"Look at the big brain on Brett!"

Second lendaddy's words. Don't be a slumlord.

I have a similar book, but figure you can never know too much about this subject. Just bought it now, used, off amazon.com! Thanks!

btw, I forgot to mention the chat board at mrlandlord.com. Click on Q&A Library to get to the BBS. I don't know of any other internet forum with as many experienced landlords. Check your ego at the door. Sometimes posts will bite hard.

Kurt:
I was a landlord (apartments) for 25 years. Every bit of the advise these guys are giving is work its weight in gold. One thing you could do on a long term basis is buy properties and 1031 into larger (or better & more desirable) properties. At the end you could 1031 into a partnership in a big mall or business district. That way you wouldn't have to manage or repair and would preserve your tax deferral while getting a decent return on your investment. You could always switch out into something else as the opportunity arose. If you are going to buy apartment buildings, look for properties that are structurally sound, but can use cosmetic improvements - just like you would do with houses. If you can do something like replace a roof yourself, go for it and it might make a property work buying. In the end, I really got fed up with dealing with tenants' problems.

Have owned rentals for 25 years, not slums.............being a slumlord is like owning liquor store in a high crime area,and working the graveyard shift.

If you're going to get into the investment property game go all the way in. don't let it be a side line or you will hate it. I tried to do it as a side line and it was a complete pain in the a$$.

also if your going to be a slum lord I must tell you the #1 way to get rid of a tennant. (this only works in the slums)

wait for them to leave and put a padlock on the door. that gets their attention pretty quick. when they call the conversation usually goes something like this "hey... why is there a padlock on my door?" "you haven't paid the rent. you don't have to pay me if you just move out." "o.k." you open the door they pack their ***** and you find another tennant.

the problem with being a profitable slum lord is that you have to do things you wouldn't tell your mom about. that can be pretty tough sometimes.

Uh huh.

Padlocking the tenant's door would be considered "self help" in most states, and is NOT the fact pattern you want to establish in dealing with a problem tenant.

Most states have pretty good summary proceedings: if the tenant doesn't pay, you go to court, where, if the situation is egregious enough, you get a writ of restitution and put the tenant out, utilizing the services of a "bailiff" who is an expert at evictions.

cramer, you failed the slumlord test.

Locking a tennant out is clearly illegal here in Washington state.

We have clear laws that favor the landlord in case of non-payment. The quickest way to have a lousy tennant stay in your building for free for quite some time during legal procedings is to break the law yourself.

What I have done, quite successfully, when someone gets behind, is to write a letter offering that if they can be out by the end of the month, clean, and return the keys, we'll call it even, and I will not go after any money owed. If not, I will go after everything. Rent, late fees, attorney fees, etc.

Without exception, the resident has been very thankful for a fresh start, and has left the apartment exceptionally clean. They're happy, and I can get somebody else who can afford to pay.

No sense wasting time trying to get money out of someone who doesn't have it. What good is a judgement against an empty checkbook?

I'm confident it's illegal in every state, but that wouldn't stop a slumlord. A slumlord takes any action to maximize profits.
jurgen

SLUMLORD=P.O.S..................

Kurt V...I'm lazy, so I didn't read all the responses, but my only advice is to cater to the long term renter. I only rent out a parking space (which gets $150/month in Chicago...not too bad). And I've had a long term renter, someone who led me on to saying he would rent, but didn't, and now a renter for 3 months straight. I hate trying to find the new renter. Even if it's just covering costs, it's nice not to have to find someone else to rent, and not to be paying the costs on your own.

Good luck. It sounds like the rental market is alot stronger than the real estate market in your area. Definitely in your favor. Chicago was like that...briefly, a several years ago.

Padlocking a tenant out in CA could get you in serious, deep dodo. The times I had to get a tenant out, which thankfully were few, I did everything legally and in a timely fashion. I would serve a 3 day notice (maybe with a 30 day notice) and the day after the three days were up - if the tenant hadn't paid and the situation wasn't resolved ,I filed an unlawful datainer. This was the fastest, best way although it cost a bit upfront. Otherwise, a tenant could draf things on for a few months, especially if you went the small claims court route.

Kurt, check out the post entitled "Feel like bailing out" on mrlandlord.com

I'm not trying to discourage you. Every landlord has experienced those down time. I am emotionally connected to my properties. I have slowly learned how be more pragmatic, but I would be lying if I said I never got anxious about vacancies. The down times are times when I need stressful bike rides. The physical stress freezes the mental strain.

I agree with evans. If the tenant doesn't pay, evict their sorry duff.
jurgen

Kurt,

I've managed rental property for a developer and I still own three duplexes. The trick is tenant selection. Credit reports are your friend. Run one on anybody you're considering renting to. A good c. report indicates somebody that has a history of financial responsibility. Further, that person tends to act responsibly in other areas of their life, i.e no noise complaints from other tenants, ruining a new carpet, etc. You won't usually get beat by this person.

On the other hand, a poor credit report almost ensures problems, either rent payments, neighbors, or damage.

Other important items are learn the rules and regulations regarding tenant/landlord rights, then follow them to the letter. Finally, document EVERYTHING.

Income property has been good to me and my wife. Good luck.

turbo6bar - I took your advice a few months ago and started reading the MrLandlord forum. And I must confess the experiences of those people seem to be very different from mine. And I attribute most of it to my property manager. I don't even know the tenants in my condo and I only know the lady in my two family because we live in the same building. As per my instructions, I only hear about maintenance problems after they've been fixed. If I have any problem I just send an email and it gets fixed at a reasonable charge. And frankly, if it weren't for the checks I receive in the mail, I wouldn't even know I owned rental property. Maybe some day I'll have a problem - but I've already made so much that I can afford to lose some dinero and still be way ahead. Again, I also made some decisions early on regarding the quality of my units which probably helps attract good tenants. And I made clear to my manager that I want my tenants treated like valued customers. So that probably helps reduce problems. But on the whole, being a landlord has been "pennes from heavan" so far for me. Obviously, YMMV.

Buy piece of distressed property with as little down as possible, repair only the essentials. Rent. When property becomes uninhabitable, simply quit claim it to the lending institution that will resell it to another "investor". It's referred to as "Walking away".

I had salesmen in my real estate company back east that had done this dozens of times and at any one time had six or more rental properties. I myself, couldn't do it. Reasons? Morally questionable and too much damn work!!

BTW - As a bit of a side bar, it is my understanding that doing new construction is almost always more cost effective than purchasing existing buildings (unless you do a rehab). And so to this end, I've been working on a plan to put up some prefab townhouse units in my city once the market settles down. Here is a link detailing the "Current Fantasy" in a Pelican thread...

http://forums.pelicanparts.com/off-topic-discussions/179808-anyone-know-about-real-estate-construction.html

My intention has been to keep the units as rentals. So I figured I'd need to find some RM5 or RM7 zoned land for building. That is okay except multifamily buildable lots can get a bit pricey. So I recently started to wonder if I can get away with building townhouses on lots zoned for single family units (i.e. RS5 or RS7) if I legally set up the units as condominiums? I'd still maintain ownership of all of the units and rent them. But I figure I might be able to avoid the high cost of multi-family land plus it would make it easier to sell the units individually as true single family dwellings years down the line if/when I decide to cash out. Any thoughts?

cole, mrlandlord.com is for hands-on landlords. Sorry, I did not make that distinction.
regards, j