W. Darrow Fiedler

Real Estate Made Simple

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How to Become a Fair, Reasonable, and Profitable Landlord in 6 Simple Steps

How to Become a Fair, Reasonable, and Profitable Landlord in 6 Simple Steps

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On December 12, 2016

In Investing, Real Estate

Owning and managing rental properties can be exhilarating. From working with tenants to keeping the landscape fresh and clean, there are numerous ways of managing a property that can bring joy and profitability to not only you but your tenants, as well. You will profit financially, while they will profit from the value added to each property you lease to them. Becoming a landlord is no small task, but it is highly rewarding. Here are a list of ways to prepare to become a landlord.

1) Live Near Your Properties
Make sure you live near the properties you are interested in. If you purchase and manage properties that are far away from you, you will have a more difficult time keeping up with maintenance and making sure the staff is doing things correctly. Make sure to check the property regularly for any needs it may have.

2) Know the Law
There are many laws governing landlords and tenants and they vary from state to state. According to Laura Agadoni from Trulia.com, “Most states have specific landlord-tenant provisions that cover issues such as security deposits, level of access to the property, and how much notice you need to give your tenants when you want them to leave. There also are federal laws you need to know, such as habitability and anti-discrimination laws.” Knowing the law will keep both yourself and your tenants safe and sound.

3) Research, Purchase, and Prepare a Property for Lease
Make sure to find a property that has inherent value, whether that value is in its ability to be renovated and used or move-in ready. Find out ways to research properties in my blog on real estate investment here.

4) Review Each Potential Tenant
Make sure to run a background check on each tenant, as well as check their credit score. You should not sign on a tenant based on these two factors alone. Get two character references and two previous rental references from each tenant. Interview the potential tenants, as well. These vetting tactics should help you to have a broader idea of who the tenant is and what they are about. You will have a better idea of if they will be caring tenants who treat your property with respect and pay rent on time.

5) Make Tenants Pay Rent
If you are too chummy with your tenants, they can start to be “flexible” with when they pay the rent. Instead of paying the rent on time, they may slide back a few weeks. It is important to A) keep a professional relationship with tenants and B) enforce tenants to pay rent on time. One can enforce timely payment by making tenants pay late fees.

6) Make Specific Leases
If you are going to have leases for each rental property, it is important to hire a lawyer who can create the language for your leases. This will keep you safe financially and legally in the event that a tenant takes legal action against you or you need to take legal action against him/her.

These are simple steps you can take to become a landlord that is fair and reasonable with tenants and profitable at the same time. They are logical steps that make sense in the process of managing and maintaining properties. Make sure to keep in mind that owning and leasing properties do not make your rich fast, but in the long haul, they will richly pay off.

5 Ways to Add Value to Your Apartment Rentals

5 Ways to Add Value to Your Apartment Rentals

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On November 28, 2016

In Investing, Real Estate

Adding value to your apartment homes will give you the opportunity to increase rent and show tenants you are available and willing to assist them with any need. There are numerous ways you could increase the value of your apartment homes. Here are five ways to do so.

1) Increase Rent 1-3% Annually

Make sure to stay on top of your competition. Research their amenities, apartments, and rents. You can even go for a tour of your competition’s apartments to see what they offer to their tenants. This will allow you to make educated assumptions of how much you can increase your rent. According to Blake Hilgemann of Time Magazine, “Make sure you know the rents in the area, researching sites such as Zillow, Rentometer, Craigslist, and the MLS if you have access. You may find there is plenty of room to increase your revenue a small amount each year (1%-3%) while remaining competitive.” With these tactics in mind, there are plenty of other ways you can increase the rent, as well, in such a way that will keep tenants with you instead of leave you for the apartment complex down the street.

2) Make Updates to Increase the Rent

Paint walls with neutral, earthy tones, and use accent walls to add a home-like feeling. These types of paints can add serious value to tenants. For new tenants, it will draw them in and will likely have them feeling at home just by entering the apartment. While with current tenants, it will show them that your are serious about increasing the value of their apartment homes. Replace aged appliances with new, stainless steel appliances. This adds a clean look that will add value to your tenants’ and future tenants’ apartments. This will likely have them willing to pay an increase on rent come the end of their annual lease agreement.

3) Add a Swimming Pool

Adding a pool to the property will pique potential tenants’ interests, as it is one of the first amenities tenants will want to check out.

Keeping a pool clean and chemically balanced is vitally important if you add a pool in your apartment community. Make sure to have it thoroughly cleaned weekly and have certain maintenance checks done daily, according to your pool guys’ recommendations.

4) Utilize Landscapers for Beautiful Curb Appeal

Keeping a landscape fresh and trimmed is an excellent way to add value to your apartment rental properties. Using a landscaper to do this for you will keep you in the seat of managing the property instead of doing it yourself and possibly wasting your time. This can be a great investment to draw in your audience.

5) Take Safety Precautions

Switch out utility equipment indoors and outdoors for increased safety. Keep outdoor lighting fresh and bright to light up the areas in which they touch. Lighting streets significantly reduces crime. Keep them on timers so that they come on right when it is getting dark. Make sure to change the timers with daylight savings times! Replace the bulbs with eco-friendly, energy-efficient bulbs to reduce costs.

Use bulbs that are around 2000-3000 kelvin to provide light that looks warmer and cozier for areas such as living rooms and bedrooms. Use bulbs that are between 3100-4500 kelvin for bathrooms to help wake tenants up in the morning and for work areas, such as basements. Use bulbs that are 4600 kelvin and above for security lighting outside and garages.

Hire a night guard to show tenants you take safety seriously. Wall in the community and install gates to enter and exit the community. You can even hire someone to screen incoming automobiles at the entrances of apartment communities for added security. These all help increase the safety and security in and around apartment communities.

These are all ways you can increase the value of your apartment rental properties and your profit at the same time. What ways have you increased your rental properties’ values? What are some ideas you would share with others? Tweet me @WDarrowFiedler with any questions or thoughts!

10 Red Flags Real Estate Investment

10 Red Flags When Considering a Real Estate Investment

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On November 17, 2016

In Investing, Real Estate

If you are looking for real estate to invest in, then you certainly want to read this blog. Make sure to stay away from the ten biggest red flags that you can encounter when searching for properties.

1) Demands a Deposit
When you have not seen the property yet, do not put down a deposit. Oftentimes, scammers will pull legitimate properties from legitimate sites and then take down the posting and disappear once they get your money.

2) Pressure to Act Immediately
Scammers will pressure you to put money down and act quickly. This is typical of scammers. Doing so can cost you money and legal fees to deal with them after the fact. Go at your own pace and make sure to consult trusted people about your purchase before moving forward.

3) Instructions to Not Consult Others
Speaking more on the topic consulting others, make sure to consult your lawyers and lenders before moving forward. Discussing all investments with trusted professionals before moving forward is vital to a successful purchase.

4) Upfront Fees
Before services are actually given, no fees are allowed to be made, according to the FTC’s Mortgage Assistance Relief Services Rule.

5) Extravagant Guarantees
When someone guarantees that they can expect to make a certain ROI in a certain amount of time and that this would work for anyone buying this property, it’s time to think about another property to invest in.

6) Lack of Documentation
Some scammers promise documents, such as titles and deeds, but they never show. Make sure to get all the documentation necessary to make this deal go through before taking any steps forward.

7) Location is in a Bad Neighborhood
Many factors play into buying a home, but location is the most important. You have probably heard the common phrase, “Location, location, location!” If the home is a great place in a poor or vandalized area, proceed with caution. Stay away from slummy or run down areas. You want to make sure a location has a great school system and economy, as well as an active local police enforcement to protect the citizens.

8) Businesses Are Closing
If you are looking to invest in an area that has businesses closing, beware. You want to invest in an area that has a great economy and demand for residents. If businesses are closing, it’s likely that people are moving out of the area to better locations.

9) Photographs Looked Altered
If you are looking at a property online and the photographs look altered, you may be making contact with a scam artist. People will alter photographs to make a property look better than it really is. Make sure to visit the property first hand before making any big decisions.

10) The Property Requires Too Much Maintenance
A property that requires a lot of maintenance or seems like it would need a lot of maintenance is not a good buy. You do not want your expenses to exceed your income from the property. One way to tell if a property is like this is to see how long it has been on the market. Make sure to do your research on properties to find out if they have been on the market for too long.

Do you think there are other red flags to watch out for? Tweet me @wdarrowfiedler, and we can talk about it!

Real Estate Investing 101: From Cradle to Grave Part Two

Real Estate Investing 101: From Cradle to Grave Part Two

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On October 26, 2016

In Investing, Real Estate

We are back with “9 Insightful Ways to Find Real Estate” and “Finding Ways to Fund Your Investment!” Let’s dive right into it.

9 Insightful Ways to Find Real Estate

Turner recommends using the following search methods:

  • The MLS: The MLS is the Multiple Listing Service. This can be found on websites, such as Realtor.com or Zillow.com, making the process of finding a property a click away.
  • Commercial Brokers: They are knowledgeable about real estate and can help you find a great deal. They also, sometimes, have listings that are not posted yet, which they can share with you.
  • Loopnet: “Loopnet.com is the largest listing site for commercial and large multifamily properties.”
  • Direct Mail: This includes signing up for print methods of marketing for properties.
  • Networking: Going to investment groups and real estate minded communities are great ways to find investors, venture capitalists, real estate gurus, or even partners. Networking can prove to be extremely profitable in the real estate industry. You never know when you will need a connection.

Turner also recommends:

  • Driving for Dollars: This simply includes driving around and looking for properties that interest you.
  • Craigslist: You can search for properties on the site, post an ad to showcase your search, or search for landlords who may themselves want to sell their property or know someone who does.
  • Eviction Records: Eviction records are in public records; so, find some properties that are being evicted, and your likelihood of finding a property to invest in will skyrocket.
  • Wholesalers: Wholesalers will purchase solid properties and, then, sell them to you for slightly higher prices.

Finding Ways to Fund Your Investment
According to Paul Esajian of Fortune Builders, here are four basic ways of financing your investment opportunities.

  • Cash Financing: Cash is the main source of financing that anyone would want for their property. This method allows for buyers, “to save on interest, increase their cash flow, and receive instant equity in their investment.”
  • Traditional Lenders: Traditional lenders require about one-quarter of your down payment up front with a good to excellent credit score.
  • Hard Money Lenders: Hard money lenders “provide short-term, high-rate loans.”
  • Private Money Lenders: Private money lenders are often-times venture capitalists. They want to invest financially, as well as offer their time in being an active part of the process. “Generally speaking, private money lenders will provide investors with cash to purchase real estate properties in exchange for a specific interest rate.”

After reviewing all of this information we have above, I suggest focusing on managing your property once you have bought it. Managing your property is critical to having a successful future. You can do this yourself, which can become a full-time job at times, or reach out to a property management group to do it for you.

If you are serious about real estate investment and want to learn more, check out BiggerPockets Ultimate Beginner’s Guide to Real Estate Investing. You can find blogs on my website, wdarrowfiedler.net, regarding real estate investments, as well. Tweet me @wdarrowfiedler with comments, thoughts, or questions about real estate investing!

Real Estate Investing 101: From Cradle to Grave Part One

Real Estate Investing 101: From Cradle to Grave Part One

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On October 19, 2016

In Investing, Real Estate

If you are anything like me, you know that real estate is an infinitely complex, riveting topic. The real estate industry has endless facets that one can endlessly dive deeper into. When trying to find your way around real estate investing for the first time, it can be entirely overwhelming. That is what I am here for. With almost four decades of experience in the real estate industry, I can lead you through the basics of real estate investing with ease.

The reason why anyone wants to get into real estate investments are simple: Money. One can either make billions of dollars in the industry or, to the opposite extreme, lose billions. There are literally hundreds of ways to make money and build wealth from a real estate investment, but we are going to stick with a few basics to help make the learning curve easier.

The oldest method in the book is to purchase real estate that can be rented for a profit. And example of this would be buying an apartment complex or single/multifamily home that can be turned for a profit. Gaining a profit from a real estate purchase is a marathon, not a sprint. It is a business, not a hobby. In order to make money from a real estate investment, usually one must earn just enough money from the rent that is being paid in order to cover the cost of a mortgage. Then, one can start earning a profit once that mortgage is paid off.

To begin, I will describe the ways in which one can earn money from a property and then go into the popular types of property that people purchase. In Part Two, I will dig into ways to find properties and ways to fund your investments.

4 Ways to Earn an ROI on Your Real Estate

According to Brandon Turner of BiggerPockets.com, there are four key ways of building wealth from a real estate investment, which are the following:

  • “Appreciation: When property values rise, the difference between what you owe and what it’s worth will increase.
  • “Cash Flow: When a property is rented for income, and there is more income coming in each month than expenses going out.
  • “Tax Benefits: Owning investment properties can help offset income from other areas of your life (see your tax advisor for more information.).
  • “Principle Reduction: If you carry a loan on the investment property, each month your amount owed decreases slightly. For example, if you buy a single family home with a thirty-year mortgage, after thirty years the loan would be paid off (with the help of the tenants’ monthly rent payments) and you’ll own the property free-and-clear.”

Now that you know how money is earned in this industry, I will explain the types of property that people commonly purchase.

Popular Types of Real Estate

Turner suggests there are a few different types of common real estate that people invest in for a great ROI.

  • “Single Family Homes,
  • Multifamily Properties,
  • Apartment Complexes, and
  • Commercial Buildings.”

When going into real estate, it is important to keep in mind that it is vital that you choose one type of niche in which to invest. When you spread yourself too thin across multiple different strategies for investing, you become a source of knowledge to no one on real estate. When searching for ways to fund your investment, your investors will be less likely to trust you since you are not an expert in any one field.

For “9 Insightful Ways to Find Real Estate,” and “Finding Ways to Fund Your Investment,” check back next week! Tweet me @wdarrowfiedler with any thoughts or questions.

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