Fixer Jay’s Mom & Pop Millionaire Blog

Besides making money, being a success¬ful landlord offers some major personal benefits. For example: You can provide an excellent quality of life for yourself and your family. You can live wherever you choose and set your own work schedule. You can spend more time with hobbies and doing the personal things that never get done when you work for someone else. Being your own boss is the envy of every W-2 wage slave.

The good news is, owning income¬ producing property and landlording is a profession that provides an equal opportunity for everyone to achieve financial independence and a quality of life second to none if you choose to participate. My good friend, Richard E., who owns and manages small apartments in San Francisco, says: “If you are comfortable with the role of owner/¬landlord and don’t allow yourself to be intimidated by the responsibility for setting out 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.”

I certainly agree with Richard: owning houses that produce cash flow every month is a great way to go once you get the hang of it. However, like anything else in life, you must pay your dues up front. Landlording is the price of admission for investors who operate income properties.

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Would you rather be popular or profitable? You don’t have to be greedy to be a wealthy landlord. What you must be is a fair-minded business person. Fair-minded means that rents are collected in a timely manner and that your houses are maintained properly by the tenants who lease them. See how simple this stuff is.

You won’t be hated when you demand timely rents. Landlords that insist on timely rents are no different than cashiers in the supermarket.

It’s your business to make sure rents are collected and the rules in your rental agreement are followed. Never let a tenant intimidate you. The most serious mistake new landlords can make is to allow the tenant’s urgency to become their urgency.

After many years of doing this job, I’m hard pressed to think of any situation so compelling that there wouldn’t be enough time to think it through. If there’s a fire at my property, the community fire department will handle everything. I’m protected by insurance on the building. Should someone die in one of my rental houses, I simply can’t do very much. I’ve yet to meet a landlord that would be of much help in this situation. The county coroner is the person you need.

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Many small mom and pop type investors give up the opportunity to make a ton of money and have a wonderful free come ­and-go” lifestyle simply because they never see the importance of learning to be a skilled landlord. You don’t become a skilled landlord when you acquire houses. You become the owner-that’s all! Skilled landlording will take some education.

Basically there’s just two ways to learn landlording. You can learn from people like me or you can learn from the tenants. If you pay me 10 times more than I charge to teach you, it’s cheaper than learning this job from your tenants.

Every landlord should know and under­stand landlord-tenant laws in his own area. Once you know the laws, your fear of rent­ers or of being intimidated will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I can assure you this is not the case, although sometimes it appears that way. Laws are mostly about equity. Remember, there are unscrupulous landlords as well as naughty tenants.

Landlords often find themselves in serious hot water with tenants because they try to inject too much logic and common sense into tenant management. Logic and common sense have their place, but they seldom count for much where legal issues are concerned. For example, it is nearly impossible to effec­tively force your personal living standards and ideals on your tenants. To do so could seriously affect your sanity. What earthly good would it do to make a million dollars from your rental properties if your tenants drive you crazy?

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Many small mom and pop type investors give up the opportunity to make a ton of money and have a wonderful free come and-go” lifestyle simply because they never see the importance of learning to be a skilled landlord. You don’t become a skilled landlord when you acquire houses. You become the owner-that’s all! Skilled landlording will … take some education.

Basically there’s just two ways to learn landlording. You can learn from people like me or you can learn from the tenants. If you pay me 10 times more than I charge to teach you, it’s cheaper than learning this job from your tenants.

Every landlord should know and under­stand landlord-tenant laws in his own area. Once you know the laws, your fear of rent­ers or of being intimidated will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I can assure you this is not the case, although sometimes it appears that way. Laws are mostly about equity. Remember, there are unscrupulous landlords as well as naughty tenants.

Landlords often find themselves in seri­ous hot water with tenants because they try to inject too much logic and common sense into tenant management. Logic and common sense have their place, but they seldom count for much where legal issues are concerned. For example, it is nearly impossible to effectively force your personal living standards and ideals on your tenants. To do so could seriously affect your sanity. What earthly good would it do to make a million dollars from your rental properties if your tenants drive you crazy?

Tags: Managing Tenants and Toilets, The Joy of Cash Flow Investing by FixerJay
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Enforcement of the rules, whether civil code laws or your own house rules is the best way you develop a smooth running manage­ment operation. Preventative techniques are as important to managing tenants as they are for the doctor who manages your personal health. One of my main criticisms about professional property managers is that they rarely act-mostly they react. They’re always ready and willing to fix the busted door, but only after the horse is outta the barn.

Rent monies are life blood to apartment owners. Yet, I know many property manag­ers and owners alike who participate with their tenants each month in a silly little “rent collection ritual.” The tenant starts the game by saying the checks in the mail. Then the landlord begins calling every day or driving out to the property to inform the tenant he hasn’t received it yet. This can go on for weeks.

Don’t allow yourself to be part of this game. Use the rules already on the books: the state landlord-tenant civil laws and your rental contract terms agreed to by your tenant.

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 It’s always surprising to me that so many landlords I talk to don’t have the foggiest notion about what they should do if their tenant goes bonkers. It’s almost as if they think that once the house is rented out that’s it. Everyone is gonna live happily ever after. Folks, let me tell you right now, that’s hogwash! Plainly stated; it just doesn’t happen like that.

“Scuzzos will still slip through your check-points … ”

Any landlord who’s been around the block can tell you that qualifying a tenant on paper is not 100 percent fool-proof, even when a prospective renter presents you with a beautiful well-written application form, the kind where every blank line is filled in perfectly and you get all the right answers to the important questions. Quite often appli­cants have good references and flowery letters from their last landlord. Even so, the system is not perfect. Scuzzos will still slip through your check-points occasionally. When that happens you’ll need to erase your mistake quickly and painlessly as possible.

Recently a young landlord said to me, “Jay, I’m not much interested in learning how-to kick tenants out. That won’t make me any money. Renting my units faster is what brings in the big bucks. That’s what I want to learn to do better.” It’s quite obvious that my young landlord acquaintance does not yet understand there are basically two ways to make money in this business. Collecting more rent is what most people think of first. However, equally important is controlling or reducing expenses.

Let me ask you this question. Who is better off, the landlord who grosses $1000 every month and pays out $500 in expenses; or the owner who takes in $1 00,000 monthly, but pays out exactly the same amount for expenses? Obviously, it doesn’t do you much good to improve your gross earnings if you lose it out the back door to higher expenses. That’s something like trying to fix a leak in a ruptured water line by increasing the pressure. By the way, I didn’t just make that up. A friend of mine actually tried to do that instead of calling in a plumber. It didn’t work very well. He blew the water line apart in five different spots.

“Doing an eviction is not very glamorous. ”

Sometimes evictions don’t seem like hot shot investor work. However, I think it’s helpful to understand just how much money is involved. Eviction costs are not exactly the same as ordinary expenses to a landlord. They are more like paying double to fix the same problem. That’s the good news. The bad news is often they cost a great deal more than double. Why should they cost double or more you ask? The reason is because when you have an eviction going on; in 99 percent of the cases you’re not receiving rent payments. At the same time, your house is still occupied which stops you from generating new income from tenants who are willing to pay. The total effect of this combination, even without adding in the legal costs can be a very expensive proposi­tion for landlords.

” … evictions don’t seem like hot shot investor work. ”

Some may argue that eventually, when you get your default judgment, or assuming you will prevail in the courtroom, you’ll get all your money back. In most cases, the odds are more in your favor that a flock of geese will fly down your chimney and swim in your bathtub.

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Many small mom and pop type investors give up the opportunity to make a ton of money and have a wonderful free come and-go” lifestyle simply because they never see the importance of learning to be a skilled landlord. You don’t become a skilled landlord when you acquire houses. You become the owner-that’s all! Skilled landlording will take some education.

Basically there’s just two ways to learn landlording. You can learn from people like me or you can learn from the tenants. If you pay me 10 times more than I charge to teach you, it’s cheaper than learning this job from your tenants.

” … there are unscrupulous landlords as well as naughty tenants.”

The Pitfalls of Management

Every landlord should know and under­stand landlord-tenant laws in his own area. Once you know the laws, your fear of rent­ers or of being intimidated will vanish. An overwhelming number of property owners incorrectly assume these laws favor deadbeat tenants. I can assure you this is not the case, although sometimes it appears that way. Laws are mostly about equity. Remember, there are unscrupulous landlords as well as naughty tenants.

Landlords often find themselves in seri­ous hot water with tenants because they try to inject too much logic and common sense into tenant management. Logic and common sense have their place, but they seldom count for much where legal issues are concerned. For example, it is nearly impossible to effec­tively force your personal living standards and ideals on your tenants. To do so could seriously affect your sanity. What earthly good would it do to make a million dollars from your rental properties if your tenants drive you crazy?

Professional property managers rarely act mostly they react.

The Keys to Good Management

Enforcement of the rules, whether civil code laws or your own house rules is the best way you develop a smooth running manage­ment operation. Preventative techniques are as important to managing tenants as they are for the doctor who manages your personal health. One of my main criticisms about professional property managers is that they rarely act-mostly they react. They’re always ready and willing to fix the busted door, but only after the horse is outta the barn.

Rent monies are life blood to apartment owners. Yet, I know many property manag­ers and owners alike who participate with their tenants each month in a silly little “rent collection ritual.” The tenant starts the game by saying the checks in the mail. Then the landlord begins calling every day or driving out to the property to inform the tenant he hasn’t received it yet. This can go on for weeks.

Don’t allow yourself to be part of this game. Use the rules already on the books: the state landlord-tenant civil laws and your rental contract terms agreed to by your tenant.

Action Keeps landlords One Jump Ahead

Landlords who learn to act before small problems become big will control most tenants. This strategy works very well for collecting rents and also for enforcing your tenant rules. Many landlords have too many rules. It’s better to keep your list of rules short and enforceable.

Would you rather be popular or profitable? You don’t have to be greedy to be a wealthy landlord. What you must be is a fair-minded business person. Fair-minded means that rents are collected in a timely manner and that your houses are maintained properly by the tenants who lease them. See how simple this stuff is.

You won’t be hated when you demand timely rents. Landlords that insist on timely rents are no different than cashiers in the supermarket.

Tags: Managing Tenants and Toilets by FixerJay
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Most new investors seriously underesti­mate how important it is to learn land­lording skills. Many so-called “Professional Property Managers” suffer from the same affliction. However, I can forgive them be­cause they’re simply working for fees with little prospect of ever becoming wealthy. We investors, on the other hand, have high hopes of becoming wealthy or at least as well off as our neighbor down the street with the Mercedes.

Landlording skills improve your income. Owning rental properties that produce income is without question a very profitable and worthwhile achievement. Most folks who buy properties and stick with it end up a whole lot richer than those who don’t. I’m a good example of this, but I must tell you, there is definitely a catch to owning rental properties.

The catch is if you do not quickly learn how to operate your rentals and handle the tenants who live inside them; you’ll think a lot more about suicide than counting your money. Getting rich is a very strong motiva­tion and will certainly carry you through some rough times. But, tenants who don’t play by our rules can have a devastating effect on our bank account as well as your quality of life as an investor.

I don’t mean to scare the daylights out of you, particularly if you’re just starting out. But, I do wish to call your attention to a very important function of property owner­ship that often receives hardly any attention. That’s because it’s not a very exciting part of investing. In fact, it’s the part of ownership that turns many would-be investors off.

” .. .it’s the dull part of ownership. “

Landlording and managing your proper­ties is very important. I’ll certainly agree with anyone, it’s the dull part of ownership. Yet it’s a path that must be traveled on your way to the gold mine. I often refer to property man­agement, including people management, as the 10 percent part of ownership that’s nec­essary in order to receive the benefits from the other 90 percent. The 10 percent figure I use comes from the amount I charged (10 percent of the gross rents) when I used to manage properties for others.

The first rule of good landlording is to treat it exactly like you would any other well run business. Managing your property is a business and the tenants are your customers. It’s your job as a landlord to provide the best product (houses) and the best possible ser­vice you can.

Offer your customer the best value in the rental business. That means a clan house or apartment, priced ideally at $10 to $20 below the competition. This is enough to swing many deals your way.

How can you tell if you’re $10 to $20 below the competition? The best way is to study your local classified ads. Then drive out and see what your competition is offering at comparable rents. Adjust yours up or down according to what you observe.

You will hear that deadbeat tenants know all the rules, which enable them to stay in your property month after month without paying any rent. Sometimes the storyteller will say this is so because the tenant has minor children and receives welfare or some other assistance.

Offer your customer the best value.

This is giving far too much credit to the tenant for being street-savvy and knowledge­able. But, chances are the tenant’s success is much more likely attributable to a dumb landlord. Seldom will any tenant stay very long in my property if he or she doesn’t pay rents. After you’ve done a few evictions your­self and learned what papers to file in a timely manner, you’ll quickly build enough confidence so that horror stories won’t happen at your properties. Again, I’ll repeat, know-how is the difference between owners who operate their rental properties successfully and the ones who are simply hoping for the best.

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Operating rental properties and dealing with your tenants are not separate jobs. The fact is, they’re inseparable parts of land lording. I owe a great deal of my real estate success to my land lording abilities. Some folks disagree with me on this issue — They argue that professional property managers are paid a decent percentage of the gross rental income to relieve owners of this thankless task. I’ve known many folks who ended up relieved of their property instead!

Now the good news — Land lording is a profession that can help you to achieve financial independence and a quality of life second to none if you choose to learn it well. A long-time investor friend of mine says it like this — “If you are comfortable with the role of ownership and management, and do not 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 can provide a vehicle for self-employment and sense of freedom that’s difficult to match in our society today.”

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%1 JOB CONTROLS 100% OF THE INCOME

I know man} small-time property owners who consistently earn $100 per hour or more operating their own income properties. Land lording is a major ingredient for making big bucks for the do-it-yourself investor. Owners of small income properties who don’t bother learning the land lording 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 land lording seminars already know I consider land lording 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 land lording will require both education and practice.

Basically there’s only two ways to learn land lording! 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 IS 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 land lording. Almost all investors I deal with are owners of houses and small apartment buildings. All can benefit. Even if you’re basic investment strategy is to buy and sell – tenants will generally be involved in the process. Tenants can make or break a property. Owners who pay little attention to land lording 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 lifeblood 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.

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!

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Many Subscribers are asking – How can we collect late rent fees? Here is the letter or memo I use – the only part that matters to most “late payers”” is paragraph 4, Late fee collection letters must have teeth to be effective.

SUBJECT: LATE RENT FEES

We need your help with timely rent payments! As you may know already, we are required by the owners to collect late fees for all rent payments received later than five (5) days past the rent due date. Rent due dates are shown on the rental contract you signed when you moved in.

In the case of HUD contracts, rents are normally due and payable on the first day of each month. The only way you can change or modify your HUD lease (voucher) is to contact your housing representative and request a modification. They will require some valid reason.

For those who mail rent payments, the postmark date shown on the envelope will be used to determine if rent was paid within the time limits. All rent payments received later than five (5) days past the rent due date must include a $35 late fee.  Late fees are specified in your rental agreement with JMK Traders/One Stop Home Rental Company.

Most residents feel that a “one time” late fee is much more acceptable than a rent increase. Owners will often require us to increase rents when the late fees are not collected.

We appreciate anything you can do to help us with this problem, and obviously, you’ll be helping yourself at the same time.
Sincerely,

                          Love Bob, aka , Fixer Jay

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