All Forum Posts by: Ryan Dossey

Want to learn how 15 seconds could save you $50,000? (Man Doesn't that sound like Geico) Keep reading! 

So we bought a home in Lawrence Indiana that was tenant occupied at close. Now if you're buying direct to seller you're going to have property owners swear that their tenant has never been late in the past 300 years until it comes time to collect prorated rent at closing. 

"I've got to level with you Ryan, He hasn't paid in 2 months." 

When I buy a tenant occupied rental I pretty much just assume that we're going to have to do an eviction and budget for a full rehab. 

This is two months in with an eviction notice posted on the door. We worked with the tenant his first month to help him get prepared to pay on time going forward. He was in a home for $300 under fair market rent. (We will work with our residents once in a twelve month period if they've been a good resident.) 

Month two we heard everything from he was getting a sign on bonus, collecting a debt, to the check got lost in the mail. (Note: we set up 90% of our residents on online/direct pay. This gentleman was still on money orders.) 

Per our written policies a late fee is added on the 5th and if no payment is made by the 8th we post a 10 day notice. 

Our tenant actually showed up to court to fight the eviction and lost. 

The day he was supposed to be out he called our attorney and asked to go on a m2m lease. We declined. 

A "forced move out" was done but he had vacated the night before. 

This is where it gets fun. His water had been shut off for 30 days. We found out that they actually tried setting up water in a random name but the water company declined. 

I was traveling so we asked the water company to cut the water on at the meter but leave it off to the house. They informed us this was their policy and they wouldn't cut the water on to the house without us there. (Although we did give them a lock box code) We wanted to inspect for sabotage prior to cutting the water on. 

We got a call 4 days later (while out of town) from a neighbor that water was running out from our garage and front door. (What everyone wants to hear!) 

 When moving out the tenant had disconnected his washer on the 2nd floor and didn't shut off the water lines. Now in his defense I'm choosing to assume the best and view this as accidental vs intentional. I wouldn't think to shut off water lines that didn't have water coming out of them. 

The water company turned the water on into the house and didn't check the meter to see if it was running. This resulted in a $250+ water bill and effectively two garden houses wide open running for 4 days. 

Early estimates have damages exceeding $50,000 for insurance. Our crew has taken the property down to the studs and we've been drying it out for over 2 weeks now. (Checking via moisture readers) 

So why is this a win? 

1) I'm a HUGE believer in personal responsibility and this was an awesome learning experience. Had we taken the 15 seconds necessary to check this nothing would have happened. (So add this to your check lists folks!) I'm thankful that I got to learn this lesson on a SFR vs a larger property or a more high end one.

2) We're going to have an awesome renovation done on insurances dime. The property is going to have brand new bathrooms, carpet, paint flooring, drywall, and a new kitchen. 

When life gives you lemons.... 

It's our job as investors to show both sides of things. If all you post are wins and not the lessons you're giving people a rose colored view of REI. I'm sharing a lesson to save you the trouble of learning it on your own.

This is also a great reminder to make sure you have QUALITY insurance. 

We use private funding to pay cash for properties and then refi out (BRRRR) into bank financing.

The neat thing for our lender is that they will get paid like clockwork, their investment was protected, and we will have no problem refinancing. If anything, their 1st position mortgage (75% of ARV) will have even more equity due to the 5 star rehab this property will be receiving.

@Alex Price cold call the buyers when you have an actual deal. Most of the big fish won't call you from a letter or post card. (I personally pitch all mine) The guys who personally call me AND have a deal... Now they have my attention! 

$14,000 a piece is one thing. 

Townhomes is another animal. 

We get calls from sellers wanting to unload these dirt cheap condos in the c-d areas almost weekly. I would advise extreme caution. 

PM Me the address and I can give you my thoughts. 

Typically with these the cap rate looks really sexy. Your actuals will be...  a different story. 

We find with our residents that setting proper expectations is absolutely crucial. Don't "maybe" as that's just dragging out the inevitable and getting their hopes up. 

We recently had a tenant ask to put in a fence and bill it back to our rent... Not gonna happen. 

We've also gotten requests for new carpet in occupied properties. 

We are on their maintenance requests immediately but we explain that cosmetics, improvements, and enhancements are done when our properties are empty. 

@Zach Ryan 25% of the pie is better than nothing. Could you have done the deal without them? 

Lesson One: Get a written agreement. You can't have surprises that way. 

Lesson Two: If you don't need them... If the partnership isn't mutually beneficial. End the partnership. 

Even if you ban guns they can still bring them in. Just ask all the restaurants with the "no guns" signs. As a CCW holder the only legal recourse I face if you notice and say something is you asking me to leave. If I don't I can be hit with trespassing but that's it. 

The only places this is different is federal/state buildings and schools. 

In Indiana I would say most of our tenants probably own. 

If your tenants are like ours... This would be viewed as very "big brother" and I see it creating more hassle than having the answer to a 911 Dispatchers question. 

From working with clients and having friends in Dallas you're not going to get a deal. In metros like Dallas wholesalers are able to sell for upwards of 80-85% of ARV.

If you're wanting $0.70 on the dollar you're going to have to go direct to seller and have a large budget for it. 

Seriously can't believe this is even a question. 

@Mindy Jensen Air France can get you to Hawaii for 30k miles. 

There are also airline that provide discounts on miles that get you to some crazy places. 

My trip to Funchal is only going to cost me 50,000 miles or what Amex says is $500. Yet... That same ticket would have cost me over $1,400.00