Delightful Aussies

These two brothers contacted me a few months ago, through a site called Bigger Pockets, which is a huge networkiing site for real estate investors everywhere.

They had searched out several attractive cities here in the US, all of which have strong rental markets. Indianapolis won out. We emailed back and forth quite a bit, they read my book, and then flew over and spent about 10 days here with me, checking out homes and neighborhoods. Both of them hope to purchase up to 20 rental homes here. They’re back home now, and are trusting me to take it from here. I appreciate the trust they’ve placed in me, and I intend to find them some “gems” that will provide steady income and long term investment for years to come.

They’re enjoying some loaded cheese fries at Outback Steakhouse in the picture … LOL! They found most of us to be kind and helpful — thankfully — and they couldn’t believe how green everything here was. One person did ask them what language they speak in Australia. (OMG.)

They’ve bought one property, and lost a few — I’ve continued to look, and have put in offers for them, and the difference in time zones has duped us a couple times. They’re 14 hours ahead and it’s a bit difficult to jump on a great deal if they’re asleep. But considering the fact a 1500 square ft. home over there in Brisbane sells for around 400-500K, they’re pretty thrilled with our prices. The Aussie dollar is a bit weak against the American dollar right now, but they can still make it work.

I love their “buy and hold” strategy, as that was my goal when I started investing  23 years ago. I’m so excited to be part of their journey, and I look forward to growing their investment portfolio. Welcome, “mates!”

 

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Rental Property Myths

When people ask me about owning and managing my Indianapolis rental properties, I get the same questions/comments again and again. Here are the most frequent  myths I respond to:

  • “I’ll bet you’re always getting calls in the middle of the night!”  No, in my 21+ years of doing this, it’s rarely happened. Yes, I’ve received calls on the weekend and/or in the evening, if someone has an emergency, like if a furnace goes out. But fortunately, I have my trusted contractors to call, and they can take it from there. I’m not making trips to my rentals on those calls. And if it’s something minor (which it sometimes is) I have them wait until the next working day.
  • “Don’t you get tired of your tenants totally trashing the places?”  Well, I’ve had tenants leave trash behind after a move-out, for sure. When I’ve evicted a person, sometimes they take what they need, and leave the rest. This happens more often in the lower economic demographic. But as far as vandalizing/destroying the apartment, out of anger or resentment, no. If you treat your tenants with respect, this doesn’t occur.
  • “I’ll bet you’re making a ton of money!”   Uh, no … When you buy rental properties, you’re buying for income, yes, but also for long-term investment. It’s not a “get rich quick” proposition. If you’re buying with a loan, you want to make sure your rent will cover more than your loan payment and other expenses (i.e. taxes, insurance, utilities, etc.). You can make a “ton of money” if you buy a ton of rentals, for sure. But the commercials you see on TV are totally exaggerated! Don’t buy into that crap!
  • “You’re a slave to those properties…you don’t have a life of your own!”  That depends on a couple things: if you fix them up well in the first place, you shouldn’t have many major repair issues going forward. And also, you have the option of hiring out the management if you don’t have the desire, personality or time to do it yourself. The cost per month is usually 8-10%/monthly rent, plus a percent of the first month’s rent. But beware — good, honest property management is hard to find.

So there you have the comments/questions I get most often — all myths. This business is intricate, demanding, frustrating, and very rewarding. I don’t regret beginning my journey all those years ago, and I do my best to educate others before they jump in. It isn’t for everyone, but for many, it can be part of a smart, long-term investment strategy.

Onward and upward!  :-))

 

Flash From the Past

When I began buying rental properties in Indianapolis, cell phones weren’t common. Most people who needed to “be available” at the drop of a hat wore pagers.
All my tenants had my pager number, and contacted me that way when they had a repair or rent issue. There were days when I’d be working at one of my rentals,IMG_8989 and I’d get four or five pages in a four hour period. Here’s a sampling of how that would go:

  • My pager would start beeping while I was in the middle of a project at one of the rentals.
  • I’d put everything down, lock up, hop in my car and head for the closest pay phone.
  • After fishing in my purse for 50 cents, I’d put it in the slot. The pay phone would eat the money, but I wouldn’t get a ring tone. Dead.
  • On to the next closest pay phone.
  • Find another 50 cents, get out and realize the phone cord’s been ripped out.
  • On to the next closest pay phone.
  • Finally, one that works! But my tenant doesn’t pick up. Ugh ….

And imagine the hassle when it’s 10 degrees outside, or pouring down rain. What a blessing it was when I was able to lose the pager and rely on the cell phone. What a luxury to be able to stay put and keep working, while taking care of issues that might arise during the day!

Driving by this old pay phone took me back 15+ years and I just had to stop and take a look at it. Technology can be frustrating at times, but it certainly saves us time and energy.

Oh, and take a closer look at the picture … how about that doorway to nowhere on the second floor of the house in the background? LOL

 

Classy Wall Repair

Bet you’ve never seen anything like this … me neither! My tenants hadn’t been getting along and I told them they’d need to move, or face eviction. So they moved, quickly.

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But not before one of them took their anger issues out on this wall. This was a make-shift storage room off the hallway, adjacent to the attic area, and the walls were thin to begin with. I find it interesting that they made this crazy attempt at “repair” … using the term loosely! A plastic bag, cardboard, duct tape and clear packing tape. Nice.

I don’t put up with disturbances at my multi-family rentals. People deserve to live peacefully, and when I get noise complaints, I give tenants one written warning, period. (“Be nice, or leave!”) I got this place up and running quickly, and now, peace and quiet has returned. Onward and upward!  🙂

 

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!

Sex Offenders?

Here’s a new one … I got a call about a rental property the other day and the guy asked some appropriate questions about the unit.  He sounded like a good candidate.  Toward the end of the conversation he asked, “So, do you rent to sex offenders?”  Whaaaat?

I hesitated just a moment and said, “Um, I’d have to check with the owner … may I ask, what was the specific violation?”

Silence, then “Deviant behavior.”  Hmmm … did he have sex with a goat?  Did he expose himself in public?  What?  I decided to let it be …

“Well, I can check with the owner and you can give me a call maybe some time tomorrow …”  He said thanks, and hung up.

First of all, I AM the owner, but I was taken aback and I use this little ploy all the time with my tenants.  Most of them don’t know I’m the owner.  (It protects me.)  Secondly, I’d never been asked that question.

So, do you have to rent to sex offenders?  Is it discrimination if you refuse?

The answer is “No” and “No.”  You can’t discriminate against anyone regarding race, religion, sexual orientation, age or disability.  But you CAN discriminate against people you feel will affect your ability to do business in a profitable manner.  Sex offenders might fall into this category, right?  Others who would?

  • People with really loud cars or motorcycles
  • People who are dirty
  • People who exhibit a nasty attitude toward you
  • People who’ve lied on their application or have prior evictions
  • People who want to squeeze six people into your two-bedroom house
  • People who smoke, do drugs or have pets of any type
  • People who have been at their job for a short time

Mr. Sex Offender didn’t call me back.  If he had, I would’ve politely told him no and wished him luck as he moved on. Sexual abuse is a huge issue in this country.  There’s a Sex Offender Registry that many people check out before they move into a neighborhood and renting to a sex offender would negatively affect my ability to do business.  And beyond that, it just wouldn’t feel right.

Onward and upward ………  🙂

Shots Fired!

Okay, so my lease has a clause that says, “Keep music, TV and other noise low so neighbors aren’t bothered.”  Unfortunately, it doesn’t say anything about gun shots fired or visits from the police.  😦

The Friday after Thanksgiving, at 11:30 PM, I got a call from a tenant in one of my duplexes, saying shots had been fired in the area, and there were police at the other side of the duplex.  Wonderful.  I didn’t get a call from the other tenants.  Hmmmm ….

I went down there the next day and of course, the tenants said it must have been a “drive by” because they don’t have any enemies, etc.  (Again, hmmmm…..)  The bullets went right through the two-inch thick wood front door and were embedded in the paneling in the living room.  Well, I’d had complaints and suspicions about these tenants previously re: drug activity and had the narcotics division check it out (to no avail), so I wasn’t buying their story.  I strongly suggested they move out and they acquiesced.

Here’s the bottom line:  if you suspect drug activity at one of your rentals, call the police and have them do surveillance.  And more importantly, put a clause in your lease to protect yourself, which I’ve done since this incident.  I’ve added a clause that states, “Police visits will not be tolerated.”  Enough said!  You need to be able to file eviction if there is police activity at one of your rentals, even if it’s domestic disturbance.  Putting that clause in your lease gives you the option to evict if you feel it is necessary.

We landlords can’t be at our rentals 24/7, and the best we can do is have an airtight lease to protect ourselves from tenants who are conducting illegal activity or creating disturbances on site.

When in doubt, get ’em out!

Do’s and Don’ts

When I’m asked about real estate investing and, more specifically, buying rental properties in Indianapolis, people always want to know my input on two things:

  • What does it take to be a landlord?
  • What’s your best advice — do’s and don’ts — to someone who is starting out in this business?

The answer to the first question is easy.  Good landlords understand the importance of being very organized and keeping good records.  They also understand the importance of “letting go.”  There are so many things beyond our control, especially in tenant management.  You have to let that stuff roll off your back and move on.

The do’s and don’ts question is very interesting.  I was interviewed for an article about this very subject and the piece appeared last week.  Here’s the link: 

 http://ow.ly/4AWWY

There’s lots of good info there, for people who are either considering investing or have already jumped in.  Several of the tips are covered in my book, but one of my favorites is to not fall in love with a potential property.  When you make emotional decisions, whether it’s about a purchase or a tenant situation, you’re headed for trouble.

Even though I read everything I could get my hands on before I began my real estate investing career, I made tons of rookie mistakes.  I wrote my book to share my story and expertise, to save others from making needless mistakes.  So, when I come across additional information, I enjoy passing it on to my readers . . . happy investing!