All Forum Posts by: Randy E.

@Adam Serdula, is it in NC?

 I once used Nationwide for my landlord policies.  When I finally balked at the high and ever-increasing rates, I went to an insurance agent who represented many insurance companies and not just one.  She came back with a policy that was less than half of what Nationwide had been gouging me for.  Essentially identical coverages, half the price.

Instead of you going to three one-company agents and trying to compare prices, go to two multi-company agents and get quotes from a dozen companies. 

 Every year is a good year to invest.  The key is to invest wisely and not assume that how/where/why you invest in 2006 is the same as in 2013 is the same as 2019.

Just like with evolution:  Adapt and thrive, or refuse to adapt and perish.

@Ricky R.,

 Here is my opinion of the order of operations.

1) Learn enough about RE Investing to decide if it is something you want to COMMIT to.  A lot of people think backwards on this.  e.g.: "I want more money.  I hear there is money to be made in REI.  I want to do REI." Then they try to get involved asap, before they even understand REI. Getting involved asap before understanding REI leads to people paying thousands of dollars to attend seminars before the individual even knows if they know enough to want to do REI.

2) Learn more about REI to decide what facet of it you wish to focus on first.  There is a big difference between wholesaling $20K distressed houses and brokering commercial deals worth $5M. A lot of newbies don't know the difference, and don't know what they need to do to get started. Educate yourself for free before you pay big bucks to decide you can't do REI or that you don't want to do REI.

3) Save money.  It's called "investing" for a reason.  To invest, a person must first have money to invest.  If you have no money, you must second (first is to learn enough to form an idea for getting started) figure out how you're going to get the money you will later invest.  

4) Learn more. Trust me, you don't want to go through the trouble of steps 1, 2, and 3 only to blindly spend your hard-earned cash on a bad deal. Educate yourself more. As said in the post before me, YouTube (and the internet in general) is full of free REI information. If a person can't fire oneself up enough to learn on his/her own for free, he/she probably is not ready to pay $1000 for a seminar either. Oh yeah, if you haven't already, attend some REIA meetings in your area. They're usually free, and there are people there (experience investors, contractors, agents/brokers, financiers) who will answer your questions ... for free.

5) Save more.  Whatever you have saved ... you're going to need more.   A green investor will go overbudget.  It happens.  If you don't have the money to cover extra unforeseen, you better have a good idea of where you can get it from in a hurry.

6) Before you pull the trigger, ask other investors about the deal.  They might point out something a newbie would miss.  Something that might save you money ... or make you more money. 

7) Work very hard and be very diligent.  Trouble is always a monkey wrench away.

 Three biggest mistakes to avoid:

1) Don't shortchange the quality of your units.  I don't mean that you have to install marble floors and gold chandeliers.  But make sure the plumbing, electrical and hvac are in great condition.  Make sure the windows and doors operate fine.  The best time to get those things rent-ready is before the tenants move in.  When you rent a unit that you consider half-way good that means it is also half-way bad, and you get repeated service calls and complaints.  Further, you will eventually end up with bad tenants because good tenants won't accept a shabby residence and will move out -- only bad tenants will accept a poorly maintained residence.

2) Screen your applicants thoroughly.  If you have a doubt, take a second and third look before approving someone.  Bad tenants account for 90% of a landlord's problems.  Go the extra effort to try to keep bad tenants out of your properties.

3) If you do get a bad tenant, don't hesitate to file for eviction once a problem arises.  Unauthorized people move in and suddenly your rental has 9 inhabitants instead of the agreed upon 2?  Serve notice, and if they don't correct the problem, promptly file for eviction.  Did they put a dog into your "no pets allowed" unit?  Serve notice, and if they don't correct the problem, promptly file for eviction.  The rent is 10 days late, the tenant won't answer your calls or respond to your texts?  Serve notice, and if they don't pay, promptly file for eviction.  New landlords often listen too much to tenants' excuses for not paying.  It's one thing when a tenant has paid on time for 14 months, then tells you a week ahead of time that the next month's rent is going to be 10 days late.  It's quite another thing when a tenant who pays late every month ups the ante by not paying at all all and has a different excuse every week.  Don't give credence to the excuses, instruct them to "pay or move", and if they don't pay, file for eviction.  I've seen too many landlords keep deadbeat tenants for months, hoping they eventually pay.  Don't wait.

@Eli Masud,

I know most out of towners assume Raleigh/Durham/Chapel Hill are one area, but they are actually three discrete cities.  They are close, but there is travel involved in going from one to the other.  

I wonder why you seek to house the employees near downtown Raleigh when the job site is in the southern part of Durham.  With absolutely no traffic, that is at least a 35 minute commute.  Any time near rush hour, it's usually about an hour, maybe more, especially because the traffic from Raleigh -> Durham in the morning (and Durham -> Raleigh in the evening) is much worse than the other way.

If your company has some educational classes set up at NCSU, that makes sense.  If there is no actual reason for choosing Cameron Park, I'd start looking in Durham for housing.  Your employees will be thankful that you set them up with a 15-minute commute instead of a 1-hour commute.

Check around the downtown area of Durham, around Duke University, and around the Southpoint area.  All those areas offer ample places to socialize and do fun things.

@Mahauijue

I have to agree with Zachary that German Shepherds are not the best indoor dogs.  I have a 16-month old German Shepherd and he wants to be outside as much as possible.  Fortunately, I am able to allow him outdoor time several times a day -- also, I fenced in a short hallway to restrict his movements when no human is home with him.  However, most people work regular workdays, which means your tenant's dog would likely be home alone for a 10-hour stretch.  I can't imagine the damage my Shepherd would do if left alone for 10 hours every day.  While my Shepherd was a puppy, within his fenced-in hallway he chewed most of the baseboard and quarter round, scratched the walls, chewed the door to the laundry room, jumped up and pulled down pictures from the wall that my children had drawn/painted, and pulled a mirror off the wall ... and more.  I imagine that's what's going to happen to most homes that have a Shepherd puppy inside.  it's possible the tenant would keep the puppy in a cage inside, but most people don't get the large cages necessary to keep 100-pound dogs.  Oh yeah, did I mention my Shepherd is now 100 pounds?  Don't believe your tenant if he says the puppy is going to top out at 40 pounds. 

Also, dogs in the puppy stage are often more destructive than adult dogs.  That is when they have the uncontrollable urge to chew chew chew everything in sight.  Dogs don't outgrow the mental puppy stage until about 18 months old.  I'd much rather have a tenant bring in an already adult dog than a puppy.

Personally, I charge a $200 pet fee (not a deposit, but a nonrefundable fee) AND an additional $25/month pet rent.  Unless we're talking about a 5-pound 4 year old adult dog, I'd never (any longer) consider lessening or waiving either the pet fee or the pet rent.

One trick I've used in the past is to skip the middleman and go straight to the source.  

Years ago, I was low on cash and needed a surprise plumbing job done ASAP before a new tenant moved in.  A plumbing company I found in the phone book quoted nearly $1K.  I said I would think about it and hung up.

Instead, I went to Lowe's and hung around the plumbing aisle, watching people come in and pick up supplies, homeowner, contractors, and guys who worked for middle-and-large-sized plumbing companies.  I found a guy whose look passed my quick eye-test and told him what I needed.  

He was picking up material for a job he was working on.  When he paid for the parts, he followed me to my rental which was only 5 minutes away.  He looked at the problem and said it was (for him) an easy fix.  He came back the next day and completed the repair.  I can't remember exactly, but I think he charged $100.  Basically, it was a little more than his hourly rate from the plumbing company.  He won, I won on price.  I got the same professional work I would have gotten if I called his employer, but it cost me hundreds of dollars less.  He became my go-to plumber for the next few years.

I got my current HVAC guy the same way.  My mother called a company from the phone book to send a technician to service her HVAC.  I went to make sure everything went well.  We talked, he ended up coming to my house to service my HVAC at a discounted rate.  A few months later, he installed a new furnace and AC in a rental I was renovating -- at a great price.  He's licensed and has his own company on the side, with invoices and everything, but he can't generate enough work on his own and thus has to work for a larger company most of the time.

The technicians working for these companies are often licensed, but don't have the people skills or marketing skills necessary to operate on their own.  They don't make hundreds of dollars per job -- they make an hourly rate and do 3-5+ jobs per day and live month-to-month.  The only catch is they sometimes have to work after hours or on weekends.  Then again, I've had guys call out for the day at their regular job to do a job for me because I paid more then their boss would have paid for that day for only half the time.

This approach may not work for everyone, but it has worked for me when I needed it.

 I agree with @Jonathan Taylor Smith, that it's not necessary for me to maintain the 3x rent income requirement for someone with a voucher.  Often, voucher recipients have income restrictions placed upon them, so it might be almost impossible to locate a S8 applicant who has a voucher for $1K and a w2 income of $2K.  As long as the tenant does not violate S8 regulations, you should receive regular rent payments.

Again, that really comes back to screening.  It's easy to find a lot of voucher applicants who would be bad tenants.  It's up to the landlord to find the ones that are good tenants.  Jonathan's ideas are a great guide to help find the good ones.

 The DHA is fairly easy to work with.  Your more important issue will be vetting the applicants.  As long as you get a good tenant, the DHA should not be a source of dissatisfaction for you.