JesseO
Contributor
Starting from scratch:
Many people think that you can't invest in real estate if you don't have money to start with. They are wrong. For those who want to want to start with nothing, you should get a job, start a business, flip houses, build cars, or do whatever else it takes to create some capitol to start with. With that said, welcome to my perspective. I am 23 years old, married, and with a child. Ok, we have a dog and a cat, but they cost a lot of money too; if you want to take care of them 100%. In any case, your income and expenses will vary with your lifestyle; this is for people who have earned and/or saved enough to invest in commercial real estate. To be more specific, this is for people who need to manage their own properties in order to become more wealthy. Good luck, and I hope you have a good heart. The following is as condensed as can be and straight to the point.
Investing in commercial real estate can be a life altering course, a big mistake, or a life-changing path to the ways of the wealthy. It depends on undeterred devotion, a lot of knowledge, and a little heart to become wealthy. This message is for those who are looking to join this community. My message is even more specific though, and focuses on my current area of expertise……Management.
I am not the owner of a property management company, nor do I ever plan on being one. I am simply trying to help those in need of such knowledge. I have only 3 or 4 years of experience, but I am coming from an investor-owner standpoint which I think is different from that of the usual manager point of view. With that being said, I think we need to get down to brass tacks…or to the point…however you want to put it.
Point one is that tenants are not your friends. If they pay on time, chat with you sometimes, help out with the property, or other things…they are simply helping their own situation, not yours. As a manager, you need to take care of everything without a tenant's help. Never ever let a tenant change the rules of landlording. After the 5th (8th, 15th, or whatever your policy is for evictions) day of the month, they must be served with an eviction notice. Explain to them that it is simple procedure and that it means nothing if they do in fact end up paying rent. If they do not pay, evict them. Once again, evict them if they do not pay rent. I don't care if their aunt died or their grandmother is sick; they need a place to live. If they want to keep a place to live, they need to pay rent. It's a sad fact, but it's called being a responsible adult. There are many community programs to help out those in need. A church, local government, friends, and family can all help those who have simply fallen into hard times. If they cannot handle the simple task of paying rent on time (barring unforeseen emergencies) then they do not deserve clemency. Your mortgage holder doesn't care how the tenants are doing, and they will charge you for late payments 100% of the time. If the tenant is 18, they can handle themselves. If they're not 18, their parents can deal with their crap.
Next issue is to create value for the property. If you were smart enough to purchase a commercial property, I hope you did your research. Buy below FMV (Fair Market Value). If you don't do this, make sure the financials support your decision to purchase. If it looks pretty and you think you can get more people to rent there by putting some flowers in the front yard, read a couple books and learn from your mistakes. Buy a place if the rents are lower than should be and the management sucks. Do not buy if the property is in disrepair and falling apart unless you plan on fixing it up and know exactly what you're doing. Buy mismanaged properties and manage them correctly. Doing this will create thousands of dollars within a couple months. Proper management is key…ask any millionaire commercial investor/owner and they will validate this claim. Lower the expenses by calling each and every contractor, repairman, A/C specialist, landscaper, and more to find out what sort of prices you can get. I guarantee that you can find a better price than the current (mismanaged) costs. It is more difficult and costly to repair broken-down properties, but some do it with excellent returns. This is not my focus. Become friends with locals and find out who does the best work and who does the cheapest work. My mailman has been invaluable in helping me to find the best people to work with who know that you have a limited budget, need things fixed immediately, and can pay the reasonable costs immediately. My mailman has lived in the area for 20 years and delivers mail to at least 5 similar properties. Become friends with other managers. Raise the rents. Raise the rents. Make this possible by exploring the market. Make phone calls and visit other properties, who should be your friends by now. By raising the income of your property by 10% you can increase profit by 100% or more.
More parts to come on these subjects...
Many people think that you can't invest in real estate if you don't have money to start with. They are wrong. For those who want to want to start with nothing, you should get a job, start a business, flip houses, build cars, or do whatever else it takes to create some capitol to start with. With that said, welcome to my perspective. I am 23 years old, married, and with a child. Ok, we have a dog and a cat, but they cost a lot of money too; if you want to take care of them 100%. In any case, your income and expenses will vary with your lifestyle; this is for people who have earned and/or saved enough to invest in commercial real estate. To be more specific, this is for people who need to manage their own properties in order to become more wealthy. Good luck, and I hope you have a good heart. The following is as condensed as can be and straight to the point.
Investing in commercial real estate can be a life altering course, a big mistake, or a life-changing path to the ways of the wealthy. It depends on undeterred devotion, a lot of knowledge, and a little heart to become wealthy. This message is for those who are looking to join this community. My message is even more specific though, and focuses on my current area of expertise……Management.
I am not the owner of a property management company, nor do I ever plan on being one. I am simply trying to help those in need of such knowledge. I have only 3 or 4 years of experience, but I am coming from an investor-owner standpoint which I think is different from that of the usual manager point of view. With that being said, I think we need to get down to brass tacks…or to the point…however you want to put it.
Point one is that tenants are not your friends. If they pay on time, chat with you sometimes, help out with the property, or other things…they are simply helping their own situation, not yours. As a manager, you need to take care of everything without a tenant's help. Never ever let a tenant change the rules of landlording. After the 5th (8th, 15th, or whatever your policy is for evictions) day of the month, they must be served with an eviction notice. Explain to them that it is simple procedure and that it means nothing if they do in fact end up paying rent. If they do not pay, evict them. Once again, evict them if they do not pay rent. I don't care if their aunt died or their grandmother is sick; they need a place to live. If they want to keep a place to live, they need to pay rent. It's a sad fact, but it's called being a responsible adult. There are many community programs to help out those in need. A church, local government, friends, and family can all help those who have simply fallen into hard times. If they cannot handle the simple task of paying rent on time (barring unforeseen emergencies) then they do not deserve clemency. Your mortgage holder doesn't care how the tenants are doing, and they will charge you for late payments 100% of the time. If the tenant is 18, they can handle themselves. If they're not 18, their parents can deal with their crap.
Next issue is to create value for the property. If you were smart enough to purchase a commercial property, I hope you did your research. Buy below FMV (Fair Market Value). If you don't do this, make sure the financials support your decision to purchase. If it looks pretty and you think you can get more people to rent there by putting some flowers in the front yard, read a couple books and learn from your mistakes. Buy a place if the rents are lower than should be and the management sucks. Do not buy if the property is in disrepair and falling apart unless you plan on fixing it up and know exactly what you're doing. Buy mismanaged properties and manage them correctly. Doing this will create thousands of dollars within a couple months. Proper management is key…ask any millionaire commercial investor/owner and they will validate this claim. Lower the expenses by calling each and every contractor, repairman, A/C specialist, landscaper, and more to find out what sort of prices you can get. I guarantee that you can find a better price than the current (mismanaged) costs. It is more difficult and costly to repair broken-down properties, but some do it with excellent returns. This is not my focus. Become friends with locals and find out who does the best work and who does the cheapest work. My mailman has been invaluable in helping me to find the best people to work with who know that you have a limited budget, need things fixed immediately, and can pay the reasonable costs immediately. My mailman has lived in the area for 20 years and delivers mail to at least 5 similar properties. Become friends with other managers. Raise the rents. Raise the rents. Make this possible by exploring the market. Make phone calls and visit other properties, who should be your friends by now. By raising the income of your property by 10% you can increase profit by 100% or more.
More parts to come on these subjects...
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