Real Estate Investing – The father figure.

August 6, 2009

Dealing with the father figure
by James Miller



I have seen it over and over again, and here is how it works:

You show an apartment or a house to a young couple, they love it and are anxious to rent or buy, but they want to bring their dad, step father, father in law, or other paternal type figure over to take a look at it. 90% of the time, this blows the deal. Here’s why…

We all play roles in our life, mother, daughter, teacher, golf pro, author, etc. When the young excited couple bring Dad over to see the place, he knows he is being brought over to evaluate, as he is the “expert” on such things. Even if he is not at all qualified, he is placed in this role, and feels a strong need to live up to it.

While the young couple is doing this to feel as though they are covering their bases and being as careful as possible, the truth is that they have already made their decision. What they really want Dad to do is to tell them what a great place they found, what a great deal it is and how smart and lucky they are for finding it.

Dad’s role is not one designed to placate. He instead feels a need to critically evaluate the place, point out any and every little issue he finds.  This action, while making the young couple feel less secure about their decision, serves to validate his role.   By it’s very nature, his role needs to be contrasting to theirs. He needs to serve as devils advocate.

For the Real Estate Investor or Landlord, the father figure is one of the worst characters to introduce late in the game.  At best, they create points of contention, about the property, which easily turn into negotiating points.  The father figure is not really objective, but critical, as for him to go into a place an not find anything means that he isn’t really serving a purpose. After all he if he doesn’t find anything, he isn’t doing his job.  Right?

It is a different story if Dad comes along on the initial viewing. His role is on a more even playing field with the young couple.  They are evaluating it together, before they fall in love with it. His role is less of a critical one and more supportive. Often times Dad will be the first one to commit to a place, and once committed, it is hard to change his mind.

Since the young couple has really already decided that they like the place before they bring Dad on the scene, his critical inspection also can cause arguments between them.  This brings a whole negativity into their minds as they stand in the apartment or house. You don’t want their impression and feel for the place biased by the emotions brought out in argument.

How do we counteract the father figure?

Always be around when the father figure is there.
If you are in the apartment or house when the father figure is giving it the white glove treatment, it is much less likely that he will be as forthright in his observations. He will hold some comments back for the car ride home. Hopefully he forgets before they get to the car, but at least that negative impression is happening in the car and not in the home or apartment.

Get them to commit to it before letting Dad have a crack at it.
If you can get a down payment, or deposit from the young couple they will have mentally committed to it.  If Dad later comes through with a bunch of reasons why they shouldn’t buy the place, they will actually respect his opinion less, as they are mentally tied to it.  In psychology this is referred to as cognitive dissonance.

Use the “take away”.
The take away is a sales strategy where you start to tell a potential customer how the product may not be right for them, or how they may not want to go ahead with a purchase.  If you are standing in the home with the young couple, Mom and Dad, and Dad starts going off about how the light fixture needs to be replaced. Just start telling them that if one little light fixture makes that much difference, maybe the place isn’t what they are looking for, and that you do have some other people who are interested.
Watch how fast dad starts back peddling when he realizes he is trashing the deal for his kids.  His role of evaluator evaporates and he quickly starts thinking about how mad they will be at him.

I have to admit it is absolutely magical to see in action.

* I often refer to this role as the father figure, as it is more traditional. In reality it is can be any authoritative figure in the young couples life, regardless of gender.

Typical issues faced by Real Estate Investors.

April 30, 2009

Typical issues faced by Real Estate Investors.

by James Miller


These are some typical issues that I am faced with on a normal day and how I chose to handle them.

I grab the stack of papers from my desk on different Real Estate related “issues” I need to review.  I had set them aside last night, so I could focus on them today.

The first issue is my fault since I accidentally overpaid a bill (by $200) for a 20 yard dumpster that we were using at one of the construction sites. I have another account with the same company where I am getting billed monthly for a dumpster that I am providing at a rental apartment. I call to see if they can apply the overpayment to the other account.

I am a little apprehensive as this company has been less than friendly in the past, which has caused me to often wonder about the validity of the myth that the Mob is into waste disposal.  I am also worried that they will not have a record of the overpayment and I will have to prove it.

It turns out that they do have a record of it and they can transfer the balance, no problem.

My second issue is that on one of the properties we picked up “subject to” the existing mortgage, the lender (Wells Fargo) shot out two letters. One letter was about how the amount of hazard insurance coverage wasn’t adequate, and the other letter was about how the deductible amount on the hazard insurance policy was too high.

We have a few different policies for the properties we have, this property was on one of our business owners policy with a bunch of other properties that provides a total coverage of around a million dollars.

Their records indicated that we only have coverage of $2000 on the house, and that the mortgage balance was about $50,000 so we needed at least that much coverage.

My immediate concern was that since we are continually dealing with so many properties, we may have missed something and somehow inadequately insured this property.

The other letter from Wells Fargo indicated that we had too low of a deductible, and with a policy this size needed a deductible of no more than $100,000.  That seemed really odd to me since I would never have a deductible anywhere near that high on any property.  A deductible that high would mean that we would need to cover the first $100,000 worth of damage and their policy would kick in the rest.   Having a deductible that large is really like not having a policy at all.  It was confusing to me at best.

I grabbed a copy of our business owner’s policy and the other papers I needed and headed out the door to lunch with my girlfriend. On the way there we grabbed the mail.  I noticed that I got “proof of service” back on a Tenant-Buyer who was behind on payments to the tune of about $3000. I don’t usually let them get in to me that far, but his business is landscaping, which is seasonal, and he gets paid sporadically. He has been with me for four year and usually makes good on what he owes me when his clients pay him.

This time around he had gotten in too deep and did the worst thing possible, which was to not respond to my calls and letters. When I lose contact with a tenant and they owe me money, I am forced to file a small claims action for eviction and judgment.  The letter I received back from the sheriff indicated he had been served proper notice of his court date, but also told me that he had moved out and they had served him at his new residence.

Unfortunately he could have contacted me to work something out, I may have given him time, hell I may have lent him some moving money. I understand that life can throw you a bad shake. But now, my big concern was to get him out of the place so I can get it bringing in money again.   If we are communicating and on good terms, I find that things usually work out the best for both parties.

Since it didn’t happen that way, I am now worried about the condition that the house is in. My girlfriend and I make a plan to go review it.  I will bring the camera with in case I need to take some photos to tack on damages to the small claims action.

The other problem with the tenant just taking off is that I will still have to go through with eviction.  While I know he has a new place to live and can reason that it is certainly very likely that he doesn’t intend on coming back, I am not in communication with him so I can’t be sure.   This means that I while I can show it, I can’t rent it until the eviction is final.  I plan for a trip to the house and mentally brace myself for the worst.

At lunch I review the Wells Fargo letters and the insurance policy. I quickly realize the problem. The $2000 they have listed as the amount of hazard insurance we have, is actually the amount we have on just the storage shed on the property.  We actually have over $100,000 on the house itself.

I see that we also have a deductible of $250 and not over $100,000 like they had indicated. I make a call to our insurance agent to verify my information is correct (which it is) and to have him send yet another policy declaration page to Wells Fargo.

I then place a call to Wells Fargo to see if I can explain their mistake to them.  I navigate my way through the automated voice system, which makes me wade though an inordinate amount of choices before letting me know to hit “0” for he operator.

Once I get a real person on the line I run into a problem that faces most “subject to” investors. The name on the mortgage is not my companies name or my name, so they can’t talk with me.  I have been down this road a few times before. I let them know that there should be a Power of Attorney and a Right to Release Information on file with my name on it.  They verify that there is, and ask how I am related to the owner.  This is where it gets tricky, if I blatantly state that we have purchased the property, we can start down the ugly road of “due on sale” issues.  Most, if not all, mortgage documents have a stipulation where if ownership interest transfers, the lender can call the mortgage due.  Taking over a property “subject to” flies in the face of this, as the seller’s name remains on the loan, but the deed transfers.

I carefully pick my words and tell her that I am not related to the seller, but “calling on her behalf”.  These are the magic words that allow us to talk freely, but don’t get me transferred to another department because the place has been “sold”.

I explain the mistake that was made to the lady on the other end of the line, and even while we are talking Wells Fargo  receives in a declaration of coverage from my Insurance Agent, which eliminates these two issues.

That night my girlfriend and I make it to the house where the tenant bolted and find that it isn’t totally abandoned. The tenant isn’t there, but lights are on, there is a nice mountain bike on the porch and miscellaneous personal items strewn about.  I resist the urge throw the mountain bike in the back of the car to hold as a hostage, and instead walk around the outside of the place.

As I peek in the windows I can see that the furniture is gone, so no one is likely living there.  They were, however, kind enough to leave at least 30 trash bags full of beer bottles, cans, and junk in the back of the garage, in front of the garage,and strewn about the lawn.

As walk around to the front of the house I see that my girlfriend has already started putting up a “For Sale” sign in the yard.  While I commend her on her aggressiveness, I tell her that it is too early to put the sign up. I either have to get back in communication with the tenant and work something out with him, or wait for the eviction to be finalized.

There is no legal reason we can’t put the sign up, just a practical one. I understand that the tenant is just as unhappy about things as I am, placing a “For Sale” sign there will piss him off, and likely end up damaged or stolen. This guy has lived there for four years.  It has to be hard for him to give the place up, and is probably also embarrassing for him. A sign would just be like slapping him in the face.  The last thing you want to do is to aggravate a tenant while they still have control of your property.

She reluctantly removes the sign and puts it back in the car.

I give the tenant a call and leave a message asking if he would call me to see if we can work something out to possibly avoid court.  It weakens my position a bit to say this to him, but my first priority is to get him to a point where I can work with him so I can fast track new tenants into the place and get it cash flowing.

My idea is to work out some sort of payment plan with him on the money he owes me and get him to move his trash and other stuff out of the place.  In return for this I would lessen the amounts owed, and temporarily fore go court as long as he held up his end of the deal.
This is a great offer for him as he is otherwise facing at least a $3000 judgment and having me garnish his wages for payment.

I would let him know all of this if I could talk with him, but so far he hasn’t called.

In some cases you can’t even get the horse to water, let alone make him drink.

Getting people to keep apartment showings

February 27, 2009

Getting people to keep apartment showings

by James Miller


It happened to me again yesterday.

I had a 5:30 showing set up at one of our vacant apartments. I arrived promptly, unlocked the place flipped on all the lights and set out the applications.

The guy never showed up to look at the apartment.

I waited for him to show for 20 minutes and then decided to take off.

It may or may not surprise you, but the events I just described are not that uncommon for property managers. I am pretty diligent about calling people the day of a showing appointment to remind them, but even with that measure in place, I still get around a 50% no show rate.

It really blows my mind that people will take the time to ask you about a place, set up an appointment and get directions, then decide not to show…or even call.

I have to admit I didn’t call this guy the day of the showing, but I had talked to him the night before.

Here is what I think happens in these situations and some of the steps I am going to take to try to resolve them. If you have any suggestions or ideas, please let me know..

1)The person I am talking to forgot about the appointment… although in this guys case, I doubt that you can forget about it that easily. We set the appointment  just the day before.

2) The person I am talking to is too polite to tell me on the phone that they are not interested in the apartment, so they set up a showing, knowing they will not show.

3) they may have looked at an apartment earlier that day and decided to take that one, blowing off the rest of the showings they had set up.

4) They knew about the appointment, but after a day of work were just too lazy and decided the couch or a trip to the bar sounded better.

There are probably a lot of other reasons that they won’t show as well.

Here are a few of the things I am going to start implementing:

1) I am going to call them back and ask why they didn’t show.My girlfriend was a recruiter for an insurance company. She would have the same problem with potential candidates and it drove her crazy. she would go so far as to call up people who blew appointments (and didn’t call) and tear into them, telling them that they just blew their chance to ever get a job there and that they should have at least called.
While I am not sure that affected her no show ratio, it apparently made her feel better.

2) I am going to start letting them know that I get a no show rate of 50% and if they can’t make it to call me.
I currently tell them to call if they can’t make it, and they have my cel phone number, but it doesn’t seem to make a difference. I will also point out that if they don’t show and don’t call, I will be calling them back to find out what happened.

One part of the problem, as I see it, is that they have nothing to lose by not showing. Since there is no realistic way for me to get a deposit over the phone, the only thing I can leverage against them is their contact information. I am not going to harass them or anything, but I will let them know that I was waiting for them at the apartment and it wasn’t cool to blow me off.

3) I am going to start letting the apartments show themselves.
While I like to meet the potential tenants, I have, in the past, been so busy that I had to unlock an apartment to let people through to see it without me being there. It works pretty well as I let them walk through and grab an application if they are interested and I think people like to be able to take their time when looking at a place.

I have been doing this with a lot of our lease option houses, as before the market slowed we would get so many requests to see the places it was virtually impossible to handle them.

I would like to hear from other landlords, property managers, and real estate agents, or anyone who has to set appointments with the general public. .

What are your no show/show ratios?

How do you prevent people from not showing up?

The Art of Patience in Real Estate Investing

February 18, 2009

The Art of Patience in Real Estate Investing
by James Miller


I have a friend who is working on buying his first property. Besides looking for his own personal residence, he wants it to be a good investment.  He is looking for a deal.

He is looking at a REO (Bank Owned) property that has been siting for a while. The condition was pretty rough, so the bank decided to put about $5000 into it to replace carpet and paint the place. A surprisingly good move on the banks part.

The fun part for me is that I see a lot of what I felt and did when I was looking for my firs investment property. I see his excitement and energy.  I also see how he is too close to the deal and starting to justify things.

Today he called me and told me that they are only off by $1400 in price, and that he is feeling a lot of temptation to call up the broker and tell him that he will accept the banks last offer.

I preempted my next statement by telling him that it really comes down to how badly he and his girlfriend want the property. Since they are also looking at if for a residence, there can be some emotion involved.  And I would hate to see him lose the property if he really wanted it.

As I had walked through the property for him, I then followed up with these two thoughts:

“It is a good deal, but not a great deal.”


“Banks are a lot more flexible than they let on.”

He had told me that the lender claimed that under no circumstances can they come down that extra $1400, they are already at their bottom dollar.

If this was an individual, I may be more inclined to believe it, but in reality nobody understands the time value of money more than a lender. They have to know that the longer they sit on a property, the more it is costing them.  When given the choice between a $1400 hit and waiting another six months before getting a seller, I have to believe that the bank will eventually cave in.

There is always the chance that my friend will miss out, that some other investor or individual will decide on buying the property at that price, but if you can position yourself so that you are ok with any outcome, you will always do all right.

Patience is the real key to buying, especially when starting out, where everything looks like a deal and you are so hungry to start investing , you can barely stand it.

Here are the basic steps to placing an offer on a property so that you can rest at night.

1) You need to quickly evaluate a property as best you can.
2) Set the price/ terms you are willing to buy it for
3) Negotiate to do better than the Price and terms
4) Be ok if you get an accepted offer, and willing to walk away if you don’t

I also noticed that my friend was commenting on how his Realtor was pretty close with him and he felt comfortable that he was looking out for his best interest.

He then later told me how the Realtor had commented that $1,400 was only going to be an extra X number of dollars per month on a payment.

This is a common technique that is used to sell. Taking a number that seems large and breaking it into terms that seem smaller. We have all heard some advertisement that talks about how something only costs “31 cents a day” or “less than your daily cup of coffee each morning”.  This technique is used to break down our barrier to a pricing objection, by making it seem to be an insignificant amount.

When I heard that the Realtor did that, I told him that he might want to be wary about whose side the Realtor was really on.

I can only imagine how the enticement of a commission in these slow times can be tempting, maybe even to the point of bending morals.

Real Estate Investing – The Greater Good

February 6, 2009

Real Estate Investing – The Greater Good
by James Miller

So much of the focus on Real Estate Investing seems to be on making money. That is the first and truest motivation for what we do.  I feel that there is nothing wrong with this. Being a capitalist, I think anything that gets the Money moving in our economy actually does us good.

But before I turn this into  Gordon Gekko’s Greed is good speech, I want to talk about the other side of what we do, when we buy or sell a place using creative real estate techniques.  I want to talk about how it helps people and the overall good it does.

Think of the benefits to our local economy and community when we do the following investing action:

When we buy a fixer upper, repair it, and resell it with seller financing:

1) We are saving this home from further ruin that time can create. At some point homes become so deteriorated that after enough time only the only choice is the wrecking ball. By saving these homes we are indeed recycling them and keeping a large amount of material out of the landfill.

2) We raise the property values in the local neighborhood. This may or may not happen to any significant degree, but it makes it easier to sell your house if it is sitting next to a freshly  restored Victorian, as opposed to being next to something that looks like a haunted house.

3) We increase local tax revenue. While we never like to see it coming, we benefit the community by creating more assessed value in a home that benefits the tax roles.  This is a dollar savings that  minutely lowers everybody elses taxes.

4) We minutely lower the cost of housing by providing another viable living space.

5) We give hope, usually to a family that is transitioning from renting to the American dream of home ownership.  We are providing renters a way to start building equity in their home even though they may not be able to qualify with a bank right now.

6) We give hope, to the seller we buy from who could not move their home otherwise. This is especially true in this tight market.  I have talked to Realtors who have sold nothing over the past six months.

With our ability to sell via lease options and other creative means, we are constantly and consistently able to sell homes.

7) We are good for the economy. I believe that if there were a massive push from our government to educate it’s population on the ways of creative Real Estate Investing we could pull out of this economic slump without the need for huge bailouts.

The banks would still have to take a hit, but a nation of savvy and creative Real Estate Investors and home buyers could eliminate the inefficiencies in the market.

If you think about all of the people out there right now who would gladly rent or sell their property with creative financing, just to get out of it, but they don’t know how, so they are letting it go into foreclosure.

Compare that against the amount of people that are ready, willing, and able to come up with a little money down and make the monthly payments in order to get into a home of their own… but they don’t know these options exist.

If you compare these two things then we know that there is room for us to make a difference in our economy without a huge infusion of bailout cash.

…..Then again, maybe I am just an idealistic dreamer.

Since posting this I have read Francine Hardaway’s open letter to two mortgage companies. In her blog, she talks about how much better things would be for her and her lenders if  they would accept a reduced interest rate as opposed to her only other option…Foreclosure.

Taking on the language barrier as a landlord

February 3, 2009

Taking on the language barrier as a landlord.
by James Miller


I have had two semesters of Spanish in high school. Since that has been over twenty years ago, I now know just enough Spanish to unintentionally insult someone or get arrested in Tijuana.

I am guessing that this topic will be a foregone conclusion in places like California, but here in the Midwest I am finding that intolerance and discrimination is indeed prevalent in my local rental area, and there are lots of qualified Hispanic tenants who are being turned down because their primary language is Spanish, and the mom and pop landlords don’t know how to deal with this.

I find that many of these landlords characterize all Spanish speaking people as “Mexican”, and seem to believe that letting in Hispanic people will cause their apartments to become run down and create all kinds of trouble.

I realized that because of this, catering to English as a Second language (ESL) tenants was basically an untapped market.

When I started taking on Spanish speaking tenants, I also found them to be some of my best tenants. Rent was paid on time, apartments were kept very clean, and I even see that the majority of them who take their shoes off at the door.

This wasn’t always the case, but in my experience I had a better than average experience with my Non-English speaking tenant base.

The only time a problem arose was when I needed to communicate with these tenants.

Here is what you will need to do as a landlord or property manager to bridge the language barrier:

1) The first thing that I needed was a translator.

There is usually someone in their life who can communicate in English fairly well. Often times they are in contact with professional translators who can get the job done. many times job placement agencies have people who are fluent in both languages. Then there is also the local high school Spanish teacher.

Many times they will jump on this opportunity, and can become a faithful resource if you compensate them modestly.

2) Get the leases changed over to Spanish.

I am not sure of the legal ramifications of a ESL tenant signing a lease written in English, but getting the lease changed over is a one time cost for something that can be used over and over again.

3) Use written communication.

I use, which can translate into several different languages. It doesn’t always translate everything 100% correctly, but gets the general idea across.

After having tenants laugh at something I had translated using this service, I figured out that using a two step English to Spanish, then Spanish back to English translation lets me verify if there is anything that can be potentially confusing or embarrassing.

4) Don’t be afraid to try.

Not knowing a language can be intimidating, but I found that we can communicate quite a bit with some broken words and pointing. Even though they all have my phone number, most of the time my Hispanic tenants will wait for me to stop by the apartment building and pull me aside if they have something that needs to be fixed.

The language barrier also helps to reduce nuisance calls, as ESL tenants will take care of the issue themselves if they can.

Some of my English speaking tenants will call me for just about anything. I have received calls asking me to replace burnt out light bulbs in apartments (even though that is their responsibility), or how the neighbor doesn’t always put his garage door down. yes, true story.

5) Make an effort to learn some key words in Spanish.

Don’t give me the “They should speak English if they want to live here” routine. That isn’t even the point. The point is to fill the apartment wit the best qualified tenant that you can.

By at least partially learning another language, you are opening yourself up to a ever growing tenant base.

Real Estate Negotiating – Harnessing the power of questions.

January 30, 2009

Harnessing the power of questions

by James Miller



Did you ever notice how the cops on the police dramas get so upset when the person they are interrogating asks them a question?

Who hasn’t heard a TV cop yell “I’ll ask the questions around here!”?

Ever wonder why it was so important that he ask the questions?

Asking a question gives you an advantage in three ways:

1) It causes the other person to come up with an answer.
From very early on we are taught to answer questions.  Throughout our years of schooling, there were always people of authority, mostly teachers, and parents, who required us to answer a question. If we gave the right answer we received praise, if we answered incorrectly, we heard a “no”. This incessant questioning, while forcing us to learn, also ingrained a deep-seated need to be right.

It is this “need to be right” that drives us to answer questions today.

As soon as we hear a question, there is a reticular activation mechanism in our mind that starts searching for an answer. This focuses the mind to find an answer and detracts you from things such as creating a question of your own.  It stops us from thinking outwardly and causes us to search inwardly for an answer.

If you want to see how motivated we are to answer questions, try this game:

You and a friend take turns asking each other questions as fast as possible. The questions don’t have to relate, or even make sense, but you can only ask a question. As soon as someone says anything other than a question, they lose.

Try it, you will see that this game shows how difficult it is to not answer a question that is asked of us.

2) Questions direct and control the conversation.
Questions require us to explain, which directs the flow of information. Once a topic has been changed it is awkward to change it without using some sort of segue.

In order to control and redirect the conversation you should get good at using a segue to transition to another topic.

Some of the segues I use most often are:

“I know this is off topic but,…..”
“By the way…”
“Before I forget….”
“I hate to interrupt but….”
“I’ll get to that in a second, but the first thing I need to know is…”

These phrases lighten the blow by acknowledging the impending change in topic.

The interesting part is that you can use them in lieu of answering a question to ask your own. This has the double impact of deflecting their question and redirecting the topic of conversation.

3) Questions buy you time.
When the other party is scrambling to put their information together in order to answer your question, you can be using the time to do your own due diligence.

One of my favorite Donald Trump stories is how he did this during negotiations on a building purchase.

Donald realized that he didn’t have all of the information he needed to continue with negotiations. Instead of revealing this point and asking for more time, he challenged the other party, asking if the knew the true history of the building they were trying to sell. The other party quickly ended the conversation and asked to get back to him at some other time.

Donald had no knowledge of any problems with the history of the building, and didn’t specifically state that he did, he just asked a question that gave him the time he needed to get his ducks in a row.

How to avoid arguments over security deposits

January 26, 2009

How to avoid arguments over security deposits

James Miller

It is no secret that property managers are one of the most sued professions. As landlords and investors we need to be able to reduce the possibility of this any way we can.

It is my contention that most arguments that ultimately lead to court actions stem from some sort of miscommunication.

While there are people out there who try to sue for just about anything, I think most people who end up in court feel that they have been wronged by someone, but have not been able to work it out with that party.

For landlords and property managers, having a good explanation of what is expected will help to reduce the possibility of arguments and court.

I found that repairs cost me much more than tenants expected and I was constantly getting challenged on the costs.

My answer to this problem was to create a schedule of fees for security deposit withholding.  Here is what I came up with:

Schedule of fees for security deposit withholding

This is the general guideline used to determine what charges to hold against a tenants security deposit. It should be noted that this is a general guideline and charges are determined on a case-by-case basis and may be higher depending upon the situation. It should also be noted that we have 21 days by law to return your security deposit. We will do everything we can to speed up the process.

We are fair in our evaluation of what to withhold from a tenants security deposit and do not treat it as a way to profit from the end of a tenants lease. A large amount of effort is needed to turn an apartment, and money is only withheld to cover any excessive damage that is beyond what is normal wear and tear.

Time for our personnel is expensed out at $50/hour.

Materials are expensed pass through.

Light Carpet Cleaning $25 per room, no remaining or difficult stains

Heavy Carpet Cleaning $50 per room, stains remain or are difficult

Extra Heavy stains in Carpeting that require replacement of the carpeting will be charged on a time & materials basis.

Light wall patching (larger than pencil eraser, smaller than quarter) $15 per occurrence

Medium wall patching (larger than quarter, smaller than baseball) $30 per occurrence

Heavy wall patching (Baseball size & larger) minimum $50 per occurrence, or time + materials

Cleaning toilet $25 (as evidenced by remaining stains, dirt, mildew or hair)

Cleaning tub $25 (as evidenced by remaining stains, dirt, mildew, or hair)

Cleaning sinks $25 (as evidenced by remaining stains, dirt, mildew, or hair)

Cleaning Windows $10 per window

Missing/damaged outlet or switch plate $5 (plate plus installation)

Removal of trash/debris $45 per garbage bag full. Large items such as furniture and appliances the size of a microwave or smaller at $75.00. Large appliances and furniture at $150 per item.

Property damage: I.E. broken fixtures, windows, appliances Etc. charged at time plus materials. Any cost for outside labor for repair will be passed through with a $15 up charge.

Light bulbs: All lights were supplied in working order with light bulbs. It is the tenants responsibility to provide the apartment to us in the same fashion any missing/out bulbs will be charged at $5.00 per for normal 40-60 incandescent. (bulb + installation) Special bulbs

Fire alarms: Were supplied in working order with fresh batteries. Will be charged $20 per missing/broken alarm.

Unusual odors: If deemed caused by the tenant (pets, spills, left out food) damage will be charged on a time and materials basis.

Lost/damaged Keys $40 per key, a landlord protection agency has a great settlement charges guide, as well as a ton of other free landlord forms.

I also created the next document to give tenants as a map to work toward getting as much of their security deposit back as possible.

Hints for getting your security deposit back.

We take photos for our files before and after you move, so we do know what was there before you moved in. Anything unusual or excessive should have been noted on the move-in/move out form. These will be the two major things we use for comparison to determine what charges to apply.

Let us know of any items that need to be repaired or taken care of before you move out. If we can plan for it, it will cost us, and you, less.

Leave all hardwood and vinyl floors in a broom swept condition. Vacuum and Shampoo all carpets.

Use 409 or other cleaner to remove any stains or marks from walls. Check heavy use areas such as switch plates and cupboard handles.

Open a couple boxes of baking soda and put it in the refrigerator and freezer.

If you know you have marks that will need to be touched up, ask us for some paint. In most cases we have the color on record and can provide you with a small amount to touch up any marks.

If you would like to try to fix any holes in the walls, drywall patching compound can be bought in small inexpensive containers. You can save the expense of a putty knife by using an old plastic credit card or ID as a spreader. Just make sure you don’t make the problem worse by leaving a rough surface.

Switch plates and outlet covers are inexpensive; In the large chain stores you can buy a package of ten for under $5. If you have more than one that is damaged it may be worth your time to replace them yourself.

Vinegar and Newspaper works well to clean windows.

Make sure any utility bills, (especially water and sewer if you are responsibile for it) is up to date and paid. Providing us a copy of a last billing statement is a good way to help ensure quick return of your deposit.

Remember to return any loose items such as remote controls, keys, etc.

If you have a difficult stain or other damage you are trying to repair before we go through, call us, as we have seen a lot of situations and have many helpful hints for removing difficult stains and fixing items in a cost effective way.

Our focus is to turn over an apartment with minimal time in between. Any effort on your part to go the extra mile will be noted and taken into account when looking at what we need to withhold from your security deposit.

Both documents are given to the tenants as they move in and when they move out so they know what to expect.

Don’t be afraid to ask for too much.

January 22, 2009

Don’t be afraid to ask for too much

by James Miller

As I was sitting in small claims court last Monday.  As I waited for  my turn to try to get a judgment against an Ex-tenant, I watched as an old man in an electric wheelchair argued his case against the tenants he was evicting.

His tenants were trying to use some claim of water damage against getting evicted and judgment for past due rent.   They failed on both accounts. After this the landlord asked to add in court costs as part of the judgment. This is a standard request, which he was granted.

The elderly landlord then asked for the most audacious thing.

He claimed that by the tenants not paying their rent, it forced him to have to refinance with the bank, causing him to incur $1700 in refinance costs. He asked that the $1700 be added as damages to the judgment.

I smiled at his bold attempt to stick it to them and waited to hear how the judge would deny this crazy request.

Instead, the judge said that it was an unique and novel idea, and that he would hold it over for a hearing.

What this means is that instead of denying the claim, the Judge was actually considering it.

Now I really don’t think this damage claim will end up having much traction in court.  If the old guy was running things that tight, it is hard to say that the tenants missing a rent payment or two, was the defining event that pulled him over the edge.

I think he will have his work cut out for him if he tries to draw a direct correlation between having to refinance and not getting in rent payments.

It seems that would be akin to getting fired for being late, and then trying to sue the driver of your carpool for lost wages. While he may not have contributed to your situation, there were surely some mistakes you made before he came along.

I sat in amazement in that courtroom, not only at the old guys creativeness, but that I had never even thought to ask for so much in court.  I realized that we all tend to ask for what we feel is owed to us, or what we deserve, but no more than that.

I think that it is human nature to ask for what we think is “fair”.

My contention is that in asking for only what we deem as “fair” we are shortchanging ourselves.  What we think is fair may be an unbelievable deal for the other side.
I am going to start asking for things that I think I consider unfair, but in my favor.

I don’t think that there is anything unethical with this as the person on the other end of the conversation has a choice whether they will say “yes” or “no”.

I may start asking if I can get a free desert with my dinner order, or a discount on the clearly priced toilet paper.

I may even suggest to my neighbor that they shovel the snow out of my driveway for me.

Who knows what I might get taken up on.

Ok, I might be taking things a bit far, but this does apply to Real Estate.

You can make thousands of dollars more from a deal just by asking for “too much”.
It reminds me of the popular Real Estate saying when making offers to purchase:

“If you are not embarrassed by your offer, you are offering too much.”

By just moving your lips, you have the potential to make more money than you can from all of those late night hours of swinging a hammer at the “fix and flip”  house.

Here are the questions I like to ask the most when dealing with sellers:

1) Are you willing to sell it for what you owe?
2) Is that the best you can do?
3) Can you do any better in price if I agree to (close quickly, let you take the appliances, etc.)
4) Are you willing to bring money to the closing table to sell this house?
5) I need to include your (boat, truck, car) as part of the deal, are you ok with that?

Try Asking  for what feels like “too much”.  I can’t promise you will get it.

I can only assure you that you won’t get what you never ask for.

What a Real Estate Agent needs to do to sell to me.

January 20, 2009

What a Real Estate Agent needs to do to sell to me.

by James Miller

The best thing I think a Real Estate agent can do is to be in constant contact with their Buy/sell list of clients.

As a Real Estate Investor, a lot of Realtors put me on the auto-mailer that emails me when they have what their program thinks fits my buying criteria. It is usually way off, as they are often just sending me things like “commercial properties over $500,000”. Or any residential income properties in a certain zip code.

Besides being off target with what I am looking for, these e-mails get to be overwhelming, and I tend not to keep up with them.

What is effective is what only Ed, one of the dozen or so Real Estate agents that I have worked with, does.

He calls me on the phone.

It is short and sweet and usually goes something like this:

“I’m not sure if you’ll be interested in this, but I see [some property] has come on the MLS.”

We don’t spend a lot of time on the phone, but he does let me know in a very personal way, that he is still looking for properties for me and what’s out there.  He also always asks me what I have “going on”, or “what’s new”.

I am not even sure If he knows how effective this is for him. Every time he calls (and he has the sense not to overdo it) he forces me to remember that he is a Realtor.

He puts himself in a position to hear about what I have going on and what I am interested in doing at that moment.   If I have a property that I am thinking about selling, I am sure going to tell him. If I have a need for a tenant, he will know right then. If I know of someone who might be interested in buying or selling He will find out about it when were talking.

There is also the possibility that I may like the sound of the property that Ed is calling about.

By taking the time to call me, Ed has positioned himself on the top of a very long list of Realtors I know.

Want to hear a little secret about Ed?

He’s not the best Real Estate Agent that I know.

Don’t get me wrong, he’s a very good Realtor, but he‘s not the best one I know. He doesn’t have a big list of letters after his title  like a lot of Realtors and Brokers. There are questions I ask him that He doesn’t immediately know the answer to. He is consistently at the top of the list for sales, but he is not yet #1.  But none of that matters because he has done the one thing that no other Real Estate Agent does.

He has taken the time to learn about me, and what I am doing, by picking up the phone.