Use a Lawful Application When Renting to Tenants

Application To Rent
I was recently asked, "What do I do if someone I don't want to rent to wants to apply?" Answer: You let them apply. Put simply, this should be your motto: Everyone is welcome to apply. But wait! Let's you talk to them on the phone, and they have an obvious problem where you know they won't pass your screening criteria. Wouldn't doing a walk through or accepting their application be a waste of time and misleading to them?! Been there. I once talked to someone who had a recent crimina...
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Real Estate Investing Baby Steps

Taking Baby Steps
Kids are interesting beasts. One minute they lack a certain skill, and the next, they suddenly possess the skill. For example, last week my daughter could not walk. She could stand on her own. She could pick up items and inspect them while standing. But when it came to traveling, she would plop down on all fours. She didn't really show an interest in walking either. Then without warning, while hanging out in the bedroom, she stood up and took a couple baby steps like it was no big deal...
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What Fireworks Teaches Us About Real Estate Investing

Fireworks
Happy 4th of July! I want to take a moment to reflect on fireworks. Not the little ones, but the big fireworks we all love to watch. Isn't it fun to sit back and admire the explosions? To marvel at the bright lights and loud booms? To delight in the grand finale and wish for more when it's done? It's a great time for everyone. It's a 20 minute show that fills you with wonderment. 20 minutes. That's it. But of course, like most great things there's a ton of hard work leading up to...
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When Does It Make Sense To Pay Off My Properties?

Mortgage Calculator to Pay Off Properties
A question I get asked regularly is: "Do you strive to pay off your mortgage as quickly as possible for maximum cash flow after it's paid off, or go for long amortizations and low payments to get as much cash flow as possible today?" Answers fall into two camps: Yes: Mortgages are bad/risky and so you should try to pay off your mortgage as fast as possible. Plus, just think of how much "extra" cash flow you'll be getting! Some people even go as far to recommend buying investment real e...
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What’s the Best Legal Structure for Owning Real Estate?

Nested Legal Structure
For my next real estate purchase, I'm investigating partnering with a couple dudes. Their construction experience and my property management experience should make for a solid team. Together, we want to buy distressed multi-family properties, fix them up and rent them out. These partnership discussions naturally brought up questions on the best legal structure we should use for owning these properties. To help figure out what to do, we met with a lawyer, an insurance agent, and an accountant...
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My Tenant’s Lease is Coming To An End, Now What?

Hand Shake on Lease Agreement
One day, seemingly out of the blue, a gentlemen called me with a problem and he wanted my help. He owned an apartment building and almost 2 years ago (after he moved out of the area) his property management company signed a 2-year lease with a sex offender. Not surprisingly, people started moving out and so the management company doubled down on their strategy by signing more 1-year leases with more sex offenders. Unfortunately (or fortunately, depending on how you look at it), they couldn't...
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12 Things Indonesia Can Teach Us About U.S. Real Estate

Indonesia Village Home
I just returned from a 3 week trip in Indonesia and wanted to share some observations related to real estate. In each place I stayed it was something different. I find it helpful to look at trends in a different context to help spot trends existing in your current place. So, without further ado, here are the observations:   Uluwatu, Bali Indonesia (a beach town on the Southern tip of the island) Prices in Indonesia are REALLY cheap. We stayed at a house for 2 nights. Got a ride...
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Find The Wedge When Buying Rental Real Estate

Find The Wedge
In business school, a strategy professor of mine, Rob Wiltbank, shared the secret to successful acquisitions. He drew a line on the board and said, "This is a company's current value over time. When you buy it, this is what you're paying for." Then he drew another line above it (much like the picture above). "This is what you want the company's value to be after you buy it. See this gap? (As he runs his finger between the two lines) That's the wedge. This is where you add value to the com...
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The Neuroscience Behind Tenant Screening

I own a Nest Thermostat. It's a great little device because it's internet connection allows it to learn about my heating patterns: It knows when I wake up and how warm I like it. It also automatically turns the heater off when I leave. My favorite feature is the ability to control it with my phone. That means I can turn it on before getting home so I arrive to a toasty home (or when sitting on the couch). Oh yeah. And it cost $250. That's a lot for a thermostat. Especially when I have ...
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Trust, But Verify Your Tenant With Interest and Discernment

Validating Application
  Let's say someone applied to live at your rental. This, by the way, is fantastic and awesome. Congratulations! Your next step is to "trust, but verify" what they told you. What you're essentially saying is that you believe what they wrote on their application, and the next step in the standard process is to validate their application with more information. And as you verify things, you'll want to do it with interest and discernment (That's the I & D of The S.O.L.I.D. Screening ...
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