This week in group investing was interesting. We got a call from tenant 1 saying she wasn’t renewing the lease, we got a call from tenant 3 saying that she almost fell on the stairs and that she needs that fixed, and we are in the process of getting rehab on deal 4 done, while dealing with the squatter and security issues on deal 4.
What I have found is that each of these issues creates stress and pressure and that that stress and pressure creates diamonds. Diamonds are rock solid, and valuable. The more pressure you put yourself under the more hardened you become and the more valuable you become. I am going to briefly go over how each of the stressful situations has actually helped us not hindered us.
Finding a handyman
One of our biggest issues was finding a solid handyman. We had gotten three requests from tenant 1 to repair several things and couldn’t find a way to get the work done without getting hustled and over charged. They like to overcharge out of staters because they assume we are loaded. I called and thumbtacked and googled and couldn’t find anyone dependable. On a whim I contacted another investor who put me in contact with a guy and that guy has been on the ball. He is now our go to guy for everything.
What I take from this is that the stress and pressure forced us to find a handyman contractor who could solve our problems and the stress and pressure put us into position to find the perfect solution. The stress came in the form of late night texts from tenant 1 while I was in Atlanta at my brothers graduation. I was fed up and that fed upness led me to work harder than I thought I could.
So many people wait and stall until they find perfection. I believe that the real world pressure of real life issues and phone calls and complaints and the fear of a law suit are what get you to perfection. You have to be willing to get in the game and tread water then soon you will be swimming laps around the problems that at one time held you back.
I’ve fallen and I can’t get up
In regard to the tenant who said she “almost fell”… I have found that tenants ALWAYS have repair issues when the rent is due. It is not your job to fix everything they complain about because most of the time its nonsense. Your job is to make sure the property is safe and functional.
We had a contractor check out the place and his conclusion is that there is no safety issue. It is likely that tenant 3 just wants a rent deduction OR what I suspect is she wants to effectively rent for free by punishing us with repairs that effectively give her free rent. You figure that if she was an owner it would be her expense. These people don’t want to be taken advantage of and sometimes they will try to ruin your profit because they don’t want to be the source of your profit.
This is why I tell people that sometimes you have to be “heartless”. Would it be great to fix everything all the time? Yes. But our business model doesn’t allow for that currently.
I try to tell people that we are in the growth phase of the business. This means that all profit goes into growth (aka acquisition of more doors). You wouldn’t hit up Google about dividends and you wouldn’t hit up FB about dividends. You know that the wait is much greater than the immediate pennies you would get at the first glimpse of some profit. The long term money is better than the short term immediate pay out. It’s better to make money off 25 doors than off 3.
Lastly, in regard to the squatter you have to realize that there are no problems only a lack of solutions. I remember when I went to dinner and discussed what we were doing (when we only had one door) someone peppered me with questions and potential problems for about 30 minutes. They wanted to know how we collected rent, how we showed units, how we handle repairs, how we handle closings. I had a solution for each problem. That has to be your goal. No problems, only opportunities for solutions.
The solution to the squatter is multi faceted because this is a talented squatter. The first thing we did was take down the boards and install a more powerful door and guard system with metal guards secured into the structure of the home. The guy still managed to get in by crawling into the upstairs window which is open. Now we are installing a motion sensor security system with a camera. Hopefully this solution works. The security system has a three year contract so we at least know our investment is safe for three years.
The takeaway from this week
So the takeaway from this week is that we are much more proficient on long distance rehab on our second rehab than we were on the first. We made mistakes on the first, still made money and got the valuable skills that are duplicatable. For years I sat around wondering how rehab works and didn’t get a full understanding until I was in the middle of one. Now this valuable millionaire making skill is second nature.
If you take anything from this it is take action on what you want don’t spend years educating yourself. You will learn more in a deal where you are constantly stressed and worried than you will casually reading a book or listening to a podcast. The hack is to act.
If you are interested in investing with our club on either the stock or real estate side we would be happy to welcome you into the partnership. Email firstname.lastname@example.org today to join.
Be great, invest well,