Fakers and Frauds

How do you spot a fake or a liar?  I’ve had hundreds of people submit rental applications over the years and some of the crap they try to pass off as “truth” is incredible!

So, how to prevent this?  Here are a few tips:

  • Have them show you a photo ID and check the address against the address they put on your application.  Also, make sure the name matches, of course.
  • Have them bring a paycheck stub or proof of income. And then, take a good, hard look at it.  Are there shadowy areas on the paper?  Typos?  Different fonts?  These items can indicate photo-copying and tampering.  Requiring this piece of supporting evidence of income will exclude many scammers.
  • Make sure there’s a spot on the app that asks for names/ages of people to live in the property.  And try to have all of them meet you there before you commit to a rental agreement.  If they’re not willing to do this, I’d be suspicious.
  • Check out the company that employs them; do a Google search.  Addresses and numbers should match what’s written on the app, and on the paycheck stub.
  • Although I don’t do credit checks for my lower income properties, I use National Tenant Network (NTN) for my credit/background checks on all of my middle/higher-end  properties I own or manage for others.   I cover the cost by charging my applicants $35 as a fee for applying.
  • Charging an application fee weeds out people who aren’t serious about renting from you.
  • In addition to the above list, I always try to drive by the place they currently live.  Is it a dump?  Is there trash in the yard and on the porch?  Does it look filthy?  Is the home in decent repair?  I find it funny that, quite often, people say they want to move because they have a slumlord who doesn’t fix things, etc.  Really?  You chose to move into that dump in the first place, right?  Doesn’t make sense …

If you add the above items to your checklist, you’ll be more likely to weed out the frauds and scammers.

Good luck, and happy hunting!  :-)



Finding Good Contractors

I do a lot of the work on my rental properties, but there are certain things I don’t know how to do, or just don’t want to do on my own.  So, how does a homeowner find good, honest contractors?

  • Networking — I’ve found some wonderful people through other investors.  I’d much rather use someone my friends have been happy with than take a chance on a complete stranger.
  • Angie’s List — I used to think this website included mostly higher-priced contractors, but I’ve actually found a couple of high quality people through Angie’s List, and their prices were reasonable.

I’ve had a few bad experiences after hiring workers who approached me, offering a good deal.  For example:   Someone offered to paint the trim on my big four-plex several years ago, and the price was fantastic.  He gave me references and of course, I checked those references.  He got glowing reviews so I went with him.  He asked for 1/2 the money up front, which is fairly common, and began work the next day.  And after that first day, I never saw him again!  Another hard lesson learned … His “references” were most likely friends or family members.

So over the years, I learned to rely on friends and other investors/landlords when looking for new contractors.  That system usually works well every time.  And if an unknown offers you a deal that seems too good to be true, don’t be tempted to grab it … you’re probably being scammed!


Success Story

Meet Jesus, Hilda and their family … when they first rented from me, their oldest daughter, Karina, was an infant.

photo 1They were wonderful tenants and fantastic people.  Kind, hard-working, excellent parents.  Jesus approached me in 2004 about purchasing the double in which they lived.  (His sister and her son lived in the other apartment in the duplex.)

I set it up as a land contract and charged him 50K for the home.  (I’d bought it for 20K, did 15K of repairs/updates before renting it out.)  I continued to carry the insurance and property taxes, but I passed these expenses on to Jesus, by adding those amounts into his monthly payment, and also charging him 9% interest.  He gave me 7K down, and paid on time every month.

Within seven+ years, he became the proud owner of that home.  Throughout those years, he also improved the property, inside and out.  Here are a couple of before and after pictures:

#22, Ch12photo 2I’ve been invited to their children’s confirmations, graduations, etc., and every time I stop by, Hilda is offering me some kind of delicious Mexican concoction she has whipped up that day.

Throughout my real estate investing journey, I’ve forged relationships that will last a lifetime.  This is just one of many examples.  Although there are plenty of scammers out there, this family and other tenants like them more than make up for the “rotten apples.”  They’ve enriched my real estate investing experience more than they can ever know.

Income is essential, of course, but these relationships are truly the icing on the cake!  :-)

Before You Buy …

When new investors consult with me about getting started in the rental business, the first question they usually ask is, “How do I know where to buy?”  After I ensure they have the finances for the purchase figured out, my answer is pretty straightforward:

1)  Make the property within a 30-minute drive from your home.  Gas is expensive, and if you buy a fixer-upper, you’re going to be spending enough money on the rehab without driving all over town to get there!

2)  Check the schools and amenities in the area.  Good schools and access to conveniences and the bus line attract renters and enable you to charge higher rent.

3)  Stop in at the local police station and get a crime run covering the past year.  Petty stuff like theft or disturbing the peace isn’t a huge deal, but if you see armed robbery, stabbings, drug crimes and worse, run!

4)  Drive your chosen neighborhood at various times of day … morning, noon, evening, weekends.  Notice who’s walking the street and “out and about.”  What do the residents’ vehicles look like?  How about the residents themselves?

5)  And lastly, TALK to people.  It’s incredible what you can learn this way.  Talk to neighbors, tell them you’re considering buying a home there (don’t tell them it’s going to be a rental … some may suspect you’re a slumlord).  Stop in at a local restaurant/bar and speak with a server or bartender who’s been there a while.  They’ll be a wealth of information … they may tell you more than you want to know.  LOL.  But that’s okay, you’re on a fact-finding mission.

If you do your “due diligence” prior to the purchase, you won’t suffer buyer’s remorse when the deal is closed.  It’s worth the time spent, trust me.

And, happy hunting!  :-)

Retire in Indianapolis? What?

Retire in Indianapolis?  Crazy, right?

Well, crazy smart, according to a recent Market Watch article titled “Retire Here, Not There.”  Hoosier hospitality is alive and well, and along with affordability, activities and amenities, we’re attracting retirees who are deciding they can handle the harsh weather because the plusses outweigh the minuses.

The cost of living in Indiana is close to 11% below the national average, and with home prices averaging around $111,000 and income tax at a flat 3.4%, this is a very affordable state … easy on the nest egg.  And while Indianapolis used to be called “IndiaNO-place” the downtown area is now a bustling, vibrant place to be … arts and culture, the symphony, opera, fine restaurants and fun pubs, Pacers and Colts, walking and biking trails … I personally know several people who have downsized after their kids graduated from college and are now living in upscale condos downtown.

The other Indiana cities mentioned in the article are Columbus, Evansville and Bloomington.  If you’d like to check out the full article, here’s the link:


Personally, I’ll be staying here for a long, long time.  I love this city.  But I can assure you, when the cold weather hits, I’ll be heading south for a week here and there, whenever I get the chance!


Minimum Wage, Minimal Housing

In an interesting study reported in the Washington Post, the National Low Income Housing Coalition looked at fair market rents across the country and calculated how much a worker would have to make per hour to live in a decent one-bedroom apartment.  The study included rent plus utilities, and was based on a 40-hour work week, 52 weeks/year.

They came up with amounts — per county — a person would have to earn per hour to be able to afford a decent one-bedroom apartment in that county.  This is called the “housing wage.”

The minimum wage is currently $7.25/hr.  Not surprisingly, there is no single county in America that has a housing wage under the minimum wage.  (There are a few counties in Arkansas that come close, at around $7.98/hr.)  When you look at these numbers, you can understand why single parents often try to rent one-bedroom places, and give the children the bedroom while they sleep on the couch.  They work minimum wage jobs and just cannot afford a bigger space.

Here in metro Indianapolis, that “housing wage” is about $12/hr., which is fairly attractive.  I’d definitely take a pass on San Francisco, however … you’d have to earn about $30/hr. (i.e., $62,000/yr!) to afford a one-bedroom decent apartment there.

If you’d like to check out the entire article, here’s the link:


Every county in American is included, so if you’re planning a move, you may want to read this before you pack your bags!





Another Painting Tip

As you know, I’m all about saving time and money.  I’ve done a few posts on painting tools, tips and techniques.  As an entrepreneur, I enjoy watching the TV show Shark Tank (ABC) and they featured a great new product I’d like to share with my readers:

Paint Brush CoverIt’s called The Paint Brush Cover.  Whether you’re a landlord, real estate investor or homeowner in the middle of a painting project, you rarely finish it in one session.  So, what do you do with that brush?  I’ve usually wrapped it tightly in Saran Wrap and it’ll keep for hours or even a couple days if need be.

Well, this product is air tight, made of plastic, and holds almost 100% humidity!  Therefore, it’ll keep that brush moist and ready to use for weeks if necessary!  Truly a time saver!  And it accommodates brushes up to 3″ wide.

I’m going to order one at http://www.paintbrushcover.com.  And by the way, when you’re totally done with the project, don’t forget to clean your brush the right way.  Paint brushes are expensive … around $10-15 if you get the right brand.  (I recommend Purdy or Wooster.)  I use warm soapy water (or my trusty Krud Kutter) and a stiff wire brush to remove all the paint from the bristles.  Start in the spine, up close to the handle and brush down to the tip of the bristles.  A good brush should last for years if you treat it with love and kindness.  :-)

Happy painting!



Almost Like New…

photoThis is my mom’s golf cart.  She bought it used, about five-seven years ago.  We’re moving her from FL to AZ (she’s 90, and it’s time to get her closer to several family members).

Anyway, it’s been sitting outside all this time and has collected so much dirt and, of course, mold.  I bought a bottle of CLR Outdoor Furniture Cleaner on the recommendation of the people at her neighborhood hardware store.

I can’t say I had much faith in the product, as I’ve tried other CLR products and have been less than impressed with the results.

But I’m pretty amazed at the difference this is making!  I sprayed it on and spread it evenly, allowed it to sit a few minutes, then scrubbed it with a stiff wire brush and voila!  I think she’ll be able to get the most out of the resale when I’m finished.

I’m wondering what other items it may address … like vinyl siding, etc.?  I’m going to find out, when I get back home to my rental properties in Indianapolis!

Take This Stuff Out!

It’s not easy running a rental business on your own.  One of the biggest challenges is rehabbing your home(s) according to what your tenant mix demands.

A piece of advice, if you’re into lower income rentals:

Most people in the lower income demographic are looking for something clean and affordable.  Period.  I always supply stoves and refrigerators, but I never hook up the ice makers in the refrigerators.  They leak, malfunction, and aren’t worth the hassle.  Ice cube trays work just fine!

Another item I don’t install is garbage disposals.  People try to put crazy stuff in them.  The unit jams up or just quits altogether.  Another repair/replacement issue!  Not worth the hassle.

And lastly, take a pass on the sink sprayer.  Tenants tend to be rough with them.  They’re easily broken, they leak … again, not worth installing.  You can buy a “plug” for the hole where the sprayer goes.

Even without the above items, my units compare extremely well to the competition, because they’re super clean, including fresh paint and nice flooring, and they’re accompanied by an attentive landlord!

As I work my way up on the income scale, I add amenities … high-end counter tops, flooring, and other accessories.

This may seem elementary, but I’ve seen too many real estate investors buy their first rental and pour way too much money into the rehab … you must make it attractive to your market, nothing more, nothing less!

Onward and upward …. :-)

Pre-Screening Tenants

I’m — basically — a trusting person.  But this personality trait doesn’t work well in the wacky world of landlording.  I found that out the hard way, early on in my career.  Choosing to think the best in people, I believed what my tenants said.  When they told me the (late) rent would be in my hands “next week,” I believed them.  When that didn’t happen, I waited patiently when they promised it for the following week.

Fortunately, I wised up through the years and I file evictions quickly when rent isn’t being paid, or when someone is trashing the apartment.  But how do you improve your chances of finding a great tenant before they sign on the dotted line?

One great way to do this is to check out the neighborhood they are moving from.  Is the applicant willing to have you stop by and visit their current residence?  If so, take advantage of the invitation!  This visit will speak volumes about how they live and care for their home.  Is it clean and orderly inside?  Even if it’s a bit cluttered, are the floors, appliances, bathrooms clean?  Does it smell funky inside?  If there’s a basement, make sure you check that out as well.  Sometimes, there’s scary stuff going on in basements!

If the applicant isn’t comfortable having you stop by, BEWARE!  This is a red flag.  If they move into your rental, they won’t want you to stop by there, either.  If they give what you feel is a valid reason for refusing, do drive the neighborhood and check out their particular house and yard.  Is there trash in the yard or on the front porch?  Is the home well-kept?  How about the back yard area? Is there trash scattered around?  Are there people “hanging out?”  Do the windows have proper coverings, or tattered sheets hanging up?  What about vehicles?  You can tell a lot about a person by the look of their car(s), inside and out.

Beyond these things, I always observe the personal cleanliness of the applicant/family.  This factor has a bearing on how they’ll treat my rental as well.

Aside from the obvious factors — work history, financial ability to pay, rental history — the above factors are equally important.  A filthy tenant who pays you on time, every time, is still a filthy tenant.  You will lose time and money renting to that person.

So protect yourself.  Go the extra mile … check out their living habits.  It’ll be worth it down the road.

Onward and upward!   :-)