What You Missed - March 2019 - General Meeting
60 Ideas in 60 Minutes
ďWe will be repeating materials that we have not done for a while,Ē introduced Jeannie. She added, ďYou can interrupt us but let us finish our idea.Ē
There will be four of us up here introducing some ideas, but feel free to add to the discussion.
What repairs to create the maximum profit? Kitchen and bath are important and help sell the house.
Asset Protection: Try not to put your name on a property; use an LLC, or a trust.
Getting too friendly? Donít get too friendly with your tenants. You have to make a business decision without the emotion of working with friends.
Dave asked, ďWhat does a buyer pay for vs. a seller?Ē It varies with the way the contract is written, what is checked off. Nothing is written in stone. You can negotiate anything in the contract. If it says ďnet to seller,Ē you will be paying everything else. If you know the property is good, you donít have to continue with the contract if you donít like the terms.
Would you take a contract with an inspection period out 60 days? No, it would tie up the property too long and you could lose a better deal.
Should you provide transportation for your handyman? When you have someone working for you and they donít have transportation, if you pick them up and anything happens, you may not have insurance to cover them. You might need commercial insurance to transport others. You can get a business policy to cover issues like this. If you get an umbrella policy, it will cover over the insurance if needed.
Do you use builderís risk insurance? If itís an empty house, you should use builderís risk.
Do you keep properties in your name? No, use land trusts. If you are sued, the trustee would not disclose the beneficiary except with a court order. There are seminars you can attend to find out how to handle trusts. It helps keep privacy for you. You can have your LLC be the beneficiary.
Donít overleverage yourself. Keep some stuff paid off and, if there are any issues, you would still be in good shape.
Make sure there are no utility liens. They can pop up much later.
Donít let anyone working for you know where you live. If you take a vacation, they can come in and take all your tools, or just come by to get some money.
How many people can you have per bedroom? Adults, two per bedroom.
For any buyers, make sure your buyer has a copy of their driverís license, a credit report, tax return from last year, lease agreements, bankruptcy, divorce decree. Check their credit.
Should you have a lease with your tenant, or go month-to-month. You are missing out on a lot of opportunities without a lease. If you donít have a written abandonment clause, you are responsible for their belongings. Florida statutes state what a landlord is responsible for unless otherwise countermanded in writing, so you can modify the responsibilities.
Is it better to hire someone to do evictions, or do your own? If you know what you are doing, and can follow the rules, you can do your own. But if you make one mistake, you will have to start over.
If you are selling the property with tenants, you would have to make arrangements to show the unit, and it would be hard to make repairs around them. You are risking a strain by forcing them out.
Who should fill out the application? You must do an application for each person over 18 and each must have their own page.
How should you appear to your tenants and workers? You should dress down when you address tenants or handymen. They might think you have more money if you donít. Act like you have a tenth-grade education and are poor.
Is it better to have a management company handle your rentals, or do it yourself? You would have to know what Florida Statute 83 covers. Donít tell them you own it, just that you are a manager. You have to watch what you do because there is the entitlement attitude. If you show up as prosperous, they feel entitled to pay late without a fee, or skip a month because you can afford it.
You must get the education so you can handle issues and make fewer mistakes. If you hear the U.S. Government against you, that is always bad.
No matter what we do, we should have a plan, or weíll be going in circles. For example, plan to buy rental number one, and work towards 10 rentals for your retirement. In 10 years, you could be bringing in four to five thousand for that retirement. Make a plan and follow it.
Make sure you computerize to keep track of everything and learn to delegate. I can check a house and see how much I put into it and what I could make by selling.
Is Quicken the best accounting software to use? Actually, QuickBooks is more powerful for business. Quicken is more for personal accounting.
Marketing is the point where all businesses will succeed or fail. This is where revenue is born. I had a rental but was not getting calls. We put it on Trulia and Zillow and get all kinds of calls now.
VFlyer.com will make up a flyer you can post on Zillow, Trulia, Craigslist or Facebook.
When you start buying properties, you can get bogged down with handymen, tenants, management, etc. That will take away from time to find other deals.
Tax tip: Mileage is a good deduction. You can write off 58 cents per business mile this year. Part of your home can be written off as an office. Interest is still deductible for business. Depreciation can be taken over 27.5 years.
People who rent furniture can bring in bedbugs. Your lease should say there are no bedbugs, so the tenant would have to pay for the removal if they get them. If they get bad enough, you would have to tent the house.
Network with like-minded people. That way, you can brainstorm and develop relationships.
We invoice our tenants and give them a tip: how to do things and how not to act: no open containers for the food; put food in jars or you will pay for the roaches.
Itís a good idea to provide the A/C filters so they keep the A/C clean. It would be good to tell them that dirty air filters can cause breathing problems for children.
If you donít feel safe collecting rents at night in the neighborhood, donít buy there: itís a war zone.
Make a copy of your passwords and put it with your will or trust documents.
If you are working on your first property you might like to joint venture with someone who is experienced until you learn how to do things.
After the meeting adjourned, discussions continued for a while.