Proprietorship is the “big deal”. No one shares the same level of motivation like the owners. Remember, its owners who borrow money against their homes. Its owners who invest their entire life savings trying to make a better life for themselves and their families. Owners have a much greater interest in their own success than anyone else. That’s what proprietorship is about. Management fees paid to others simply won’t buy it.

Try to picture if you can your professional property manager racing out on a repair call Sunday afternoon to fix the handle on Sally Mae’s toilet. Nothing serious-the handle just broke off and the lever fell down inside the tank. You can see the flapper chain lying in a coil right there on the bottom. It’s easy to fix, but still, Sally and the kids can’t flush. Naturally all the grand kids are there on Sundays. She needs help right now or she’ll never speak to the owner again. That’s you! I’ll make you a little bet if that toilet ever flushes before Monday morning, then an owner went over to fix it. That’s proprietorship.

If you feel this way about managing real estate and trying to get tenants to play by your rules, you’ve got lots of company out there – believe me! What you don’t have is my excellent method for handling a bunch of tenants with at least 90% less effort than your friends. I won’t say it’s magic – but you might think so after you start using my memo’s!

I call it “MANAGING YOUR TENANTS BY MAIL” and 90% less hassle is not an exaggeration – believe me! There’s no good reason to have personal confrontation, even telephone calls and especially those unpleasant visits to your tenant’s house begging for your own rents! You can forget that kind of nonsense!
It’s a simple concept — I’ll teach you how to manage without nasty arguments and without those emotional outbursts that take away all the joys of counting your money. You don’t need to listen to lame excuses when you provide good quality service. After all, it’s your property! You shouldn’t have to chase the money your tenants owe you.

Think about it! There is absolutely no way on this earth I could have ever handled 300 screaming tenants and still enjoy any privacy for myself. I wouldn’t have enough hours in the week to counsel my tenants. Not only that, there’s no good reason to allow this to happen. Just the thought of it makes me start thinking about a morning drink! My memo by mail method handles almost all my tenant problems quite nicely — AND WITHOUT THE EMOTIONS, WHICH ARE ALMOST ALWAYS PRESENT WITH PERSONAL ONE-ON-ONE CONTACTS. Believe me when I tell you – there’s no good reason to manage properties with your emotions! The fact is, emotional confrontations are the number one reason why shortsighted investors sell out before they ever get rich, you can do much better — And my memos will prove it to you!

Here’s my promise to you — Try my method for a while and if you don’t like it, go back to your old way and I’ll refund all your MISERY. So far, no one’s ever asked me for a refund yet, so I feel pretty confident. Handling tenants my mail might sound kinda cold and impersonal – but it’s much more business-like, and a lot more professional! It’s also a marvelous record-keeping system. Try it, I know you’ll love it — But the real value comes from making your management job so much easier on yourself.

I suppose that’s good advice but I also suspect the speaker doesn’t depend very much on rental income to buy groceries like I do. Obviously, the questions I have, along with thousands of other small-time landlords are:
What happens if I can’t find tenants in those two categories? What if my properties don’t attract blue-collar workers or senior citizens? The last seminar- leader I tested those questions on tried to avoid me at first. When I kept on asking, he sorta turned the other way and tried to pretend he didn’t hear my question!

MOST RENTERS PAY THEIR RENT

Contrary to the landlord-tenant “horror stories” we’ve all heard about, most tenants who agree to rent your property will also pay their rent. This fact eliminates about 95% of your collection worries. Trust me on this, I have enough tenants to prove it. The big problems are caused by the remaining 05% who can literally destroy your life! It’s the old story about one rotten apple in a barrel and unfortunately, “destroy your life” is not too strong a term for what can easily happen when innocent, but “dummie” landlords do battle with “ring-wise” deadbeats.

To begin with, the “playing field” is not exactly level. Deadbeat tenants. are entitled to use many “free-bee” services, starting with specialized legal assistance. Usually a local legal aid society or the Civil Liberties Union is available for the asking. Also, the court system is different for’ deadbeat renters. For example, most don’t pay a fee to answer complaints like ordinary citizens. They are granted a “fee waiver” simply by filling out the pauper’s form or a declaration stating they have no money to pay! I’ve never known or heard of a landlord being able to use this “non-pay” gimmick, even though I have known several landlords who filed bankruptcy because they couldn’t collect from “deadbeats”. To do well at landlording, it’s best to accept the popular myth that — ALL LANDLORDS ARE RICH, RUTHLESS, TYCOONS AND TENANTS ARE THE CIVILIZED WORLD’S MOST DEILBERATELY ABUSED AND MISUNDERSTOOD PEOPLE — With the possible exception of witches and “fortune tellers”!

This is how my MEMOS got their start! I was extremely desperate to find a way to free my mind of tenant problems. We human types can only process one thought in our brain at one time. It’s nearly impossible to have constructive, moneymaking thoughts if you allow your tenants to constantly keep you upset! Believe me when I tell you, the time and money you can lose over emotional tenant confrontations staggers the imagination.

THE LANDLORD’S MIND – IT’S A TERRIBLE THING TO WASTE

Doing business with tenants is what us landlords do. Needless to say, it’s where our money comes from! However, nothin’ says we have to personally go see them for every little issue that pops up! For example; too many guests showing up at their duplex, cars parked on the lawn, habitual late rent payments. Most of these matters involving their tenancy can easily be handled much more efficiently and emotionless with short hand-written memos.

Managing Tenants By Mail

In order to say the right thing – it helps to pretend you are the tenant receiving the memo! How would this memo set with me, you should ask yourself! When I can say to myself, this is a reasonable request and it sounds quite fair, I feel I’m ready to send it to my tenant. I rarely need to waste any time thinking about what I want; I already know what I want! My challenge is to write a memo that my tenant will likely respond favorable to! You must always remember, threatening memos seldom change anything. Your goal is to present a written argument to your tenant making him understand that – he’s much better off to comply with your proposal than if he doesn’t. You must clearly spell out or paint a visual picture of what will likely happen if the tenant ignores your memo. Obviously, tenants are very sensitive to any words that sound like a rent increase might be in their future. We call this “The Hook”.

Allow me to share one of my favorite memos I use for my late paying tenants – I’m trying to convince them to pony up their late fees. This memo enjoys about an 85% success rate.

DEAR TERRY TARDY:

WE NEED YOU HELP!   During the past six months or so, our records show your rents are coming in later and later! This month (Sept.), we didn’t receive your payment (check 9171) until the 13th. Apparently you forgot to add the late fee to your payment! As you know, we allow 5 extra days as a grace period after your official rent due date. Our rental contract shows your rent date is the 1st of each month, but it’s always mailed much later.

Starting immediately, please include the $40 late fee with your rent payment when it’s mailed after the 5th of the month. We use the postmark on the envelope to determine late rents. I hope this sounds fair to you! We’ve found that most of our tenants prefer paying a one time late fee rather than having their regular monthly rent increased! Thanks so much for your help
- Bob, Manager

In this memo, my hook is in the last sentence, which I’m sure you can pick out! Tenants can spot it in a split second – and I will tell you, this is an extremely effective memo for beefing up late fee collections. I might also point out – no tenant has ever called me with questions about this particular memo – it seems, they all understand it perfectly well!
Students who have learned to use my memos wouldn’t trade them for anything. Most claim, once they learn how to design - or create a convincing hook – they work like magic!

Many of the requests I got involved lots of dollars.  They would ask for rear yard fences -where none existed when they moved in.  What generally happens in this case — They  acquire a dog or decide to baby-sit small children in the backyard for extra income.  Don’t misunderstand what I’m saying here — I’m very much in favor of rear yard fences,
front ones too for that matter.  What’s missing in all of these requests, however, is the “CONSIDERATION”.   That’s the contract term for the extra money.  The question is who should pay for these special add-on requests?  I agree that houses without carpets are like cheeseburgers without fries.  But as you probably already know — McDonald’s charges extra for fries — And so do I for more carpets.

LANDLORDING IS A PEOPLE BUSINESS

Operating rental properties and dealing with the tenants are not separate jobs.  The fact is they’re inseparable parts of landlording.  I owe most of my real estate success to my landlording abilities.  Some folks don’t agree with me on this issue — They argue that professional property managers get paid a handsome percentage of the gross rental income to relieve owners of this thankless task.   Many owners end up relieved of there property instead!

The good news is — Owner-landlording is a profession that will help you to achieve financial independence and a quality of life second to none if you choose to participate.  A long-time investor friend of mine puts it like this — “If you are comfortable with the role of ownership and management, and don’t allow yourself to be intimidated by the responsibility for setting down the rules by which tenants may live in your properties, you will find as many others have — That owning and operating small rental properties provides a vehicle for self-employment and self-expression that is difficult to match in our society today. ”

BESIDES MAKING MONEY, being a successful landlord provides many sought-after personal benefits.  For example, you can provide an excellent quality of life for yourself or your family.  You can live anywhere you choose and set your own work schedule.  You can spend additional time with your hobbies and do those personal things that never get done when you work for someone else.  Being your own boss is the envy of every W-2 wage earner.  Just about everyone dreams of making a big income working for themselves.

I know many small-time and medium-size property owners who consistently earn $100 an hour and even more doing landlord work: Landlording is the key ingredient to making big money for “Do-Lt-Your-self” investors.  Owners of small rental properties who don’t learn landlording often throwaway a fortune because they allow the tenants to run their business and their buildings.  That’s a very poor choice, believe me!

TENANTS CAN MAKE OR BREAK A PROPERTY

It’s my Opinion that small real estate operators fail much too often because they never learn or understand landlording.  Almost all investors I’m in contact with are owners of houses and small apartment buildings. Even if your basic investment strategy is to buy, hold and sell — Tenants will normally be involved in the process.  Tenants can make or break a property.  Owners who pay little attention to landlording skills are basically allowing property managers or the tenants to have control over their investment dollars.

I can assure you based on my own personal experiences — A dumb landlord is absolutely no match whatsoever for the liberated “Rock-N-Roll” tenants of today.  You gotta know your stuff, now – — Because the tenants know theirs.  Remember this important fact Tenants are the lifeblood for a landlord.  Tenants are a landlord’s customers.  Almost every business has customers.  They are a very necessary and vital part of owning and operating rental properties because they supply the revenue. Obviously a landlord’s problem would be extremely serious if he or she didn’t have tenants to pay the rents.

As a rule, most small investors I know attempt to build their real estate portfolios with a small amount of cash and a large amount of personal effort.  This is what I teach because it’s the same method I use.  Unlike the cash rich syndications, small investors substitute personal skills in lieu of money.  They have the advantage of learning the landlord job from the bottom up — By doing it themselves.

ALWAYS TAKE CARE OF TENANT BUSINESS PROMPTLY

Good landlord’s always act first — Rather than re-act later!  Don’t fight and argue with tenants anymore than you would fight and argue with your boss over work requirements at your job.  Obviously discussions are all right, but fairness should always prevail.  Landlords are the bosses of houses.  They make the rules for tenants who live there.  Never compromise the issue of WHO’S IN CHARGE.  When tenants have the upper hand living in your rental property, you’ve got serious problems.

How do I know this, you ask?  At least half of the properties I own today were purchasd fom highly motivated sellers wo wanted more than anything else to get away from their tenants.  I made that possible for them—But at a reducd price of course!

Most beginners don’t fully understand the true value of learning to be a good landlord.  As you may have guessed by now — It’s a serious business.  Not only does it involve the daily management of your tenants — It also has a great deal to do with your long-range real estate profits.

LANDLORDING CAN BE LEARNED VERY EASILY

One of the many advantages of owning and operating rental houses is that individuals without any special skills or advance training can become very successful by substituting personal efforts (labor) instead of spending money to hire things done.  It often takes new owners twice as long to do a job, but remember it’s also training, in addition to the owner’s “free labor”.

You don’t have to agree with me about any of this. You don’t even have to like it –Please keep an open mind.  Someday if we meet, you may even thank me for the help.  Hands-on operators, the do-it-yourselfers, can put the big guys to shame in terms of building net worth.  Call it tender loving care if you wish or whatever else.  Nonetheless, it works!  There is indeed a great deal of truth to that old Chinese proverb which says ___ “The best fertilizer in the world comes from the owner’s shadow.”

Besides making money, being a successful landlord provides many sought-after personal benefits. For example: you can have a better quality of life for yourself and your family. You can live anywhere you choose and set your own work schedule. You can spend additional time with your hobbies and do those personal things that never get done when you work for someone else. Being your own boss is the envy of every W -2 wage earner. Almost everyone dreams of making a big money working for themselves.

A 10% JOB CONTROLS 100% OF THE INCOME

I know many small-time property owners who consistently earn $100 per hour or more operatin their own income properties. Landlording is a major ingredient for making big bucks for the do-it-yourself investor. Owners I know many small-time property owners who consistently earn $100 per hour or more operating their own of small income properties who don’t bother learning the landlording part often throwaway a fortune because they allow the tenants to run their business and control their buildings. That’s a very unwise decision for property owners. Folks who have heard me lecture or attended my landlording seminars already know I consider landlording and people management the $10 job that earns me $90. Those numbers come from the fact that I charge 10% for managing properties. Naturally when you manage your own properties, you can’t pay yourself – but saving 10% is almost like earning it! Many small-time “Mom & Pop” investors pass up the opportunity to earn a lot more money with their investments simply because they fail to see the importance of learning to become a skilled landlord. You don’t become a skilled landlord because you acquire houses. You only become the owner. Skilled landlording will require both education and practice. Basically there’s only two ways to learn landlording! You can learn from people like me who have many years of experience – or you can learn from your tenants! I can tell you right now if you were to pay me 10 times more than I charge for seminars – it’s still much cheaper than learning the job from your tenants. Every landlord should know and understand the landlord-tenant laws for his particular state. Once you know and understand the laws, your fear of tenants (being intimidated) will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I will assure you this is not the case, although sometimes it may appear that way! Laws are mostly about equity. It’s well to remember — There are unscrupulous landlords same as naughty tenants!

PERSONAL CONTROL KEY TO SUCCESS

I can tell you from my experiences that many small-time real estate owners fail too often because they don’t see the need to learn about landlording. Almost all investors I deal with are owners of houses and small apartment buildings. All can benefit. Even if your basic investment strategy is to buy and sell – tenant’s will generally be involved in the process. Tenants can make or break a property. Owners who pay little attention to landlording skills are basically allowing property managers – or their tenants to have control over their investment dollars. I will assure you based on my own personal experiences — Dumb landlords are absolutely no match for the liberated “Rock-N-Roll” tenants today. You gotta know your stuff now because the tenants know theirs. Never lose sight of this important economic fact — Tenants are the life blood for landlords. Tenants are the owner’s customers. Almost every profitable business has customers. Tenants are the most important part of owning and operating rental properties because they supply the money. Obviously a landlord’s problem would be down-right serious if he or she did not have tenants who can pay timely rents. One of the major advantages that small operators have over limited partnerships or syndications is the personal involvement. Owners who are personally involved are much more sensitive to what is going on at their properties. They can act quickly when the need arises. There’s no front office approvals, no voting, and no “red tape” or politics. It’s strictly a single party control. Eventually, you’ll begin to understand why complete, control – or as complete as possible is a most important part of making big money with real estate. In the meantime, you’ll just have to take my word for it.

ALWAYS TAKE CARE OF TENANT BUSINESS PROMTLY

Good landlords always act first – as opposed to re-acting later! Don’t fight and argue with your tenants anymore than you would fight and argue with your boss over the work requirements at your job. Obviously discussions are fine, but fairness must always prevail. Landlords are the boss of houses. They make the rules for the tenants who live there. Never compromise on the issue of WHO’S IN CHARGE. When tenants get the upper hand while living in your rental properties – you’ve got some serious problems. How would I know this, you ask? At least half the properties I own today were purchased from extremely motivated sellers who wanted more than anything else to get away from their tenants. I made that possible for them ­ but at a greatly reduced price of course! Most beginners don’t fully understand the true dollar value of learning to be a good landlord. As you may have guessed by now — It’s very serious business. Not only does it involve the daily management of your tenants – but it also has a great deal to do with your long-range real estate profits. Landlords who learn to act before small problems become big ones – will control most tenants. This strategy works very well collecting rents – also, enforcing your tenant rules. Speaking of rules; many landlords have far too many rules! It’s best to keep your list of rules short and enforceable, rather than long-winded, without any teeth.

FAIRNESS SHOULD BE YOUR GOAL, BEING POPULAR IS NOT

One of the most important questions all landlords should ask themselves is — What would I rather be ­popular or profitable? Don’t let your mind wander here! You don’t have to be a greedy tight-wad or steal candy from babies to become a wealthy landlord! What you must be, however, is a fair-minded business person. Fair-minded business means that accounts receivable (rents) are collected in a timely manner and that your business assets (HOUSES) are maintained properly by you and the tenants who lease them. See how simple this stuff is! Collecting the rents should be your proudest moment! It means you selected a tenant who can pay you! Collecting your money is first priority and you need never defend the reasons why! Many new landlord­owners feel they must explain to their tenant why they need the rent money! Have you ever heard the supermarket manager drop by the check-out register to explain to you why he must be paid for his groceries? Sounds silly - but many landlords still feel they must do it! Landlords will not be hated or disliked anymore than the supermarket cashiers or bank tellers when they demand timely rents. Everyone knows that cashiers will not allow groceries to leave the store until they collect the money. Customers expect this and they don’t feel hateful toward cashiers or bank tellers for following the rules! Landlords who insist on timely rent payments are no different than cashiers in the supermarket!

ALWAYS BE FAIR BUT DON’T GIVE THE RANCH AWAY

Several years after I became a “Full-Fledged” landlord, I found myself trying extra hard to make my tenants happy to live in my houses. I didn’t realize it then, but this won’t likely happen! It seemed -the more I tried to please, the more my tenants wanted from me! For example, some tenants who rented my economy units that didn’t have carpets in every room (several of my least expensive houses have carpets in only the living room) started asking for carpets in the bedrooms too. However, none of these conversations included any mention of paying extra rents. Several of these requests involve considerable expense. Tenants would sometimes ask for rear yard fences where none existed when they moved in. What generally happened – they would acquire a dog or decide to babysit small children in the backyard for added income. Don’t misunderstand what I’m saying here — I’m very much in favor of rear yard fences, front ones too for that matter. But what’s missing in all of these requests is “CONSIDERATION’. That’s the contract term for the money. The question arises – who should pay for these special add-on requests? I agree that houses without carpets are like cheeseburgers without fries. But as you probably already know — Burger King charges extra for fries – and so do I if you want more carpeting or a rear yard fence.

As the owner-landlord, it’s your business to see that rents are collected and that rules and regulations set forth in your rental AGREEMENT/CONTRACT are followed and obeyed. You must never allow a tenant to intimidate you! It will almost always lead to poor landlord decisions. I believe the most serious mistake the new landlords can make is to allow a tenant’s urgency to become their urgency. Let me explain this a little better so you don’t think I’m a cold-hearted monster-landlord!

COMMONSENSE SHOULD ALWAYS PREVAIL

After many years of responding to various tenant call-outs, I’m hard-pressed to think of any situation so compelling that I wouldn’t have enough time to think it through! If a water pipe breaks, certainly I’ll act quickly, but I’ll still plan what I need to do. If there’s a fire at my property, the community fire department will handle everything. As for me, I’m protected by my insurance policy on the building. Should someone die in one of my rental houses, what could I possibly do? I’ve yet to meet a landlord who’d be of much help standing over a dead tenant. The county coroner is the person you need the most! In short: leaky pipes burned down houses and expired tenants are no more urgent to a landlord than dying patients are to a doctor – or raging fires are to a fireman. People will die on the doctor’s table everyday and you can’t listen to the evening news without hearing about another fire in the neighborhood. These are everyday events we deal with. Pipes will always be springing a leak, people die everyday – and of course, buildings will burn to the ground. That’s just normal management stuff! Your job as the landlord is to be as responsive to your tenants as you possibly can. But, never should you allow yourself to be stampeded into rushed decisions simply because your tenant says you should! In short, don’t allow your tenant’s urgency to become yours. Do not take what I just said the wrong way — You must always give the best service you possible can and treat your tenants fairly. In fact, at my seminars and in my training materials I recommend investors use my 60/40 RULE. What it means is - I try and give my tenants 60% of my efforts and assistance in exchange for only 40% from them. Here’s the way I see it. My tenants are making me a wealthy man! I buy real estate­ they pay for it. I take expensive trips, they pay my bills. I drive expensive cars and live in an expensive house – and again, they pay all my bills. Without my tenants, I wouldn’t own very much real estate, my trips would be a whole lot shorter and I’d likely be living in a house much like the ones I rent. I don’t believe 60/40 is too much to give, do you? Landlords often find themselves in serious “hot water” with tenants because they try to force too much logic and commonsense into managing their tenants. Logic and common sense have their place alright, but they seldom count for much where lots of restrictive rules are involved. For example~ it is nearly impossible to effectively force your own personal living standards – or ideals on your tenants – a very common mistake for many new landlords. I would seriously advise any owner-landlord to think about what I’m telling you here, because it has a great deal to do with sanity — YOUR SANITY. What earthly good would it do you to make a million dollars from your rental properties if your tenants drive you to the “nut house”? My advice – stay away from them as much as possible and when temptation becomes more than you can bear – pray for them instead. Save your sanity – you’ll need it for collecting rents. You don’ have to agree with me about any of this. You don’t even have to like it — Just keep an open mind. Someday if we meet, you may even thank me for the help. Hands-on operators, the do-it-yourselfers, can put the big guys to shame in terms of building net worth. Call it tender loving care if you wish or whatever name you choose – just try it ’cause it works! There is indeed a great deal of truth to that old Chinese proverb which says — “The best fertilizer in the world comes from the owner’s shadow.”