How do I find a agent to interview?

The simple answer to this is talk to every agent that you see. It is not uncommon to see a real estate agency with a agent in the middle of shopping malls. This is a good opportunity to meet and get a general idea of how the agent will take care of your business interests. You can usually have a good idea if you want to follow up after a brief chat. I usually leave the conversation by giving the agent my business card and telling them if they find any properties that fit my descriptions to give me a call. The good ones will get back with you in a day or two with some example properties to look at. From there I check out the property and see if they truly understand what I am looking for. Another place to find realtor's is to go to a real estate company and talk to some of the people that work there and see if any have anything for sale or know of anything at that time. You can basically find a agent anywhere so don't be afraid to talk to them about what you are looking for.

Never sell yourself short.

Remember that as a new real estate investor you are a valuable commodity to any agent. Think about it, most people buy one or two houses in a lifetime, but there is no telling how many properties you are going to buy. When I first got started I would buy or sell between 3 to five houses a year. That amounts to what would be a lifetime of purchases from the average home owner.

Need a agent that knows what a investment is.

This may sound very simple but it is very important to getting a good agent. Some agents are salesman and not necessarily working for you. If a agent is trying to sell you on a property they probably are not right for you. Your decision to purchase should be based on the fact that the property is a good investment for you under your guidelines not some sales pitch. I once went to look at a house that a agent wanted to show me and got a huge sales pitch. I remember telling him that there really wasn't a lot of room financially to buy the property. I stressed that the property did not fit into any of my guidelines that I set up for myself as a investor but he kept selling. I realized then that he did not agree with what I thought was a investment so we never worked together again after that point.

Do I need a agent with a lot of experience?

Maybe. I know that does not answer the question but I feel that you have to judge a agent on a case by case basis. I have had agents with a lot of experience that did not understand what I wanted to get out of investing. But some others with experience did. Some agents with little experience are just starting out and are really eager to find you properties. They will go out of there way to make you happy. So judge for your self and see what you can come up with.

How many Agents do I need?

The answer to this question is complicated.

The best possible scenario would be to have one great real estate agent to work with. That way you could deal with only one person and take comfort in the fact that they are doing there job to get you the best deal. But this theory in reality does not always work out the way it is drawn up. I like to go with a approach of multiple realtor's especially when you first start out, because you may not know yet what kind of agent you have until some time has passed. I like a mix of both experienced and a good young agent who may be just starting out and is very eager to make a living in the business. This way you can develop a team of realtors working for you. I do however like to reward a agent who finds a property for me by letting them sell the property they found for me in the event I decide to sell that property. This builds a good relationship and helps the agent work hard for you.

A new tool that the real estate agent has now that was never available when I got started is e-mail. Have your agent set you up on a automatic email list that alerts you to any new listings in the area that you are looking to buy. This way you will have the information everyday without having to rely on a real estate agent to check there computer every day. Back when I first started this option was not available in fact there was virtually no Internet listings. The only person that had access to the online listings was the real estate agents themselves. So you can imagine trying to keep your business going by hoping someone will check their computer.

The way that I used to combat this was to have more than one real estate agent this way I would have a better chance of getting the information that I needed. I still feel that this method applies today because you never know who a real estate agent is going to know and if they hear about some good deals.

 All real estate investors have trouble periods if they invest in real estate long enough. The difference between the long term investor and the investor that can't wait to get out of the real estate business is the way they look at things. The way you look at things can make the difference between making a little or a lot of money in real estate.

I have talked to a lot of real estate investors over the years and you can tell in a very short period of time how successful they will be. A positive investor has a much better shot at success than a negative investor.

Take the situation of replacing carpet in a rental property for example. Let's say that a tenant lived in a rental property for 4 years and the carpet was ruined when the tenant left the property. That carpet needs replaced before a new tenant moves into the property. The negative investor will view this situation as a insult to them and become angry at the fact that they have to buy new carpet. Some negative investors will begin to hate the whole rental business and everything that comes up will be another cause for anger and grief. Contrast that with how the positive investor views the situation. A positive investor sees the carpet as a cost of doing business and even though they don't like buying new carpet the four years of rent is viewed as a overall gain on the investment. I have found that after four years of renting a property the carpet is usually shot anyway so it is just a cost of doing business.

Another example is getting cheated out of rent. Say a landlord loses a month and a half of rent on a rental property. Let's assume that this is around $1000 at roughly $700 a month. Let's also assume that the tenant lived in the property for 18 months. This is another situation where it is very easy to take this personally. Your long term success depends on how you view the situation. The negative investor takes this personally and dwells on it for a long time. They will also view this as the tenant basically stealing $1000 from them. Anger and betrayal will soon follow. However the positive investor will see this as a opportunity to get a better tenant in the property. They also focus on the fact that they collected 16 and a half months rent from this tenant. They will also do more to try and minimize this kind of loss in the future.

I found that the negative investor turns most negative situations into a bigger problem than they really are. A positive investor views a negative situation as a cost of doing business and does not make that situation personal.

Just like most investors you are looking for the best real estate deal that you can find. In order to do this you have to look at all real estate marketplaces. I have found that in my experience the real estate market place that has the most confusion is the sheriff sale. There is not a lot of information on the sheriff sale and it can be pretty frustrating to a investor who is just starting out. I wrote this article to clear up a few concerns that a new investor may have. My experiences may help guide you in the right direction or at least identify the right questions to ask when you start to look into sheriff sales.

What am I bidding on? You are bidding on foreclosed property that went through the whole foreclosure process and it is now available for auction at the courthouse. The properties that you are bidding on have taken a while before the foreclosure process is complete. That means that most properties have been vacant and depending on the area may or may not have been winterized. In a lot of cases these properties will have been vacant for a considerable amount of time. In some cases a year or more. In a year a lot of things can happen to a property. It is not a bad idea to assume the worse when figuring what it is that you want to bid on a particular property. For example the lack of winterization can completely destroy existing plumbing in cold weather climates. And the fact that a property stands vacant can ruin landscaping and other features of the property without the proper maintenance. I find that it is a good idea to include the worse case scenario in your estimates so that you can conservatively come to a estimate that keeps you as the investor financially safe. The reason that you have to as a investor take the conservative approach is the fact that you are not able to see inside of the properties that are on the sheriff sale. You will be able to drive by the properties but there is no showing like you would normally see in a property that is for sale on the real estate market for example.

So basically you are bidding blind and you will not know what is in the property until you actually buy the place. I have been both pleasantly surprised and disappointed in properties that I have bought on sheriff sales. Some properties that are bid on may have people living in the property. They may be tenants or the previous owners or the actual owners of the property. These people are a great source of information to you as the real estate investor. In most cases I found that they are more than willing to talk about the whole situation. In some cases the property owner may even work out a deal with you before the property actually goes through the sheriff sale. This is a great situation for you because you don't have to against anyone to get the property.

In summary you may not know exactly what you are bidding on in a sheriff sale. I found that it is a good idea to keep all estimates conservative. This way you will have at least have a buffer zone to work with if there are any unforeseen problems that may arise.

 It happened to me again and I thought it would never happen to me again. What I'm talking about is what I call the slippery slope of collecting rent payments. I thought I had everything as far as collecting rent figured out and would not have any problems.

Let me start by explaining what I mean by the slippery slope of rent collecting. A couple of months ago I let my tenants get behind a little on their rent and it turned into a big amount.

Month number one.

The tenant comes to me and says that he is going to be a little short on cash for the rent this month and he will make up the difference in the next two weeks when he gets his new paycheck. I say ok thinking that that sounds perfectly reasonable to me. Two weeks later I got all my money for the rent. The problem is that It is the 18^th of the month and he is without any money because he gave nearly his whole check.

Month number two.

Tenant is short again because his last check was given to me for last months rent and the rent is due again. He gives me what he has and it is still short. In the mean time his utilities are starting to get overdue. Now he needs utilities so he has to pay some of these utilities with his next check. So at the end of month number two I am down a couple of hundred dollars from my rent of 600. By the end of the month I get 400 with a promise that they will pay the rest of the money on the next paycheck.

Month Number Three.

Its the first of the month. Now I am owed 800 dollars and I will be getting my 200 from last month on the 5^th of the month. Here is the dilemma that every landlord faces. So far the tenant has paid his rent in full every month except for this one. The question what do you do at this point. Do you give them a eviction notice because the rent is not paid by the first. Or do you wait it out for a few more days to see if you get your money that the tenant has always paid up to this point. I am offered 500 at the end of the month which leaves me with a balance of 300 left that the tenant owes me.

Month Number Four.

Its the first of the month again and now I am owed 900. The tenant says that he is going to give me 500 on the next Friday when he gets paid. Keep in mind that it is on the 10 th of the month. Here is where the big dilemma starts to come in. Do I wait until the 10th Or do I put a eviction notice on the door and possibly risk not getting anything from the tenant. I found that most of my tenants will not give you money unless they are absolutely positive they have all the money or that they can get it right away. Because after all they will need every penny that they can get just to get into a new rental property after I evict them. Also if I evict them I will probably not get any rent money for at least a month or maybe more until I can finalize the eviction and get a new tenant to move into the property.

So you can see that it can really start to snowball from this point forward. They were in fact a pretty good tenant but they ran into some hard times and got so far behind that they cannot pay the rent much less catch up with the past due rents. I can't tell you how many landlords who own rental property run into this problem. I hear this story many times and every story seems to start out and end about the same way. Keep in mind that I have never had a tenant catch up when this situation started happening.

Here is what I did in this particular situation.

I took the 500 that he offered me on the 10^th of the month because I knew that I probably lost this month anyway. But I decided that I was going to throw them out on the first of the following month. When the first of the month came around I put a eviction notice on the door and decided it was time to get some new tenants after the process. I was offered 400 on the first Friday of the month but I decided that they were just getting to far behind to ever catch up and I had to cut my losses. Three days after putting up the notice on the door I went down to the courthouse and filed the eviction and set up a date for a court hearing. It was scheduled for the 22nd of the month. Here is the lucky thing for me, the tenant just moved out of the property on the 15^th or close to that. They did not tell me when they moved they just left. I say that I am lucky because I just went in and was able to get the property ready to rent and even had it rented by the first of the next month. I canceled the court date but I probably should have just went through it to keep everything legal but I was sure that they were gone.

I lost 900 in rent on this deal because I had to use all the security deposit on some new carpet, paint, and some other repairs that were needed. But as you can see I could have lost a lot more if I kept this cycle going. It is not uncommon to see someone being owed 2000 dollars or more when they keep hanging on and waiting for the tenant to catch up. As the utilities start to get higher and higher the tenant has to pay more in a particular month just to keep the electric and gas on without interruption. For example say it is around tax refund time and the tenant promises the rent when his tax refund check comes in so you let them stay a little bit longer.

Heres what I should have done.

Not getting your rent can really put you in a cash bind fast. Especially when you have multiple houses to deal with. It seems that the more properties you get the less time you have to spend on collecting rent from a individual property. I actually found you spend more time trying to collect the rent when you don't keep right on top of the situation. The checking up on the tenant and calls and driving there to pick up rent etc...

I have talked to other real estate investors that have many houses and they handle the situation very different than I do. I tend to give the tenant to many chances and tend to get my self in trouble like the situation above. I used to be even worse than the situation I just told you about when I just started. The one investor I talked to said that he just tells his people right up front what is going to happen if they don't pay there rent. He told me that after the third of the month if he does not have his rent a eviction notice goes on the door and he files the eviction 3 days later if he still doesn't have the rent. At this time the tenant owes the landlord a 75 filing fee that the court charged him. He then gets a court date set for around the 20^th of the month and proceeds if he doesn't get all of his money and he does not take any payments of any kind unless they are in full. This may seem a little harsh but I believe that it is the best way for the landlord to do things. After all the bank and property tax office does not let you miss any payments. The funny thing is that he does not have many problems with collecting his rents and he has been in the business for 30 years and his father was in this business a long time before him.

Download | Duration: 00:08:36

 This is the second in a series of podcasts where Allison reads the articles available on www.rentalrealproperty.com In this podcast Allison reads the article titled The slippery slope of rent collecting for any investment or rental property owner. This podcast details the situation where a couple of months can snowball into a big problem for a landlord

Download | Duration: 00:05:01

This podcast is we are starting a new series where Allison Williams will read some of the articles that are available on www.rentalrealproperty.com In this podcast Allison reads the article titled Rental property eviction - how long does it take.  This article tells of my experience with a recent eviction process that I just went through.  There are many variables that takes place in a eviction but this could give a good idea of what to expect in the event of a eviction.

Download | Duration: 00:07:56

 

This podcast is a general update of what is going on at the Investment Real Estate Podcast. I am also introducing a new feature of tracking the progress of a property that I am currently working on.

Here are some details of my latest investment property.

Purchase price 32,000

Repairs 14,000

Total 46,000

The property is a four bedroom, living room, dining room, 1 bath, kitchen, and full basement.

Rent will be around 700 to 800 a month.

Notes:

The property came with a new furnace central, central air, water tank, and siding. I am putting in new carpet, kitchen and bath. Along with painting the whole house. Also I am able to do most of the work myself with a employee. This was a great price for this property I would have never been able to get this property for 32,000 it would have taken at least 40,000 on the low end before the property prices started dropping. The rent would still have remained the same however.

Download | Duration: 00:11:00

In this podcast I talk about what I did to schedule a recent rehab project that my brother was working on. 
Be sure to consult your lawyer or real estate professional before making any major real estate investing decisions.

Download | Duration: 00:13:22

 

In this podcast I talk about a article I read about meth labs and investment property.  The article talks about a retired couple who faced clean-up costs totaling 84,000 for a rental property used in the production of meth. The really bad twist on this story is that the house only appraised for $72,000. They also tell about another homeowner who had to pay $60,000 to decontaminate a property used to make meth, That was the largest total since the law took effect in 2005. Caoimhin Connel said about the clean-up “they can run from a couple of hundred dollars to a couple of hundred thousand dollars”
 As always consult a lawyer or a real estate professional before making any major real estate investing decisions.

Download | Duration: 00:09:09

In this podcast I talk about the question of when am I going to feel comfortable Investing in real estate.    

I have had many questions from listeners and readers about needing even more information before they are able to invest in a investment property. The first question that you have to ask yourself is what are you getting this information for. Read and get as much information as you can for the first couple of months. Use books, podcasts, and blogs to gain as much knowledge as you can. You should always continue to educate yourself and keep up on new developments in the future. But if your researching to get rid of all doubt in your investing you may never get to that point.

And as always consult your lawyer or real estate professional before making any major real estate investing decisions.