Book Review – Rental Property Investing
- Real estate can lead to early retirement, but it’s not passive income. You have to work for it.
- Among other investments, rentals allow you to do this for less cash compared to stocks/investments
- Demand will never end
- Reasons this works: appreciation, cash flow, tax saving, and loan paydown
- Ensure investment makes you money from the beginning. “Price is what you pay. Value is what you get” – Warren Buffet
- RIsk is powerful but dangerous. Educational foundation before getting too deep. Don’t skimp the math. Bad math = bad investment
- Success is an action
- Surround yourself with success
- Being a good investor means being able to walk away from 80% of your deals. Don’t find good deals; find great deals.
- Finding a contractor is always the #1 difficulty. Have a few. Go to home depot at 6am and find the contractors there. These are the ones you want to work with.
- The best time to find a job is when you don’t need one…
- Gauge Prices : https://www.padmapper.com
- Multi-family causes more headaches
- Location matters. Even great deals in poor locations can go wrong fast.
- MLS is comprised of 100s of list. Only realtors have access to everything. Use automated alerts.
- Use craiglist for sale by owner
- Look for houses with easy fixes: smell, hidden 3rd bedroom, ugly countertop and cabinets, roof, and even mold
- AVOID: Problems with neighborhood, foundation and shared driveways
- Negotiation is being calm and adjusting
- The underwrite is the main decision maker. We can be creative. Convince the front-end sales guy. He can convert the underwriter.
- An LLC will not prevent you from being sued. You can still lose everything. Good insurance can also be what you need.
- No one cares like you do. Remember that when using property managers.
- Strength comes from adversity. Know that with rentals. You’re going to learn a lot.
- As a tentanat
- Change filters in heater, etc.
- Remove lint from dryer
- Flush water heater
- Caulk
- Fertilize lawn
- Easiest way to punish tenants is through fees. Do this or they will take advantage. Nice guys get screwed time and time again.
- If the Tenant broke something, that’s their problem. If it’s caused by normal wear and tear, that’s your problem.
- Keep dogs/pets to a minimum. 20 pound or minimum at the very max. If multi-family, no pets at all.
- Build a good system. If you’re continually stressed or upset, dont’ get mad. Just realize your system is broken. There are ways to fix this (e.g. hire people, create a backlog of contractors, etc.)
- Know the benefits of the 1031 Exchange when looking to trade up. You have to be quick… 45 days quick to be in contract with a new investment by the close date.
- Always put your rental rate to be competitive or higher. Do not attract bad tenants with below market rent.
- Strength comes from adversity – Remember rentals are hard.
- Trees grow stronger in wind and when they have to strive to get to sunlight
- Some people want it to happen, some wish it would happen, others make it happen.
- Pay it forward. Give 10% of your paycheck or educate those around you. A lot of people gave up a lot for your current success. Let’s be thankful!