Why do we work as landlords guarding and caring for our properties?

Why do we put up with all the problems such as getting rid of bad tenants, keeping deadbeats out, complaining tenants and floods?

Why do we keep on persevering  even in spite of having a bad year like 2010?

Recently, I read the fascinating bestseller Bernie Madoff book, Too Good To Be True by Erin Arvedlund.

I mention it because it is an excellent  step by step guide on how to lose your fortune.

But I'll summarize.   Some very smart wealthy people broke the first rule of investing.  They handed their golden eggs and geese over to a fox thief.

So what does that have to do with our real estate investing?

We are hands on investors.  We watch our nests very carefully.  Spending money is painful for us and we understand you have to make your properties better so you put the money in them.  But we are ever vigilant and we certainly do our due diligence on anything and everything that involves our hard earned reserves.

I guess I grow tired of people making fun of us.  Someone did make fun of me yesterday, or at least I perceived it as such.  I was working on one of our properties and the person questioned me as to why I found myself doing such work.

Well, let me explain. 

I want to oversee it and make sure things are done properly.  We had a problem that needed to be solved.  We got in there and yep, we had dirty hands before the afternoon was over.

 But it was also kind of a good feeling.  We took care of the problem and that property will run more smoothly from now on. And  it is a money maker.

For now, our real estate investments and money are safe.  That means our retirement is also safe, unless the government taxes us more severely.  But we're not crying like many people in the Madoff book who let that sly fox attack their hen houses and devour all those golden eggs. 

Here's my take away.

Those folks forgot something very important.  They forgot to ask questions.  One stated he didn't want to ask very many questions because he was getting such a high return on his money.

What?

You should stay on top of everything whether you're making money or not.   You just need to know and with real estate investing you often find out very quickly.

• Investor Mistakes: How To Avoid Making Common Mistakes Investing in Commercial Real Estate Part 3 Greetings from New Mexico! I have been having all kinds of problems with my blog feed so I apologize to everyone. I hope to have that squared away this weekend....Unless my IRS Stimulus payment shows up......Hmmm...where the heck is it? Check out this write up if you are curious at......
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Let's face it.  We're not the only ones who think it's boring.   

Here are two of  our favorite reviews.

Subprime Mortgage Fallout Expected To Continue For Years …

Here's a report that you have to have a strong stomach to be able to read: "Commercial Real Estate Losses and the Risk to Financial Stability," prepared by the Congressional Oversight Panel, which was created to oversee the expenditure …

Tough years ahead for commercial real estate – and community banks …

The title of the report says it all – “Commercial Real Estate Losses and the Threat to Financial Stability.” The problem is that there is over $1.4 trillion in loans coming due within the next four years. Over half of those loans are “ underwater. … And get this: “Community banks, unlike the largest Wall Street banks, face the greatest risk for insolvency due to mounting commercial real estate loan losses.” Some other quips from yesterday's news release: …

• Commercial Real Estate Investing - Quick Real Estate News Greetings! Some really interesting commercial real estate news and education (links provided below). If you research the market (commercial real estate market) carefully, you can watch a migration.... a movement. This is a very important transition that can be seen in most market cycles as asset prices plummet. With the......
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• Financial Risk Management. "Misfortune loves a shining mark.... Every owner of gold is tempted by opportunities whereby it would seem that he could make large sums by its investment in most plausible projects." -Arkad, the Richest Man in Babylon. Translation: Don’t take unnecessary financial risk or make foolish choices with your money.......

The short answer is "no," according to Justin.

The long answer is what  we've always said on this blog.  Yes, you can become wealthy and live off your properties in your retirement, etc. if you are willing to work hard and smart.   The problem for most people is they are not willing to do that.  They often get discouraged when they have to deal with tenants and they give up.

So what's new?

Not much, with this read.    My theory about that is there really isn't a whole lot that is new about real estate investing anyway.  You buy a property, fix it up, sell it for a profit, or keep it as a long term landlord.  Let's don't make it complicated.

Of course, the devil is in the details.  This book gets into some of the meat and potatoes of it and that's one reason why Justin refers to it as kind of a dry read.  Okay, most textbooks are.  You want excitement, watch one of those dumb info commercials about below average people  who suddenly make real estate fortunes over night.

What Justin does bring up in his review which I think is particularly interesting is the cash flow question.  Do you have a positive cash flow or not?  He also mentions that this book was written before the current housing boom crash so you need to understand the figures probably don't add up.

You can learn a lot from books like Real Estate Fortune.  Just don't get carried away with all the hype.

Read Justin's review of 2 Years to a Million in Real Estate.

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• Millionaire By Thirty: The Quickest Path to Early Financial Independence (review) I have to say that lately it feels like I've read everything there is for me to read as far as financial books go at this time. I'm not about to invest in real estate yet, so I don't need to read those books (it would be a bad distraction......

You get about 10 slides per property to look at and to claim it is not addicting would be giving you false facts.

Facts are, it's downright fun.

What's my most fav house of the day?
It has to be that 5000 sq ft manse located just below the infamous Hollywood sign.
I love the views. I also like most of the rooms, except for all the steps, and I don't like the master bedroom.

Check out House of the Day Slide Show

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He's also the star of yet another real estate reality shows. This one is called, what else, Real Estate Intervention.

But don't let the nice smile on the cute bald man fool you. He's into tough real estate love.

And that often gets him into trouble with some of his homesellers who are not totally dealing with realty reality.
That's because they still think their properties and houses are worth more than they actually are.

But it always comes down to one question that he always asks them.
"Do you want to sell or not?"

Simple, isn't it?

Here are some more of his sayings which are turning out to be priceless…(maybe I should reword that)

"If you don't price it right, it won't sell."
Duh?
And my most fav, " Real estate pricing is an art, not a science,"
Read more about Mike Aubrey

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• How to Become a Real Estate Investor Real estate is a great investment option. One could buy a house, work on it or rent it out, and watch their initial investment double. Real estate can be quite valuable, especially if people buy the right kinds of places. With careful thought given to property types and funding options,......

Stephen Crowley

Busted: Life Inside the Great Mortgage Meltdown  is an agonizing first hand account of journalist Edmond Andrews' fall into pre foreclosure. 

As he waits for the bank to react to the non-payment of his mortgage for the last few months, he has spent the time wisely writing this very good book.

He is quite honest and it is a very painful read.

Getting Inside the Head of a Distressed Homeowner

But if you want to get inside the head of a distressed homeowner to find out exactly how people like this think and tick, this is your book.

Still, there's a lot of soul searching and old time gospel meeting confession in here. 

"Going down front", as we call it at my church, has been replaced with writing a probable New York Times best seller.

A Bad Arm

So what does he confess from his soul about the  bad ARM on his Silver Spring, Maryland house?

"I have no one to blame but myself for my woes- but it is too easy to snarl in contempt at homeowners who got in over their heads in the housing bubble," he says.

I think he's right about that.  We need to be caring, but still there's a disconnect for me.

 You may be like me, but I still don't  really get how reasonably intelligent homeowners got in over their heads in upside down mortgages.  I don't see how so many of them fell for ARM's in the first place.

Andrews explains it like this… "the smart money enabling the dumb money to take huge risks."

Okay, maybe…

Read Journalist writes about his own mortgage mess

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I spent  most of yesterday afternoon buying appliances.  Thank goodness I don't have to do that everyday.

We needed four refrigerators, and two stoves to be delivered at two different locations.

I walked into a leading retailer, not Sears, after trying unsuccessfully at Lowes and another contractor kitchen company with an order that I thought would at least get their attention.

Nada.  The kitchen contractor company informed me a lot of big apartment houses are buying from him already and he really wasn't willing to give us any kind of discount. Sniff, sniff.

Lowes didn't seem to care one way or another.  I guess they don't work on commission.    

So we ended up at the leading retailer who will remain nameless, because I'm just too polite to call their name out in this blog.

There has been a great big price increase so that nonsense that inflation hasn't hit us yet is a bunch of baloney served upside down.

A typical apartment refrigerator is now around $469 or so on the average.

We did hit their "sale" if you can call it that, so we received $50 off each frig.

Then they tried to get us to take the 10 year warranty, which is exactly, you guessed it, $49.95.

"But it covers everything," the salesman said.  "Just think how much a new compressor will cost."

I don't need reminding, thank you very much.

But I refused a new Chinese brand they kept trying to push.

I don't know anything about the brand and I wasn't taking chances.  They had plastic shelves in the doors that looked about as substantial as copying  paper.   Our tenants would have torn those apart the first week.

But I guess the biggest problem always has been delivery.  Don't get me started…

I managed to knock another $50 off per delivery charge, which I felt pretty good about.  I just looked the man in the eyes dead on and told him I was very upset about what happened  last time.

"We had two sets of frigs and stoves delivered to two condos in the same complex, very close to each other, and you all charged us full delivery for both.  That's  times two. How do expect a good customer to react to that?"

"We almost didn't come back and buy these appliances because of it," I said.

This time I hit pay dirt.  He cared.

It's amazing what you can get if you'll just ask  for it.  That's my tip for today.

If you don't ask, you don't get.

Which goes to prove that "stimulus plan" better start kicking in soon.  These people are hurting enough to actually knock off that ridculous fee.

Which brings up the question how many other fees can we get knocked off  if we just start negotiating with everyone…

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Housing Helix with Jonathan Miller is a really good real estate podcast blog.

You get great interviews for free.

Jonathan Miller is a New York real estate appraiser who will tell it like it is which means he won't be dull.

He covers a lot of topics we need to know about such as toxic mortgages.

Tune in to his podcast with Curbed's Lockhard Steel

Go to Housing Helix

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The Wall Street Journal has an interesting feature called the Home of the Day Tour.

It's a slide show with some very unusual and unique homes across America.

"It's really cool," as the kids would probably say.

I am particularly curious about the "Hawaiian retreat" which is a 2.73 acre property near the Volcano National Park.  It's a bed and breakfast.

Interesting.

Might be one of your more exciting vacations…

Take the Wall Street Journal Unique Home Tour

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It really depends on the area where your units are located, but more landlords are banning cigarettes from their units.

There are a lot of reasons for this, of course.

A few years ago, I had to clean up one of my  units where the previous two tenants were heavy smokers, and it was a whale of a job.

There were nicotine stains all over the walls.  I cringed to think what those cigarettes were doing to the inside of those men's lungs. One of the men has since died, I found out.

Then there's the smell. 

Personally, I'm not bothered too much by the odor of cigarettes.  I may be in the minority, but I've always liked the smell of smoking, although I have never smoked myself. 

But the smoking debate continues. 

Some samples from some of the Fark readers:

"This is bad news for Obama…."

"How can there be a price on ruining your health?

"Good. My social liberalism goes out the window on this.Irrational, I know.

Hypocritical, yes.

But I'm stickin' with it!"

Tune in for the Landlord Smoking Debate at Fark

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