So…should you get a property manager or should you run your own show? Well although there is no single right answer to this question there are some factors that I think investors should keep in mind.

I’m big on outsourcing jobs that I have no business doing. Yeah, I could roll up my sleves and lay a new carpet myself in that vacant unit I’m turning – I could get a knee kicker and a power stretcher and wrestle my way through the job, but I’d burn a whole weekend in the process and the results would probably look pretty lousy. Actually I’d burn two weekends – I’d have to ask one of my buddies to help me and as a quid pro quo I’d end up helping him move at some point in the future.

Continue reading Should real estate investors hire a property manager?

Real estate investors looking for a realtor in Houston should check out Eurika Coleman, a real estate professional that I’ve been working with for the past few years. 

It’s not my custom to shill for realtors, but I’ve often written in the past about building business relationships and how this is a key to successful investing - so I figure it’s time to give a some credit where credit is due.  Eurika is an agent that has helped me to maintain my sanity over the past few years. 

Continue reading Houston Realtor - property manager

Well I haven’t been a very diligent blogger as of late, but my excuse is that I’m now working full time for one of our presidential candidates. I’m told that mixing business and politics is unwise so I won’t specify which candidate - because If I did I would alienate 100% of my Republican readers and almost (but not quite) half of my Democrat readers. So – I won’t say who I’m working for.

But I will say that being on the road non-stop (I’m writing this dispatch on a plane from North Carolina to Puerto Rico) has acquainted me with some of the finer points of being a long distance landlord – a good reminder of why I prefer to invest close to home where I can keep an eye on things. What’s saved me is the fact that I have developed a bullet-proof relationship with an excellent realtor that I trust and with a handyman/contractor that values me as a repeat customer and not an easy mark. So although I like to keep an eye on things I realize that the world isn’t going to come unglued while the cat’s away.Good investors who have developed reliable relationships realize that they’re not indispensable - their businesses continue to run in their absence.

Continue reading On the road…

Back in December I wrote a post on the impact that immigration reform would have on real estate investors. In that article I mentioned a nasty negative local campaign for State Representative that was being waged between Talmadge Heflin(R) and Hubert Vo (D). At the time I skewered Hefflin, the Republican, for a spamming our neighborhood with a particularly stupid mailing in which he implicitly accused Vo of issuing a Texas driver’s license to Osama Bin Ladin.

Vo won the election. But now it’s Vo who finds himself in the news. And this falls squarely into the “what was he thinking?” category. Vo, as it turns out, is a genuine card carrying slumlord.

Continue reading Landlords are public figures

Back in 2006 I hired someone to perform some professional services. He was small businessman running a limited liability company, came with good references and was recommended by some people that I trusted.

We agreed on a $2,000 month-to-month retainer to do some marketing work. I paid him the first month’s two grand, he cashed my check and then disappeared. Vanished.

So here are some things I learned from this experience.

Trust is crucial. I do business based on looking someone in the eye and shaking their hand. You can’t do business without taking risks. Trust is a big factor in my decision making process, and this experience won’t change that fact.  But it does emphasize the importance of having a rock solid contract, and an organized file of every check that you’ve paid for services. A great convenience of today’s internet banking world is the fact that you can easily log on, click on a payment, and print out a front-and-back copy of the endorsed check. This guy took me for a ride, but I archived the paper trail and stayed prepared for round two.  This ain’t over.    You can’t sue someone you can’t find. That was the big hangup in this case. I got all the prep work done to take my flaky business partner to court, but have never been able to serve him with papers. Don’t give up. The statute of limitations in Texas for civil cases is a leisurely four years. That’s an eternity. Take your paperwork and seal it in a file for safe keeping. And periodically take a look around – the creep might show up.  Even though you’ve written off the loss it doesn’t cost you anything to stay on the trail.  Assume you’re going to court, prepare accordingly, and be ready to win. Once you track the guy down, hit him with a cool, well organized declaration explaining how you’re about to sue him back to the stone age. The other guy may be lazy and dishonest (which is why he stole from you in the first place) but chances are that he’s neither stupid nor insane. If you have your ducks in a row then nine times out of ten the guy will see the light and pay up before he suffers the indignity of being dragged into court.  The small claims court process isn’t difficult. If you’re savvy enough to buy and sell houses then you’re savvy enough to manage a small claims court case (up to $10,000 in Texas). Go get a brochure from your courthouse and follow the instructions.

Continue reading Stay on the trail of dishonest contractors

Ethics in investing is a topic that I’m interested in. This is one that I’ve written about before, both in the press and here in this blog . It’s one that I don’t think gets enough airplay – but the lessons of ethics and investing are the subplot to many of the other ideas and strategies that I write about on this blog.

Here are five discrete thoughts that have emerged from experiences that I’ve written about recently.

Honest investors are fearless investors: I have a lot of philosophical reasons for being honest, but I also have a practical one: Continue reading Smart investors are ethical investors

Real Estate Investment Clubs (REI Clubs) have long been touted as an excellent means of learning about real estate investing, finding deals and networking with other investors. It is important for beginning investors to find clubs in their area that are reputable and have a dedicated group of members and hold regular meetings and networking opportunities.

Trustworthy clubs will let you attend your first one or two meetings for free. Here are some more tips to finding a great REI club to help you start your real estate investment business:

Beware of the Sell-fest - there are a few bad Continue reading Profiting from Real Estate Investment Clubs

Those of you who watched this week’s Democratic Party debate will note that the current foreclosure mess was an oft repeated theme. The candidates are trumpeting what they’ll do if they win in November, but two bills are already before Congress that will impact lenders and consumers.

The somewhat awkwardly named Emergency Home Ownership and Mortgage Equity Protection Act of 2007 and the Foreclosure Protection Act of 2008 are both being debated. Both are focused properties with nontraditional (neg am, interest only, etc) mortgages or subprime mortgages. Mortgage balances and monthly payments would be reduced based on how much a home’s value has decreased.

Continue reading Foreclosure relief :: we risk making a bad problem worse

Mortgage payments are on the rise.  Prices have collapsed.  “I’m outta here.”

Over on Money.com there’s an interesting piece on when is it ok to walk away from your mortgage, which reports on the deluge of homeowners who are upside down on their mortgages and are simply sending their housekeys back to the banks and walking away. “Jingle mail” they’re calling it. 

Well the idea was enough to push me into a state of moral indignation, thinking about the great American blame game and the general lack of accountability in our society.

But, having though about it a bit, I’m not sure so sure…

Continue reading Moral minefield of foreclosure and bankruptcy

As investors we’re not out there spinning the roulette wheel; we’re looking at the underlying fundamentals and taking measured risks. That said, investors do need to take a view of the future in order to make decisions in real time – and BusinessWeek’s recent cover story gives the housing market a timely and even-handed overview.

You’ll see some of the boilerplate that you’ve read before, but pay attention to a reference to an influential paper written by Harvard economist Gregory Mankiw which back in 1989 predicted a precipitous decline in housing prices. The premise was that a shrinking body of first-time buyers along with a glut of downsizing baby boomers will collectively pull lots of demand out of the market, leading to an excess of supply and a sticky plunge in prices.

Continue reading A 25% drop for housing prices?