Thursday, March 30, 2006

Free Public Records Searches

The site has access to about 36,000 public databases, organized by state. Most of these searches are free -- there are some that are pay services (either one-time or monthly subscription).
Here are some examples of available info:
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Wednesday, March 29, 2006

Free Rental Property Management Forms

Here is a site with some free property management and mortgage related forms.
They are in HTML format.
Here are some examples:
 Rental Application
 Co-signer Agreement
 Request for Work
 Inspection Form (move-in/out)
 Balloon Note
 Assignment of Deed of Trust
 Quit Claim Deed
 Purchase Contract
 Option to Buy 
Note: Always check with an attorney on validity of any generic form you obtain.
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Tuesday, March 28, 2006

Hard-to-obtain REI Domain Names for Sale

Buy These Valuable Real Estate Investing Domain Names before they're gone. Some are specific to NJ and Florida. Others are generic.

If you are serious about an online prescence for your investing business, you need a good domain name. If you've tried, you know how hard it is to get them too!

Sunday, March 26, 2006

Ways to Advertise a Vacancy - My Impressions

Here are my thoughts on cost and effectiveness for vacancy advertising, based on my limited experience and location:

For Rent Sign: Other investors have told me that this is the best bang for the buck; my HOA doesn't allow signs so I am limited to sticking it in the window - which was not effective. I also wonder about the security "smartness" of this idea.

Word of Mouth: Let everyone in your REIA know you have a place to rent, in case they know someone. Also, tell friends, nieghbors near the rental unit, and give your current tenants a $150 reward for referring a qualified renter. This can really cut down on vacancy time. I have not had this work for me yet.

Flyers: I posted flyers with rip-out contact tags on community bulletin boards at the library, food stores, drug stores, and park. I did not have any success but if you can find a high traffic area like a bus stop, you may do well with this.

Rental Agencies: While I am dubious about the service they offer (and would never use one as a prospective renter), they don't charge the landlord anything - so I say use them. I did get a few calls from agency clients. You may even want to call these agencies as soon as you are aware of an upcoming vacancy.

Newspapers: This is by far the most expensive advertising method, however, it did generate the most phone calls for me. You might want to try the other methods first, but if you are in a hurry, get an ad in the paper and try for a discounted rate.

Internet: I didn't have much luck with online newsgroups, Craig's list, and othe rental specific sites. In fact, I got two calls, both from out of state, of people not knowing how to use a search function! The other lead I got was via email and it was just the other day - the unit has been rented for over a year now! That shows that some sites never remove information unless you go and do it yourself.

Realtors: OK, this is one I have mixed feelings about. I actually got my current tenants via a Realtor, so I'm grateful for that -- but I would have to say I wouldn't do it again unless I was desperate. Here are the beefs I had:

  • They wanted 1 month's rent as a finder's fee (that's $1200).
  • They wanted a commission if I decided to sell the place to the renter
  • They insisted on using their application and lease since they are "protected" and understand it; even after I spent hours and hours fine-tuning my paperwork (this was the one that ticked me off the most)
  • This particular realtor tried to negotiate the rent on behalf of her clients, as if this was a house sale...Excuse me?

So how would I go about advertising a vacancy in the future -- Here are the steps I would take in order.

Before the unit is vacant I would:

  1. Word of Mouth - Tell tenants to recommend someone; tell neighbors it will be available; post message on REIA newsgroup
  2. Put up a sign - window (or grass if you can do it)
  3. Call Rental Agencies - let them know when it is available
  4. Put up a few flyers in key locations - but not go overboard since it doesn't pay off time-wise

Once the unit is vacant I would:

  1. List an ad with one or more newspapers (small local and "big" county paper)
  2. Maybe try a few internet posting, but keep track of where I list them
  3. If I get desperate - call a realtor (but make my demands up front)

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Write Down Your Tenant Criteria

One of the best ways to stay out of trouble with Fair Housing is to have specific criteria for your selection of applicants, and then Write Them Down! Also, make sure you follow them and can prove it -- a checklist is a good idea and keep the checklist with each application. Only about 5% of landlords do this.
Tip: Make your standards high - you can always go back and then select the most qualified applicant if no one meets the criteria -- but the first that does meet the criteria you must rent to them.
By the way, you should not give these criteria to prospective tenants. It is simply an internal document for you -- just in case.
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More Tips on Landlording and Leases

Do a rent survey to find out how much your place is really worth to a renter. You may have to ask Realtors, pretend to be a renter and walk through a few places to see what kind of shape and amenities they have, and of course, check the newspaper.
Always charge the maximum security deposit your state allows; in New Jersey it is 1 1/2 months rent.
Make sure that the amount of days the tenants have to notify you that they will be leaving is greater than the amount of the security deposit, otherwise they will tend to use that money as the last month's rent...then you have no money if there is damage after they move out.

Can You Deny Renting to Smokers?

Smokers are not federally protected under the Fair Housing act. There are two caveats, however:
  1. If you have federally subsidized housing; you cannot disallow tenancy based on smoking
  2. You must apply the ban to every applicant, do not make an exception for someone who appears to be the perfect tenant on paper but smokes - either you allow it or you don't.


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Can you reject tenant applicants with a criminal record?

The Fair Housing Act section 3604(f)(9) says: "Nothing in this subsection requires that a dwelling be made available to an individual whose tenancy would constitute a direct threat to the health or safety of other individuals, or whose tenancy would result in substantial physical damage or property to others."
Obviously opened to some interpretation, but definitely strong enough language to allow a landlord to turn down many felons. It is doubtful that this would apply to misdemeanors. The key phrase is that there must be a current threat to others. I have read that crimes such as fraud, DWI, and vehicular homicide may not apply. Obvious crimes that DO apply include: murder, assualt, rape, arson, child abuse/molestation, and selling drugs (but not drug posession arrests).
Always run a criminal background check on propsective tenants!!
Also, I always to a Megan's Law check. In NJ this info is free at the State Police Megan's Law Registry Website.
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Avoid Discrimination When Finding Tenants

Here are some tips for staying within the Fair Housing Guidelines --
Here's the biggest tip that will keep you out of trouble: Treat everyone exactly the same!
Here's another key tip: Offer Everyone an Application!
Examples of how to screw this up:
1) A married person is not told a credit check is required; a single mother is told a credit check will be needed (assuming both have same qualifications)
2) A married person is told it takes a day to process the application; a single mother is told it will take up to a week.
3) Single college student not offered an application; young professional offered an application.
4) Telling different persons that the required security deposit is more than another person.
5) Telling someone the place is rented when it is not.
6) Processing applications not in the order received.
You cannot ask anyone about any of the following: race, religion, age, sex, marital status, or disabilities.
You do have the right to reject someone for unexplained negative information; you also have the right to ask about the need for any requested adjustments or accomodations for the property - but only if the person asks first!
Credit Reporting Act Facts:
  • To run a credit report you need a permissible purpose (lease application is permissible)
  • Always have tenant sign application which has a statement allowing you to run credit report
  • Do not consider information more than 7 years old
  • Credit reports should be held in strict confidence and not disseminated, and should be stored in a locked location
  • NEVER run a credit report against yourself; it is illegal!

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Friday, March 24, 2006

Down to Earth Landlording a Required Read

I want to recommend another book on the subject that should also be required reading for those who plan to buy-and-hold. It is Down to Earth Landlording: An Investor's Guide to Successful Property Management by Don Beck. I've heard Don speak and he is excellent and this book summarized his decades in the landlord business. Some of the tips and tricks in here are just awesome - some I doubt you have heard anywhere else!
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Thursday, March 23, 2006

Finding a Real Estate Attorney

Need to find a Real Estate lawyer near you? Here are two places I use to check:
Martindale (part of Lexis)
Also, sometimes has advertisements and directories for searching.
Of course, the best way to find an attorney is by reference in your local REIA. I highly recommend finding an attorney that spends close to 100% of his/her time in Real Estate as possible. Also, make sure they are either an investor themselves, or work with other RE investors. The attorneys at your REIA are the best bet.
PS - If you need to find the meaning of a legal term, check out the Law Dictionary
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Tuesday, March 21, 2006

Peter Fortunato

I went to the local REIA meeting last night to hear Peter Fortunato speak. Pete has been doing real estate since 1970 when he was 18 years old. By the time he was 28 he was "retired" from his day-to-day job and spent the rest of the time just investing in real estate. One of the more interesting things he said was that he has not used a bank since about 1977; all of his deals are funded by either the seller, or money partners, usually the former.

Here are some of the important tidbits from his talk:

  • You don't find deals - you create them

  • You create deals by finding out what the seller really wants

  • In a capitalistic society, no one will make a deal unless the thing they receive is better than the thing they give must find a way to do this

  • Do NOT use partnerships, you are responsible for the sins of your partner! It is best to use Joint Ventures and Trusts.

  • Options are a powerful tool for controlling and investing in real estate, especially with your IRA.

  • When creating an option on a piece of property, never have a statement allowing the seller to buy back the option in the future; this can be considered a disguised loan and can get you into trouble. It doesn't mean you can't let them buy it back in the future, but that should not be part of the option.

He is a great speaker; he is entertaining and tells it like it is. His website lists a few speaking engagements, although most are in Florida where he lives.

Here is a book that Peter recommended everyone to read:
Building Wealth One House at a Time : Making it Big on Little DealsBuilding Wealth One House at a Time.

I have read this book and agree whole-heartedly. It is very practical and straight-forward. If you do exactly as Schaub says, you will guarantee to retire wealthy.

Friday, March 17, 2006

Working with Contractors (tips)

- Make sure they're insured or else you will need workmen's comensation since you will be his "employer" during the time he is there.

- Find out if there will be any subcontractors; if so, they should be insured as well.

- Get everything you want done in WRITING; include schedule and payment terms.

- NEVER pay anyone before work has begun...period.

More Maintenance Tips

A few more tips to help with repair of the units:

  • Remove wallpaper with spray bottle filled with hot water and 1/2 cup of fabric softener.
  • Mildew can be removed with 1 part bleach, s part water solution; let sit for one hour.
  • Greasy oven racks: bathtub of hot water and Drano crystals; then wash in sink
  • Vinyl floor cleaner: 1/3 cup laundry detergent; 1/3 cup drano crystals; COLD water; let stand for 20 minutes
  • Chandelier: put plastic down on floor; spray bottle with pint of water and 2 teaspoons of rubbing alcohol
  • Vegetable oil will remove paint and stains from your skin
  • Windows: water and vinegar mixture
  • Ceramic Tile: 1/4 cup vinegar; 1/3 cup ammonia; 1/2 cup baking soda, 7 cups water
  • Tubs: soak paper towel in bleach and lay it over stains (or fill with pool chlorine)
  • Toilets: Use denture tablets to clean deposits
  • Carpet dents from furniture: put an ice cube on each dent
  • Bulbs: light coat of petroleum jelly on threads before putting in
  • Paint brushes: soak in hot water and vinegar; use fabric softener in can when finished
  • Wine Stains: Paste of table salt and vinegar; allow to dry and vacuum off

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Common Landlord Repairs

If you don't do your maintenance right away on your units, you will pay even more later. Here are some hints and tips for saving time and money on repairing rented units:

  • Standardize materials to the extent possible
  • Get a service contract on the furnace; I did this with NJ Gas and for only $77 a year I  have peace-of-mind that the tenant has someone to call 24x7 if there is a heating problem
  • Unclog a slow drain: 1/2 cup baking soda; 1/2 cup of vinegar; wait a few minutes, then pour boiling water slowly.
  • Replace shower heads with lo-flow
  • Have A/C cleaned prior to season
  • Always replace glass with plexi or safety glass (liability reasons)

Here are things you probably should NOT do, since they are overkill:

  • Installing new kitchen cabinets when the olds ones are still functional (replace knobs, or paint instead)
  • Ripping up carpet that is only slightly worn (just clean it)
  • Using too high of grade of carpet or padding (medium grade)
  • Using paneling when sheetrock will do
  • Painting using multiple colors
  • Removing wallpaper instead of painting over it
  • Using soft vinyl floor when tile is longer lasting.

The Better it Looks the Faster it Rents

Law: Good properties attract good and bad tenants; bad properties only attract bad tenants.
How to make a place attractive?
Exterior improvements that help attract good tenants -
  • Nice easy-to-maintain curb appeal
  • Nice mailbox
  • Painted or powerwashed exterior
  • Clean gutters
  • Caulk around windows

Interior improvements -

  • Check all plumbing for leaks
  • Clean all tiles, shelves, sills, switch plates, heat grills, fixtures, ceiling fans
  • Clean all appliances and make sure they work
  • Bathrooms should have good caulk and be cleaned out
  • Hang a shower curtain
  • Place air fresheners around the unit
  • Paint (use good quality paint)
  • Clean (or replace) carpets; shine hardwood floors
  • Spray for insects if necessary (termites, cockroaches, ants, fleas, bees, etc.)
    • Cheap cockroach killer: condensed milk + boric acid; make a paste and apply under sink, stove, and near refrigerator

Inspirational Quotes

Another list of inspiring quotes:
"Do today what others won;t, so you can live tomorrow like others can't."
"You can't change the people around you, but you can change the people you are around."
"Many people dream of worthy accomplishments...others stay awake and get them done."

Glen Gallucci

I attended a one-day seminar by local investor Glen Gallucci in NJ this weekend. He is a very good instructor; really speaks in practical terms. While I knew most of the information that he presented, I did learn one new thing:
How to Sell a House in 5-Days.
That was pretty interesting. Anyway - I recommend his stuff if you are into Whole/Rehabbing.
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