I’ve got a special announcement for anyone with investment real estate (a residential rental property) in the Raleigh / Durham area… Blue Chariot Management is here! I’m sure you’ve heard my prior brief mentions of hiring me and Blue Chariot to manage your rental property here in the Triangle area of North Carolina, which includes Raleigh, Durham, Chapel Hill, Cary and the smaller surrounding cities up to about an hour in all directions. Until now we’ve been slowly taking on clients mostly from referrals – but TODAY is the official launch of Blue Chariot Management!

Long Intro…

Welcome to a Special Episode #12 | Elevate Your Real Estate Investment – Introducing Blue Chariot Management

Now the [… and Landlord] Rental Real Estate Investing Podcast is all about following a road-map to financial freedom through residential real estate investing (rental properties). To that end, of course I seek to teach about real estate in general, but since it’s rental real estate, naturally I also seek to teach how to be a Landlord (the best you can be). But the name “… and Landlord” originates from the full title as mentioned in the intro you just heard – “Husband, Father, Entrepreneur, Realtor – (a long list of other titles and descriptions)… and Landlord!” – and as such, certain special episodes (like this one) will touch on some of those other aspects of who I am and what I do.

So today’s episode serves as an announcement for my latest entrepreneurial endeavor, that also relates to my being a Realtor (a requirement here in North Carolina to be a Property Manager) – Blue Chariot Management!

Since I started Blue Chariot back in 2015, it has grown to become many things, the latest of which is Blue Chariot Management. Let’s start with the Website… Go to BlueChariot.Management (not .COM / .Management), although you can get there from BlueChariot.com – instead go directly to BlueChariot.Management. This is where you can learn and inquire about Blue Chariot’s Property Management Services.

In prior and coming episodes of the [… and Landlord] Podcast, I have and will continue to give insight into tools and tips for effectively managing your investment rental property on your own. But being able to do something yourself does not mean that its always the best use of your time.

As such, you can now hire me and the Blue Chariot Management Team to manage your investment rental property on your behalf – if located in the Raleigh / Durham area of North Carolina. That’s why in addition to “Introducing Blue Chariot Management”, the title of this episode is “Elevate Your Real Estate Investment” – which is exactly what having Blue Chariot Management take over your investment rental property will do for you.

If you’ve not already, I invite you to listen to Episode #8 “Don’t Let Vacancy Kill Your Rental Cashflow“. And Episode #9 “Rental Property Advertising – How To Make Your Rental Home Stand Out From The Crowd“. In these two episodes I demonstrate how to avoid VACANCY, which is one of the largest expenses you’ll suffer as a Landlord – while your rental property sits empty between tenants. In these, I also touch on how to lessen the frequency and cost of tenant turnover – another major expense for Landlords.

So “Elevate Your Real Estate Investment” by hiring a Property Manager who knows how to get the most attention for your now (or soon to be) vacant rental property. And who further knows how to screen tenants and handle the tenancy to result in a long-term occupant who treats the home with care, causes no problems and pays their rent on time.

To this end, listen to Episode #11 “Make Sure Your Lease Protects Your ASSets” – where I mention your lease can be a sword and shield to protect your rental investment. Having an effective lease that covers common occurrences and a Property Manager who knows how to leverage it for tenant screening, handling and the communication is a large part of how a long-term, problem free tenancy is created. Which all goes a long way towards avoiding not just vacancy, but also damage to your property and costly tenant turnovers.

Further, Blue Chariot Management provides you with all the reports and data that you’ll need to know just how well your real estate investment is performing, including all that your accountant will need for annual tax filings.

Blue Chariot Management services include: marketing your rental vacancy; tenant screening, leasing and on-boarding; rent collection; property maintenance; financial reporting; and handling of all tenant communications, notices, lease violations, and more… – and if ever needed… Eviction handling (although our systems, policies and procedures are implemented so as to make that a highly unlikely outcome).

Prior to offering Property Management myself, I’ve been asked by other investors what they should look for in a Property Manager; and what questions they should ask. Well its a bit self-serving (granted), but were I a rental property investor seeking to outsource my Property Management, I’d want to go with someone who is also an investor themselves – who owns and manages their own rental properties. One of the benefits of having your property managed by Blue Chariot Management is that your property will become a Blue Chariot Property – treated no different than my own.

I have a client rental property listed for rent right now with no interior pictures shown – yet when broadcast to my list of people who have previously inquired about one of my rental properties, interest has been very high – and its likely I’ll have it rented prior to even posting interior pictures or conducting showings, because those familiar with Blue Chariot already know what to expect from a Blue Chariot Property. The brand itself becomes a powerful marketing tool – helping to promote higher rents and less vacancy. And since these people have already been in contact with us previously, they already know how Blue Chariot Properties are managed. So you can “Elevate Your Real Estate Investment” by having your rental property become a Blue Chariot Property.

As a Blue Chariot Management client, everything you’ve heard me say to date here on the [… and Landlord] Podcast (and that I will say going forward), will be put to work for your rental property, to elevate it to the highest level of profitable performance. And as a Realtor with Blue Chariot Realty, if you ever wish to sell your property or buy another – we can represent you there also. In fact, if you are an investor like me who buys distressed properties to make them into rentals, you can have no better team member to help you evaluate and acquire properties – and get them quickly rehabbed into cash-flow positive rentals. We’re even able to help you secure financing for a purchase and then manage the rehab on your behalf – right through tenant placement and refinance. That’s what I do with my own properties, so I can certainly help you in doing the same.

So nothing more lengthy for today’s episode… I just wanted to officially announce Blue Chariot Management, and make it known that we are now offering Professional Rental Property Management in the Raleigh / Durham (Triangle area) of North Carolina. Checkout the Website at: BlueChariot.Management (not .COM / but .Management). And we can be reached by phone at: 844-YES-BLUE (that’s 844-937-2583). If you have a rental property in Durham, Raleigh, Cary, Chapel Hill (or any of the smaller cities within an hour in all directions), that is (or is soon to be) vacant, reach out to us and get a FREE Rental Analysis and quote for our services.

If you have an occupied rental that you’d like for us to take offer and the tenant will be remaining, that may also be possible (we have done that on occasion); however, at this point our focus is on placing our own tenants. A lot goes into tenant placement and training them to do things a certain way and setting expectations, so taking over an existing tenant does not always work as well – depending on how things were handled previously.

Right now Blue Chariot Management is focused on single-family and small multi-family homes. And as we go along we’ll move into larger multi-family, only as we invest in our own properties of that larger size, as that is really a different animal altogether. Also, we’ll eventually offer services in other markets; however, for now we wish to expand solely in the Raleigh / Durham area. Growth in multiple markets is the long-term goal for Blue Chariot, but there’s no hurry – so we wish to grow here at home before expanding to other markets.

Again, please check out: BlueChariot.Management – and please also excuse my pretty face near the bottom of the home page.

Outro…
Disclaimer…

Just when you think you’ve heard every ridiculous statement a tenant can make, one says to me last month… “I deposited my rent on Monday the 6th because May 5th was a Sunday and banks were closed, so you shouldn’t charged me a late fee.” – So I proceeded to explain “rent is due on the 1st. It is already late as of the 2nd. But the lease provides a grace period through 6 PM on the 5th before the late fee applies (regardless of what day of the week the 5th happens to fall on). And bank deposit wasn’t the only payment option available to you.” – now thankfully, in addition to this being North Carolina state Law, it’s all spelled out in my lease.

Your rental property is an asset, and your lease needs to protect your ASSets. You need to know your state Landlord and tenant Law and make sure that your lease is in full compliance with the law. But additionally, your lease needs to have certain common sense and likely scenarios spelled out in advance – leaving as little as possible to interpretation, question, doubt or challenge.

I look for quotes I like that relate to the topic of each episode, but I could not find one this week – so I’ll make my own…

“Avoid conflict with your tenants, but should you find yourself in an unprovoked battle, your lease is both your sword and your shield.” – Jonathan Taylor Smith – (having just finished watching Game of Thrones)

Intro…

Welcome to Episode #11 | Make Sure Your Lease Protects Your ASSets
So another one I heard last month from a tenant wanting to go month-to-month instead of renewing the lease for another year was… “Why would you need to increase the rent another 6% just because I want to go month-to-month? That’s not right!” – So I proceeded to explain how our normal increase when signing a new 1-year lease is around 1.5 to 2% (give or take), but if you want to go month-to-month its an additional 6% to help offset the cost of the likely coming vacancy.” – and then I further explained that “we only allow month-to-month occupancy for up to 6 months from February to July. You must then either vacate at the end of July or sign a minimum 6 month lease for August through the end of January of the following year. This is to prevent off-peak (Fall and Winter season) vacancy, which are harder months to find new tenants.” – and again, this is all now spelled out in my lease in advance, including the rent increase amounts and renewal scenarios.

Now this specific tenant was one of the few that had a lease where this was not all stated in advance, as this person has been a tenant for awhile, going back to before I clearly accounted for this scenario in my lease. So I worked out a compromise that we were both happy with, since the person had been a good tenant up to that point and was just unsure of their exact plans for the coming year. But this had recently come up with some other tenants as well, so I had since accounted for this scenario in my lease.

You see, whenever something occurs that is not clearly covered in my lease already, I either add it or change the existing verbiage as needed (reviewed by my attorney) to properly account for the situation going forward. Then as I bring on new tenants and existing tenants renew, I get them all on the latest version of the lease. I actually have a numbering scheme so that I know exactly which lease version each tenant is on. And over time, lease additions and changes have occurred far less frequently as my lease becomes a more perfect document (accounting for most scenarios and situations) to protect my assets, of which I’m referring to both my rental properties and my rental business, Blue Chariot Properties and related companies.

Where did (or should) you get your lease from?

As stated, at this point my lease is highly customized to my specific needs, and those of my clients whose properties I manage on their behalf under Blue Chariot Management. But I first started with a copy of the lease that I had from when I was last a tenant back in 2001. I had also been given a lease by a friend who had a rental property before I got into rentals. Plus, I even found and downloaded a few online, and I was told they can be purchased at Office Depot or Staples. I reviewed each of these and tried to merge them into one document with the basic provisions I liked well enough to proceed. However, at some point I came across the Website at EZLandlordForms.com – which provides state specific leases, in addition to many other useful documents for Landlords. I think the site was mentioned in a book I was reading at the time about being a Landlord. And I’m a Pro Member at BiggerPockets.com – which now also provides state specific leases (although this came after I had already discovered EZLandlordForms.com).

After reviewing all the options, I liked the basic North Carolina specific lease from EZLandlordForms.com – so I started using it after having it reviewed by my attorney. And its a good thing I did, because the customization options (which I love about this system) can create a situation where you’ve added something to the lease that is not permitted by your state law. For example, I selected the option to add a daily late fee and set the amount at $10 per day; however, my attorney informed me (and I confirmed this for myself by reading the statue) that daily late fees are not permitted in North Carolina. So if I had proceeded with the lease containing that provision and ended up in court against a tenant having charged them a daily late fee, it might not have gone well for me.

I was also happy to hear from more than one attorney, that while I could certainly pay them to create a lease for me, it also would be based upon a template (not unlike the one created by EZLandlordForms.com) – which after review was said to be perfectly fine by one, and very good by another.

But will it stand up in court?

Now in full disclosure, I have not had to evict anyone yet, and so my lease from EZLandlordForms.com (and further customized by me) has NOT been tested in court yet. So I cannot say that a judge has heard a dispute between me and a tenant, read my lease as it relates to the dispute (and overall), and then ruled in my favor. But what I can say is that my lease from EZLandlordForms.com (along with my various customizations, which are extensive) has been reviewed by my attorney. And it is that same attorney who is likely to represent me in court, when (or if) I ever end up there. And since this attorney could have charged me to create a lease on my behalf, but instead just charged the time to review and tweak certain aspects of my customized lease as obtained from EZLandlordForms.com – I’m confident it will stand up in court. I also know that my business practices are above reproach, so if I ever do end up in court, I’m certain any judgement will be in my favor.

But then that is also another benefit of having a strong lease along with ethical business practices… It makes it far less likely that I ever will end up in court. Multiple times during the tenant screening and on-boarding process, I tell tenants to read the lease (TWICE) – and make sure they fully understand and agree with ALL provisions. I provide certain critical excerpts from the lease at first contact, and I provide a sample lease for review early in the process.

By the time a person reaches the point of becoming a tenant in one of my owned or managed rental homes, they should be well aware of all rules, policies, procedures and the various lease provisions. They go into tenancy with their eyes wide-open. There is even a line for tenant initials on the lease that confirms they have read the lease in full – TWICE.

This then frames all conversations and potential conflicts in the undeniable fact that the matter is likely already covered in the lease to which they agreed and confirmed to have read TWICE before signing. I can thus respond to any such matters (always in writing through our ticketing system, NEVER by phone) with the exact page and bullet point number that the lease speaks on the matter and how it is to be handled, who is responsible for what, etc… If necessary, reminding them that they signed this lease after initialing that they had read it TWICE – so none of how this is to be handled should be any kind of surprise to them, and so if they don’t agree with this handling, why did you sign the lease and proceed to occupy the home?

Therefore if dealing with even a moderately reasonable person, while having ethical and professional business practices, speaking and treating people with respectful kindness and following the lease to the letter – it is unlikely to end up in court in the first place. A reasonable person would not likely push things that far knowing their going to lose in court and then have to pay all the court and legal fees on top of whatever the original dispute was.

But reasonableness needs to exist on both sides of any contract…

A contract (which is all a lease really is) provides a frame work for setting expectations, establishing policies and procedures, handling disputes, penalties, remedies, etc… And while I mentioned the need to follow the lease to the letter, there should be room for reasonableness on both sides of the contract. Now there is a need to treat everyone equally, so as not to violate fair housing regulations – but at the same time, I do make room for the occasional exception (in the tenant’s favor) as to how a potential dispute may be handled. YES, the lease can be your sword as suggested in my earlier quote, but a sword is not the best means of handling every dispute… You know, “he who lives by the sword, dies by the sword.”

An example of an exception I’ve made… My lease has a provision that the tenant is responsible for the first $50 of any repair; and they are entirely responsible for any repair that falls below this amount or that was caused by negligence or abuse on their part or by their visitors or guest (regardless of the amount). This provision provides an incentive for the tenant to treat the home with care. They cannot just treat the home any kind of way, break things and then make a repair request and expect for it to be handled solely out of my pocket. It will either be their responsibility to handle entirely, or they will be charged $50 towards the repair cost (which then becomes rent due in the subsequent month, and treated as late rent if not paid).

But in many cases when a tenant makes a repair request, with all else being good – I may choose to handle the repair on their behalf (without imposing the $50 fee as a goodwill gesture). But make sure to point out in the lease where I was within my right to do so (and likely will be imposing the fee the next time). So even when it is reasonable for me to NOT follow the lease, I make sure to point out when and why I am electing not to do so (in writing) – to avoid any claim of equal housing violation or favoritism or anything like that – and to make it clear that this is NOT an established precedent of me ignoring the lease, but a one-time or limited goodwill exception. And if I ever did end up in court, showing a willingness to make a reasonable goodwill exception further increases my likely-hood of prevailing in court – as the reasonable party on the right side of both the contract and law.

So I don’t want to be a bully or otherwise unreasonable, but most Landlord / Tenant conflicts can be avoided and your rental property (which is your asset) protected, by having well established policies – that your tenant fully understands and has agreed to. And if you do make an exception to those policies, make it seem as if you are rewarding their otherwise great tenancy – and that you are doing so as a one-time or limited exception.

For example, last year I had a few incidents of tenants making me aware a week or so before rent was due, that they would not be able to pay the full amount, and would therefore be late. Two of these tenants had never been late before. In each case I informed the tenant that I must impose the late fee as detailed in the lease, which is 5% of the total rent due. But if they paid at least 1/2 of the amount by the 5th, as a one-time exception for their first time being late (and having let me know in advance) – I would allow them to pay the remaining amount along with the following month’s rent, without sending or posting the 10-Day Pay or Vacate Notice. And I would therefore not pursue eviction on the 17th as stated in the lease, but the late fee would still apply.

One tenant took me up on this offer, paying 1/2 of that month’s rent; and they did pay the remainder along with the following month’s rent on time, including the prior month’s late fee. The other tenant somehow found a means to pay their entire rent on time, no doubt to avoid the late fee. Had I been willing to waive the late fee, they would have certainly been late that month also – but I became a higher priority in their finances when learning it was going to cost them an additional 5% (which is a LOT, if you are already struggling).

But there was also yet another tenant in this same situation. And that tenant had a history of having been late (often). So in their case, I thanked them for letting me know in advance, but I did not make the offer to allow them to pay 1/2. Instead, based upon their established track record, I told them the entire amount would be due by the 5th, or they would get a 10-Day Pay or Vacate Notice on the 6th and my attorney would have to file for eviction on the first business day that is on or after the 17th. And as had become common for this person, they did not pay their rent by the 5th, they got the notice on the 6th – but they did pay in full before the 17th, so we did not have to pursue eviction.

So now because of tenants like that one who frequently pay late, my lease has been updated to state something to the effect of “multiple occurrences of late rent payment during the lease term may result in lease non-renewal and requirement to vacate or if renewal is offered, it will be at a higher rent increase of 3% instead of the typical 1.5% to 2%.” – so I am giving them even further incentive to pay rent on time.

You need to learn from the past to improve the future…

Each time I have a new occurrence with a tenant that is not well or best covered by my current lease version, I update the lease accordingly – and run it by my attorney. I also adjust my business processes (as it relates) to improve upon or prevent the situation going forward. I mentioned in last week’s episode on accepting Section 8, that most of my custom lease provisions originate from two problem tenants. But everything I’ve experienced in the past has in some way adjusted what I do and how I run my rental and management businesses going forward. It truly is “whatever doesn’t kill me (or put me out of business), makes me stronger.”

I learn from every occurrence of the past and present to improve my future. And whatever I could have done differently (hindsight being 20/20), I make the adjustment. And where that adjustment relates to my lease, I make the change or improvement there as well (getting the blessing of my attorney) – and then work to get all tenants on that latest lease version upon renewal or new tenant placement. And if it were something urgently critical, I guess I could also require the signing of an amendment – although I’ve yet to do so.

So always be working to improve your rental business and the lease that supports that business and helps to protect your rental home asset. Or for a shameless plug, if you are located in Raleigh / Durham (the Triangle area of North Carolina), you can hire me and Blue Chariot Management to apply our learned expertise and put our latest lease version to work at protection your renal home assets to avoid the effort of having to do so yourself.

So how will you handle your lease?

Again, I recommend BiggerPockets.com or EZLandLordForms.com (that’s the letter E and the letter Z). Both will give you state specific leases. And there is a small fee for both. BiggerPockets requires a Pro level membership, but if you are serious about Real Estate Investing, you should likely have a membership and be active on BiggerPockets anyway. EZLandLordForms.com is less essential to your day to day mastery of Real Estate Investing, but its ease of customization and all the additional forms it provides makes it well worth the cost.

Additionally, EZLandLordForms.com provides eSigning ability, and literally every form you may ever need to send your tenants, in an easy to use system supporting full customization. But with either option, BiggerPockets and EZLandlordForms.com – you’ll be getting a state specific lease that is attorney reviewed, and you can customize it as needed. The customization is just a little easier with EZLandlordForms.com. So make sure that you have your own attorney review the lease along with any customizations you’ve made.

Then go above and beyond to make sure that your tenant reads and understands the lease and has no means of saying otherwise, should you ever end up in court. Make sure all your communications are in written form that is automatically dated, time-stamped and preserved. And in such communication, refer back to the specific page and provision of your lease that relates to the matter being discussed.

And if for any reason you should alter from the handling as detailed in your lease, make sure the precise reason for doing so is explained. And do so in a manner that prevents it from being seen as a precedent for future handling or anything that could be considered a equal housing violation. You can’t be seen as treating one tenant differently from another, especially where it could be said to be based upon discrimination, bias or favoritism for or against a protected class. Such as, you can’t hold true to your lease provision against pets, in a multi-family property for example – and then allow one tenant to have a pet, while denying the same for another (that is excluding the completely separate topic of service animals – OMG).

So I could go on, but I think you’ve got the idea…

Just make sure to keep your lease up to date, and improve it as you go to account for the various situations you have and will encounter as a Landlord – because to paraphrase the great man I quoted earlier in the podcast,

“… your lease is both your sword and your shield.”

And a closing quote from Sarah Strohmeyer…

“Life is a Lease and God is the Landlord.”

Closing…
Disclaimer…

There's no escaping that Section 8 has a stigma among Landlords. "Section 8" is one of my keyword alerts on the Real Estate Investor Forum at BiggerPockets.com - so I get text alerts whenever Section 8 is being discussed on the site. I try to engage in as many of those conversations as I can - and it would be an understatement to say that most of the comments are negative towards the program and those who are on it.

Landlords tend to be rather conservative in both their financial and political outlook. Many invest in Real Estate as a means to avoid high taxes. So a tax payer funded assistance program (of any kind, housing or otherwise) is considered to be a "government handout", which is then seen as the cause of the high taxes they seek to avoid in the first place. For that reason (and others), Section 8 is thus rejected outright by many (if not most) Landlords.

And to make matters worse, Section 8 tenants have gotten a reputation (deserved or not) as being problematic, including often being in violation of leases, abusive to neighbors and Landlords, as well as, destructive to their properties. So should Landlords avoid Section 8 tenants? Or can accepting Section 8 vouchers grow your rental business? I'll seek to answer these questions in this show (from my prospective anyway).

Intro...

Welcome to Episode #10! - I've reached double digits, and counting! I've got some more topics I wish to discuss solo, but I'll also have guests on soon - so look out!

Section 8 - is a government assistance / rent subsidy program for certain individuals and families with very low income, allowing participants to secure private housing of their choice where the rent is then fully or partially paid by the program. While in some locations Landlord participation in the Section 8 program is mandated by law - Landlords in most locations choose to participate in the program (or not). This show relates to those locations where Landlords have a choice - and then, which choice you may want to make.

So I wish to start by providing a few quotes from Matthew Desmond, author of the book "Evicted: Poverty and Profit in the American City". I've not read this book yet, but I will soon. I understand that its rather harsh towards Landlords, but I wish to read and judge that for myself. But even if so, the following quotes from the author should help to set the stage as to why I participate in the Section 8 program...

"I think that we value fairness in this country. We value equal opportunity. Without a stable home, those ideals really fall apart."
Another...
 
"Housing is absolutely essential to human flourishing. Without stable shelter, it all falls apart."
And another...
 
"We can start with housing, the sturdiest of footholds for economic mobility. A national affordable housing program would be an anti-poverty effort, human capital investment, community improvement plan, and public health initiative all rolled into one."
 
And one more...
 
"The poor don't want some small life. They don't want to game the system. They want to contribute, and they want to thrive. But poverty reduces people born for better things."

Four quotes, by Matthew Desmond.

Now I'm a pretty conservative guy, and I've voted for both Democrats and Republicans throughout my voting life at all levels of government. And you would be hard pressed to find someone who hates high taxes more than me. But I also feel that now in the 21st Century here in the United States of America - we as a society have to find viable solutions for certain basic essentials of human life and dignity, like food, clothing, shelter, healthcare, education and jobs.

As a Landlord, I can't do anything about most of those, but I do aid in providing shelter / housing for over a dozen families. And as an Entrepreneur, I also employ (at least part-time) dozens of people, who can then use that pay to help obtain those necessities on their own. I take pride in these roles of doing my small part to help provide housing and jobs.

And now, not to go religious on you, but Jesus says in the Bible at John 12:8 a statement to the effect of "The poor you will always have with you". Many people mistakenly take this scripture to mean it is a waste of our time trying to aid the poor or end poverty; but a more in depth study of this and other statements from Jesus actually reveals the requirement to be of aid to those who are in need. Now if you question that and you want to have a religious discussion with me, by all means - bring it on. But I warn you, I'm not ignorant of the Bible. I've spent more time studying the Bible than I have learning Real Estate.

So I see the need for individuals and society as a whole to play a role in being of aid to those who are in need. And while certainly not perfect, I see the Section 8 program as an attempt (flawed though it may be) to provide housing to families with low income. I therefore see it as my duty as a person of Faith and a Landlord with the means to do so, to participate in the program as best I'm able (but I'll give you a possible exception to that statement later). And please forgive me if I like getting paid by the government each month in the process of participating in the Section 8 program... It feels like I'm getting my tax money back. And I paid a LOT in taxes before I got into Real Estate.

So despite the negative reputation and stereotypes, I started accepting Section 8 as of my 4th property. And now, a few years later, exactly 1 less than half my properties are rented to person's with Section 8 vouchers - and I'm happy to participate in the program, plus I benefit from doing so.

But should you consider accepting Section 8?
In my City of Durham, North Carolina - Section 8 (called the Housing Choice Voucher Program) pays market rents, and sometimes ABOVE market rents. So whenever I obtain another rental home, I look to make it available to someone on Section 8, as long as I'm able to do so at or reasonably near market rent for a tenant who passes all of my various qualifications and screening criteria.

To give you an example of how I work to make my units available to Section 8 voucher holders... I recently had a 3BR Townhouse listed for rent at $1,320/mo. A person with a Section 8 voucher toured and then applied for the home, and all qualification and screening criteria were well met by the person, with the exception of income (which needs to be 3x rent). But in the case of a voucher holder, the income qualification can potentially be covered by the voucher (and I'll speak more on that shortly).

In Durham, Section 8 (the Housing Choice Voucher Program) is administered by Durham Housing Authority (DHA), and they will initially pay up to $1,356/mo for a 3BR. But the actual approved rent depends on the property location, included amenities, plus the income and other factors of the prospective tenant, such as their income, family size, etc... In the case of this Townhouse listing at $1,320/mo, the person was approved by DHA for only $1,287/mo - which is $33/mo LESS than I was seeking.

But despite the $33/mo shortfall, I accepted this tenant at $1,287/mo, because that amount is still profitable for me. Also, I have a non-Section 8 tenant in an almost identical unit at the same location at $1,260/mo, so I'm still getting more from Section 8. Yes, I could have held out for the $1,320/mo that I was originally seeking (and would have likely gotten it), but maybe only after an additional month of vacancy. Further, I can almost certainly get it increased in the 2nd year. So I'll take a 1st year hit of $396, but as it would happen, this tenant was ready to move-in within a shorter period of time than others who applied. So I actually make more for the year at the lower rent than I would have with another tenant who needed an additional month or more to move-in - thereby saving me a month of vacancy loss. I lose over 3 times as much from a month of vacancy than I do from discounting the rent.

I mentioned another example in last week's episode, of where I deliberately set the rent ask at $1,512/mo for one of my better single family 4BR homes - instead of $1,525/mo that I could have gotten. Because $1,512 is the maximum DHA will pay for a 4 bedroom under Section 8. Thus, by setting this rent, I opened my rental listing up to all those in Durham with Section 8 vouchers; and I was able to list the house for rent on GoSection8.com - resulting in many additional inquires.

As I mentioned last week... I contacted the Director of Durham Housing Authority's - Housing Choice Voucher Program. She informed me that there were 2,742 participants on the HCV program. And approximately 65 families with vouchers were searching for housing in Durham. With over 1,500 additional families on the waiting list - just to get a voucher to then begin their housing search.

So I seek to make my rental homes available to Section 8 voucher holders, as listing on GoSection8.com not only gets the attention of those those 65 families in Durham now searching (who only have 90 to 120 days to find a home); but I also potentially get those 2,742 existing participants looking at my property, as they are often seeking to improve upon where they live now - that they likely selected out of desperation before their 90 to 120 days expired when they first received their voucher.

But not only that... I've found that with proper tenant screening, consistent policies and procedures, clear communication, setting of expectations in advance, plus treating people with respect as valued customers - I've had very little in the way of problems with my Section 8 tenants. And with two exceptions that I'll relate in a moment, I've yet to have a Section 8 tenant leave one of my properties. In other words, they've been great long-term tenants. And on the other hand, my non-Section 8 tenants are always subject to leave, as they simply have more options.

But you give a person a great home in a peaceful location where they and their children can feel safe and make it clear what is required of them to keep that home - it would take a special person (and I use the word "special" in a negative sense) to mess up that ideal situation.

But there are ways this ideal situation can go wrong...

And that is among the many things that Landlords fear about participating in the Section 8 program - things can go wrong. Remember I mentioned two exceptions to never having a Section 8 tenant leave one of my properties... It has happened twice so far.

As I've mentioned before, I started my Real Estate Investing career in 2015; and I accepted my first Section 8 tenant with property #4 in 2016. That tenant is still with me today... No problems! But I also put a Section 8 tenant into my 5th property, and it did not go well. To date, I've had two problem tenants, and both were on Section 8. Thankfully, I've still not had to evict anyone; and I've been able to return at least a portion of everyone's security deposit - including those two.

But for those two Section 8 tenants who caused problems for me, it was actually a failure on my part that allowed them to become tenants in the first place. As it would happen, I actually owe them both a debt of gratitude, as they helped me to become a better Landlord. These two tenants are responsible for most of my tenant screening rules and additional lease provisions. I may not be confident enough today in my skills as a Landlord to take on third party property management as I have, if not for those two tenants. And so I have them to thank for Blue Chariot Management, where I now manage properties for others, because they made me raise my game.

In both cases, after suffering through repeated communication lapses and frustrations, I just refused to renew their leases and gave them notices to vacate. Each moved out peacefully and their security deposits were sufficient to remedy any damages, with the remainders refunded. But I learned a ton about proper tenant screening in the process (things I could have done better); and I improved my lease and processes greatly. And so while anything is possible - it is far less likely that this will happen again anytime soon. Although it is inevitable that I'll get another problem tenant again eventually (Section 8 or not) - as good tenants can go bad for any number of reasons.

A major concern of Landlords who accept Section 8 tenants...

You fear that the tenant will someday lose their voucher and then be unable to afford the rent. For example, I have a Section 8 tenant who pays less than $20/mo tenant share, against nearly $1,200/mo in rent. If this tenant ever lost the voucher, it is next to impossible to expect they'd be able to cover the rent on their own. And I'd be faced with having to evict the family if they failed to leave voluntarily. Because as much as I'd feel compelled to be of aid, it is a business - and I feel that I was of aid by having made the home available to Section 8 to begin with.

So if the person loses their voucher for ANY reason, they'd have to realize that I'm running a business. And that rent has to be paid in full so that I can pay the mortgage and other expenses associated with the property, such as: taxes; and insurance; and there might be HOA dues; and property management, and repairs and maintenance; and vacancy; and capital expenditures. Owning rental property is not free, its not even cheap - and if the rent isn't being paid, all of those expenses (and more) has to come out of the landlord's pocket. And no business can lose money and stay in business for long. And so then it becomes unfair even to the other tenants who are paying their rent in full and on time. So even if there was no mortgage on the property, all of those other expenses still have to be paid. And what if the Landlord is retired and living on that rental income. The Landlord is under no obligation to take a hit on the rent that is owed - and should NOT do so.

But this risk of voucher loss may rise to the level of unacceptability in certain cities. I'm fortunate here in Durham, North Carolina - that not only is the Section 8 program administrated effectively by Durham Housing Authority; but North Carolina Landlord / Tenant Law is such that it doesn't usually take more than a month or so to get someone out of a home if they are behind on rent.

Here in North Carolina, I could literally file for eviction on the 17th of June, after having sent a 10-Day Pay or Vacate Notice on the 6th. And if hitting all the dates with courts processing normally, and advertising the coming vacancy during the process, I could have a new tenant in that home by August 1st (if no significant damage was done) - and if so, certainly by September 1st. So a worst case eviction scenario here is 3 months of missed rent, and it can be as little as 2.

Now 2 or 3 months is certainly a lot to lose in rent, but at least it not like some places where its 6 months or a year or more. I've even heard of some places where it can be years (multiple) - just to get someone out of a home who's not paying a dime.

So because tenants here know the eviction process moves quickly in comparison, and they know it will be highly unlikely to get approved for another rental anytime soon with an eviction on their record - most would not push it that far, and just leave on their own. Also, since I try to maintain excellent communication and respectful relationships with my tenants, most people (being decent) would not want to create a hostile situation with me over an issue that I didn't cause. Especially based upon how I've treated them during their tenancy, making repairs and doing things as necessary - and also that I made the home available to them in the first place.

Even those two tenant I had problems with, avoided creating a hostile situation with me... Why?

A Section 8 voucher creates an additional incentive for the tenant to avoid conflict with the Landlord...

Here in Durham, if a person with a Section 8 voucher wants to use their voucher elsewhere, they must be in good standing with their prior landlord (like ME). They cannot trash my property or leave owning me money, and then just move their voucher over to the next Landlord's property. Having the voucher in place actually creates a major incentive to act right - something I don't have as leverage against my non-Section 8 voucher tenants.

Combine this factor of leverage that the voucher creates along with my highly desirable homes - and it is very unlikely that a Section 8 tenant would cause conflict with me. As previously stated, there are over 1,500 families waiting to get vouchers in Durham, with 65 families currently looking for homes - who are under a 90 to 120 day time-limit to find one.

For myself, having gotten a reputation in Durham as a Landlord who provides nice homes on Section 8 - I get calls and emails weekly from person's wanting to know if I have any homes available or coming. I also make it abundantly clear during the first rental inquiry contact and at each step along the way to tenancy - that I am extremely serious and adamant about tenant screening and following my lease to the letter. These things combined with scheduled inspection, effective communication and respectful valued customer (tenant) treatment - I fully expect my Section 8 tenants to remain with me for years.

And I especially like it when their going to school, working to improve their credit and when DHA lowers their payment portion - because that means the person has gotten a new job with better pay. Helping to provide a great home for a family that creates a sense of safety and security, while they work to improve their overall situation - is extremely satisfying.

Especially when considering that most of my homes were uninhabitable when I bought them, and I rehabbed them into excellent places to live. That doesn't just benefit me, but it benefits that tenant and it benefits the community that house is in, that it was previously a blight on the neighborhood. It benefits the City, the State. And most of all it provides a great home for children to learn and grow up to become productive adults, which benefits the Country and everyone.

This is why, despite being a person who hates high taxes, I also support programs like Section 8, as the alternative is so much worse. Its hard for a person to improve their situation in life when they cannot even lay their head down at night and think about how to do so. So, I take pride in helping to make that possible, and hey... I benefit myself financially in the process! What's better than that!?

But does Section 8 work like this where your properties are located?

From my engagement with Landlords in other locations on BiggerPockets.com - I'm well aware that what I've stated here does not necessarily apply everywhere. There are certainly cities where the Section 8 program is a joke of inefficiencies, ridiculously policies and frustrations at every turn - where a Landlord must laugh to avoid crying. Combine a poorly run County Section 8 program with a State's and/or City's Landlord / Tenant Laws that are grossly shewed towards the tenant - and you've got a recipe for disaster that every Landlord would be well advised to AVOID.

So ultimately you need to educate yourself on your City and State Landlord / Tenant Laws. If it is likely you'll miss more than 3 months of rent trying to evict someone, then you might want to avoid even owning rental property in that State. I'm aware (like I said) of some States where it can take 6 months or more to evict someone (even years). Why bother being a Landlord in those places!?

Then for those locations that evictions can happen within a reasonable amount of time, further education yourself on how the Section 8 program is administered in those Counties. Learn how inspections are handled. Learn how tenant caused property damage is treated. Learn if tenants can move elsewhere without being in good standing with you as their current or prior Landlord. Learn how payments are handled, rent increases, etc... And when everything aligns well (as it does thankfully for me in Durham, North Carolina) - any failure to do well with Section 8 at that point is almost certainly YOUR FAULT. As it was my fault that I ended up with those two problem tenants. It was NOT the fault of the Section 8 program or Durham Housing Authority.

So PLEASE don't let the Landlord Horror Stories of others keep you from participating in the Section 8 program, as I wouldn't have ANY rental right now, if I had listened to others about all the horrible things tenants were going to do to my homes - while also not paying their rent.

Now just because Section 8 is for families with low income, that doesn't mean your properties have to be of low quality...

What is the rent range of  your homes? Do you have properties that rent for less than $500/mo? If so, you may wish to disregard ALL that I've said in this show, as it does not likely apply to your properties. I don't have any properties that rent for less than $900/mo for a 2BR for example. My properties are all in desirable locations where a person would actually WANT to live. Most have granite counters, vinyl plank and tile flooring, stainless steel appliances and other such upgrades that make them both durable and highly desirable. These are critical elements, as a desirable home in an ideal location will attract the best applicants - because with or without vouchers, bad properties attract bad tenants. Because that bad tenant knows that you probably can't rent your P.O.S. property to anyone better than them.

But if you have a great property, bad tenants know you have a choice in who you're going to rent it to, so most don't even bother applying once confronted with your professional handling and pre-screening methods. On the other hand, good tenants (including those with vouchers) will be attracted to your great property and they'll line up to be the one who gets it. And if a person with a voucher is fortunate enough to be that one, they will not want to mess around and risk losing it by violating the lease or creating conflict with the landlord or neighbors.

Further, I collect a substantial security deposit. North Carolina law allows for up to 2x rent, and I advertise my rentals at 1.5x rent. I'll then lower it to 1x rent for extremely well qualified applicants; or increase it to 2x rent for those with greater challenges than average. But the average applicant for one of my rentals can expect to pay 1-1/2 times rent for their security deposit. Just the amount of the security deposit rules out many seeking my homes, but it is a further protection for me in that a person will not want to risk losing their $1,800 security deposit when their tenancy comes to an end. They'll need that to move into their next home, so doing damage to my property is certainly not in their best interest. And a lot of times those security deposit funds were borrowed from a family member or friends who did not want them to miss out on having this great home. And that is further pressure to act right.

And for those who are unable to come up with the security deposit, Durham has a few programs, including one for homelessness prevention, that will pay the security deposit on behalf of the tenant - who then gets that money refunded directly back to them when they move elsewhere without having done any damage or owing any back rent or other such funds. Since use of such programs are limited, it may be critical for that person to get the full security deposit refunded. And I help them in that regard by conducting quarterly inspection during which I point out anything that they need to address or actions they need to alter that could impact their security deposit. I WANT them to get the full security deposit refunded, as it means my property has not been damaged beyond normal and reasonable wear-and-tear, and that they have no outstanding balance owed. That is great for me and gives them the funds they need to continue elsewhere. But even that is rare, because as I said, they tend to stay!

But if you are renting homes that are $450/mo for a 2BR and you are charging one month's rent as your security deposit, the person who wants that home is far more likely to be a problem tenant than someone paying twice that amount at $900 for a much better home and location. People who rent those homes are doing so for a reason, and you don't want their reason to become your problem. Plus, a $450 security deposit is not enough money to have an impact on behavior, nor is it enough to really fix anything that has been damaged.

And even for those good people who are forced to rent that $450/mo home because they cannot find anything better within the 90 to 120 window given - since far to few Landlords participate in the Section 8 program, and even fewer with nicer properties. That family is going to treat the property for what its worth and how it makes them feel. If they come home to a location and home that they don't like, they are going to treat it poorly (its just human nature). And likewise, if they come home to a location and home they love, they are far more likely to treat it with the prideful care reflected by the pride they feel in having this as their home (again, its just human nature).

That is why bad properties tend to get worse, and good properties tend to stay good or even get better. Its also the concept behind Home Owner's Associations to enforce a neighborhood standard of expectations, rules and standards. The average person will tend to live up or down to what's present and allowed around them. If you accidentally drop some trash on the ground and it lands atop other trash already there, you are far less likely to pick it up than if what you had dropped was now the only trash present. So have nice properties and set high expectations, and enforce your rules to keep them that way.

So my conclusion on the Section 8 / Housing Choice Voucher Program for Landlords is...

That you get out what you put in. You will be successfully if you have a superior product (your ideally located home where people actually WANT to live with nice upgraded amenities), and strict adherence to proper policies and procedures for tenant screening, following your lease and generally how you run your rental business - with a focus on customer (tenant) service and communication.

These are the keys... As a Landlord, you can be of immense aid to those in need of a safe and secure home while benefiting yourself financially in the process. Again, what is better than that!? OR, you can ignorantly state that ALL people on ANY form of public assistance are bad, and they have only themselves to blame for their situation. You can claim that their entitlement mentality will result in your property being destroyed, ending in a costly eviction - and for those contrived reasons, refuse to participate in the program to the harm of those you could have aided and to your own financial harm.

If you try and fail at Section 8 rentals, look at yourself and improve your process; or hire Blue Chariot Management to handle it all for you. But I will put one asterisks on it... If you live in one of those areas where tenants rule in the Landlord / Tenant Law - and it takes something like 6 months or more to evict a person - then screw that market. Take your ball and go to a market where Landlords are actually seen as a solution to the housing problem, and not the problem themselves.

Those markets can have their rent control and tenants living months and longer for free. I won't be the person buying homes there, and we'll see where people live when no one has any incentive to buy and rehab distressed houses into rentals. But that's my conservative side coming out again.

State and local governments need to realize that you get more of what you reward and less of what you punish. So if you reward Landlords for working to create more affordable rental housing, and create a system that makes it logical for them to do so - you will naturally get more affordable housing. But if you punish Landlords, for example by making it take forever to get non-paying tenants out of a property, or by imposing rent control - how can you be so stupid to not realize you'll get LESS of what you claim to want?

Thankfully, here in Durham North Carolina (at least for now), the Section 8 program appears to be administered well by Durham Housing Authority (not perfect, but well). And there is no rent control and it does not take an unreasonable amount of time to evict a non-paying tenant. So I would say this is a great location to be a Landlord and it is well worth the effort to participate in the Section 8 program here. Others will differ from my opinion on this, but they are likely in a market that is more harsh towards Landlords and/or the Section 8 program is not well run in their area. Also, they have likely not put in the work to make their product desirable and to have policies and procedures that place the ideal tenants.

Ok, I'm done for now...

But I am certain to speak more on the subject of Section 8 rentals later; and I'll let you know if I encounter any Landlord Horror stories related to a Section 8 tenant or otherwise.

- Exit / Outro...

- Disclaimer

Whenever I list one of my homes for rent, I know the following day is going to be filled with phone calls. For the most recent rental listing of one of my better single-family homes, I got the first inquiry call literally within 1 hour of posting it to Zillow; and the next day, just as expected - was filled with calls, emails and texts from people seeking to rent that house. Now your market may be different than mine here in Durham, North Carolina - but there are things you can do just about anywhere, to make your rental home stand out from the crowd.

Advertising your rental vacancy is a critical element of my show from last week (Ep. #8 | Don't Let Vacancy Kill Your Rental Cashflow) - but here in this episode, I'll go into further detail specific to advertising and making your rental home stand out in a crowded rental market. Today's quote..

“The world accommodates you for fitting in, but only rewards you for standing out.”  ― Matshona Dhliwayo

Welcome to Episode #9 - Rental Property Advertising - How To Make Your Rental Home Stand Out From The Crowd.

Would you consider the location of your rental property to be a "crowded rental market" (as I do air quotes)? Are there lots of homes for rent with many having been listed for weeks or even months? I advertise my rentals in many ways and on many sites, that I'll go into later in this episode, but with one possible exception - I get the greatest response from Zillow, and the sites that Zillow syndicates to, like Trulia and HotPads. So let's run a quick test on Zillow to see how much competition your rental market has. And as it would happen, this process is also the start of my market research that helps not only to indicate how I should advertise a given rental to make it stand out, but also what the target rent should be.

First, go to Zillow.com and enter your city and state, which for me is Durham, North Carolina. Click the link for [Rent] and then adjust the search results to show all home types for rent in your city (except for Apartments, so show only Houses, Condos & Townhouses) at any rent and any bedroom count. How many such properties are for rent in your city right now? For me in Durham it is 280, but before I excluded Apartments, it was 1,638. Then adjust the sort order for [Rent] "(Low to High) & "(High to Low)" to see what the lowest and highest rents for homes are on Zillow in your market at this time.

At the time of this recording, on Zillow for Durham (excluding Apartments) the lowest rent is $750/mo for a 1BR; and the highest is $3,900/mo for a 4BR House @ 2,865 SqFt. Now if I had not excluded Apartments, the lowest would have been around $500/mo (sometimes even lower) and the highest would have been well over $4,100/mo for some of the newer Downtown Durham "Luxury" Apartments (as I again do air quotes).

Now anything for rent in my city is technically my competition; however, my properties tend to rent from $900/mo to $1,600/mo (for the most part), so let's add Apartments back into the search and then set your ideal rent range. Also, I don't have any 1 Bedrooms - I'm going to set my search results to 2+ BR, you set whatever bedroom count relates best to your situation. Now with those settings for me, Durham returns 544 results. Is that more or less than your city once you adjust the search to fit your typical rent range and bedroom count?

These 544 are my competition in the City, and if I remove Apartments from the results, it drops to 120. But I leave Apartments in because I want to consider everything that is available for rent in the city within my rent range and at my bedroom count. Also, lots of really nice Duplex, Triplex or Quad Units are entered as Apartments, and so I don't want to exclude these. I also know that my Single-Family Houses, Townhouses and side-by-side Duplexes have an advantage of desirability over anything where you have to climb steps to get into the home; or where there's another family living above and thus walking on the ceiling of the home. ALL People prefer Single-Family Houses, Townhouses and Townhouse-style (side-by-side) Duplexes to Apartments any day - but I must still account for them in my analysis.

So now let's size up the competition...

Browse the pictures that you see for the Zillow search results in your City. Again, for me I'm working with 544 results - but I will shortly narrow this further. Your likely to see a mix of exterior pictures and kitchens with the occasional living-room picture thrown in. For those with a main picture being of the interior, most will be furnished or staged. It will be pretty obvious which are using professional photography and which are using cell phone pictures, but some even with pictures taken on a phone will be decent. But the vast majority of the pictures will be of a lessor quality. In fact, some will be so bad, that if you also have a Property Management business like I do, you should note those addresses to contact the owners and pitch your professional services - they need it.

If your rental home falls within the search criteria a person is seeking (i.e. location, bedroom count / size and rent), then from that point - PICTURES MATTER more than anything else. And the most important pictures are exterior and kitchen. I'll also include living-room, but preferably where it also shows the kitchen, along with nice flooring and lots of space. Whether leading with an exterior or kitchen picture depends on which is the most eye-catching and noticeably different (hopefully also better) than your competition.

For the rental house I spoke about at the opening, I went with an exterior picture, but it was one taken at night with every inside and outside light on. It's a beautiful picture of the home that absolutely demands to be clicked to see the inside - especially when listed at only $1,512/mo for a 4BR house @ 2,097 SqFt. That picture makes the listing stand out; and the next 2 pictures (which Zillow also highlights) is of the community sign and the kitchen viewed from across the living room. If they are seeking a 4BR in this rent range, the prospective tenant cannot help but to click further to see the other pictures, of which I provided 57 - positioned and ordered so as to take the person on a virtual step-by-step tour of the house.

When done viewing these pictures, the person cannot help but to feel they know the house and whether or not it will work for their needs. Most people request an in-person showing anyway, but that's because in part, it all looks too good to believe at the stated rent. Now I'm pretty good with cell phone pictures. I watch YouTube videos on getting professional quality photo results with a SmartPhone, and I use a Samsung Galaxy Note 9, which is known in part for its excellent camera. I'll also likely take a course at the local Durham Tech College on Cell Phone Photography later in the year. But if you are not as good with cell phone pics, or don't have the correct phone for doing so, then hire a pro - it's not as expensive as you might think.

Can you upgrade your rental home?

What also is not as expensive as you think is making certain upgrades to your rental house. In a rental market of basic white appliances, how much more will stainless steel appliances make your rental stand out from the crowd? Often, stainless steel appliances are not much more expensive than basic white - but they can make your rental 10 times more appealing.

If you buy distress homes to rehab into rentals as I do, then these upgrades are logical inclusions to the original rehab budget. But if not, the next time you need new kitchen counters in your rental, considering going ahead and upgrading to granite. And the next time you need new carpet, why not just replace it all with vinyl plank flooring? Have you ever considered resurfacing kitchen cabinets to white or gray; adding stainless steel cabinet door handles; better kitchen sink faucet; upgraded light fixtures and fans; improved vanities in the bathrooms, and such?

Not only do upgrades like these make your rental home look much better (making your rental more appealing and thereby able to command a higher rent), but upgrades like granite counters and vinyl plank flooring are much more durable, making your tenant turnover far less costly. These upgrades can also increase the value of your home - beyond their cost in many cases. So unless just completely out of place for your area and rental range, these upgrades are a worth while consideration and make for great pictures. And the pictures are everything on a rental listing.

It laughable when looking at rental ads on Zillow, seeing just how many poor quality photos are posted. How many homes are lacking desirable upgrades. And then even how few photos most listings have. But hey... That's good for me, as it makes my listings stand out all the more. And it makes my Property Management clients love me and how well I market their rentals . So another quote from (and hopefully I'm pronouncing the name correctly)...

Matshona Dhliwayo ― “A pink rose among a thousand white daisies stands out; be likewise.”

Now let's see if we've set the correct rent...

Let's narrow our Zillow search criteria a bit more to find the best rental rate. If you've not already done so, change the bedroom count to match your rental home exactly. Then set a minimum square footage that is slightly less than your home, and observe the results. For me, after I set 4 bedrooms of at least 2,000 SqFt, the results went down to 1, that was slightly bigger and newer than my home at $1,550/mo. Since 1 is not a good sample size, I needed to make some adjustments, so I reduced the minimum square footage to 1,800 - and the results increased to 4 that were priced from $1,560/mo to $1,600mo.

I then entered the specific address of my house, instead of searching all of Durham; and I backed off the criteria (removing the price limits, lowering the square footage) and zoomed out on the map, until I started getting results. But the results I got were not in my same neighborhood. In fact, they were in slightly better neighborhoods (judging only by average house price / value and age), and despite being smaller than mine, they were actually listed for slightly more than I was targeting. Now on the other hand, they had also been listed for rent for several weeks - for example, one at $1,595/mo had been listed for 45 days. I don't want my listings sitting for 45 days while I suffer vacancy loss! As I mentioned in last week's episode, you are likely better off lowering your rent by even as much as $100/mo - if it allows you to avoid a month or two of vacancy.

Now Zillow has their "Rent Zestimate", so I consulted this, along with Rentometer - which showed an average rent for a 4BR in this area of $1,419/mo and a median rent of $1,475/mo. I also did research on CraigsList.com and several other rental listing sites. Now my rental house is of a little better quality than many in the area, but I also like to remain slightly below market rent - to lessen vacancy and encourage long-term tenants. This all suggested that I can successfully list the house for rent at $1,525/mo; however, I instead lowered this and listed at $1,512/mo, for one reason - Section 8.

Should You Consider Accepting Section 8?

In my City of Durham, North Carolina - Section 8 (called the Housing Choice Voucher Program) pays market rents, and sometimes ABOVE market rents. Exactly 1 less than half my homes are rented to tenants who have Housing Choice Vouchers; and I look to make as many of my rentals as possible available to those who are on Section 8.

So in the case of this most recent of my rental listings, I deliberately set the rent ask at $1,512 instead of $1,525/mo - because $1,512 is the maximum Durham Housing Authority will pay for a 4 bedroom under the Section 8 (Housing Choice Voucher) program. Thus, by setting this rent, I open my rental listing up to all those in Durham with Section 8 vouchers. I can then list the house on GoSection8.com - which is the only website that I've found to occasionally generate even more inquiries than Zillow.

Now I know that most Landlords gasp and recoil at even hearing the suggestion of making their rental home available to Section 8. Unfortunately, Section 8 has opinions on both sides of the spectrum among Landlords. Some hate even the idea of the program, considering it a government handout, and where not mandated by law, refuse to participant in the program under any circumstances.

That's unfortunate, and too bad for those Landlords - But other Landlords (like myself), participate willingly in the program, as I said - making most of my rentals available to those with Section 8 vouchers. But there's no denying that Section 8, while having some benefits over non-subsidized tenants, also has some additional risks that must be fully understood and considered before going the Section 8 route - which I'll detail for you in an episode specially about Section 8. And I'll also admit that in certain locations the Section 8 program is not run effectively; and I would stay away from it in those location like the plague. But thankfully for me - Durham, North Carolina (Durham Housing Authority) actually manages the program well.

But now let's go with some stats... I contacted the Director of Durham Housing Authority's - Housing Choice Voucher Program. And she related to me that there are currently 2,742 participants on the HCV program. Approximately 65 families with vouchers are currently searching for housing in Durham. And approximately 1,500 applicants are on the current waiting list - just to get a voucher to then begin their housing search.

So if you open your rental house in Durham to those with Section 8 vouchers, you not only potentially get the interest of those 65 families now searching (who only have 90 to 120 days to find a home); but you may also get the attention of those 2,742 participants, a large number of whom are constantly seeking to improve their current home - that they likely selected out of desperation before their 90 to 120 days expired when they first received their voucher.

As stated, listing my rentals on GoSection8.com often gets more inquiries than does Zillow, because so few landlords are willing to participate in the program (and even less with nice homes) - that it makes my properties stand out like that pink rose among a thousand white daises.

So when setting my rental rates, I consider what is the maximum that Durham Housing Authority will pay for X number of bedrooms under its HCV / Section 8 program. In my city you can find this by searching Google for keywords like "Durham HCV Payment Standard" - and it will take you to a page that has a link to the Payment Standard PDF at the bottom. My rentals are 2, 3 & 4BR - of which Durham pays up to: $990; $1,356 and $1,512 in rent for these - respectively.

So lowering the rent ask on my latest listing by $13/mo from $1,525 to $1,512 - may end up costing me $156 for the year. But I consider that more than a reasonable concession to have potentially thousands more people seeking my property. And even if someone with a voucher doesn't get this specific property, it puts me and Blue Chariot Properties or Blue Chariot Management on their radar and it gets them on my rental vacancy notification list - so they may get the next one.

I'll go into the many benefits of accepting Section 8 in your rentals in another episode, as well as some of the risks that must be considered. But when combined with effective tenant screening, scheduled inspections and consistent policies, accepting Section 8 can make vacancy a thing of the past - while pulling in ABOVE market rent for your rental from a tenant who is likely to remain for many years to come.

OK so, a picture is worth a thousands words,  right... But you do need the words...

Now how do you describe your rental listings? Don't just state a bunch of facts and figures, like "This house has 4BR/3BA at 2,097 SqFt for $1,512/mo"... Tell a Story! "Welcome Home to your 4BR House in the quiet Greenwood subdivision of Durham off Tyne Drive. In addition to 4 bedrooms, your next home features 3 full bathrooms across 2,097 SqFt of space - which does not include the 2-car garage and large raised deck in the wide-open back yard for barbecuing." - now of course I could go on, but I think you see the picture I'm trying to paint with words.

And if I did continue, I would go on to mention the skylights, large windows in every room, plantation style blinds, stainless steel appliances, fans in all bedrooms and living areas, large walk-in and whole-wall closets, washer / dryer hookups, security system, and on, and on.

Your description should make people want to see this house, even if it had no pictures. But when combined with your enticing pictures, it should make them want to apply immediately. Because it should be more than clear, that this home will not be available for long - so they should not waste time, because this house will go to whomever acts with the greatest urgency.

I often have people apply for my homes prior to even having a showing, so who my homes won't likely go to is the people who want to measure the rooms to see if their bed will fit (like they can't get a different bed). But for those people I even try to include the bedroom measurements right there within my listing. I don't want any excuses, nor do I want to waste my time showing the home to someone only for them to remark "the bedrooms are too small" (as I again use air quotes).

So to conclude...

Now you've got your rental listed with like 50+ pictures creating a virtual walk-thru of the home; and your main picture is an amazing shot of the exterior or kitchen (or maybe the kitchen shown from the living-room across a wide open space featuring nice flooring). Your description text paints an equally impressive picture that compels people to move with a sense of urgency - giving them all the details as needed to make a decision as to just how much they already love this home.

And you didn't just list your rental on Zillow and its syndication partners of Trulia and HotPads, but you also considered accepting and posting on GoSection8.com. And I've not mentioned it before now, but sites like Cozy.co, not only allow prospective tenants to apply for your listing (running credit and background checks); and to pay their rent online. But Cozy also syndicates your rental listing to additional sites, like Doorsteps.com and Realtor.com. There are also many other sites that you should consider listing to, including CraigsList.com. There is no such thing as listing your rental on too many sites.

And of course if permitted and effective for your location, you can also place a "For Rent" sign out in front. I don't do this personally any longer, as online advertising has been so effective for me - plus I have a number of homes under an HOA that would not allow signs. But I'll do a coming episode on handling rental inquiries with details on how to automate much of this work.

And where it makes sense to do so, you have your rent ask set competitively, possibly even slightly below market. And if you're willing to consider it, you've set your rent ask within the range of what Section 8 will pay for a rental in your City for the number of bedrooms. When posting a rental listing at a competitive rent that features amazing pictures with a compelling write-up - your rental will shine among the competition like the house on the cover image for this episode.

So I'll close this episode out by completing the prior quote by...

Matshona Dhliwayo ― “In a world full of daisies dare to be a rose.”

And this doesn't just apply to your rentals - it applies most of all to yourself. Be the rose in all things!

Rental vacancy can be one of the largest expenses you'll face as a Landlord. And the fewer properties you have, the more impactful it can be. Because if you have one rental property and it goes vacant for any period of time, then you suffer a 100% vacancy rate - with ZERO rental income.

Having more properties lowers the percentage of vacancy suffered, such as a Landlord with 4 units with only 1 vacant, suffers a 25% vacancy rate - with rental income still coming in from the other 3. But regardless of how many rental units you have, you don't want a unit that rents for (let's say) $1,200 per month, sitting vacant for even a single day longer than it needs to, as you are losing $40 of rental income per day!

So let's talk about how to avoid letting vacancy kill your rental cashflow...

Welcome to Episode #8 of the [... and Landlord] Rental Real Estate Investing Podcast- Don't Let Vacancy Kill Your Rental Cashflow. That's the topic we're going to discuss today. Oh, and I am really loving having a Podcast. Ideas for episode just keep coming to mind, and I've not even had my first guest yet. So for all those who've been listening, THANK YOU for your support. OK, so let me share a quote...

"Planning is bringing the future into the present so that you can do something about it now." - Alan Lakein

So how does that quote relate to minimizing or eliminating vacancy? Far to many Landlord fail to plan for tenant turnover. You know that your tenant is going to leave at some point. Plan for that day from the start, thereby bringing that day into the present so that you can do something about it NOW.

How do you do that? It actually starts with the lease you create with your current tenant. Set provisions into your lease so that the exit of your current tenant happens under circumstances that makes it easier for you to prepare for and obtain your next tenant.

For example, many Landlords put in a default 30 days notice required to end or prevent auto-renewal of a lease. No, no don't do 30 days... unless prevented by law, your month-to-month lease should require a 45 day notice to end tenancy. But for that matter, DON'T do month-to-month leases!

If I do a month-to-month lease, it is never for more than 6 months and MUST end in July, so February through July only. If still in the home come August, then they must sign a minimum 6 month renewal through the end of January of the following year. Why? Because the further into Fall and Winter we get, the harder it becomes to get a new quality tenants should the current month-to-month tenant suddenly decide to leave.

November and December tenant turns are to be avoided like the plague. And if you do allow a month-to-month lease, charge a premium. I charge a 6% premium if a tenant wants to go month-to-month - to discourage it first, but also to build up additional cash reserves to over-come some number of vacancy days when they do leave. But if I do my job properly, the vacancy days between tenants will be something minimal, like 2 or 3.

So, why 45 days notice required to end a month-to-month lease? Those extra 15 days are critical... You find your next tenant during those 2 weeks starting the day after you receive notice from the current tenant. And since most tenants are currently renting elsewhere and will need to provide 30 days notice to their Landlord (who doesn't likely follow this 45 day policy), it gives you enough time to find, screen and prep for your new tenant, and they have time to notify their current Landlord.

Now if the tenant is NOT on a month-to-month lease, then you put a provision into your lease that it automatically renews for another 1-year term (with an automatic rent increase) - if notice is not received of intent to either end the lease or drop to a month-to-month tenancy at least 60 days prior to the end (the renewal date). But for good customer service, you set a reminder notice to go out to the tenant at 90 day point, alerting them to the coming 60 day notice deadline.

The tenant either then allows the auto-renewal to happen at the already known increased rent, or they elect to end the lease and vacate (giving you 60 days notice). Or they request to drop to month-to-month tenancy, which if allowed (Feb to July only), it will be at an already known rent increase (maybe 1.5 to 2%) + an the additional 6% premium that you charge for month-to-month tenancy.

This all means that vacancies do not happen for you without you getting ample notice. So what do you do with that notice? It must also be stated in your lease that once notice to end the lease and vacate premise has been given by the tenant (be it 60 or 45 days in advance), you have the right as Landlord to enter the property with 24 hours notice. Now this right should be established in your lease anyway, but in this case its specifically for the purpose of entering the property to conduct inspections (to make sure its actually clean and tidy), to take pictures and video; but most importantly to conduct showings to find your next tenant before the current tenant even leaves the property.

How to handle showings:

Upon receiving notice from the current tenant, you will immediately list the property for rent (everywhere), including a sign out front if allowed and appropriate and also effective in your area. You field the inquires (and I'll have a separate episode on that), and once pre-screened (more on that coming also) - you pick a certain day and you schedule showings for that day every 15 or 20 minutes within a 2 to 4 hour window. You do this while the current tenants are still living in the home, but NOT while they are actually present. Make sure its a day and time when they're not going to be there.

During the showings, you remain behind the person, directing them where to go. You do not allow more than 2 persons into the home at the same time - and NO CHILDREN. After-all, this is still someone else's home and the last thing you need is for someone to take something or for a child to break something. You let the current tenant know that people will be in the home for supervised tours, and that you require the home be neat and clean with access available to all rooms, and all valuables put away.

You arrive early, about 20 minutes before the first showing, and you do a video walk-thru of the entire home. You actually do the video walk-thru twice. The first time you are doing it by paying close attention to the items that are in plain sight within the home, in case any claim is made of something going missing, you then have a video for reference from prior to anyone coming into the home. The 2nd walk-thru video is to show the home for anyone that pre-screened well, but could not make it over on that day during your showing window. Have this video edited and then make it available only to those who are interested in the home, but unable to make the showing.

You should also have and keep high quality pictures and a walk-thru video from when the home was empty prior to the current tenant. This all should give person's enough confidence to apply for the home without having a showing, although most will still insist on it. if so, you insist that they come during the established window, because it is an occupied home that will not be vacant for another month or more, and you must respect the quite enjoyment of the home for the current resident - so you are only planning to do 1 showing. And if you cannot find your next tenant from that showing, then do another a few days or a week later.

Rental Listing:

If you do not get much interest in your rental listing, then you have a problem that needs to be solved. Hopefully the problem is not your property location, as that is the hardest (if not impossible) to fix. If the location is good, but you have an issue with the property condition or pictures, then get that fixed. Although its not a good look to start repairing and improving things for some unknown future tenant when you did none of that for the current tenant. You also don't want to be making major improvements while the current tenant is still present, that may then get damaged prior to or during their exit.

Now if you're not getting much interest in your rental listing because of price, that is easy to fix. Consider... If you reduce the price by $100/mo from $1,200/mo to $1,100, you are losing $1,200 per year at that lower rent. But if it prevents you from having a month of vacancy, then the result is exactly the same. And if it stops you from having 2 months of vacancy, then you prevented a $2,400 loss! The house will rent quickly at some amount, and so you must determine if the reduced rent to get more eyes on the property may result in a better outcome than risking a month or more of vacancy.

Price cures all problems. So, if your problem is price as to why people aren't looking at your rental, just lower it a bit. It’s far better to just lower your price a little bit, and have more eyes on your property, than to be stubborn on price, and get tumbleweeds and crickets, because you might find that ideal tenant at a price that’s 20 or 40 or 60 or 80 or $100 less than what you were asking for, or what you wanted for the property, but that tenant might be wonderful. And they might be there for years to come, especially if your properties tend to be like mine where they’re really nice.

You give a good tenant a really nice home at a slightly below market rent, and that tenant is likely not only to be there for a long time, but to have pride in that home, and to take care of it. And you can always increase the rent at each renewal. Me, personally, I like to keep my rents a little bit below the market rate, anyway. I don’t mind lowering the price a slight amount if it’s going to get me more attention, and then it’s going to eventually get me a tenant who’s likely to be in that property for 3,4,5 years or more.

Tenant Turn:

Vacancy kills your rental cashflow not just because of the period of time that the property sits empty, generating no income. That’s one thing. But even worse than that, I've seen estimates that the typical tenant turn is about $3000, to get a property ready to be re-rented again to a new tenant, because in many cases, you might have to put in new flooring, you may have to paint. Right there, that could easily be $6000 just for those two things.

Imagine if you have to do even more. And imagine if you have tenants that leave every year, and you have to go through that expense every year in addition to a month or two of vacancy, $3000 or more, to get the property ready for the next tenant. I mean, you have a property that rents for, let’s say, $1500/mo, and you suffer a month or two of vacancy, then you have another $3000, or more, to get it ready for re-rental. You could easily be $6000-9000 in the whole for one period of vacancy for a month or two, and the expenses related to getting the property ready to be rented again. Avoid that. Avoid that by, first of all, keeping your existing tenants for as long as possible, but also making it so that when one tenant is on the way out, the next tenant is on the way in right behind them with days, not weeks, not months, in between.

Now, in a perfect world, the old tenant will be moving out on, let’s say, Friday, May 31st, and the new tenant is going to be coming in right behind them the next day on Saturday, June 1st. No time in between, and you didn't even miss a day’s worth of rent.

But realistically, you need to account for some number of days in between tenants just to handle your repairs and maintenance and cleaning. There’s a process to that as well. For instance, I have a property that will be going vacant on June 2nd. The tenant is paying for two extra days in June, because of the fact that that’s a weekend, and they wanted those extra couple of days to get everything moved out and cleaned up without being pressured to do it during a weekday.

So, that’s fine. The tenants that are coming in their place, I scheduled for them to start their lease on the 7th of June, that following Friday. So, I have the Monday through Thursday, basically, to do what I need to do. I have those four days to get my handy man in there, and any other vendors that I need to do work for me, to get them in there and get it ready for the next tenant.

Now, I assume that there’s going to be some paint touch up that’s necessary. I would be surprised if it is anything beyond that that needs to be done. I'm pretty confident that I'll be able to get this property turned around and ready for the next tenant with literally one day for my team to go in there, and do the needful to get it ready for the next tenant. If my tenant coming in wanted to start on Tuesday, the 4th, I'd bet you we could accommodate that, and do our work on the 3rd, that Monday.

Types of Tenants:

The reason I have that confidence is because of how I run my rental business. I don’t sign a lease with the tenant and then disappear, and only interact with them when they report some maintenance problem, or when they’re behind on their rent.

I have regularly scheduled inspections, where every quarter, every three months, I'm going to come in that property, and I'm going to inspect not just that all of the mechanicals are working properly, but I'm literally being completely upfront with them that I'm coming in, in part, to inspect how well they are taking care of the home. With the major part of that being cleanliness. Is the home clean, or is it filled with piles of junk and clothes that haven’t been washed in weeks? Because those are the types of things… food everywhere, that breed pests. I don’t want pests in my properties, and I don’t want properties that are not being properly maintained.

So, I let them know that I'm coming into the property every three months, and if there’s anything that is determined to be below our standards for how a property needs to be maintained, that’s a violation of the lease, and I'll give you the opportunity to cure it. But if it continues beyond that first time, I literally would evict someone over that. And I'm so adamant about these things, even from the very first contact of a potential tenant, I haven’t had the problem yet, because people know that I'm serious about it.

I make it so obvious that there have been tenants that, literally, decided that they did not want to rent from me after getting the e-mail that goes out as an autoreply to any inquiries that come in. You inquire about one of my properties, you get an autoreply, and that autoreply will tell you all about the property, and it will have a link to where you can apply and have pictures, and everything of that nature. But it also has a highlight of our more critical policies and procedures. And it goes over our rental criteria that we are going to use to determine if you qualify to rent the home, and also the policies and procedures that you would have to adhere to.

And it talks about no smoking, and how we handle late rent payments and no one else living in the home other than the people that are on the lease. All of the different things related to the inspection policies and all of that, it’s all in that e-mail that they get right from the start. It’s meant to be scary. It’s meant to be off-putting, so that those people who would have given me a problem, they go away magically after reading that e-mail.

And so, I've had people say ‘no thanks’, because apparently you evict because you breathe too hard. Okay, well, good! That person was going to cause me a problem, anyway. So, I'm glad they read it and took that from the e-mail. That was the intent.

The people who get past that e-mail are the ones who likely would not have been a problem for me anyway, and they don’t care that I'm going to come in and do quarterly inspections. They know that they take care of their home, and they have no intention of violating any of the lease policies. They don’t care how I handle late rent, because they knew they weren’t going to pay their rent late anyway. They don’t care about how I handle people living in the home who aren’t on the lease, because they weren’t going to be moving in any cousins, nieces or nephews in the first place. They don’t care about my smoking policy because they don’t smoke, and they wouldn’t have someone in their house smoking.

So, these are the types of tenants that I look for, and because of this, when one of those great tenants does unfortunately decide to leave, I know that the house is in good condition, because I was just in it a month or two ago, or maybe it was right up at that three month period, where I was going to be coming back in to do another inspection, anyway. But I know that three months ago, it was in great condition. Unless they completely trash the house during the move-out, I already know that it’s in a pretty good state, and it shouldn't require all of that much in order to get it ready for the next tenant. And therefore, I only need a day or two.

And if it’s the case where this tenant has been in the property for something like five years, or so, and it’s time to put in a new carpet, or it might be time for a complete paint job, well, I'm going to account for that. And first of all, weeks in advance, I'm going to already have that schedule to happen on that day after the prior tenant vacates, they’re coming in to handle it. And I would give myself enough time to get everything done that’s necessary. But I already have this all planned, so it’s just like the quote at the beginning… you plan to bring that future date into the present so that you can take action on it now.

It’s all about knowing what your circumstances are, and planning for them, so that you can get this property turned around in the quickest amount of time possible. And hopefully, you had a tenant who had been in there for years, and hopefully you have another tenant coming back in that’s also going to be there for years.

And I will do an episode about my pre-screening process, and the e-mails that go out, and how I make tenants communicate in the way that I require them to communicate, how I purposely make them jump through certain hoops just to see if they can follow directions.

And it goes into things as simple as… If someone wants to see a rental the following day, I'll go ahead and tend to schedule that appointment, so I know about when they’re wanting to do it. But I'll also tell them that, okay, your showing is tomorrow at 11 am. You need to call me at 10 am to confirm that you’re going to be there. If you don’t call at 10 am, I will not be there at 11, and you would be surprised how many people don’t call. And sometimes how many people actually show up for the 11 o’ clock appointment, but didn't call at 10, like instructed. That’s fine. I won’t be renting to that person, anyway, because I know now that they can't follow directions.

But when you get the person who can follow directions, and does go through all of your pre-screening criteria without a hiccup, and isn't turned off by the e-mail that you send, telling them all the different ways they’re going to get evicted if they break any of these rules, that person, they’re not going to be a problem for you. And I can tell you also, that they will respect the way you run your business, and that you are a professional. It will be a joy to them to be a tenant, and they will be a tenant of yours for years to come.

The Tenant is Your Customer:

So, you will lessen the likelihood of a tenant turnover, but you always have to remember that once someone does become your tenant, that they are your customer. Yes, you’re running a business. Yes, you have to do certain things a certain way, and you have to make sure that everybody is adhering to the rules and regulations of your business, but never forget that your tenant is your customer. Treating them as though they are a valued part of your company, will also make them want to stay longer.

It is not uncommon for me to send a gift card around the holidays, or to give a person a bottle of wine or something that they’re going to enjoy like that, because you want them to know that they are a valued member of your company.

Blue Chariot Properties values its customers which are its tenants. And if we do that, and do it well, they stay around for a long time, and so you don’t want to do anything that’s going to make it more likely that your existing tenant is going to leave, but you also want to have systems in place that when they do leave, you can have another tenant right around the corner, days, not weeks, not months, ready to move into that property and start that cycle all over again with your next tenant.

All of my properties are occupied. I have no vacancy, and I have not suffered a complete month of vacancy in any of my properties with one exception. And the one exception was me breaking my own rules, and that was I allowed a month-to-month tenancy to occur without certainty as to when it was going to end, and right up till the day that it ended, I didn't know if the tenant was going to be renewing, or if there tenant was going to be vacating. And they went back and forth on it several times, but I didn't enforce the fact that I need an answer thirty days before the decision. I let it be up in the air right until the last moment, trying to be nice, and I ended up with a month of vacancy as a result. That property was rented at $1200/mo, so I literally lost $1200, because I violated my rules one time. Don’t worry, it won’t happen again.

Book Recommendations:

Okay, enough of that. I could go on and on talking about things you should do, and in some cases, what you should not do to minimize the likelihood of suffering a month of vacancy. But I think you got the idea. I wanted to mention something else. Last week’s episode was about books. And so, we released https://www.andlandlord.com/books/, a page on the website that features all of the books that I recommend a real-estate investor, and in some cases, just a business person, should read. I have not had a chance to personalize each of the entries on that page, to let you know what this book specifically did for me. I'll get to that for each book as I have the opportunity to do so.

They all played a critical role in where I am today. Every one of the books on that page did something meaningful to improve what I was doing as a business person, to improve what I was doing in real-estate, or to even teach me what I should be doing in real-estate. So, for different reasons, all of those books have a very valid purpose as to why I put them there, but I'll go into detail on each of the pages as to exactly what the book did for me.

One that I just finished writing is about The 4-Hour Workweek. So, go to https://www.andlandlord.com/books/, find the 4-Hour Workweek on that page, and select that one. It has a little write-up of what that book was for me.

Another one that I finished is Secrets of the Millionaire Mind. So, go to https://www.andlandlord.com/books/, find Secrets of the Millionaire Mind, on that page, and then click through. You'll see the details that I wrote about how that book affected me.

I mention in there that the book can be a little hokey at times, but it’s an amazing book about the mind, about programming, about your mental programming, about your mental blueprint; why you do the things you do, and how the different negative ideas about wealth and money, like ‘money doesn't grow on trees’, and ‘money is the root of all evil’, and’ I can't afford it’. All of those different things that get programmed into our minds from childhood on, how they affect us and our money and our wealth outlook, all throughout our life, and as I was reading that book, I encountered several references that spoke to me directly. I was jaw-dropped reading some of the things that it had to say about programming of the mind and mental blueprint as it relates to money and wealth. I loved the book even though it’s a little hokey at times. I highly suggest that you read it.

Go to https://www.andlandlord.com/books/, and find Secrets of the Millionaire Mind, find the 4-Hour Workweek. Those are the books that I've most recently highlighted as to what they did for me, and I think the 4-Hour Workweek, is a perfect example of exactly what I've been doing for the last twenty years. I've been self-employed since 2002, and it’s because of the types of things that the 4-Hour Workweek book tells you to do, that thankfully I stumbled across before I even read that book. It works, and it is what has allowed me to be self-employed for all these years. So, check it out, anyway at https://www.andlandlord.com/books.

Conlusion:

Now, I’ll get out of here now. I think this is the first time I've crossed the thirty minute threshold on an episode. I didn’t think that would happen until I actually started having guests, but I had a little bit more to say on this topic, and maybe I was a little too long-winded, I don’t know. Give me your feedback. Let me know how I'm doing, and I can't improve unless I have the feedback to know what I'm doing right, what I'm doing wrong. If there’s a topic you would like me to do a show on, whether it would be me, solo, or I bring on a guest to share their expertise, I'm open to suggestions. I'm doing the show not just for myself, but also for you. So, I want you to let me know what you want to hear, what you want to learn. And for those who have been listening, I sincerely appreciate it. And if you do have any desire for the books that are at https://www.andlandlord.com/books/, it is helpful to me if you buy them from that page. I'd thank you for doing so, and I'll see you next week.

Do you read books? If so, are they Fiction books; or do you read Business, Finance and Mindset books? You see I went for a very long time without reading any books. I was a Web Programmer, so I would often read books on Programming PHP, Perl, ColdFusion, JavaScript and other scripting languages. But once I had found what I needed to know to solve whatever coding challenge I was facing at the moment – I put the book down and did not touch it again until some other challenge arouse. I used them more as reference manuals than anything else.

So one year I was away at a business conference, sharing a room with a colleague and he was listening to a Mindset book, which I referred to as a “Self-Help” book – as I asked him “why are you listening to that!?” – Somehow I had developed a negative outlook on such books. I pretty much considered it beneath me to read or listen to such non-sense. I’ve since apologized to him for my comments, as now I try to read a different book on Mindset, Business or Finance – at least monthly. I absolutely LOVE these books, and they’ve helped me greatly to excel in Business but also to improve as a Person in general.

I had learned, as the quote says…

“Reading is essential for those who seek to rise above the ordinary.” – Jim Rohn

Or how about this…

“The more that you read, the more things you’ll know. The more that you learn, the more places you’ll go.” – Dr. Seuss

Welcome to Episode #7 – Books Every Real Estate Investor Should Read.

I absolutely love quotes, so here’s another for you… “If we encounter a man of rare intellect, we should ask him what books he reads.” – Ralph Waldo Emerson

Now not to suggest that I’m a man of rare intellect, but hey – If I don’t think highly of myself – who the hell will? So I remain my biggest fan!

In this episode, I’ll relate some of the books that I’ve read and feel worth you reading as well – as they benefited me greatly, so maybe the same will be true for you also.

To this end, a new page is now live on the [… and Landlord] Podcast Website at: andLandlord.com/books -and here I’ll post details about each book that I mention on the Podcast, along with a link to where you can order the book or get it on Audible.

So in Episode #2 – I mentioned the book Rich Dad Poor Dad by Robert Kiyosaki. This book is cited possible more than any other by Real Estate Investors as the book that got them interest in and into the business of Real Estate Investing. Not that its the best book ever written on the subject of Real Estate Investing… I wouldn’t even say that it is a book about Real Estate Investing necessarily. However, it sets your mind on a different track when it comes to Money, Business and Investing – and it uses Real Estate as an example of the type of thing one SHOULD invest their money in… Because its an asset that produces an income (rent from tenants), tends to appreciate in value and is highly tax favored by the government – among many other reasons.

And then in both Episodes #4 & #5 – I mentioned the second book by Robert Kiyosaki – The Cashflow Quadrant. This is my personal favorite in the Rich Dad series; however, I believe there are a few (including his latest) that I’ve yet to read. I like this book because it talks about the different ways we all get our money, divided into 4 “Cashflow Quadrants”. I’ll not go into that again here in this Episode, but listen to Episode #5 especially, for full details. But in short, this book helped to open my eyes as to the differences in being an employee, small business owner or self-employed (on the left side of the Cashflow Quadrant); versus getting income from a business and investments (on the right side). Its a great read to get you thinking along the lines of diversifying your income and creating a situation where money and systems are working for you, instead of you working for money.

The [… and Landlord] Podcast Books page at: andLandlord.com/books – will grow over time to contain many book recommendations. However, today I’d like to speak about two in particular, that you can find now on this page along with Rich Dad Poor Dad and The Cashflow Quadrant both by Robert Kiyosaki. They are “The 4-Hour Workweek” by Tim Ferriss; and “The Richest Man in Babylon” by George S. Clason.

The 4-Hour Workweek is a book about getting out of the 9 to 5 job trap… How to get out of the cubical and stop working for money to create a situation where you’re leveraging businesses, people and money – to work for YOU. It is exactly the sort of book you should read after Rich Dad Poor Dad and The Cashflow Quadrant, as these two put you in the mindset of making major changes in your financial life – but they are short on actionable advise. What to do… How to do it? Whereas The 4-Hour Workweek is packed with actionable advise that can allow you to create a plan of action, and to start making actual changes in your financial life – by changing the way you make your money.

Go to andLandlord.com/books and click through to the page on The 4-Hour Workweek. There you’ll find my comments on what this book did for me. Unfortunately, I found it a bit late along my path, but it still had a major impact on my course of actions as I worked to remove myself from being involved in almost everything that happened in my businesses. After-all, you can’t create a 4-Hour Workweek for yourself when everything depends on you.

And then The Richest Man In Babylon is a book that is nearly 100 years old; and even more so, it features stories (or parables) set in ancient Babylon, over 8,000 years ago! Why should you bother to read such an old book containing apparently even older stories? Because the stories teach a financial lesson that is just as valid today as they were 100 years ago or even 8,000 years ago for that matter.

Among other lessons, The Richest Man in Babylon teaches “The Seven Cures for a Lean Purse” and “The Five Laws of Gold”. Now you’ll have to get beyond references to things like “purse” and “gold” and just hear and think “wealth” and “money”. You’ll also have to get past all the thee’s and thou’s and other aspects of Biblical speak – but it only helps to take you back in time so the stories really take hold.

These stories will stick with you – for the good. I still think about the “4th Cure for an Empty Purse”, “Guard thy treasures from loss” – whenever I’m about to make a new investment property purchase, go into another area of business or start a new business partnership. I don’t want to be one of those people who amasses millions of dollars only to lose it all in a bad investment or two. This book will not only help to protect you from that sort of outcome, but it will help to build your wealth to begin with.

So remember to checkout the Website at: andLandlord.com/books – which now has these 4 books listed, and we’ll be adding more as they are mentioned on each future episode of the Podcast. And while this episode was all about books, in future episodes we’ll just mention related books and post them to this page or we might do short book segment within the Podcast.

And I don’t want to leave you in complete suspense as to what the full list of books is going to be, so I’ll just mention a few more of them now. In no particular order, some of the additional books will be…

Secrets of the Millionaire Mind

The E-Myth Real Estate Investor

The E-Myth Revisited

Think and Grow Rich

Rich Dad’s Who Took My Money?

The ONE Thing

The Book on Investing In Real Estate with No (and Low) Money Down

The Book on Managing Rental Properties

The Millionaire Real Estate Investor

Extreme Ownership

Never Split the Difference

Pitch Anything

Pre-Suasion

Psyched Up

Influence

And the classic…

How to Win Friends & Influence People

Now as I go through additional Podcast episodes, each of these books will be mentioned as it relates to the topic at hand, or some experience I had. Or something that I think would be beneficial to you in your journey to becoming a Landlord, or to becoming the best Landlord you can be. Real Estate Investing and being a Landlord entails many different aspects of Mindset, Business and Finance. So all of these books play a role.

You’d be surprised how a book on time management, or efficiency, can make your landlord business so much more streamlined and efficient, helping you to put in policies, procedures and systems that take burden off of you, placing it elsewhere, and freeing your time, while still doing an excellent job for your customers, which are the tenants, so that you can grow your portfolio without creating stress, bringing more people onto your team, working with more vendors, more contractors. And as you bring these people in, and your company grows, and you have more employees, it’s only going to make everything run just that much more smoothly if you’ve read a book like How to Win Friends & Influence People or Extreme Ownership. And you know that if your company isn’t working like you want it to, it’s not your employee’s fault. It’s your fault, because either you haven’t communicated to them properly, or you haven’t trained them properly, or you hired the wrong person. A book like Extreme Ownership will help you internalize those things, so that you can get the best out of yourself, so that you can, in turn, get the best out of everyone around you.

These books have an enormous impact on all aspects of your business, of your life, of your finances. As i read them myself, I’ll make them available to you, letting you know what I got from them, what it did for me. And so, I created this page at https://www.andLandlord.com/books, to be that destination where you can go to see what I’m reading, and what you might want to read and why. Now, in full disclosure, if you order a book from that page, I do get a small affiliate commission from Amazon. It’s nothing much, but every little bit helps lessen the expense of producing this podcast.

So, if you listen to the podcast, and you’re going to get the books anyway, I would certainly appreciate it if you get them from https://www.andLandlord.com/books.

So let’s end this episode on Books Every Real Estate Investor Should Read with some final quotes…

“If you are going to get anywhere in life you have to read a lot of books.” – Roald Dahl

And…

“Once you have read a book you care about, some part of it is always with you.” – Louis L’Amour

In 2019, maybe more than ever before - you need to be able to evaluate properties, market for deals, negotiate with sellers, and have reliable funding in place to close. As I've mentioned before, I started my Real Estate Investing career in 2015, which admittedly was a better time to have started than 2019.  In fact, I'd say I was about 5 years late. Had I started in 2010, its possible I'd have 10 times the number of properties as I do now. But like the Chinese Proverb says...

"The best time to plant a tree was 20 years ago. The second best time is now."

Welcome to Episode #6 - Evaluate, Market, Negotiate & Fund - What It Takes To Succeed As A Real Estate Investor In 2019...

Having started my Real Estate Investing career in 2015 instead of 2010, I'll try not to lament only catching the tale end of what may prove to be the greatest opportunity to acquire deeply discounted properties in mass that may occur within my lifetime. Likewise, YOU should not use the current market condition as an excuse NOT to get started or to grow in YOUR Real Estate Investing business in 2019.

Sure, 10 or 20 years ago would have been a better time to start, but would you say that someone just turning 18 now (so they were only 8 years old 10 years ago) has missed the Real Estate train due to their "bad timing of birth?" - and so they should not even bother with Real Estate Investing now? Of course not!

Regardless of the decade or year; irregardless of the current market condition - (and what is the difference between "regardless" and "irregardless" anyway? Nevermind...) - THERE ARE ALWAYS OPPORTUNITIES in Real Estate! You just need to know how to recognize them, how to take them down, and how to perform to profit.

This requires certain skills - but the good news is that it can all be learned... So how do you go about finding and acquiring rental property deals in a market like what we have today - where everything appears to be overpriced (at least from a positive cash-flow prospective)? At the start I said... In 2019, maybe more than ever - you need to be able to evaluate properties, market for deals, negotiate with sellers, and have funding in place to close.

So let's start with evaluating properties...
Among other things, I've spent the last 4 years learning how to evaluate properties. Remember that one of the key indicators of a potentially good rental property deal is where the likely monthly rent is > 1% of the purchase price + any rehab needed and other expenses. So if you are buying it for $80,000 and it needs $15,000 of rehab to be rental ready, with maybe another $5,000 for closing, holding and other costs, totaling $100,000 all-in; then you'd want to be able to rent that property for $1,000 or more per month. That's called the 1% Rule and it's a strong indicator of a likely great deal - or at least certainly worth your further consideration.

Now from 2010 to 2015 and a few years thereafter, you could almost throw a rock and hit a 1% deal in most markets - they were all over the MLS. It was not even uncommon to find 2% deals, and I've heard of some people bragging of 3% deals or better that were just been sitting on the MLS for months. My personal best is just a little over 1.5%, but my properties also tend to appraise (post-rehab) far above what I had in them, thus allowing me to pull out most (if not all) of my cash upon refi; and in many cases also pull out a nice profit for myself; having equity remaining in the property; and also still maintaining positive monthly cash-flow.

What this means for you is that while the 1% Rule is a great rule-of-thumb consideration, it does not represent the sole-method of profiting from rental property. There are certainly times when it makes perfect sense to buy a property that is < 1% on the rent to cost consideration. The lowest I've gone is just above 0.6% - but I also have no cash remaining in that property (thus an infinite return); pulled out additional cash as profit at refi (free money, tax free); have a ton of equity remaining in the property (I refinanced at 65% LTV); got great tax benefits (due to the expensive rehab finishing the attic into a second 2BR unit); and it sits in an ideal location with progress all around (so massive appreciation potential). I also got the vacant lot next door where we start construction next month on a home with $300,000 comps all around. With all those benefits, do I really care that it failed to meet the 1% Rule? So don't treat the 1% rule as if it were written on stone tablets coming down from a mountaintop held by an old man with a white beard.

If you want to find good deals in 2019 you'll need more than a strict adherence to the 1% Rule. And in that regard, if you're new to Real Estate Investing, you may even be at an advantage over those who started earlier like myself, as my business partner has to remind me all the time (when we're evaluating deals) that it's not 2015 anymore. For example, its hard for me to even think about paying over $100,000 for a 2BR Townhouse, when from 2015 to 2017, I was buying them for $60,000 - and now they're going for twice that and even more. I have to be reminded to take off my 2015 glasses and see things for how they are TODAY. I've missed out on a lot of properties for this reason, as others are able or just willing to pay more than I am.

You see, everyone has different circumstances... I've recently lost deals to persons who paid what I consider to be ridiculous prices for properties that cannot possibly yield positive cash-flow at what they paid. However, maybe they're in a 1031 Exchange, and the alternative to paying too much for the property is getting hit with a massive tax bill. Better to over-pay for a property than to give the same money away to the government and have NOTHING to show for it. Or maybe they are paying all cash; whereas I must account for the cost of financing. Or maybe they are going to live in the property for a year or more, so they are getting much better financing and low to no down-payment; whereas I must put down 20% and my interest rate may be a point or two higher. Maybe they are going to do most of the work themselves and thereby building sweat equity in the property. Or maybe they are just going to knock the current building down (I'm seeing a lot of that in Durham) and build something new that changes the value proposition entirely. So what one person can pay for a property and have it still be a good investment may be entirely different (more or less) than what you or I can pay for the same property due to differences in our circumstances.

So you'll need to understand all the various means by which you can profit from a given rental property to know if you should buy it despite not having the best rent to cost consideration. Can you add square footage (up or out) to increase the value at refi and resulting cash out? Can you steal space from elsewhere in the house to create an additional bedroom of reasonable size to boost the value and rental rate? Is the property at a location that is almost certain to appreciate - highly distressed but ideally located, maybe in an improving downtown area? Can it be torn down for the land to then build something more valuable for the location? Now some of this gets into more speculation than I'm willing to indulge for myself (I'm an investor, not a speculator), but you may be more risk tolerant than me.

These are all different considerations when evaluating what a property may be worth paying for, as you have to be able to justify paying the prices that properties are going for in 2019... How are you going to make any money!? And will you regret what you paid or even be upside down come the next downturn in the economy? Or will it even matter at all if you still have positive cash-flow?

Now this all assumes that if you are going to be rehabbing the existing property into a rental, that you know reasonably well what the approximate cost of that rehab will be; what the finished property will appraise for at refi; what it will rent for on a monthly basis; and what other expenses will average, such as: Taxes (which may go up based upon what you paid at the next assessment); Insurance; HOA (if any); Vacancy; Repairs & Maintenance; Capital Expenditures; Property Management; Interest Rates; Points; Fees; Closing Costs; etc... You'll need to have all of this down cold when running your numbers. I'll go more into detail on these in another episode when I dive into how I evaluate properties for the BRRRR method that I use - which stands for: Buy, Rehab, Rent, Refinance, Repeat - which I believe was coined by Brandon Turner of Bigger Pockets. And I think they have a book coming out soon specific to the BRRRR method of Real Estate Investing.

Now let's talk about marketing...
Once you know how to evaluate a property for all that its worth (or could be) - you have to learn how to find them... And in full disclosure, I'm still working on that myself. Hey, we'll improve on this together. There are countless ways to market for deals. I've never been one for bandit signs, but you see them blighting just about every street corner anywhere you go... I BUY HOUSES! Well hell, so do I, but I HATE those signs. However, they must work to some extent or people would stop spending money on them. Just say no... I've spent too much money building my "Blue Chariot" brand, to advertise it (directly or indirectly) with cheap signs illegally placed at street corners. I looked into billboards a couple years back, but it was much more than I could justify at that time. I've also looked into advertising on radio and TV, but the timing just wasn't right.

I do direct mail and door hangers, which have gotten me a few properties. And I can't NOT do the online methods of SEO / SEM and PPC, when I own a Website business, so I'm into that with varying levels of success. I really should put more effort into that, as I should logically have top ranking for "Durham I/We Buy Houses" (and related keywords)... I'll have to get to work on that.

I like calling landlords, for rent signs and CraigsList rental listings to see if they'd like to sell, but that's time consuming so I'll need to setup a VA to handle this on my behalf. Lists for divorce, probate, pre-foreclosure, tax liens, evictions, code violations, etc... They all work to an extent. Really, almost everything works if executed properly and consistently. But some of it (like direct mail) takes more money than others. You can easily spend hundreds, even thousands per month on direct mail. I'll do an episode specific to marketing for deals; however, I'd like to invite a successful wholesaler on as guest to speak to their methods.

Speaking of which... How do you think wholesalers are getting deals? If you are in contact with wholesalers and they are sending you properties for consideration, you should consider each one a personal defeat, that you let someone in your market who is not even going to buy the house themselves get it under contract! Then they are going to sell that contract to you, when if you were on your game, you would have found and worked with that seller directly and likely gotten a much better deal for yourself in the process - or at least that is how I feel whenever I get a property lead from a wholesaler. But there's certainly a logic to letting others do what they do best and paying them well for a valuable service of bringing you consistent deal flow. Hey, as long as they are bringing value, go with what works. That may prevent you from needing to become an expert marketer yourself and may even remove some of the need to be a great negotiator.

So let's talk about negotiating with sellers...
As I said before, I've spent the last 4 years evaluating deals (buying a good number of them), but the books I'm reading now are often on the topic of negotiation, as it does me little good to be able to evaluate a deal if the ones from the MLS all suck. Having gotten most of my deals from the MLS in prior years, I now realize that to continue my business growth in the current market, I must now go out and make my own deals - BEFORE they hit the MLS or come to me from a wholesaler. But even in that statement, I still feel everything works with the right strategy and proper consistent execution, including the MLS and working with wholesalers - negotiation comes into play in all cases.

So now I'm reading books like: Never Split the Difference (Negotiating as if Your Life Depended on It) by Chris Voss; Pitch Anything (An Innovative Method for Presenting, Persuading, and Winning the Deal) by Oren Klaff; Pre-Suasion (Channeling Attention for Change) & Influence (The Psychology of Persuasion) (two books) by Robert B. Cialdini; and the classic, How to Win Friends & Influence People by Dale Carnegie. These and other such books provide an insight into the human mind, behavior and how to do and say things in a way as to get what YOU want out of most situations in life. These techniques are not always easy to apply, but with practice and genuineness to create win/win situations - they can become a normal part of your personality.

Amazing things will happen for your Real Estate business when you can convenience sellers to give you financing or to sell to you on terms like a lease-option, and do so in a manner that does no harm to (and actually benefits) the seller. To date I've done 3 lease-option deals where everyone benefited greatly, and those sellers now offer testimonials and references as to my ethics in business and personal character - which will just make the next such deal even easier, when I can put that person on the phone with 3 others who've done similar deals with me in the past.

I'll speak more on these and other books and my work to become a better negotiator. One such book is Psyched Up (How the Science of Mental Preparation Can Help You Succeed) by Daniel McGinn, which relates especially well to me, as I've always had a fear of public speaking and presentations. When I went into the house to speak with the first sellers who did a lease-option deal with me, I had to devote a considerable portion of my thoughts and efforts to just not shaking as I explained how it all worked - as I was just that nervous. But by the third lease-option deal I was fine, which built confidence for my first presentation to a Private Lender.

So now let's talk about the money...
Most people think you're not going to buy anything if you don't have any money - and so they rule-out Real Estate Investing as something they can pursue, as they think instinctively that to buy a $100,000 house, naturally you need to have $100,000. But this same person would not think twice about going to a car lot and buying a $10,000 or $20,000 car with no money down... Something about that extra zero creates a disconnect for most people that they cannot easily breach. And even when the extra zero isn't there, such as for a $60,000 house, in 2019 they are harder to find and/or just may not be in an ideal location; or needs so much rehab work that you're right back in that 6 figure zone with the extra zero coming into play again.

So let me start by saying that if you can barely pay your existing bills; do not own your own home; have no money in the bank, no savings (no retirement, no insurance); and your combined score from a few frames of bowling is higher than your credit score - you may not be ready for Real Estate Investing (just yet). In that case I suggest you start listening to Dave Ramsey or Susie Orman and get your financial life in order. They provide great advice for that. Because while you may not need a lot of money to be a Real Estate Investor, it helps to have some - and it is even more important to be able to show at least some recent history of managing well what money you do have.

Unless you have some special circumstance, you're likely to need about $5,000 to maybe $30,000 of available funds for down-payment, fees, closing costs and reserves. This can be cash in the bank (ideal), or a Home Equity Line of Credit (HELOC), a loan from a retirement account (IRA / 401K), etc... And your credit score will likely need to be somewhere in the 700 range for the best rates, but some lenders will go lower. You'll also likely need to be some distance in time away from your last late payment, judgement, lien or bankruptcy. But this all relates to your first purchase or maybe your first few using conventional funding, such as from a bank.

You can lessen or eliminate most (if not all) of these requirements, by using 100% OPM - Other People's Money. In the beginning, OPM will likely come only from family and friends - as their love for you may overcome the reluctance to fund what is your first time Real Estate endeavor. But you may also find a seller willing to offer some period of 100% seller financing or a lease-option - it happens, and you won't know if you don't search (market for deals) and ask (negotiate).

But the real fun is once you've established yourself as a knowledgeable and trustworthy Real Estate Investor - because then OPM will come from those who were strangers just days, weeks or months before. It is also when sellers are most likely to be willing to sell to you on terms, which might include 100% seller financing. Further, it is when Hard Money Lenders (aka Professional Private Lenders) will bend over backwards to give you the best terms on money for your deals.

Once you have a few Private Lenders and a Hard Money Lender or two on your team, along with a few conventional lenders, each day that you wake in this business feels different, as your biggest problem is no longer finding money for deals - it is finding the deals in the first place. And then the dilemma shifts from concern about finding money to buy properties to finding enough properties that meet your criteria to keep your Private Lender's funds in-use.

You don't want to have funds committed to you by a lender and not be able to find suitable properties to leverage those funds continually. You'll also have Hard Money Lenders calling and emailing you each week to ask if you've found another property yet. So this becomes the primary reason for needing a highly effective marketing machine and then being able to negotiate win/win deals with those potential sellers. I'll have a future episode about finding and working with Private and Hard Money Lenders - and there's a great book on the topic called "Raising Private Capital (Building Your Real Estate Empire Using Other People's Money)" by Matt Faircoth of Bigger Pockets.

So how do you become and grow as a Real Estate Investor in 2019?
YES, its much harder than it was from 2010 to 2018... You'll need to be able to evaluate deals properly, quickly and from a number of perspectives. You'll need to be a proficient marketer to find properties (off market deals) to evaluate and buy. And once your marketing efforts are bringing you a steady stream of deals to evaluate, you'll need to be able to negotiate effectively with those sellers to take the deals down at a price that creates a win/win for YOU and the seller. And regardless (or maybe is it "irregardless") of all that, you won't be able to buy anything if you do not have your finances and business in order such that banks and individuals are willing to lend to you at rates and terms that make the numbers work.

Your lenders are a part of your team, and on many deals it may seem as if the lender is benefiting more than you are - which is why I seek to become a lender myself. But without the lender there is no deal to be had, as even the richest person does not have enough money to buy every property that comes their way. EVERY REAL ESTATE INVESTOR USES OPM... But outside of family and friends (and often times even then) it requires you to position yourself as a Real Estate Investor who is knowledgeable and trustworthy - as no one has any money they will be OK with losing. People work hard for their money, so it is an immense responsibility when using OPM to fund your deals.

Well, that's it for now... I'll talk more about all these things, but let's bring this episode to a close, as it is already the longest so far. Get into the Real Estate Investing business and if you are already, then grow your business in 2019. And if you have no desire to learn how to evaluate properties, and market for deals, and negotiate with sellers - then maybe you should be the bank for others if you are in a position to do so. Being a Private Lender can be very rewarding. I'll talk more about accredited versus non-accredited investors and ways of adding Private Lenders to your team in a future episodes, but reach out to us at BlueChariot.com/invest - if you'd liked to learn more about being a Private Lender on a coming project by Blue Chariot Properties.