20 years, I'm getting no more than I paid for it. It's a heartless financial tool. Doesn't mean it needs to be a bad property, doesn't mean i put bad tenants in, but, it is what it is.

Actually you made a noob mistake.

If the tenant has $100 on Friday night, if you actually want to see it, collect it there and then. There is no chance that it'll make it through the weekend.

 3x as everyone else.

There are 2 reasons.

Someone who earns (and can be verified as earning that) will be a better tenant than someone who doesn't. Very simply, trash sinks to the bottom. 3x gives you a half decent chance of getting the floaters. Now I am aware how a toilet works, so floaters may not be the best analogy. And trash also floats in the middle of the Pacific. Hmm. But you get the idea.

Second reason is straight forward affordability. If you go 2x, how will they afford the latest iPhone (or if they are deranged, a Samsung), how can they afford a new car every April, how can you eat out every night, and how do you afford 300 channels on DirecTV? Hence 3x is a nice affordability multiplier.

I draw the line on the 6th day when I tape a notice to their door about non payment.

I don't play games.

I'm not so broke that a couple of grand is gonna hurt.

And I am no longer interested with working with that tenant.

I don't have to worry about whether a lease is renewed or not, the tenant won't be behind or late in the first place.

The only time I will give leeway is if a tenant has spoken to me before the rent is due, does not avoid me, answers my texts truthfully and had a track record of paying on time. 

 Wow, you really must hate yourself if you want to become a PM.

We were going down that route, we were actually very good at it, but there simply is no money in it. 10% to get all the headaches is a bad deal at the end of the day. It's just not a profitable business to be in.

I never had a problem with cats, until we let our two strays into the house over the winter.

Both used the box, one has been neutered, the other - we haven't caught him to chop his balls off yet, but we're gonna catch him in the next week or so for sure.

Now we've had indoor female cats for years, and never had a smell problem with the box. I nearly had 4 cats trained to use the toilet - so damn close - but one of them was just really stupid. I mean really really thick. And like the US education system, you can only go as fast as the dumb one. What annoyed me was that the other congenitally stupid cat figured out how to use the toilet almost instantly, it was the supposedly the clever one that was dumb as a brick.

But anyway, I digress, my god that unfixed tom stank the place out. No more unfixed males in the house.

You put both on the lease.

Whether you need both to qualify for the rent individually is up to you, and frankly, we don't have a set rule for that. If a new couple impresses enough, sure we'll do a joint income, if we think it's a roll in the hay gone wrong, we'll need both to qualify individually.

With both are liable, even if one leaves the house, they are both liable.

 It might be about the dollar, but if you have to go to court, it's about protecting your investment.

Lets make an example, you have $100k in an online brokerage account somewhere, and one day the brokerage stops your access to the account. Throw a number there - they prevent you having access to that account for 7 weeks. They eventually unlock your account after you get a court order. There was no reason for them to lock the account in the first place.

Are your thoughts towards the brokerage firm, good thoughts? Or would you move your money, regardless of whether they made up losses, to another brokerage firm?

Any right minded person would move their money in a heartbeat, and they would never trust that financial institution again.

At this point, this house is your investment, the brokerage firm is the tenant and literally have the ability to lock you out.

So regardless of whether the tenant makes up their losses - which frankly most of them don't - why would you trust your customer with your investment again?

When it gets to eviction, it's not about making up losses, it's about protecting the investment. Eviction isn't a tool to get money, it's to regain control of the investment.

If you want to make up your losses, then pursue a judgement. If the tenant can pay your losses (and downtime), then they can pay the judgement.

Looks like a couple of hours work, but in honesty, those are handyman jobs. You don't need a plumber for those.

Because in many cases, the person who passes away has no money or assets to pay for any of the funeral costs, and the family has to get together. That will be exactly my tenants problem - she just got stung for several thousand in funeral costs.

Even if you aren't hit for funeral costs, you may still have to take time off work, and in many cases travel to the funeral at very short notice. Do you know how much a flight ticket is these days? Not cheap.

Or they could just be lying as they had a fantastic weekend and blew it all on cocaine.