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EXECUTION A side of rental houses

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Rabby

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My main, building a business execution thread is:

EXECUTION - Building Industry-Specific Community -- Progress Thread

But there are times every day when I just have to let the work rest, because I want to evaluate results before continuing to act. So in that spare time, since TV makes me vomit, I'm running this experiment to see if I can acquire some houses/small-multifamily, and either hold them for rental or wholesale the contract for purchase to another investor.

The why: I think it's dumb that I don't have passive investments outside of my business (a school) and a few stocks and metals. It's also dumb that I have no experience with leasing out and maintaining real property. It bothers me at the identity level. I "identify as" an investor, but my investments are too weak.

I own one building as an investment, an 1800sf office condo near a major intersection. Since my school occupies it, it's more like part of that business. For accuracy sake, a land trust owns it and the business is beneficiary.

Back to residential RE. What I'm looking for are "deals." Someone has messed up the whole property ownership thing, and they have little chance of selling to a retail buyer. I am probably their buyer of last resort.

Awkward Disclaimer: Please note that this will not be evil or predatory in any way. I fully intend to offer them (whoever they end up being) a deal that is better for them than what will happen without my intervention -- mismanagement followed by morbid stress levels, tax auction, foreclosure, etc. I'm not coercing anyone. Plus, I want to leave the closing table with the same person willing to make future deals with me, or rent from me, or buy from my business.

I'm documenting my process here, and my progress. As of this writing, I am putting together the process. Some of my methods might be kludgy. It's an experiment. I'm taking what I can apply from business, or think up on the fly, and trying it on RE. That's it.

Also, if I fail utterly at this, I promise to openly admit it here and we can have a laugh about it, and maybe a postmortem. Let's see what happens.
 

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Rabby

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What I have so far:
  • A lucky list of 13 houses that I got from driving a middle class neighborhood looking for signs of distress. Haven't painted, lawns not mowed, poor maintenance, paranoid owner or tenant with cameras everywhere and scary trashbags over the windows, you know the usual.
  • A VA in India who helps me with the repetitive stuff.
  • Knowledge of county appraiser and clerk of the course sites.
I already had my VA look up the 13 houses owner names and addresses (they could be owner occupied or tenant occupied after all). That was partly a test for my VA, since he's new to me.

Today I made a training video to show the VA how to find the previous week's evictions on the Clerk of the Circuit Court site for my county. I figure I can sort through these each week if they're in a spreadsheet, and write to the ones I'm interested in... like, not the 100 unit apartments, but yes the single family homes and *-plexes.

Maybe some of the landlords are exasperated because they can't keep a tenant in the place? That's my theory, and I'm also making the assumption that I can execute tenant screening and evictions and maintenance better than an absentee or inexperienced landlord (even though I'm an inexperienced not-yet-landlord, heh).

So by the end of the week I should have a list of last week's 270 or so evictions, plus the low-maintenance houses I documented. I have template letters I'm refining, a few of which I'll send this week (I can get the 13 out of the way at least).

I'll use my school's office address as a return address I guess. Maybe use a UPS box instead, haven't decided.

There's a great answering service I'll use to take calls from anyone who calls off of my letter. I can have them ask a few questions, and they'll text me the info from the caller, plus a way to contact them. I use them already for afterhours business calls and it's really useful. $20/month minimum, ultimately cheaper than a receptionist even if the phone rings a lot... I want to preserve my time while not spending too unnecessarily. I'll get them set up this week, I hope.

Weekly:
  • Have the VA run my eviction list
  • Write to the most likely candidates on the previous week's list
  • Drive for ugly houses, time permitting
  • Write to ugly house owners from previous week, if any
  • Evaluate my marketing strategy, look for things to add or improve if needed
Daily:
  • Call any prospects who contact me from my letters or other marketing
  • Inspect houses or prepare contracts if we've gotten that far with any of them
Wish me skill ;)
 

becks22

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Public records are awesome aren't they? You can also run county specific tax lien searches and look for judgments against the landlords.

Get a UPS or USPS box. It's worth it. Mine is $140 a year and I can have it shown on my stuff as a street address so I label everything as
My company
29 xx st #1111
Town, NY 12033
 

Rabby

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Public records are awesome aren't they? You can also run county specific tax lien searches and look for judgments against the landlords.

Yes! In so many ways. I do public record requests with the state every year or so, and it's amazing what they can give you too.

I saw that I could find liens with the county. I haven't gotten proficient with sorting those yet. A lot of them are things like mechanic's liens on homeowners, or liens by the state on an individual for failure to pay sales tax (ordering from out of state, or maybe selling taxable products without registering). Those could be useful I guess. But if I find a good way to separate out liens and fines against absentee landlords for poor maintenance or other violations that could be quite good.
 

Rabby

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As promised, I am here to say "oops, I overestimated my time." My "main project" took up all my time and more, so I only got as far as the processes I could outsource on this one. Some guy in India is really an expert at crawling my local property appraiser's office. I will re-evaluate whether I have time for this project next week after I've re-designed my daily work on the other one.
 

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