All Forum Posts by: Joe Splitrock

Too funny! Yes, Candy Crush, Fruit Ninja, Angry Birds and even FreeCell can be played on your smartphone. Have a great weekend!

That is a great question!

In my own situation the neighboring tenant found out before I did. They were mid-lease and asked to be released from their lease because they didn't feel safe. I quickly released them without penalty and they moved out the following weekend.

To my knowledge there is not a law in my area that forces me to notify of a crime. Unless it makes the news, I am not even sure most people would be aware. (We do check a crime report website to keep tabs on our neighborhoods). Once you are aware, beyond the law, there are liability and ethical concerns. A good test of the right thing to do is to put yourself in the neighboring tenants position. Ask yourself if you would want to know? The answer is probably yes. Treat others as you would like to be treated!

News travels fast anyway, so going to your tenants and proactively letting them know you are dealing with the situation is probably smart. If someone is dealing drugs, it is likely that the neighboring tenants are already aware. They will be happy you are dealing with the problem. There is risk that someone may move out, but that just underscores how important it is to screen and deal with problem tenants quickly. 

@Mindy Jensen is right that you should contact housing and they will probably revoke her voucher. There are plenty of good people who follow the law who deserve it more anyways! 

You may want to notify her that you are in need of doing a routine inspection on the unit - triggered by the fact that she was arrested for dealing drugs in your property. My assumption is your lease and/or state law allows you access for inspection purpose with appropriate notification. Say for example you are required to give 24 hours notice, then notify and gain access. You need to see what is going on over there. 

I would also contact the police and let them know you own a property where a tenant is accused of dealing drugs. Ask what information they can share. Ask them if you can cooperate in any capacity. Ask them if they have any suggestions of what a landlord should do in this situation. I had a situation at a property and the police were very informative. 

@Tammy Richards you mentioned you only have a partial copy of a lease? The first thing I recommend when buying a property is signing a new lease with the tenant. Their agreement was signed with the old owner, so even if it was complete, I am not sure legally where that leaves you standing. Even if the tenant has time left on their lease, you can sign a new document. You can just keep the term the same. As long as you are not changing the rate or term, most people will happily sign a new document with the new owner. I would just explain it it is for both of your protection. I am not a lawyer, so please consult yours before taking this advice.

I heard that podcast and great job! What you have done is very impressive. 

Going back to the title of this post, I would argue one huge advantage of any real estate rental is the ability to increase rents. I got into this business because I saw these advantages:

1. I can finance a house and have my tenants make cover my payment.

2. I get extra monthly income beyond expense each month that I can put into other properties or paying down my mortgage.

3. I get depreciation advantages on my taxes.

4. Rents go up over time. I view this as an inflation adjusted income stream. 

5. My property values increases over time, so I can make money when I sell.

Keep in mind that rent rate increases are dependent on the property quality and location. You may need to spend money to increase rents. If you are in a depressed area or find yourself in a recession, the rent rates could be flat or decrease. Property value only increases in the right area and with the right upkeep on the property. The concept of increasing rents being an advantage is true, but is dependent on many variables.

@Dawn Anastasi you mentioned you bring a laptop and scanner to showings. One tip that may save you a little trouble is to use a smart phone instead. I just bring my iPhone and I have a scanner app on my phone. It takes three high resolution photos of the document and merges the three into a high quality scan. It was better and faster than my home scanner, so I actually got rid of my scanner to free space on my desk. 

Another tip - When I ask for pay stubs for income verification instead of having them bring it to me, I just tell them to e-mail a photo to me. Photos on today's smart phones are good enough to read all the detail. 

I also take photos of their drivers license. I have even taken a photo of the person getting out of their car and sent it to my wife. I did that one time when the person sounded creepy on the phone. That is probably a good idea for anyone worried about safety.

Sorry to get off topic. Everyone covered the questions pretty well. 

I would probably ask an investor what is important to them. My agent was giving us a gift card at every closing for a restaurant. It was a kind gesture, but I finally told him to save his money. I told him what is important to me is that he responds quickly when I need something. He stopped giving me gift cards. He always responds to me immediately.

Some people may argue that a realtor should give a thank you gift and respond quickly. For me, telling him to keep the $50 was a gesture to show I value him. It was also out of respect for the fact that he may take my phone call when he is out to dinner with friends or enjoying family time. 

You will learn a lot by asking what the investor needs. If they need someone experienced with investors, you cannot offer that today. If they need someone hungry and willing to go all-out for them, that is likely something you can do. If they need you to reduce commission based on volume, you need to figure out if that works for you.

One other thing to consider is whether investors are an area you want to deal with. Some realtors do better with first time home buyers. Some deal with foreclosures. Some are trying to move up to higher priced homes. It is ok if you decide investors are not a good fit for you. 

There is an old movie called Money Pit. The IMDB description says, a young couple buys a house that has a suspiciously low price... Watch the movie and you will get a good laugh, but there is a good lesson there. 

I purchased a 100 year old building with 6 apartments and a huge retail space. The day of closing there was water dripping from upstairs, a leaky shower covered up by the seller. I went on to replace 5 of the 6 showers. All six kitchen faucets. Every kitchen drain was leaking. The 5 year old roof was leaking. Two people were moving out as we were closing. I had to replace five furnaces. The water heater started a fire. My insurance dropped me. I had to chase rent from a meth addict tenant. None of the tenants had security deposits, the previous owner had had the new tenant clean instead of paying security deposit. It is a very long story. The point is that it is easy for a rookie investor to think a couple cans of paint will fix everything. 

Don't be so eager for a deal that you find yourself settling for a money pit.

@Account ClosedI hope you don't view race as a barrier or even age for that matter. I think you will be judged more on your experience / track record.

I started in this business in my late 20's and I was a young guy. I sat in front of a couple bankers who came just short of laughing at me. (To this day, I will not do business with those banks.) I did find when I was young, that dressing professional was important. I have been the nicest dressed guy in a room and the worst dressed guy in the room. As you can guess, it feels more empowering if you are the nice dressed guy. I would work extra hard to make sure you are prepared and have a plan. Show that you are young and smart. Youth has an advantage because you will speak with passion. Just be careful not to over-promise so you can build credibility.

It sounds like you have some experience, so maybe you want to put together a portfolio showing your projects. You could put together a video, PowerPoint, photobook, etc. Then you could share it with people to add credibility. 

You are way ahead of where I was when I was 22. Keep posting and tell us more about your successes! Good luck!

@Dee Jones I know you mentioned this post is old, but I would argue after 2.5 years it was actually a totally dead thread on this forum. Nobody was thinking about it until you brought it back to life for discussion. 

@J Scott is spot on asking what your situation is? I would be interested to hear your success stories and if you have any connection to this Flip2Freedom program. I have never heard of it and I don't flip houses. You seem very passionate about this, so I am curious to hear your story. 

I think the way credit reporting agencies are able to do this is that they are simply gathering data reported to them. There is also a method for disputing and correcting your credit report, which I am assuming you would need to have a process similar. 

Rather than calling it a deadbeat database, I would call it a reference check data base. A landlord reports property address, rent amount, move-in date, move out date, number of late payments, money owed and condition of property at move out.

The challenge with any database like this is that it is only good if people input data. I am not sure what percentage of landlords are active on Bigger Pockets, but say it was 10%. That means this database would be far from complete even if everyone on BP participated. 

To get this off the ground it would need to be free, but once it got bigger it would need to generate revenue, so that it could have full time administrators.

Interesting idea. As they say on Shark Tank, I am a customer but not an investor, I am out.