As the first of the month roles around, the lovely rent checks arrive at our company post office box and remind me, yet again, why I love this business. Monthly Gratification, while not instantaneous, is frequent enough to fuel the fires of enthusiasm and fan the flames of fervor needed to continue the hunt  for homes with that elusive quality landlords hold so very dear…

…Positive Cashflow

There’s a saying amongst the single that one must kiss many frogs before finding one’s handsome prince. And while the Mrs. does not advocate the kissing of amphibians of any variety, there is a rather close correlation in the world of rent houses and real estate investment that goes something like this:

One must run many numbers on many houses before one can recognize a single family home that will cashflow in a positive direction.

And as a secondary sidenote:

One must actually buy one or two and live with it awhile before one recognizes how much positive cashflow is necessary to actually pad one’s business account rather than maintain the status quo.

And a tertiary:

If one buys a dog, one must kick it to the curb at the earliest opportunity whilest learning from one’s mistakes and prancing forward with one’s investment strategy or one is likely to become one of those bitter individuals that claim  only slumlords can make money in real estate.

Definitely not a dog…

Popularity: 5% [?]

Tags: landlord, rent houses, tenant

As some know, The Background Check Manual is free here on this website. It’s also available in worddoc or .pdf format via email if you’d rather have the entire e-book in one spot for reference purposes. The manual contains tons of information on identity verification, public records retrieval, etc. and includes links to state websites and sex offender registries. The manual is free. We only ask that you do not copy or share the document in any form. If you know anyone who’s interested, please send them here.

There’s a very important point to remember:

• The manual was not *written* for landlords.
• It can be *adapted* for landlords. Big Difference~

The manual was originally written for small business owners, nonprofit organizations such as churches and charity groups  and youth organizations like softball and soccer leagues. The primary purpose for these groups is to screen out undesirables, felons and abusers who target and prey upon the young, weak and elderly by seeking out positions of authority.

Think wolves amongst sheep.

Funny Thing Happened on the Way to The Rental Business…

As landlords, our goals are quite different. We want to rent to responsible adults who will respect our property and pay the rent. Period. Running every possible civil and/or criminal record costs too stinkin’ much and takes way too much time away from fun stuff like compulsively checking MLS and Craisglist.

• Remember, we’re granting permission for someone else to occupy our property.
• We’re not moving in together.

When the mister and I bought our first rental, the lessons learned from all those months running public records paid off bigtime. I was able to adapt the background check manual to suit our new situation. Now, when an application hits my desk, I can run a credit report, verify identity, check all personal and business references, and check criminal and sex offender databases in 20 minutes or less (unless I hit a wall of answering machines instead of real live people, in which case, calls get forwarded to the home phone and the mrs. can go back to baking brownies and refinishing furniture.)

The Part Where the Mrs. Stops Beating About the Bushes and Gets to the Point Already…

So here’s the deal.

• I chose to offer the background check manual as-is just in case someone, somewhere might want to start a background check program for their softball league or volunteer fire department. 
• The manul has tons of information totally unnecessary to the landlord doing a routine screening.
• This blog is geared toward real estate investment, not softball leagues.
• Therefore the vast majority of readers are landlords, not softball players 
• Therefore, therefore, the manual is confusing and unusable to the vast majority of the readers of this blog.
• (Heavy sigh…)

Therefore thrice, I’m going to do my best to clear up any confusion over the next few days. I’ll be referring back to the manual, so if you want a copy of the document in question, send an email with ‘Background Check Manual’ in the subject line. The manual has tons of information that explains the process of public record retrieval and identity verification and even makes social security numbers mildly interesting.

The manual is available on this site under the Tenant Screening tab at the top of the page.

Popularity: 12% [?]

Tags: background check manual, background checks, landlord, tenant, tenant screening

Whilest away thinking Deep Thoughts and being all Zen and Stuff with The New Plan, one of our tenants moved out. Things went  fairly well until we arrived on the premises for cleaning and make-ready.

We were greeted with this cheery sight:

Amongst Big-Shot real estate investors, this is what’s commonly known as ’A Clue’ as in ‘Something Here is Seriously Remiss and the Landlord Needs to Get One.’

And peaking out amongst the branches of the flowering plum on this lovely spring morning…

Let’s get in close to fully appreciate the composition and detail of our artist in residence…

De-e-e-e-p breaths.

Repeat after me… ‘it could’ve been worse, it could’ve been worse…’

 By the Way, Exactly How Much *Was* That Deposit?

Much emoting ensued. Many hands waved about in a pointless, yet oddly satisfying manner. Panic maneuvers began, stalled, began again as the landlord in attendance realized that spray paint on the exterior might indicate unseen interior damages. At which point, Hand-Wringing with Muttering Sauce commenced whilest keys were fumbled, dropped, inserted in the wrong lock, etc.

After a long and detailed search of the inside (which thankfully yielded only a couple of dog-chewed miniblinds and scratches to the interior doors), the Brz cell phone bill took a hit as calls flew back and forth. It was decided that Mrs. Brz would call the tenant while the mister worked on lowering his blood pressure. This is an important point to this painfully long saga as the mrs possesses certain skillz which escape the mister, namely the ability to detach completely from The Situation At Hand and speak in a monotone, yet professional manner which sounds suspiciously like a telemarketer.

Waiting 4 hours before making the call doesn’t hurt either.

Much Ado About Something

There’s a happy ending to this tale of woe. The tenant took full responsibility and had the little artist out scrubbing pronto. Bricks and fence were cleaned to our satisfaction (I’m told a graffiti solvent was eventually employed.) And, after subtractions for cleaning and doggie damage, the former tenant even received a portion of her security deposit.

So… the tenant was relieved, the landlord was relieved and the little Brz’s were joyous because they didn’t have to scrub anything.

And we have yet another great story to embellish when we congregate around the driveway fire next fall.

Popularity: 12% [?]

Tags: landlord, landlord tenant relationship, rent house damages, security deposit, tenant

Once upon a time I was organized. Then a mean ol’ tree landed on our home, rainwater spewed over my closing documents, the file cabinet from Walmart leaked and what do you know… no more organization.

During our refugee days, organization consisted of keeping papers in color-coded laundry baskets where wet papers were left to dry following their rescue. All the while I promised myself daily that the minute we moved back home, new files and a logical filing system would get first attention over decoration.

Didn’t happen.

Then yesterday, I wasted an hour and a half hunting for our survey– a survey that originally cost $450 and who-knows-how-much for another copy, not to mention an hour and a half that could’ve been spent doing more dishes or compulsively scanning MLS and other fun stuff. And while I consoled myself that this would just be another lesson in the REI business school of hard knocks, the bile in my throat didn’t agree.

Finally gave up. Called our old mortgage broker to ask for the name of our surveyor to order another copy. He said, “That’s sitting in our back room. Found it the other day… guess we never mailed it.” Heavy sigh of relief followed by mild irritation followed by a resolution to get organized *this month* before the agony of income tax rolls around yet again.

So, because I’m irritated and do my best writing in states of agitation, you shall be bombarded with my indignation so I don’t fry the poor child-units.

Many pictures to follow as I peruse Office Depot for the most expensive way possible to a life of Organizational Bliss.

Popularity: 8% [?]

Tags: landlord, Record Keeping, REI, rent houses

Books That Deserve a First, Second, Third and Thirty-third Reading

Reading this wonderful post over on Shaun’s blog, How To Get Started In Real Estate For Under $400, got me thinking about our own beginning in REI. For starters, our experience closely mirrored his post (never tried #10… just not a birddog by nature). And I can’t help wondering how much we spent on our real estate and financial education. Books by the dozens followed me home, some helpful, some not-so-much.  Many’s the time, I wished for an outhouse just so the book wouldn’t be a total waste. 

So in the spirit of meat for the hungry, here’s a list of favorite authors. These are the books re-read between projects.

For inspiration:

• The first few books by Robert Kiyosaki, particularly Rich Dad/Poor Dad, Rich Kid/Smart Kid, Cash Flow Quadrant. These started our journey to financial independence. It took way too long to figure out they don’t actually tell you *how* to do a single thing and much of the advice is seriously dated and/or doesn’t work InYourLocalMarket. Still, I recommend them to everyone because the concepts are foreign to most and nobody tells the story better.
• Richest Man in Babylon by George Clason. If you haven’t read this book, buy a copy right-this-minute and send me a big thank you donation when you’re financially free. And I’m not joking- read and apply the principles and your life will change. (Make sure you’re reading the original version written in 1926 as a series of pamphlets– several contemporary authors have written books with the same or very nearly the same title.)

For practical application, anything by:

• Jay P. DeCima aka Fixer Jay (author of Start Small, Profit Big in Real Estate and Investing in Fixer-Uppers) Jay’s method will work almost anywhere making his books an exception to the general rule that most real estate books are big on pep-talk and low on practical application. The mister and I read his books about once a year.
• Lonnie Scruggs - Lonnie’s known as the mobile home guy (Deals on Wheels and Making Money With Mobile Homes) but I love his books for another reason-he understands the principle of compound interest. Read through his stuff and you’ll begin to see the Richest Man in Babylon principles worked out practically in the present day.  (I’ve got his latest book, Taking the Mystery Out of Money, on order and plan to review it separately.)

Note: Terry Sprouse over on Fixer Uppers and Rentals Houses has a book titled, Fix Em Up, Rent Em Out, that looks particularly good, especially for anyone getting started. It’s next on the reading list with a full review planned for next week.

Popularity: 12% [?]

Tags: getting started in REI, landlord, Rehab, rent houses