tag:blogger.com,1999:blog-293098932024-03-07T11:46:43.721-05:00Landlord ShmandlordA blog about being a landlord and investing in real-estate.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.comBlogger43125tag:blogger.com,1999:blog-29309893.post-12943563485693171982006-11-30T02:21:00.000-05:002006-11-30T02:24:19.047-05:00Just Moved Shmandlord to it's New HomeI just finished the transition to Shmandlord's new home. The new address is:<br /><br /><a href="http://www.landlordshmandlord.com">http://www.landlordshmandlord.com</a><br /><br />Please update any links you have. If you're using an RSS feeder, you should not experience any problems (as long as you're using the feedburner feed).<br /><br />Please email me if you have any problems!<br /><br />This is the last post that will appear on the blogspot page.<br /><br />See you over at the new pad!Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-85604839699798243562006-11-27T23:41:00.000-05:002006-11-28T00:42:15.718-05:00Link ADD<img src="http://static.flickr.com/12/14302519_18c8878163_m.jpg" alt="knight" align="right"/><ul><li>I just stumbled upon a new site on which I've already wasted too much time: <a href="http://www.neighboroo.com/">neighboroo</a>. It allows you to analyze a few statistics about the population of the country by zipcodes, then work your way out.</li><br /><li>Check out <a href="http://www.johntreed.com/Kiyosaki.html">John T. Reed's analysis</a> of Kiyosaki's <a href="http://www.amazon.com/gp/product/0446677450?ie=UTF8&tag=landlordshman-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0446677450">Rich Dad, Poor Dad</a>, which goes completely against what you'll hear from most real estate investors. If you're familiar with Kiyosaki, I'd like to hear your thoughts on this analysis.</li><br /><li>A cool rental listing site: <a href="http://www.housingmaps.com/">housingmaps</a>, </li><br /><li>Maybe/Someday: <a href="http://www.sothebysrealty.com/">Sotheby's International Realty</a></li><br /><li>I've been playing a bit of chess recently, and would like to play against any interested Shmandlord readers. If you'd like to play, start up a game with me over at <a href="http://postcardchess.com/ccard.html">Post Card Chess</a> (using the email address landlordshmandlord AT gmail)</li><br /></ul><br />Image: <a href="http://flickr.com/photos/saad/14302519/">saad</a>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com2tag:blogger.com,1999:blog-29309893.post-72762829427830985232006-11-27T01:15:00.000-05:002006-11-27T09:19:40.448-05:00Organizational overhaul<p>For a while I've wanted to overhaul my organizational system in hopes that I can improve my productivity and prevent important details from slipping by. In addition to my landlord ventures, I have a full time job and am also starting my own <a href="http://www.reliabledatasystems.com">software company</a>.</p><p> <center> <a href="http://www.amazon.com/gp/product/0142000280?ie=UTF8&tag=landlordshman-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0142000280"><br /><img src="http://static.flickr.com/11/16833182_9d782a285a_m.jpg" width="240" height="180" align="center" border="0" alt=""/></a> <br /></center><br />So, this weekend I made the move to implement the <a href="http://www.amazon.com/gp/product/0142000280?ie=UTF8&tag=landlordshman-20&linkCode=as2&camp=1789&creative=9325&creativeASIN=0142000280">Getting Things Done</a> system. The basic premise is that you:</p><br /><p><ol><br /><li>capture all the things that need to get done into a logical and trusted system outside of your head and off your mind</li><br /><li>disciplining yourself to make decisions about all the inputs you let into your life, so that you will always have a plan for next actions that you can implement or renegotiate at any moment</li><br /></ol></p><br /><p>In the next few days, I will describe how I fit my landlording into the system, what worked, and what didn't. If anybody has or does use this system I would appreciate your thoughts.</p><br /><p>Thanks <a href="http://flickr.com/photos/kengo/">kengo</a> for the image.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-17693152714226650192006-11-26T23:46:00.000-05:002006-11-27T10:34:55.689-05:00A lesson on what not to do<p><a href="http://flickr.com/photos/sercasey/292671790/" title="Photo Sharing"><img src="http://static.flickr.com/104/292671790_b6c2754f26_m.jpg" alt="foreclosure" align="right" height="180" width="240" /></a>I know I've mentioned the blog before, but I cannot stop reading <a href="http://iamfacingforeclosure.com/">I am Facing Foreclosure</a>. Just for the quick overview, Casey (the blogger) bought 8 properties to flip (not rent) with a combined value of over $2 mil. He did this by taking out over $140k in credit card debt, lied on his loan applications, and put no money down. He is now suffering the consequences.</p><br /><p>Anyway, I just wanted to post a quote from one of his <a href="http://iamfacingforeclosure.com/98/renting-a-house-in-foreclosure/">blog posts</a> that struck me as funny. I have to admit that when I first read it, I felt a hint of jealousy, but quickly snapped out of it for obvious reasons. He is toying with the notion of renting out one of the houses that is being foreclosed:</p><br /><blockquote>I’m not paying the mortgage so why not collect some cash, right?</blockquote><br /><p>You know, I really wish I could just not pay my mortgages, and pocket the rent. Wouldn't you? He then enumerates the reason why renting is not worth it to him.</p><br /><p>Funny. If you have any thoughts on how I can stop paying my mortgages please let me know. However, I will not consider suggestions that result in foreclosure.</p><br /><p>Thanks <a href="http://flickr.com/photos/sercasey/">sercasey</a> for the image.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-81511310393807618142006-11-24T23:29:00.000-05:002006-11-24T23:37:17.812-05:00Working things out with Section 8I spoke with the Section 8 inspector, and he was very reasonable.<br /><br />It turns out that the township code was recently changed, and that is why I need to fix the wiring in the basement. He just wants the visible wire properly replaced, which will have to be done by an electrician. He also gave me a very generous timeline.<br /><br />Regarding the paint, I don't have to scrape and repaint all exterior wood like the sheet said, just the areas that need it.<br /><br />Regarding the pipe, he was also very reasonable, saying that I could just properly cap it.<br /><br />He also asked if I could call back Monday to schedule inspections of my other apartments, which is required by the township every two years. All of the remaining inspections will most likely be sometime in December.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-29449703574791449562006-11-14T22:29:00.000-05:002006-11-14T22:43:28.938-05:00Problems with Section 8Looks like I spoke too soon <a href="http://landlordshmandlord.blogspot.com/2006/10/section-8.html">when I said </a>that the Section 8 inspector hasn't made my life a living hell.<br /><br />I don't think that I'm on the guy's bad side, but I just got the letter about this year's required fixes. The list isn't pretty, including:<br /><br /><ul><li>Replace visible wiring in the basement (the wiring hasn't changed since I've received a CO).</li><br /><li>Remove an unused natural gas pipe in the basement. (What? This has also been there for years.)</li><br /><li>Scrape and repaint porch, and all visible wood outside. (It really just needs patching, not a full scrape/repaint).</li></ul><br /><br />There are a few other requests, but the rest are understandable. I'm trying to get in touch with the inspector to see why all of the sudden he found things that have been there for years.<br /><br />I will let you know what happens.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com3tag:blogger.com,1999:blog-29309893.post-45345489848232667542006-11-14T22:24:00.000-05:002006-11-14T22:28:02.154-05:00New: The Carnival of Real Estate InvestingAnesia over at <a href="http://www.thelandlordblog.com">The Landlord Blog</a> just started the <a href="http://www.carnivalofrealestateinvesting.com">The Carnival of Real Estate Investing</a>. <br /><br />Check out the first edition <a href="http://www.thelandlordblog.com/2006/11/13/carnival-of-real-estate-investing-1/">here!</a>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-41790450964964554752006-11-07T12:59:00.000-05:002006-11-07T14:28:38.704-05:00Is it really?<img src="http://www.realtor.org/images/home_buyers___sellers/1106_newspaper_ad_small.gif" align="left" alt="wsj nar ad" /><br />As was <a href="http://www.themortgagereports.com/2006/11/national_associ.html">pointed out in the last carnival</a>, the National Association of Realtors has launched a $40 million campaign to <strike>end any softening</strike> promote the buying and selling of properties. Their slogan is "It's a great time to buy or sell a home", which obviously cannot be completely true.<br /><br />Now, I'm not one of the extreme pessimists who believes that you will spontaneously explode if you own investment property early next year, but I do believe that the market will continue to soften and that it may not be the best time to buy or sell all homes. Over at <a href="http://bigpicture.typepad.com/">The Big Picture</a> there are two articles about this, but the second one titled <a href="http://bigpicture.typepad.com/comments/2006/11/analyzing_why_i.html">Analyzing why "It's a great time to buy or sell a home"</a> dissects every line in the recent WSJ ad and explains why "every single statement in the ad is materially false or misleading". <br /><br />I think it's worth a <strike>laugh</strike> read.<br /><br />Also, <a href="http://bigpicture.typepad.com/comments/2006/11/its_a_great_tim.html">here</a> is the first article.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-56455851381597452732006-11-06T01:57:00.000-05:002006-11-06T09:51:15.952-05:00Carnival of Real Estate 17<p>There were lots of great posts this week, and it's been hard picking which ones to include. I was very impressed with the breadth of topics, and feel that we, the <a href="http://www.carnivalofrealestate.com/">Carnival of Real Estate</a> community, should continue to encourage posts regarding all aspects of real estate: realtors, mortgage brokers, landlords, stagers (yes, there was a good post on staging this week), etc.</p><br /><p>I am going to list my top 5 and then include the remaining posts in no particular order. Here it goes:</p><br /><ol><li><a href="http://seedsofgrowth.com/the-pumpkin-that-sold-me-a-house">The Pumpkin That Sold Me a House</a> describes how a realtor can differentiate him or herself. Whatever industry you're in, it is always important to focus on the customer's experience, which is something that is too often forgotten. This post is short, but illustrates how one realtor, without exerting much effort, is reaching their customers in a very effective way.</li><br /><br /><li>Ugh. <a href="http://www.truegotham.com/">True Gotham</a> has a really great read about a frustrating mess, at <a href="http://www.truegotham.com/archives/a-brokers-job-coop-board-anticsredux.html">Co-op Board Antics-Redux</a>.</li><br /><br /><li><a href="http://daily.hotpads.com/hotpads_daily/2006/11/in_defense_of_t.html">In Defense of Landlords</a> over at <a href="http://daily.hotpads.com/hotpads_daily/">hotpads.com</a> explains why rental prices are rising.</li><br /><br /><li><a href="http://www.mlpodcast.com/blog/">Mike's Corner Web 2.0 for Real Estate Pros</a> has some good commentary about adapting to change in <a href="http://www.mlpodcast.com/blog/2006/10/change-its-good-thing.html">Change is a good thing</a>.</li><br /><br /><li><a href="http://transparentre.com/">Transparent RE</a> makes many much needed points in <a href="http://transparentre.com/2006/10/29/an-open-letter-to-the-title-insurance-industry.aspx">An Open Letter to the Title Insurance Industry</a>.</li><br /></ol><br /><br />Additional Posts:<br /><ul><br /><li><a href="http://www.thedigeratilife.com/blog/index.php/2006/11/04/this-old-house-is-worth-123-million/">This Old House is Worth $1.23 Million</a> compares two houses, each worth the same, in two different parts of the country.</li><br /><br /><li><a href="http://real-estate-net.blogspot.com/2006/11/are-zoomf-and-nestoria-merely-imitating.html">Are Zoomf and Nestoria imitating Trulia?</a> What are British real estate sites like?</li><br /><br /><li><a href="http://www.themortgagereports.com/2006/11/national_associ.html">The National Association of Realtors Takes an Ad in the Wall Street Journal</a>. "It's a great time to buy or sell a home"? Doesn't sound like sound economics to me.</li><br /><br /><li><a href="http://www.bloodhoundrealty.com/BloodhoundBlog/">Bloodhound blog</a> refutes some of the ridiculous claims against Zillow by the National Community Reinvestment Coalition in <a href="http://www.bloodhoundrealty.com/BloodhoundBlog/?p=592">Defending Zillow</a>.</li><br /><br /><li>We often don't hear from Stagers on the CoRE, but this week <a href="http://realestaging.blogspot.com/">Home Staging, Rants & Ravings</a> submitted a list of reasons to stage in <a href="http://realestaging.blogspot.com/2006/10/stagers-are-we-really-red-headed-step.html">Stagers.. are we red headed step children that get no respect?</a>.</li><br /><br /><li>What's the difference between the rich and the ultra-rich? <a href="http://wenchwisdom.blogspot.com/index.html">Wisdom From Wencypoo's Mental Wastebasket</a> describes it in <a href="http://wenchwisdom.blogspot.com/2006/11/revolt-on-revolt-of-fairly-rich.html">A Revolt of the Fairly Rich</a>.</li><br /><br /><li><a href="http://www.zillowblog.com/">Zillow blog</a> gives an overview of the <a href="http://www.zillowblog.com/zillow_blog/2006/10/blog_business_s.html">Blog Business Summit</a> containing many good tips for using your blog to help your business.</li><br /><br /><li><a href="http://www.nubricks.com/">Nubricks.com</a> has a little insight into Parisian real estate at <a href="http://www.nubricks.com/archives/215/property-paris-immobilier-france-apartments/">The future of immobilier in the Paris property market</a>.</li><br /><br /><li>Always a great read, <a href="http://www.thelandlordblog.com/">The Landlord Blog</a> has (one of many) great posts about <a href="http://www.thelandlordblog.com/2006/10/25/sifting-through-property-manager-candidates/">Sifting Through Property Manager Candidates</a>.</li><br /><br /><li><a href="http://yochicago.com/today/">YoChicago today</a> on <a href="http://yochicago.com/today/new-construction/3004_3004/">What does it mean when a Chicago developer moves into his or her own building?</a></li><br /><br /><li><a href="http://www.realcentralva.com">Real Central VA</a> has a short but good post on <a href="http://www.realcentralva.com/2006/10/31/brand-loyalty-and-quality-customer-service/">Brand loyalty and quality customer service</a> stemming from a recent consumer experience.</li></ul><br /><p>Thank you everybody for submitting the wonderful posts. Also, thanks to everybody who stopped by for the <a href="http://www.carnivalofrealestate.com/">Carnival of Real Estate</a>. Next week, the Carnival will be hosted at <a href="http://www.truegotham.com/">True Gotham</a>. Please submit your posts by Sunday, November 12th.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-54841111566473452212006-11-02T18:34:00.000-05:002006-11-02T19:56:56.692-05:00The Reverse-Millionaire<p>It's been over two years since I bought my first building, and since the very beginning my goal has been to accumulate as much real estate as possible. The phrase I've been using to describe this aspiration is to become a <strong>Reverse-Millionaire</strong>: to owe as much money to the banks, in the form of secured real-estate mortgages, as possible. The thought is, that the more money I owe the bank, the more properties I'll own and the more money I'll make, not necessarily in the short term, but by holding for the long term. If I can become a reverse millionaire while I'm young, in 15-20 years I'll most likely have "boatloads of money". There are lots of other advantages, for example, any rent inflation, becomes more money that I can pocket each month.</p><br /><p>In order for this tactic make sense, I have a few important rules.</p><br /><ol><br /><li><strong>Only buy a place when you definitely have the monthly cashflow to support it</strong>. I only want to buy a place if I know that I have the money to pay for it. I assume a 33% vacancy rate, meaning that if I receives $1,000 a month rent, count it as only +$666.67 toward cashflow to cover maintenance and vacancy costs (banks conservatively use 25% when calculating your income before giving you a mortgage).</li><br /><li><strong>Only use 30-year fixed mortgages.</strong> Although you will have to pay a higher interest rate, this will keep the mortgage costs from spiraling out of control. After I buy a place, I know that my principle and interest payments will stay the same for the next 30 years, which is very comforting (although insurance and taxes go up).</li><br /><li><strong>Do not lie on the applications.</strong> This should be obvious, but it isn't always as you'll see shortly. When a bank gives you a mortgage, they're betting based on the information that you gave them that you are going to pay the loan back. They use the information on the application to determine how likely it is that you will default. If they are willing to give you a loan based on an honest application, then they believe that they won't, within a tolerable level of risk, lose money. There are reasons for the checks and balances that the bank uses, when you lie you're much more likely to get yourself in over your head.</li><br /></ol><br /><p>Now, using this method I've purchased four properties in the last two years. I am not quite the reverse millionaire that I want to be, but I'm about two-thirds of the way there. Because I followed the rules listed above, I am in fine financial shape. If interest rates go to 500% tomorrow, that's fine for me because I will be paying the same amount for the next 30 years. If a tenant doesn't pay rent for a few months (as regular Landlord Shmandlord readers are aware does occasionally happen), then I can handle it.</p><br /><p>The key point that I want to make is that, if I didn't follow something similar to the above guidelines, it would have been very easy for me to achieve my goal of becoming a reverse millionaire by now. For example, I could have selected much riskier loans, like the infamous interest-only ones. Or I could buy more places from sellers that are in kahoots with shady mortgage brokers, which appear to be able to offer loans regardless of credit scores. The problem is, if I did these things the entire house of cards would be much more unstable than it is now.</p><br /><p>Not everybody has been as careful. Case in point: Casey at <a href="http://iamfacingforeclosure.com/">I am Facing Forclosure dot com</a>. This guy racked up 2.2 mil in debt (including 140k in unsecured credit card debt). Now, as you'll see very quickly on his blog, he's in trouble. I stumbled upon his blog on <a href="http://www.iwillteachyoutoberich.com/archives/2006/11/casey-serin-stupid-real-estate-decision.html">I Will Teach You To Be Rich</a>, where oddly enough Ramit knew Casey from high school and gives some insight into Casey's character:</p><br /><blockquote><br />Casey had tried to sucker people into a scam real-estate deal less than a week before he admitted he was going through foreclosure. I was fortunate enough to recognize his pitch as bulls**t, but what if someone had gotten conned into it? Financial scams on unsuspecting people make me furious. So I read through his site. It turns out that he had bought multiple houses in different states (hoping to flip them quickly), lied on his applications to get his loans approved, and had grossly miscalculated how much it would cost to renovate and flip them. Bad move. His debt is now over $2 million. <br /></blockquote><br /><p>Now I don't feel quite as bad about not being a Reverse Millionaire yet. However, I'm still confident that if I continue the course that I'm on, I'll eventually get there in a reasonably safe way.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com4tag:blogger.com,1999:blog-29309893.post-80243586503854016592006-10-30T10:56:00.000-05:002006-10-30T11:18:33.574-05:00Carnival of Real Estate at Real Central VA<a href="http://www.realcentralva.com/">Real Central VA</a> is hosting the <a href="http://www.realcentralva.com/2006/10/30/real-estate-carnival-10-30-2006/">16th edition</a> of the <a href="http://www.carnivalofrealestate.com/">Carvival of Real Estate</a>. Also, check out <a href="http://realestatetomato.typepad.com/the_real_estate_tomato/">The Real Estate Tomato's</a> <a href="http://realestatetomato.typepad.com/the_real_estate_tomato/2006/10/halloween_carni.html">Halloween Carnival</a> which will be posted, appropriately, tomorrow.<br /><br />Landlord Shmandlord will be hosting next week's Carnival. If you would like to participate, please <a href="http://www.carnivalofrealestate.com/2006/07/how_to_submit_a.html">submit</a> your best post by Sunday November 5th.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-57673423237084045902006-10-29T21:00:00.000-05:002006-10-29T23:16:21.938-05:00Section 8<a href="http://www.tenantmarket.com/blog/">Do-it-yourself landlord</a> has a great post <a href="http://www.tenantmarket.com/blog/archives/49-Section-8-Series-A-Look-Inside-Landlord-Incentives.html">here about Section 8</a>. I have been dealing with Section 8 for over two years, and have no real complaints. Here are a few things that I learned:<br /><ul><br /><li>The inspector always lists at least a few things that need to be done. Usually these things are extremely minor, but need to be done in order for the rent payments to continue. While I haven't done so myself, I'd imagine that if you get on the inspector's bad side, they can make your life very difficult.</li><br /><li>When I've requested a rent increase from Section 8, I've accompanied the request with comps from the local circulation. The rents of these comps are always a little higher than what I'm asking. To date they have not denied any of my requests.</li><br /><li>The rents are near the top the fair-market value range.</li><br /><li>Rent is always in your mail box, on time.</li><br /><li>Section 8 tenants have an extra incentive to take care of your place and pay their rent on time: if they don't, they lose out of the free money. This is powerful = )</li><br /></ul>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com4tag:blogger.com,1999:blog-29309893.post-38764168724524128962006-10-25T22:11:00.000-05:002006-10-25T22:24:23.546-05:00I've got a new tenant!Finally, my apartment is rented. The lease is signed, and the security deposit and first month's rent were paid. I performed a background and credit check, and also verified that he has had a stable job for several years. There was a surge of interested the past week, so I had a few applicants.<br /><br />I want to reiterate: make sure that you call a perspective tenant about an hour before you're supposed to show the apartment. I've found that usually when I forget to do this, they forget to show.<br /><br />There was only one noshow this time around, who when I called 15 minutes after she was supposed to arrive, she responded: "Oh, I was not able to borrow a car. Can you show it to me this weekend?" She surprisingly was actually looking for an answer.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-26127543499227977912006-10-18T21:45:00.000-05:002006-10-18T21:56:26.121-05:00How to screen a tenant<p>When a potential tenant calls, there are several things I do to avoid wasting time. When they first call, they expect the landlord to lead the conversation. I usually start by describing the important details about the property. Make sure you include:</p><br /><ul><br /><li>Location</li><br /><li>Number of bedrooms</li><br /><li>Monthly price, and what's included. Water, sewer, heat/oil?</li><br /><li>Required amount when they sign the lease. Security deposit? First/last month's rent?</li><br /><li>Parking situation: Is there a garage? Offstreet parking?</li><br /><li>Date it will be available</li><br /><li>Are pets allowed?</li><br /><li>Requirements: credit check, background check, verifiable job?</li><br /></ul><br /><p>The point of the description is to make sure the tenant knows what you're offering. Very often something in the list will turn them away and this is the end. </p><br /><p>Next, they usually either have some additional questions about the property, which you should answer, or they'll ask to see the place. Before setting up a time to show it, there are a few questions you should ask:</p><br /><ol><br /><li><strong>Who will be moving in?</strong>Make sure that the apartment is an appropriate size for the number of potential tenants.</li><br /><li><strong>Do you have any pets? What type?</strong>Maybe you allow pets, but you don't allow elephants.</li><br /><li><strong>When are you looking to move in? What type of lease are you looking for?</strong>This is good because often people are not planning to move for longer than you're willing to wait? Also, the other day this question saved me because a guy wanted to see the place, but it turned out that he was only looking for a three month lease, which I was not interested in.</li><br /><li><strong>Do you have good credit? Do you have a job? What do you do?</strong>These things are important. Are you going to verify that they really have the job? </li><br /></ol><br /><p>Now if they made it this far, it's time to show the property. If you make the appointment a few days out, it is good to call them the morning of to make sure they are still interested (and that they remember).</p><br /><p>At the showing, if they are interested and I like them, I usually have them fill out an application and give an application fee. Optionally, you can offer to apply the application fee to the first month's rent if they're accepted. The fee pays for the credit and background checks (<a href="http://landlordshmandlord.blogspot.com/2006/08/well-today-at-noon-i-met-court-officer.html">which are now a mandatory part of the process</a>). Also, the application fee commits them until you sign the actual lease.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-59946665244523915712006-10-18T21:16:00.000-05:002006-10-18T21:19:36.809-05:00Guest Blogger: Pete's Findings<p>Pete emailed a follow-up to what he found at the apartment:</p><br /><hr/><br /><p>Supposedly, the tenant moved out on Friday. No forwarding address. I stopped over on Saturday to see how they left it. I saw their car tracks on the lawn from the patio door, so that was a good sign! I went inside and everything was gone except a mattress, a lot of shoes, and a lot of junk. Oh yeah, and their abandoned car with the flat tire! I should have had that towed weeks ago, but I was just hoping they would take it with so I didn't have to worry about it. I figured I would give them one more day just in case they wanted their shoes. I got the report today from my cleaner... written on a closet shelf was "F*** you Pete!" I think that counts as official notice they moved out. There wasn't much real damage though. Just that kind note etched into the wood and some tooth picks broken off in my maintenance closet lock. Any idea how to take off a door knob from the outside? Oh the joys of being a landlord.</p><br /><hr/><br /><p>Thanks again Pete. If you haven't already, check out his blog, <a href="http://visualizemilwaukee.blogspot.com/">Visualize Milwaukee</a></p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-65488209012254584872006-10-13T22:49:00.000-05:002006-10-13T23:10:45.879-05:00Guest Blogger: Follow-up on the Pete Situation<p>Here is Pete's second blog post about what happened today in court:</p><br /><hr/><br /><p>For all of you on the edge of your seats wondering what's going to happen, here is the next installment of Pete's dog issues. Today was our court date for the eviction. Against popular recommendation, I moved through the eviction process without a lawyer. And this is the first eviction I have ever done! So I was a bit tense wondering what technicality I probably messed up on. I had my 5 day notice, an affidavit of service of the court papers, and my eviction papers. I had a lease, rent roll, and other paperwork as backup too since I wasn't sure what to expect. Then, I sat in court and waited. My tenant didn't show up so when I was called up everything went quick and smooth. I was given my writ of restitution and was my way. Before I called in the sheriff and movers, I tried calling the tenant. And glory to my ears: "that number has been disconnected." I called another tenant and they confirmed the dog owners were sneaking their way out! So, as long as they didn't do any real damage, this story is basically over. They owe me a little rent, and some court fees, but I doubt I'll ever see any of that. I will see what the place looks like tomorrow, then I start my search for a new tenant.</p><br /><hr/><br /><p>Congrats Pete, amazing that you were able to get them out so quickly! Let us know if the place is damaged. Thanks again for the great posts! Also, if you haven't already done so you can <a href="http://visualizemilwaukee.blogspot.com/">check out Pete's blog, Visualize Milwaukee, here</a></p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-2233415702220593782006-10-12T19:42:00.000-05:002006-10-12T20:13:30.606-05:00Guest Blogger: Pete's dog situation<p>Today we have a guest blogger, Pete from <a href="http://visualizemilwaukee.blogspot.com/">Visualize Milwaukee</a>. He will actually be in court tomorrow for eviction proceedings relating to problems with his tenant's unwanted dog. I want to thank Pete for sharing this story, and I hope everything works out for him.</p><br /><hr/><br /><p>Rick’s dog issues were very similar to a problem I am having with a tenant now. The tenant is my on-site manager in a multi-unit building. They approached me in January about wanting a dog. I told them their lease forbids dogs without written permission and that I am not too keen on dogs. They persisted (“You know we keep a clean place”, “You already trust us, we’d be great dog owners”…), so I told them I would allow a dog under these circumstances:</p><br /><ol><br /><li>we sign a 1-year lease</li><br /><li>we sign a pet-amendment to the lease</li><br /><li>they provide an additional $200 pet-deposit</li><br /><li>a pet-rider at $50/month</li><br /><li>I could terminate the pet-rider at any time</li><br /></ol><br /><p>They balked at that, so I figured I didn’t have to worry about it anymore! So, September rolls around and I get a call from another very upset tenant. After calming them down (why do I have to play therapist for my tenants?), they tell me that there was a dog running around in the hallway. The dog apparently chased/followed their young child and got its leg caught in the main entry door. The owners of this dog came out and started cussing at this tenant for hurting their dog, and that they are going to have to pay the vet bills for his broken leg! So, as the landlord, what do I do? </p><br /><p>The dog owners a) didn’t tell me about the dog b) broke their lease c) were not controlling their dog and d) were threatening other tenants over it!</p><br /><p>Well, it turns out the dog was a birthday gift (from my on-site manager), so what could they do about it? I’d understand right? They offered to pay $50 extra per month and a $100 deposit. I wanted to keep a generally good tenant who was helping me take care of the place. When I called them, the dog owner was still blaming the other tenant because the dog got out on accident!</p><br /><p>After all that, I finally decided the only thing I could do was give them a 5-day Notice of Lease Violation. They had 5 days to get the dog out or move out. They called and said they’d move out before the end of the month (which was 2 weeks away). I figured that would be better than going through an eviction, right? Well, wrong. On the 1st they were still there with the dog, and had told another tenant they weren’t leaving. I filed for eviction last week. The tenant called and cussed me out on the phone. We’ll see what happens. The court date is tomorrow, Friday the 13th.</p><br /><p>Part of me says, “Well, if I just allowed pets I wouldn’t be going through this mess.” But, in reality, I know this would be more of a problem if I did. I have had complaints from 3 tenants, I’ve had their dog chase a tenant, and I’ve had the dog owners threaten others rather than take responsibility for their own pet. So, in the end, I think I’ll keep the no-pet policy. What about that pet-rider though? I’ll have to rethink that too. </p><br /><p>-Pete</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-46268874394040387912006-10-10T22:31:00.000-05:002006-10-10T22:44:28.333-05:00Update on the dog situationI ended up coming up with a contract for the tenant with the new dog that will allow them to keep it, but their rent will increase and they'll have to leave an additional security deposit just for the dog.<br /><br />She has been a good tenant and has been following the rules. Part of the additional agreement allows me to go through he apartment on a regular basis to make sure that there isn't additional damage.<br /><br />Ain't nothing easy.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-64547656254791387252006-10-03T18:25:00.000-05:002006-10-03T18:35:56.675-05:00Getting ready to begin the huntObviously the renovations were not finished in time to rent the unit out by October 1st, but they will be done soon. When I know the final price tag I will find the old tenants and bring them to court. Of course, the first problem is finding where they are. I have their rental application, which has SS numbers, drivers licenses, and contact numbers. Also, a check just arrived for them from County Special Services. I obviously haven't opened it, but just received the OK from my lawyer to contact them to see if it was accidentally sent it to the wrong address, and if so, what was the correct address?<br /><br />I've wanted to wait until I have all the renovation figures required before I go after them, because once I find them things are going to unfold rather quickly, and I want to be able to take them to court right away.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-26362670100534509192006-09-30T23:55:00.000-05:002006-10-01T01:21:58.837-05:00Random links that are worth a gander<ul><li>Joshua Dorkin over at <a href="http://www.biggerpockets.com/renewsblog/">Real Estate Investing for Real</a> found <a href="http://www.biggerpockets.com/renewsblog/2006/09/30/really-creative-financing-for-that-vacation-home-you-always-wanted/">a really great way</a> to buy the vacation house you've always wanted. What an awesome idea! But unfortunately, I don't think it's a method we can all use at the same time.<br /></li><br /><li>Whoa, <a href="http://www.breitbart.com/news/2006/09/30/D8KFAPOG0.html">homes selling for over $100 million</a>. These things are pretty amazing: car washes, multiple golf courses, gold fixtures, titanic-style stair cases, 2+ million dollar taxes.<br /></li><br /><li>The <a href="http://www.carnivalofrealestate.com">Carnival of Real Estate</a> is up over at <a href="http://yochicago.com/today/">YoChicago today</a>. Check it out <a href="http://yochicago.com/today/real-estate-business/the-oct-2-carnival-of-real-estate-at-yochicago_2809/">here</a>!<br /></li><br /><li>Once again I'd like to thank the people over at <a href="http://www.zillow.com">Zillow</a> for their great API, which made it really easy to setup <a href="http://www.rmorrison.org/NetWorth">NetWorth</a>. They have a great product, and I can't wait to see what new features are coming down the pipe.<br /></li><br /></ul>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-18958952521012282702006-09-26T22:30:00.000-05:002006-09-26T22:35:23.594-05:00Oh no, not more dogs?I showed the apartment tonight to a woman with two children. She was aware that the place is being renovated but wanted to see it anyway. It turns out that it isn't what she's looking for. While up there though, several interesting things happened.<br /><br /><p style="margin-bottom: 0in;">First, I wanted to see what else needs to be done before the place is rented. It is actually looking very good, and should be rentable this week. The largest outstanding items are the windows, but I have the quotes and know now which windows I'll completely replace and which ones will only get new glass.</p><br /><p style="margin-bottom: 0in;">The other ridiculous thing that happened is that one of my current tenants, who has been there for multiple years, informed me that she has already bought a puppy and wants permission to keep it. First of all, this is against her lease, which as of now forbids it without written approval from me (the pet agreement). I did tell her about 6 months ago that I would allow her to have a dog if she filled out the extra pet agreement, but that was before the <a href="http://landlordshmandlord.blogspot.com/2006/06/dogs-shmogs.html">dogs shmogs</a> incident. Today I just said that I'm going to have to talk to my lawyer to determine if she can keep it. After I left, she called me to say that she spoke with her finance and decided if they can't keep it they're going to move out.</p><p style="margin-bottom: 0in;"><br /></p><p style="margin-bottom: 0in;">Of course, it isn't just any dog. It's a bullmastiff puppy. From what I've read, these things get huge, are powerful, and will defend its family well. I did find one funny note, according to <a href="http://www.wikipedia.org/">Wikipedia</a>'s <a href="http://en.wikipedia.org/wiki/Bullmastiff">bullmastiff page</a>:</p> <p style="margin-bottom: 0in;"></p><blockquote><br />The Bullmastiff is courageous, loyal, calm, and loving with those it knows. It has a very strong protective instinct and will defend its people against anything it perceives as a threat. <strong>However, it doesn't normally attack to protect, instead it simply knocks the intruder over with its massive size and pins them to the ground. Bullmastiffs become immensely attached to their families and do best when they can live inside with their people. </strong><br /></blockquote><p></p> <p style="margin-bottom: 0in;">I don't know if I can deal with dogs anymore, especially large ones. At the same time, they have been very good tenants. Also, if I did allow them to keep it I would certainly require more rent.<br /></p><p style="margin-bottom: 0in;">I'm going to sleep on it. <strong>If you have an opinion about bullmastiffs, please let me know!</strong></p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com4tag:blogger.com,1999:blog-29309893.post-50819998361699466242006-09-25T18:35:00.000-05:002006-09-25T18:52:55.321-05:00NetWorth Web ApplicationYou may have noticed a new image on the sidebar:<br /><center><br /><a href="http://www.rmorrison.org/NetWorth"><img src="http://www.rmorrison.org/NetWorth/badge.php?login=rvm&mode=percent" alt="NetWorth" /></a><br /></center><br />It is from a little web application that I've been working on called <a href="http://www.rmorrison.org/NetWorth">NetWorth</a>. It allows users to monitor their Net Worth using real estate values from <a href="http://www.zillow.com/">Zillow.com</a> and stock quotes from <a href="http://finance.yahoo.com/">Yahoo Finance</a>.<br /><br />Once you've input your assets and liabilities, you can then put a banner on your website like the one above. It'll then automatically update as it receives new values from Zillow and Yahoo.<br /><br />There are actually three different banners to choose from You can show:<br /><ol><li>The percentage change in your Net Value over the past week</li><br /><li>The dollar change in your Net Value of the past week</li><br /><li>Your current Net Value</li><br /></ol>If you choose to allow only the first one, viewers have no way of knowing your actual net value, but can get an idea of how it changes over time (and therefore, your mood).<br /><br /><a href="http://www.rmorrison.org/NetWorth">Give it a shot</a>, and I would appreciate any feedback.Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com1tag:blogger.com,1999:blog-29309893.post-21783756239974348542006-09-25T13:31:00.000-05:002006-09-25T13:34:13.309-05:00Carnival of Real Estate #11The 11th editon of the <a href="http://www.carnivalofrealestate.com">Carnival of Real Estate</a> is <a href="http://matrix.millersamuel.com/?p=879">posted</a> over at <a href="http://matrix.millersamuel.com/">Matrix</a>. Go check it out!Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-7921013969649794782006-09-22T21:38:00.000-05:002006-09-22T15:40:26.692-05:00Renovation update<p class="MsoNormal">The unit will be ready to show early next week.<span style=""> </span></p> <p class="MsoNormal"><br />We had to paint the whole master bedroom, which the previous tenants painted a hideous shade of purple. <span style=""> </span>We also had to patch the holes left in the other rooms.<span style=""> </span>Interestingly enough, one of the holes, which I noticed only after all of the junk had been removed, is fist-sized and was conveniently covered up by a wall hanging.</p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal">All of the rugs have been ripped up and the floors are being sanded, which will be completed tomorrow.<span style=""> </span>We will then finish them, and cover them with throw rugs (easier to replace). I have a list of potential tenants, but am going to wait until early next week to show to show it (by then the apartment will be cleaned too). <span style=""> </span>Hopefully I’ll get it rented by Oct 1.</p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal">I am also replacing the two windows that the last tenants broke. <span style=""> </span>Actually, the previous owner replaced every window in the building except for these two, so I suppose I was fortunate that these were the ones that were broken.</p> <p class="MsoNormal"><o:p> </o:p></p> <p class="MsoNormal">Once I have the bills for all the repairs *and the place rented*, I will start tracking down the old tenants and bring them to court.<span style=""> </span>I have a few leads, but as of now do not know where they are living.</p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0tag:blogger.com,1999:blog-29309893.post-10721178701330688672006-09-03T22:21:00.000-05:002006-09-03T22:27:08.846-05:00The Risk of Floods on a Purchase<p style="margin-bottom: 0in;"><a href="http://www.flickr.com/photos/79623570@N00/99034013/" title="Photo Sharing"><img src="http://static.flickr.com/19/99034013_2a1c7364b5_m.jpg" alt="Police tape" align="right" height="240" width="180" /></a>Flooding has been in the news a lot recently, and it can (obviously) be very devastating for a real estate investor. For example, look at what happened to investors whose buildings were flooded in New Orleans due to Katrina: instantly they're no longer collecting rents, their properties require extensive repairs, and their investments are worth significantly less than before the flood. Future investors will certainly need to factor these risks into any future purchases.</p> <p style="margin-bottom: 0in;"><br /></p><p style="margin-bottom: 0in;">The above case is pretty easy to analyze because the risks are fairly well known. There are times when the problem isn't so straightforward.</p> <p style="margin-bottom: 0in;"><br /></p><p style="margin-bottom: 0in;">One such case is when flood patterns change, sometimes very unexpectedly. The Delaware River, for example, runs along the border between New Jersey and Pennsylvania. Anybody who is familiar with the Delaware and its river towns are most likely familiar with the notorious Flood of 1955, which was the worst in living memory. Afterwards, there was a long period without much flooding. Seemingly all of the sudden there have been a series of very bad floods the past few years. In fact, if you examine historical flood data, you'll see that half of the "Major Flood Stage" crests on record occurred in 2004-2006 (For these numbers, I am using historical crest data at <a href="http://newweb.erh.noaa.gov/ahps2/hydrograph.php?wfo=phi&gage=rgln4&group=255041&view=1,1,1,1,1,1">Riegalsville, PA</a>. Major flood stage is 30ft.).</p> <p style="margin-bottom: 0in;"></p><ol><br /><li>38.85 ft on 1955/08/20</li><br /><li>35.90 ft on 1903/10/10</li><br /><li><span style=""><strong></strong></span><strong>34.07 ft on 2005/04/3<span style=""></span></strong></li><br /><li><span style=""><strong></strong></span><strong>33.62 ft on 2006/06/29<span style=""></span></strong></li><br /><li>32.45 ft on 1936/03/19</li><br /><li><strong>30.95 ft on 2004/09/19</strong></li><br /></ol><p></p> <p style="margin-bottom: 0in;">The first question that comes to mind is, why all of the sudden have there been so many floods. Proposed reasons include (<a href="http://www.nj.com/news/hunterdon/index.ssf?/news/hunterdon/stories/wildagain_081805.html">source</a>):</p> <p style="margin-bottom: 0in;"></p><ul><br /><li><span style="font-size:85%;"><span style="font-family:arial,sans-serif;">Poor management: floods could be minimized by regulating flow into and out of reservoirs that release water upstream</span></span></li><br /><li><span style="font-size:85%;"><span style="font-family:arial,sans-serif;">Overdevelopment and construction, both along the main stem of the river and its tributaries.</span></span></li><br /><li><span style="font-size:85%;"><span style="font-family:arial,sans-serif;">Bad luck. Too much rain, too quickly.</span></span></li><br /></ul><p></p> <p style="margin-bottom: 0in;">A friend of mine lives on the river in what was thought to be a 50-year flood-plain (this means that he has a 1/50 chance, or 2%, of having his house flooded in any given year). The river entered his house in each of the three floods listed above. Each time, he has had to refinish walls, replace appliances, landscape his washed-away driveway and yard, etc. His house was worth upwards of a few million dollars in 2003, and he believes that these floods could have eaten away over 30% of this value.</p><p style="margin-bottom: 0in;"><br /></p><p style="margin-bottom: 0in;">His flood insurance does help somewhat, however each flood still ends up costing him thousands of dollars, not to mention the hours of work preparing, evacuating, and then restoring. He personally believes that upriver construction is primarily responsible for the problem, and is interested in selling the property if he can get what he believes it is worth. He acknowledges that this will most likely require him to wait for an extended period without floods.</p><br /><br />As an investor, how can you prepare for a situation like this? Should you simply avoid buying a place anywhere near rivers or lakes? If not, how do you prepare for the potential financial hit? How about other natural disasters, like earthquakes in California?<p style="margin-bottom: 0in;"><br /></p><p style="margin-bottom: 0in;">Personally, each of the places that I've purchased are in areas where it is highly unlikely that they're going to have problems with a flood, and I am certainly comforted by this. I can appreciate how desirable water-front property is, but I believe that in order to purchase it as an investment you need to have a very large slush fund set aside (making it much less lucrative).<br /></p><br /><p style="margin-bottom: 0in;"> </p><p style="margin-bottom: 0in;"><small>(Note: I took the above picture in Lambertville, NJ in April, 2005. If you would like to see more, check out <a href="http://www.flickr.com/photos/79623570@N00/99033576/" title="Photo Sharing">this guy kayaking in his backyard</a>, <a href="http://www.flickr.com/photos/79623570@N00/99033973/" title="Photo Sharing">a submerged river-front shop</a>, or an image of <a href="http://www.flickr.com/photos/79623570@N00/99033889/" title="Photo Sharing">the Lambertville Station</a> (there are two parking lots under there.)</small></p>Rick Morrisonhttp://www.blogger.com/profile/08463218287720669826noreply@blogger.com0