All Forum Posts by: Thomas Lillevold

Greetings from the newbie,

My question is this...What are some "outside the box" methods for finding properties to purchase?   I have used Craigslist, I have used word of mouth, I have used real estate agents, I have even driven around looking for signs "for sale by owner".   

I need more tools in my toolbox to find these properties.   

Our leases are 18 pages, we try not to leave anything out.   We cover all the usual items but we go into things such as not parking unregistered vehicles on property, where tenants can and cannot park, state specific legal items such as amount of time we have to return security deposits at lease expiration, cleaning up the property upon termination, quiet enjoyment for neighbors and tenants, tenants cannot paint without written permission from us, etc, etc, etc.     

We have had 2 page leases in the past and this is an area where I firmly believe that bigger is better.   We also have purchased property's from other landlords and had to honor their weak 1 page leases for the inherited tenants until the lease terms were up....an unappreciated field of endeavor to say the least.   Their weak leases turned us into referees for tenant battles because nothing was put into writing and everything became he said/she said...not fun to sort these things out so my advice is take your time writing your leases to cover everything you can possibly imagine, its better for everyone in the long run.   It literally takes us an hour to go over our leases with our tenants in the beginning but I think even the tenants appreciate it because it protects them as much as it protects us.  Tenants that are unwilling to sign leases with such detail is a huge "red flag" anyway...why would you want a tenant that doesnt agree to not park disabled cars in the driveway or keep the noise levels down for their neighbors or trim around trees, mailboxes, landscsaping when they mow the lawn?  These are all things that keep your value of your property up and enable you to offer more desireable living areas for your tenants.    

I've been in your situation before....communication is the key.   If you are in contact with the seller or if your real estate agent is in contact with the seller.   Tell them you are not trying to insult them you just have a number that you cannot go beyond on the price...dont get emotional about it like so many others on here have said. let your calculator make the price you have to get it at.   I always try to find things that I plan to do to the place and I include that in the discussion with the seller.   Its not personal...its business.   I always tell them, this is my offer, I am not trying to upset anyone, and you wont upset me if you say no.   

Like I said before, I am always upset with myself if my first offer is accepted because I dont like to leave money on the table.   If you are buying for yourself, that is different, if you are buying for business, you have to get the property at the best price you can.   It sounds like you are buying for both so I think you have to blend the offer a bit.   You want to get the property to live in but you should try to do well on the price so it does well with the rent you talked about too.

Good luck and I would like to hear how it goes for you.

Hi Shaka,

I always do comps for the area and take careful consideration of the condition of comps when valuating properties (in your case you said the property was in very good condition).  If a property is priced right I will make a higher offer.   If it priced too high, my offer reflects that too.   It always comes down to how bad do I want it also.   I am a firm believer in offer-counter-offer.   I have countered back and forth as much as 4 times before purchasing.    If I feel a property is priced too high but is a property I would love to have, I have offered as low as 60% of the asking price.   I do think in some cases this is risky because you can offend the seller to the point that they just do not negotiate pricing.   Other times you will get the sellers lowest offer on the first counter offer.   Its a gamble but my thinking is I need to get the property for the lowest possible price and I never want the seller to accept my first offer because that tells me I offered too  much.   

Hopefully, this helps you a little and best of luck to you.

Tom

I have had problems with contractors also...specifically, when I had a reputable plumbing company do some work in my home and a defective pipe fitting failed...the contractor that I hired to do the reframing and remodeling tried to get me to join him in a scheme to scam the plumbing company out of money during the water damage repairs.    Luckily for me the work was almost entirely completed in the house but the relationship soured so badly with the contractor we almost came to blows over the mess.   I would never hire this guy again which is a shame for him because his work was very good.    

I have been trying to decide if I should give him bad reviews in my small town.  My business reputation is extremely important to me and I do not want this guy trashing my good name around town so for now I am just letting it be.    

After all this, I strictly use word of mouth to find contractors and have mediocre results with this.   I tried the Angieslist but my town is too small to have anyone nearby listed on her website so that was a waste of my money.   Other web searches only produce minimal reviews which I dont put much stock in....even the best contractors are not going to be able to keep all customers happy at all times and many people will only leave reviews for companies if their experience was bad.   I do not use contractors enough to know all of them in my area, for now if I need work done, I do not hire the cheapest, or the most expensive...I go for the one that leaves me feeling like I can trust them when I meet them face to face....its more my gut feeling I guess.   I wish I could rely on a more scientific approach to finding good contractors.  

I will be interested in seeing if others have a method that works well for them that I can apply.   I am eager to find a good, honest, affordable contractor because building my team is very important to me.   I have a great real estate agent that has been with me since 2012 and we have used her to purchase 3 properties in our small business...it is great to have a person you can trust and rely on regularly.   

Thanks,

Tom

My wife and I would like to meet with other real estate investors in this area (Chippewa/Eau Claire)....our schedule is complex but we would love to try.   If there is still an interest in this, can someone please include us in the discussion.

Thanks,

Tom

Welcome,

I too am new but can tell you that so far this is a great experience.  Great people and great advice.

Tom

Hello from Wisconsin,

I've heard a lot of good things about BP so I thought I better jump in.  My wife and I have been in the landlord business for about 6 years now but still learning a lot.    

Can anyone suggest some good books to read on the subject of rental investments?  I have read Robert Kiyosaki, Ken McElroy, Sharon Lechter, Dolf Deroos, Fiance Kennedy, and others from the Rich Dad collection.  

I am wondering what formulas other people use to determine if a property has good cashflow?  I find it quite difficult to get sellers to release financials on properties that I look at.  My system is this....if I can't get the numbers I do not risk buying it.  However I worry that I am missing out on good cashflow properties because I simply lack the information needed to formulate a good evaluation.   I am wondering how people in this forum deal with that problem?

Thank you,

Tom