Archive for May, 2008
Coming Soon to Your Local Crack House Near You
A little Friday Night Investment Property Humor.
I was driving down the road the other day and pulled up beside this big black piece of equipment. I snapped a couple pictures below. It appears to be a construction Bobcat (small dirt mover) outfitted with bullet proof glass and a crazy shield on the front. It has [...]
A little Friday Night Investment Property Humor.
I was driving down the road the other day and pulled up beside this big black piece of equipment. I snapped a couple pictures below. It appears to be a construction Bobcat (small dirt mover) outfitted with bullet proof glass and a crazy shield on the front. It has police stickers on it and I figure it must be for SWAT to enter houses.
I hate to say it, but I had to laugh when I was thinking about the poor slumlord landlord that finds out this machine was used to enter his property and forcibly removed the tenants! I started daydreaming for a second and wondering if I could borrow it to evict a couple tenants (oops, did I say that out loud)!
Storms Hit Investment Properties in Hugo Minnesota
If you were watching the news over the holiday weekend, you may have seen the storms that ripped through Hugo, Minnesota. It was sad that a 2 year old boy was killed, many houses were destroyed, and several people injured. Several other investors and I own properties in the same neighborhood as the destroyed houses.
In [...]
If you were watching the news over the holiday weekend, you may have seen the storms that ripped through Hugo, Minnesota. It was sad that a 2 year old boy was killed, many houses were destroyed, and several people injured. Several other investors and I own properties in the same neighborhood as the destroyed houses.
In fact, you can see most of the news crews from the front door of one of my townhouses. Below are some pictures of one of my buildings (click for larger versions). The damage is quite severe, but at the same time, nothing compares to the people that lost their entire houses (and a child).
Once a Bad Tenant, Always a Bad Tenant
I have been beating myself up lately over my bad tenants. In the last 30 days, I have had to evict one tenant for non-payment of rent after only 6 months, ask another to leave at the end of the month after repeated police calls (and probably not collect their past due rent), and threaten [...]
I have been beating myself up lately over my bad tenants. In the last 30 days, I have had to evict one tenant for non-payment of rent after only 6 months, ask another to leave at the end of the month after repeated police calls (and probably not collect their past due rent), and threaten another with eviction because of non-payment. Plus I have another one or two that are on the edge of eviction for non-payment.
If you remember back to January, I had made an Investment Property New Year’s Resolution to reduce my bad debt expenses. Unfortunately, like my personal goal to lose 10 pounds, I am failing. I decided to do some research and pulled all of my past and present tenant files and tried to find some common theme amongst all the “bad tenants”. I realized that while many of the problems are with the tenants, it appears I am the one enabling their bad behavior. Here is what I found.
If it walks like a duck and sounds like a duck, it is probably a duck.
While I rarely see a tenant that has a great credit report, the tenants that have problems paying their rent on-time (or ever) have typically shown a history of financial and/or rental problems on their background checks. The ones that have several items in collections especially seem to have issues with rent. I guess paying late and/or not paying a bill is in some ways like criminal activity or drugs, once you get past your first time, it just gets easier each subsequent time to not think about the consequences.
Bad tenants apply here
Over the last 30 days, I have been in full leasing mode as many of my leases expire either May 31 or June 30. Just like someone that leaves one abusive relationship and falls into another abusive relationship (often because they don’t feel like they can demand better), I found that I keep wanting to make exceptions for prospective tenants that have bad traits (I am in no way minimizing the plight of someone in an abusive relationship, I am just making a point). Although it is easy to deny the applicant that lies to you about the recent eviction, it is tough to say no to a single mom who is working 2 jobs but only takes home about $980 per month and wants to rent your $750 per month apartment. Can she and her child live on only $230 per month, even if she claims it is not a problem?
Lose a month of rent or have bad debt because of an eviction-which is worse?
Although I am not a fan of having a vacant rental unit and losing a month’s worth of rent, I believe that is an easier one time event than having to constantly call and hunt down your tenant for your rent. Plus, when you have a tenant that is bad at paying, each month you are also wondering if you are going to see the rent or if this will be the month you need to evict.
Realizing and admitting you have a problem is the first step in solving it. I am committed to demanding better tenants. Here are a couple things I am going to do differently:
- Never book an apartment showing without spending a couple extra minutes on the phone and asking them about their income, rental background, and other details. I think I have been quick to just set up an appointment because I am in a hurry when they catch me on my phone or because I just want to get bodies through the unit.
- If they have a history of bills in collection, run the other way.
- Ask for additional damage deposit if I feel like taking a risk on the person.
- Sticking to the rule that the prospective tenant must make at least 3 times the rent in documented gross income per month.
- Commit to doing a more thorough background check via phone calls to previous landlords and employers.
- Not accepting incomplete tenant applications or missing data.
I have been successful up until this point, but I want to improve my business and strengthen my cash flow by reducing my non-paying tenants. I also want to reduce my work and stress load by having tenants that always pay on time.
Stupid Property Repairs #5
I suppose it is tough to say this is a Stupid Repair, as all the houses of this vintage (pre 1950) were built this way.
It is more about how various investment property owners have attempted (and I am using that term generously) to deal with this troublesome bathroom feature.
Back when many of the properties in [...]
I suppose it is tough to say this is a Stupid Repair, as all the houses of this vintage (pre 1950) were built this way.
It is more about how various investment property owners have attempted (and I am using that term generously) to deal with this troublesome bathroom feature.
Back when many of the properties in Minneapolis were built, I guess people only took baths. Consequently, most bathrooms have a large window in them that is above the bathtub. While this is a design feature even seen in new homes, the problem comes in when a shower head is added to that bathtub to make a shower. Now, that nice light-filled window is water magnet with few great solutions.
Here are a couple attempts to fix this situation (all that are destined to fail)! Click on the pictures to see them in all their glory!
| Interesting way to tile over the window! | Notice painted black windows for privacy! | |
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| Tile the window ledge, but leave the wood window! | ||
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It is that old saying, when life gives you a bunch of lemons, make lemonade. I think these guys put some vodka in their lemonade when they thought up these repairs!Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.
Foreclosure Data and Reports
Foreclosure Data and Reports
Mortgage Crisis Continues To Affect MN Communities
A report by HousingLink shows that the foreclosure crisis continues to be a problem for communities across Minnesota. According to HousingLink’s projections, over 28,000 Minnesotans will lose their homes to foreclosure in 2008. In greater Minnesota, the highest rates of foreclosure are in counties surrounding the [...]
Foreclosure Data and Reports
Mortgage Crisis Continues To Affect MN Communities
A report by HousingLink shows that the foreclosure crisis continues to be a problem for communities across Minnesota. According to HousingLink’s projections, over 28,000 Minnesotans will lose their homes to foreclosure in 2008. In greater Minnesota, the highest rates of foreclosure are in counties surrounding the Twin Cities metro area and major regional centers such as Duluth and Rochester.
The report was sponsored by Greater Minnesota Housing Fund, Minnesota Housing, and the Minnesota Home Ownership Center . To view a copy of the full report, or to look at county-by-county foreclosure data, visit www.gmhf.com (follow the link for “Foreclosure Crisis: Tools and Resources”).
Scott’s Investment Real Estate Blog Reading List
Being an ex-geek (or is it recovering geek?), I try to keep myself up on much of the latest technology [previous to my current career as a Real Estate Agent and Investor, I was the Sr. Director of Information Systems for Caribou Coffee]. I am especially interested in the web, blogging, and search engine [...]
Being an ex-geek (or is it recovering geek?), I try to keep myself up on much of the latest technology [previous to my current career as a Real Estate Agent and Investor, I was the Sr. Director of Information Systems for Caribou Coffee]. I am especially interested in the web, blogging, and search engine optimization.
Many of you know about RSS news feeds, but for those that don’t, it is a quick way to track all of the blogs that you are interested in reading. They are all “fed” to your new reader in a quasi-email type way that allows you to quickly get to each new post without having to go to the individual blog sites. For those that are interested, I wrote a post about how to subscribe to a blog or RSS feed. I personally use Bloglines as my reader.
Now I rarely post about anything other than Investment Real Estate, so you are probably saying: “Where is he going with this!”. I thought it would be interesting if I gave you my suggested reading list of other real estate investing blogs that I read on a regular basis. Many are not Minnesota based, some are funny and entertaining, some are highly educational, others are thought provoking.
So here we go (in no particular order):
Kansas City Real Estate Investing
Go and take a look at some of these. Sign up for their RSS feed. Read for a while and enjoy.
-Scott
