Archive for the ‘overcoming obstacles’ Category

How I Evicted A Problem Tenant in 4 Steps

Sunday, May 4th, 2014

I recently did my first tenant eviction. It’s something I always felt a little queasy about doing, since the procedure was kind of hazy to me. But I found the whole process fairly easy.

Contrary to widespread misconceptions,  the justice system favors the landlord. If a tenant violates the contract, the law is on the side of the landlord. And, not having enough money is an unacceptable reason not to pay the rent.

I had a tenant that had a habit of paying late. I warned him that this can’t continue, yet after the warning he I still didn’t receive his payment on the due date – the first day of the month.

Here are the steps that I took to remove him:

1.)  I filled out a “Pay or Quit” form that gave him 5 days to pay up or remove himself from the premises. I taped it to the front door and mail a copy to tenant. I made a copy of this form from my copy of the Arizona Landlord’s Deskbook.

2. ) He didn’t pay or leave so I went to the County Courthouse and filled out a form to set a court date to have him evicted. I paid $42 to process the paperwork and $40 to the County Constable to hand deliver the Eviction Summons to the tenants. The Summons named the tenant as defendant, stated the date and time of the trail, and listed the amount of money they owed. It took one week before we could get a trial date.

3.) At the trial, my wife and I show up, but the tenants do not. The judge awards the judgement to my wife and I and gives us a paper ordering the tenants to leave and to pay the costs, which includes an additional $85 for Court Costs. The Judge’s Eviction Notice gives the tenant 5 more days to get out.

4.) We mail a copy of the verdict to the tenant and he is out before the 5 days is up. We don’t anticipate getting the last month’s rent, but our main goal was to remove them from the premises.

The entire process is simple enough that it can be done without a lawyer. However, in the court I saw one tenant who had hired a lawyer to represent her. The rest of the landlords that I saw did not have lawyers.

My only regret was that I waited longer then I should have to file the paperwork with the county. I negotiated with the tenant, which turned out to be futile. It wound up taking about a month to actually remove the tenant. Had I acted quicker, he could have been out in half the time.

Overall, going through the process was empowering because it gave me confidence that the government is there to assist landlords to remove problem tenants.

Excuses for not paying rent

I have found that tenants can afford to pay for cable TV, new Ipods, big screen televisions, yet they can’t afford to pay the rent. I often think to myself, “Something is wrong with this picture.”

Here are some sad but true excuses that tenants have come up with (from The Landlord Protection Agency at http://www.thelpa.com). If you hear excuses like these, it’s probably time to start the eviction process.

“I had to pay my car registration & I owed my former landlord money.”

“Oh come on. You’re gonna harass me on Valentines Day?”

“We are expecting a couch delivery in the next few days.”

“You know with Christmas gifts and parties, we’re a little short on the rent this month.”

“My last landlord had no problem with me paying late. This seems to be a real big issue with you.”

“Sorry I said I would have the rent and the late fee. I lied. So where do we go from here?”

“I would have paid the rent, but I though I needed it more than you.”

“So many things came up this month that I had to deal with. Now I don’t have the rent money. Sorry. I don’t know what to do. I’m sure not gonna borrow it.”

“I lost my cell phone with your number in it. That is why I couldn’t call you to tell you what happened!”

“We had to use the rent to pay our electric bill. They were gonna turn us off if we didn’t pay the whole bill.”

“Why you bothering me? I told you I work 2 jobs and don’t have time for this!”

“I would have paid your rent, , but I had to make the car payment.”

“I did not pay the rent when I said I could because that is the only day I can sleep late.”

Follow Schwarzenegger’s Advice to Put Fuel on the Fire

Thursday, December 13th, 2012

“Adversity causes some people to break, and other people to break records.” — Anon

The Governator

I think one of the most powerful motivations in my life is when someone tells me that I can’t do something.

In his autobiography, Total Recall, Arnold Schwarzenegger puts it this way:

Sometimes you have to appreciate the very people and circumstances that traumatized you. Today I hail the strictness of my father, and my whole upbringing, and the fact that I didn’t have anything that I wanted in Austria, because those were the very factors that made me hungry.

Every time he hit me. Every time he said my weight training was garbage, that I should do something useful and go out and chop wood. Every time he disapproved of me or embarrassed me, it put fuel on the fire in my belly. It drove me and motivated me.

What strikes me, is that it wasn’t the fact that Arnold was tormented that made him into the over-achieving force of nature that he became (warts and all), it was the the way that he used that ordeal as motivation to reach his goals.

Arnold’s motivational story:

 

My favorite blog articles for the week:


Now is the Time to Start Meandering into Fixer Upper Houses

Tuesday, February 14th, 2012

Yep, that's me painting a fixer-upper house

If your circumstances are such that it is impossible for you to start investing in real estate today, you can start by just meandering in that direction. You can program your mind to pay attention to anything related to real estate. Cut articles out of the newspaper, buy books at book sales, ask friends and co-workers how they purchased their house, watch for free classes or seminars.

If you don’t start following your dream now, you may never do it. There’s a lot more to life than just making a living by working at an uninspiring job.

Start to Prepare Yourself

You can be constantly learning and preparing for the day you will purchase your first fix-up property. Virtually anything you need to know is available to you through books, audio recordings, workshops, seminars, public education programs, consultants and training programs.

I meandered for approximately 11 years before purchasing my first investment property. Now I wish I had started sooner, but you can’t begin until you have the desire and the knowledge. Sometimes, desire and knowledge can be acquired simply by observing someone else operating a successful business.

Reason to Not Invest and Reasons to Invest

There are always reasons not to invest in real estate. The most common reason used to be that people thought house prices were too high. Now, the situation has reversed itself and housing prices are at historic lows.

The time is ripe to start meandering in the direction of Fixer Upper Houses.

See What’s Happening in Your Neighborhood

You might want to check out how low houses are selling for in your neighborhood. You might be surprised.

You can find housing prices at Zillow.com or on the multiple listing service (MLS).

Follow Your Dream With Fixer Upper Houses

Wednesday, February 8th, 2012

Go confidently in the direction of your dreams. Live the life you have imagined.
— Henry David Thoreau

While you pay a price for following your dream, you also pay a price for staying where you are. You lose the opportunity to develop new life-coping skills that help you deal with unexpected crises or joblessness. You may suffer from depression by staying in a debilitating job.

Marsha Sinetar, in To Build the Life You Want, Create the Work You Love, says that excelling at a job that you love could be the best mental health insurance for people who feel depressed or anxious about their work. Americans spend $12.4 billion each year to treat clinical depression.

Do You Have Zest and Gusto?

Science fiction writer Ray Bradbury, in Zen and the Art of Writing, wrote that, “life is short, misery sure, and mortality certain.” Yet, he advocated that as we move along life’s way, and in our work, our lives should be filled with “zest” and “gusto.” With zest and gusto, traveling to the grave, Bradbury vowed to fight injustice, appreciate beauty and encourage children.

Is there enough zest and gusto in your life to fight in-justice, appreciate beauty and encourage children?

What do You Trade Your “Life Energy” For?

We should wisely use the time that we must devote to work. Our working hours constitute at least one-third of our lives during the work week. As Joe Dominguez and Vicki Robin point out in Your Money or Your Life, money is what we chose to trade our time, or “life-energy,” for. The authors distinguish between “wants” vs. “needs,” and promote not wasting money on unnecessary consumer goods. Instead, they advocate conscientiously saving money until you reach the point where you can free yourself from the working treadmill.

Fixer Upper Houses was Right for Me

The independence of working with fix-up houses was this type of “right” job for me, and can be for you too. It can be the road to operate a business that develops one’s independence, creativity and imagination. With real estate, you can invest a small amount and gradually accumulate money as both your rental income and equity increase over time.

Video of TV Interview for “Carve Out Your Niche”

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The Secret to Success (video)

Friday, January 21st, 2011

The secret to success in life and business (even the fixer upper house business), according to Napoleon Hll and Ralph Waldo Emerson, is to be persistant and to follow your intuition.

 

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Masters of Our Fate (video)

Tuesday, December 7th, 2010

We are masters of our own fate and captains of our own soul because we have the power to control our thoughts.

Bob Morgan was a stuntman on the film How the West Was Won. He was run over by a train during the filming but made a miraculous recovery with the help of a strong positive mental attitude.

Control Your Thoughts and Reach Your Dreams

Control Your Thoughts & Reach Your Dreams

Monday, October 25th, 2010

What things do you actually have control over in your life?

When you think about it, there are actually very few things that we can control.

For example, I was forced to give up my dream of boxing. I ruined my hands in the ring. The referee kept stepping on them.

We are required to buy insurance for our cars and houses. The kids must go to school and have supplies and clothes. We choose food, cars and most consumer goods based on the advertisements we see on television. Different levels of government and social pressures decide many things for us, or leave us with limited options to choose from.

And, it doesn’t get any better as time moves on. It seems the older we get, the fewer choices that we have. Men still chase women when they get older, but only downhill.

The One Thing We Control

Napoleon Hill says that we have control over but one thing, the ability to control our own thoughts. This is the most significant and inspiring of all human traits. It is part of our divine nature. This divine tool is the sole way to control your own destiny.

Mind control is the result of self-discipline and habit. You either control it or it controls you. The most effective way to control your mind is by keeping it busy with a definite purpose, supported by a clear plan.

The Ultimate Question

A lot of people I know have read Think and Grow Rich, and they say that they think it is a great book. But, very few know the answer to the following question.

What does Napoleon Hill say that you must do twice daily in order to make your desires become reality?

On page 36 of my copy of Think and Grow Rich, Napoleon Hill says that you should have:

1.) written a concise statement of what you want,

2.) how you plan to get it, and

3.) when you will get it,

then you should read your written statement aloud twice daily, once before retiring at night and once after arising in the morning.

What Does This Have to Do With Real Estate?

In the early 2000’s, I thought my job was going to be cut and I that would be unemployed. I decided I needed a steady second income so I wouldn’t have to rely on my 8:00 to 5:00 job to bring home the bacon .

After I concluded that buying fixer upper houses and renting them out was the best second income for me, I wrote down my desire on a piece of paper and carried it around in my wallet.

I wrote, ” I will find and buy a fixer-upper house in the next 60 days.” In less than a month, I found and bought my first fixer upper house, and that was my start in this business.

That was the first time I experienced the power of this technique. I have had many subsequent successes with the technique as well.

Like most of us. you have ideas and dreams. But, if you go beyond just identifying them and you write them down, and put your passion into them, they are more likely to come true.

Confessions of a Fixer-upper-holic

A Passionate Life, Turn Your House into a Rental

Saturday, June 5th, 2010

In the movie Man on a Wire, French tightrope walker, Phillipe Petite, runs a cable between the two World Trade Center Towers in 1973, and walks across the 200 ft wire.

It is truly an awe-inspiring feat. People on the ground watching commented:

”It was extraordinary, it was very very beautiful. It was like he was walking on a cloud.”

“It’s beyond anything you can possibly imagine. It’s mind boggling. The awe of the event and the overall largeness of the scale was magical. It was just profound.”

Even one of the NYPD officers who were sent to remove him said, “I personally thought that I was watching something that no one else would ever see again in the world. But it was a once in a lifetime experience. Everyone (all the police) was spellbound in watching him.”

Petite planned the event for 6 ½ years.

He said, “There is a great joy when I am on the wire. Passion is something that knows no bound. It’s not that I am ready to lose, it’s that I’m ready to gain. It’s living intensely. I lose myself in my passion. I do not care about the aftermath.”

“If you are passionate, you are going to do what you want to do all day long, and you are going to become the best at it.”

Movies like Man on Wire remind us that passion is an option and a choice in our lives.

Sometimes it may take something like losing our job to realize that we are not following our passion, and to provide us with the opportunity to pursue that passion.

Following your passion can involve something as simple as turning your house into a rental.

Due Diligence, Part 3 — Inspecting the Property

Wednesday, February 6th, 2008

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Following the outline from “Real Estate Investing for Dummies,” aimed at investors in fixer upper houses, we now move to the property inpection part of due diligence.

You have made an offer on a house, it has been accepted by the seller, and you are now in a period where you must determine whether or not the house is really worth puchasing. If you inspect the property and the physical condition is not satisfactory, almost all purchase contracts allow you to gracefully back out of the deal with no loss of earnest money.

Even if the investment property looks good on paper, and your pre-offer inspection didn’t unearth any skeletons, a wise investor will always do a thorough physical inspection before purchasing.

Although we investors tend to be frugal (see, skinflints), this is not the time to cut corners. You need an extensive inspection by qualified experts. I mentioned in an earlier post that I have a handyman/friend who has extensive experience in the construction & building trades, who inspects my investment properties. Unless you know someone that has that kind of background, you ought to hire someone who does.

Almost always, the inspection pays for itself. You will find problems in need of repair that are of far greater value than what you will pay the inspector. And the good part is, the seller will have to pay for the repairs if he wants to sell the house.

Many investors use a two-track approach to property inspection. You are looking for two types of problems:

1. Patent defects — those which are more superficial and can be spotted by merely looking at the property. These include broken doors, cracks in walls & ceilings, and spots in ceilings indicating a leaky roof.

2. Latent defects — those which are not visible to the naked eye, and are only identified through delving deep into the bowels of the house where few have treaded. In fact some potential problems, such a water pipes inbeded in the slab would be nearly impossible to evaluate. In fact, you couldn’t evaluate it at all unless you had a disclosure from the seller.

Next Time: Disclosure Requirements

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Conducting Formal Due Diligence

Wednesday, January 30th, 2008

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I am currently reading “Real Estate Investing for Dummies” by Tyson and Griswold, a well-written and thorough book that covers the basics of what real estate investors should know. I’ve long considered “Investing in Real Estate” by McLean and Eldred as one of the best introductory texts for real estate investing. Yet after reading the “Dummies” book, I find it equally as good, and perhaps a little more accessable for the new investor.

Here is my list of Top New Real Estate Books that I posted on Amazon.

To assist those who invest in fixer upper houses, I’m incorporating key parts of the “Due Diligence” chapter from the “Dummies” book with my own real estate observations.

Once you have made an offer on a house and it had been accepted by the seller, the “due diligence” period begins and you have until the close of escrow (or completion of the sale) to check out the physical and financial condition of the property. If you discover that the property has problems, but you think the deal is still worth pursuing, the seller may be willing to correct any deficiences, or give you money to to complete the necessary work yourself.

It’s during this time frame that you must get all of your questions answered and be sure you know what you are getting. If done properly, it will require quite a bit of effort on your part. But it must be done, if you wait until after the property is in your possession, its too late to ask the seller to replace that broken furnace.

You should work closely with the seller but take his word for anything. Only trust what you have in writing.

In my case, most of the house that I buy aren’t bought from the owner. They have been reposessed by a bank, the Veteran Administration or HUD. But I still do due diligence by having my friend/handyman go through house with a fine tooth comb. He knows more about the house repair than anyone I know.

There are two key components of due diligence process:

1. review of books and records
2. the physical inspection

A thorough look at these two components should allow you to determine if the property is worthwhile, priced right, and your goals. The due diligence is your last opportunity to either complete the transaction, or cancel the escrow, have your money returned, and look for another property.

Next post: Reviewing Books and Records

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