Real Estate Profits And Losses. Scenario 14: I Need A New Crib!!!
The Money Kings are keepin' it real, baby!!!
For your consideration: Real Estate Profits And Losses. Scenario 14: I Need A New Crib!!!
It's now time for a Money King TRUE real estate story.
A buddy of ours was out working on one of her places. Her name is Shelly. Shelly had one of her kids up on a ladder painting aluminum siding with some metal paint. Her husband was laying vinyl. A local contractor was cutting the lawn. Shelly was cleaning gutters. This is typical stuff.
Shelly is a smart landlord. She coupled a maintenance day on one of her units with a bunch of showings to prospects since there's nothing worse than wasting your time waiting for people you DON'T KNOW to show up to talk about how they might be paying you money for something some day--especially housing. A lot of new real estate agents are finding this out during these tough times!
Anyway, all of our buddy's work came to a grinding halt when a young woman in her early twenties shows up to the unit and yells:
I need a new crib!!!!!
To all of you readers not knowing to what said young lady was referring . . .take a look at the entry for "crib" in the Urban Dictionary. Nuff said.
The Money Kings have no idea as to the education level, moral character or ethical aptitude of the yelling young woman. What we DO know is that when a person you don't know comes up to your unit looking to rent and yells, "I need a new crib!" You need to start shuckin' and jivin', stickin' and movin', and bobin' and weavin'--IMMEDIATELY.
"Why? Money King?"
Well, let's go over the rest of the story:
The young woman comes up yelling about needing a new crib. Shelly correctly says, "Okay. I don't have the place ready to rent right now, but you can take a look inside really quick."
The reply from the young woman is, "I need a new crib!" Again.
Shelly shows the woman the place. Then the young lady says that her landlord is "losing" the building she's in. They (whoever "they" are) are taking over the building from this (possibly fake) landlord, and that's why she's looking for a new place.
Now for the money saving tip:
A person that needs a new "crib" because she's losing her existing "crib" the next day is:
- Fundamentally irresponsible. No one loses a building over night and tenants always know when they're getting booted by the authorities, because they're warned first.
- Has no idea what it takes to convince a stranger that she's a great tenant. Even if this woman is the world's greatest tenant, how would anyone know when she's repeating over and over that she needs a new place to live--now!?? No Money King rents to someone on a whim or a rush.
- Finally, Not worthy of any of a landlord's time. Even if you could rent to this young woman, because she's insistent on being GIVEN the property in less than 24 hours, you don't have the time to do a proper background check. And, Money Kings never rent without background checks!
Long story short, Shelly got the woman to fill out an application and she left eventually. You can fill in the blanks from there. When, not if, this happens to you, you'll be prepared.
Good luck out there.
Keywords: real estate, tenants, money, desperate, owner, prospect, crib, irresponsible
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Give me a crib!
Your right a properly rented property requires a back ground check and time to prep the property if it has not been already. Your also right she would have been notice of moving and waiting till the day before is a red flag. All you can do is show the property and do a credit check and verify your observactions are correct.
To someone looking to rent present yourself in a proper manor dress appropriately. Plan to pay application fee and fill out an application. Work with property manager to find the best date for move in.
I think this ties into what
I think this ties into what I now consider to be rule #1 of owning rental property: thou shalt live no further than a 30 minute drive from thine properties.
I don't think that you necessarily need to manage your properties - a management company could be hired for that. Managers do need to be kept on a tight leash though, which is why I think the distance rule is more important than managing properties yourself.
Anyway, my personal story: I broke this rule, big time. When my battalion came home from Kuwait after Operation: Desert Strike in 1996, I had zero debt, a ton of cash, and a VA home loan benefit that was untapped. I got into a fourplex about five minutes from the main gate of Ft. Hood, Texas, moved into one of the three bedroom units, started collecting my housing allowance, took on two roommates, and I rented out the other three units. I went from making what an E-4 with two years of service was getting back then per month to making the equivalent of an E-9 who had served 22 years.
Everything went great for the last 18 months of my service (I did four years total), then I got out and headed home to Washington state. I had a great manager and everything went well for about five years, up until my manager was killed in a motorcycle accident.
After that, the managers that took over apparently didn't care. If someone came into their office shouting "I need a new crib!," they signed 'em up and handed over the keys. Long story short, it took only two years for me to go from having over six months of mortgage payments in reserve to having none, and I finally managed to bail out without ever missing a payment but having to put up $2300 at closing. Then the IRS came along and nailed me with depreciation recapture the following tax year.
I got out of that mess with an awesome credit record, but that's about it. I'm enjoying the benefits of my credit history now - I'm signing on my new place on Monday - but I sure wish I hadn't broken rule #1 of rental property in the first place...
That voice!
Mmmmmm... what a voice you have! Care to share my crib?
Love, Fabio
XOXOXO
So, if a potential tenant
So, if a potential tenant rolled up and said, "Yo, I need a new domicile," would that be cool?
Someone could roll up and
Someone could roll up and shout "I am the Queen of France!" If they've got steady income, a clean credit report and good references, that would work.
In other words, I think you're focusing on the wrong thing here and missing the point.
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