BUY & HOLD: How To Buy, Fix, Tenant & Manage Rentals | Ben Clardy | Skillshare

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BUY & HOLD: How To Buy, Fix, Tenant & Manage Rentals

teacher avatar Ben Clardy, Real Estate Coach

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Taught by industry leaders & working professionals
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Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

47 Lessons (5h 48m)
    • 1. BUY & HOLD: Promotional Video!

    • 2. About Your Instructor

    • 3. Why This Course Was Created

    • 4. The Goal Of This Course

    • 5. This Course Is Both LINEAR & MODULAR

    • 6. How This Course Is Structured

    • 7. Why There's Special Emphasis On Single Family Homes

    • 8. Factoring A REALISTIC Rate Of Return

    • 9. The "Debt Snowball" Strategy

    • 10. Cashflow VS Appreciation

    • 11. Choosing Your Investment Market

    • 12. 2 Basic Ways To Buy Rental Property

    • 13. Your Power Team Members

    • 14. Connecting With Your Power Team

    • 15. Where To Find Rental Property Deals

    • 16. Analyzing Deals

    • 17. Calculating Rental Yield

    • 18. The "100x Rent Rule"

    • 19. Making Offers On Houses

    • 20. Getting More Offers Accepted

    • 21. Get Your Funding In Order

    • 22. 8 Types Of Rental Property Loans

    • 23. Could "House Hacking" Be For You?

    • 24. Managing The Escrow Period

    • 25. Closing Day

    • 26. You Bought A House... NOW WHAT!?

    • 27. Rental Property Renovation Standards

    • 28. "Tenant Proofing" Your Rental

    • 29. What's A General Contractor?

    • 30. Finding A GREAT General Contractor

    • 31. Working With General Contractors

    • 32. How To Pay Your General Contractor

    • 33. Understanding The Fair Housing Act

    • 34. Choosing A Property Manager

    • 35. Tips For Placing Good Tenants

    • 36. The Tenant Application Form

    • 37. Screening Tenants Automatically With A Google Form | PART 1

    • 38. Screening Tenants Automatically With A Google Form | PART 2

    • 39. How To Run A Background Check


    • 41. Minimizing Tenant Turnover

    • 42. EVICTIONS

    • 43. Landlord Eviction Mistakes To Avoid

    • 44. Exit Strategies For Rental Properties

    • 45. Putting It All Together

    • 46. What To Do From Here

    • 47. SPECIAL BONUS: We Can Help You Buy A Rental!

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About This Class

Welcome to BUY & HOLD!

This Real Estate course teaches you how to buy, rehab, tenant, and manage rental properties!

Allow me to start off by telling you what this course DOES NOT teach...

- How to create instant cash-flow with a never-heard-of, proprietary strategy!

- How to enjoy never-ending streams of "magical mailbox money" without lifting a finger!

- How to own problem-free rental property while avoiding dreaded "tenants & toilets" problems!

Nope... this IS NOT that kind of course!

Instead, this is a real-world class, taught by a real-world Landlord, that will ACTUALLY BENEFIT YOU in the real-world.

I'm not saying that money, lifestyle, & freedom aren't real... but it's going to take some WORK to get you there.

The good news is that I've already done the heavy-lifting, made the stupid mistakes, and perfected a streamlined process.

My intent is to transfer my knowledge & experience to you in a way that you can implement for measurable results.

I want you to have the simplest path to success, so I'm sharing the knowledge I've gained over 12 years of owning rentals.


  • Download and learn how to effectively use the Master Lease Agreement

  • Determine if cashflow or appreciation is more important for your investment strategy

  • Decide whether it's best for you to invest in your local market or own rentals remotely

  • Learn how to build a team of capable Real Estate professionals to manage your rental projects

  • Learn how to perform effective due diligence on potential rental opportunities

  • Become a more confident and capable Real Estate Investor

  • Equip yourself with proven contracts and forms to buy houses and lease them to qualified tenants

  • Learn about the BRRRR strategy and how it can help you grow your rental portfolio in a repeatable manner

  • See ways to keep your tenants happy so that they stick around for a long time in your rental properties

  • Learn about dangerous legal pitfalls to avoid when placing tenants

  • See how you can buy rental property with an IRA using a 1031 Exchange

  • Access valuable outside resources that can help you run background checks on tenants

  • Learn how to build a great working relationship with a General Contractor

  • See what your options are for liquidating tenanted properties should you decide to sell

  • Learn how to maximize your chances at getting your offers accepted at the best prices possible

...and this is only scratching the surface of what you will learn in this comprehensive class!

- - - - - - The ultimate goal of this class is for YOU TO ACTUALLY OWN RENTAL PROPERTY - - - - - -

It all starts by enrolling in this course!

From there you'll progress though a series of bite-sized lessons and exercises that encourage ACTION.

Each lesson will present you will a series of steps that you will complete to produce measurable results.

Are you ready to buy, rehab, tenant, and manage rental properties of your own?

Let's make it happen.

I'll see you in class!


Meet Your Teacher

Teacher Profile Image

Ben Clardy

Real Estate Coach


My name is Ben Clardy.

I'm a Real Estate Entrepreneur, but I'm a teacher at heart.

I create HIGH-QUALITY / LOW-COST Real Estate courses for my students.

I've made MANY of mistakes in my investing career. One of them that I will always remember is the day that I wrote a $25,000 check to a "Real Estate Guru" that promised to teach me everything I needed to know to succeed in Real Estate. That was a BIG mistake.

I lost an incredibly large amount of money that day, but I did learn something important:

I learned that I wanted to save other people from making the same costly mistake.

You see, it's not uncommon for people so shell out 10k, 20k, or even 50k dollars in order to learn the ro... See full profile

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1. BUY & HOLD: Promotional Video!: Hey there, my name is Ben clotting and I'm excited to share with you this course on a buy and hold real estate investing. This course teaches you everything you need to know about how to find by fix, tenant and manage rental properties. The course is called buy and hold. So why buy and hold routines? Rentals are the best real estate strategy for long-term wealth and cashflow. Rentals provide both cashflow and appreciation. So cashflow, you know, you're making money every single month with red shacks and depreciation is to property value improving over time as the Market Value increases. Rentals are always in demand and they always will be in-demand. There's lots of financing option available, especially for single family homes, which makes it more accessible to a wider group of people, there is compound scalability with rental properties, and that's kind of a term that I've I've created myself here. What I mean by that is the more rental properties you own, the more purchasing power you have, and the more aggressively you can pay off the principal bounces of each of those properties. So you start with one and then you get two. And now you can use the second property to help pay off the first one and then you buy three, and then you can use the second third property to help pay off even more on the first one. So your power to pay off premise, principle balances and make additional purchases grows as your property portfolio credit. So that's what I mean by compound scalability. Rentals are resilient to market fluctuations. And holding rental properties is a strategy that lends itself to automation. So with wholesaling or flipping houses, if you stop working, then the checks stopped coming in with rental properties. Once they're properly set up and manage, the rental checks are going to be coming in no matter what. So that's what I mean by automation. They are controllable, touchable, tangible, and real. So unlike other investment options like stocks or different things like that, it's just, those are just numbers on a screen and looking at graphs and that kind of thing. But with a rental property, you can drive over to it, you can look at it. You can touch it. You can either it's just something to be said about real tangible real estate or investment assets that you can actually touch. You know, it's not some abstract thing and there's something very special about them. With rental properties, there are multiple exit strategies available. So even though it's a rental, that might be something you could pivot and sell is on a turnkey rental to another investment or another investor or if the property was vacant, you could probably so it is a vacant home or if the market may access, you can take that vacant property and possibly kinda take it in the retail flow direction. So there's multiple options available, and options are. Really just invaluable when you have only one exit strategy available and you gotta make that work. There's a lot of stress and the potential for failure is higher. But when you have multiple options available, it's a very good place to be. Buy-and-hold rentals they are satisfying to own and it helps you contribute to the common good. I mean, you are actually providing families with places to live. There's something very special about that. With rental properties, you are building generational wealth. So again, unlike wholesaler flips or other real estate strategies with rental properties or buying hold in general, is actually assets that you hold for a long period of time that you never actually have to sail. You know, these are assets that can be passed on to your kids or grand kids or anything like that. So that's what I mean by generational wealth. And generally speaking, rentals are the best strategy for creating the coveted financial freedom that everybody is striving for. It's a very special thing. And again, talking about flips and wholesaling with those when you stop work and when he stopped making offers and put in contrast together and work and rehabs and all this other stuff when you stop, the money stops. But with rental properties when they're properly set up and managed, the checks just keep coming in. And that is a very, very good. So one more final slide here I want to talk about is this course really for you? I mean, I've made this course from the ground-up to cover all the bases concerning rental properties. But is it really for you? You don't need any prior real estate experience for this course. We're going to focus specifically on non-commercial rentals, meaning single-family detached, duplex is trapped. Lexis and quarter plexuses are all, are all applicable under this strategy. But what this course is going to be a special emphasis on a single family homes because I feel like there's the most opportunities there. They're the easiest to get into. And again, they have the most options. So we're going to talk specifically and in-depth about single family homes. But, but the rest of this course, you know, the information and knowledge will apply to small multi-family as well if that is your thing. This course does assume that you're buying your first rental property. I'm covering all of the basis from a to Z. So whether you are a beginner or an intermediate investor or a pro, there is stuff here for you in this course, but again, I'm covering all of the basis. So if you are a beginner than this is the course for you. If you want cashflow over time instead of quick profits, you know, talking about comparing rental income to the short-term profits of flips and wholesaling. But in this course is for you, and this course is not about flipping houses or wholesaling. Although there are a few points where we will kinda tie in to those different strategies. We will talk a little bit about them, but generally speaking, we're not going to be talking too much about flipping or wholesaling, but you will need to be able to turn instruction into action. I can give you all of the knowledge you need, but ultimately it's going to be up to you to make it happen. I'm gonna do my very best to encourage you and motivates you along the way. But ultimately it's up to you. But you can do this. Implementation is absolutely everything. The process we're going to be going through from beginning to end, this whole gamut of rental property knowledge. It is not necessarily easy stuff. However, once you get through it a couple times, I'm telling you it's like riding a bike. Riding a bike. It is I mean, it's a scary prospect when you first hop on a bicycle, you don't know how it works. You know, you don't have balance. I mean, but she learned as you go and then as you practice it, it becomes second nature and this is absolutely no different. You will make mistakes, but that's perfectly okay. I'm going to focus on giving an actionable level of detail along the way. It's a little bit of an art to determine light, how much detail to give. In these courses. I could go super-duper granular, You know, as far as detailed goes. But I don't do that because I feel like it kind of encourages paralysis of analysis. It makes people kinda overthink. It's almost too much information. So I focus on a level of detail that encourages action and results and everything else you'll just kind of learn by osmosis and by going through the steps. In the end, ultimately, success is up to you. But I'm telling you I'm gonna do everything I can on my end to help guarantee your success. And to wrap this up, I'm just going to tell you that you can do this. If I can do this, you absolutely can't too. I am nothing special. I mean, my goodness, several times just in this little video here, I've fumbled over my words and said stupid things. I mean, I'm I'm just I'm an ordinary guy, but I stuck with this long enough to figure it out. And now I'm going to pass this knowledge onto you so that you can apply it and help benefit your business and your life as a result. So I think that wraps up this little pitch. I encourage you to try out. It is called di and home. I'll see you inside. 2. About Your Instructor: So I wanted to make this section just to kinda share a little more information about myself so that you have a better feeling of who you're getting instruction from here. So again, my name is Ben clarity. I am an investor, I'm a family man, I am a sailor. And most importantly, I'm just a regular dude. So yeah, I'm married. I have a wife and a little girl, a 10-year-old girl. You know, I mentioned that I am a sailor. That's actually as far as being able to enjoy kind of, you know, the fruits of being a real estate investor. And one of the biggest impacts it's had on my life is that it has allowed us to travel and buy travel. What we normally do is we have a sailboat and we'll go sail around the Bahamas and the Caribbean. And that's kind of one of our passions in life is sailing. So that's what I mean by I'm a sailor. And then lastly, you know, I say that I'm just a regular dude. It is totally, totally true. I mean, that's important because I mean, it just goes to show you that, you know, if I can figure this stuff out and make it work, you absolutely can too. So I learned real estate investing out of necessity when basically a job was falling out from under me. In a prior life, I was a mechanical engineer working with this military contracting company. And sadly because of some management problems, the company was basically just an, a slow downward spiral. And luckily the spiral lasted long enough that I could learn something to replace that job. And what I learned was real estate investing. And I actually, what was nice was I was actually able to quit that job before the company just completely imploded on itself. So yeah, that was nice. So I am mostly self-taught for sure. And probably the biggest teacher of all has been a lot of the stupid mistakes I've learned along the way. So I have flipped, rented and wholesale over 300 houses since 2008. So, you know, as far as volume goes up, done a ton of wholesaling and that's that's the largest chunk of that. 300 number 300 represents how many houses I've I've closed on. And then rentals is actually the smallest number of those, but those are the ones I've held for the longest period of time. And then as far as what I had to least experiences experienced in our retail flips, I've done probably a dozen or so of those. And usually I get into those deals not by necessity and planning, but really just because of an exit strategy from another deal, maybe it's a wholesale deal that turns out to be something that is flip bubble or rental that goes vacant. And maybe the situation is one that makes sense to retail flip that house instead of keeping it as a rental. So that's how I kinda get into those details. And another interesting thing is, you know, I mentioned in 20082008, as you may know, was kind of an interesting time in the real estate market. That's when things were really just fallen apart. You know, the crash kinda started around 2006. And then I chose to get into real estate right in the middle of the crash basically, which again, you know, not a bad time to buy houses for sure. I mean, it's an insane buyer's market back them. And, you know, that's the nice thing about real estate is you kinda just flex and modify your strategy based on the market. And that's when I got into it was 2008, right in the middle of the crash. So kind of one of my focuses and making these courses is making them very cost-effective and also making them to meet the needs of my students, the specific needs of my students. And what I mean by hears that my courses were inspired by students needs is that I mean, I communicate well with my students and I take their feedback. Or even, you know, constructive criticism or mistakes I've made or any number of things. And I modify my courses. I will build a course from the ground up to meet my students needs. And then from there I will tweak and tune it on an ongoing basis based on student feedback. So I really do put the needs of my students first and I get such a kick out of here. And you know how students have benefit, have benefited in their businesses as a result of my courses. And that's huge. So far I've had the pleasure of coaching over 15 thousand students. And that's combination of one-on-one coaching and consulting and enlarge part by these online courses. So 15 thousand, that's a crazy number. But yeah, it's my pleasure to be able to have an impact in the businesses of that many people. So this next one, I'm more fundamental than technical, that may not make a lot of sense. But what I was trying to explain in there was, you know, in stock trading there's basically two fundamental schools of thought as far as how you analyze stocks. There's fundamental analysis which is based on, you know, general market trends and kind of just old school techniques to see kind of where the stock is headed. And then there's technical analysis which is really zeroing in and looking at trends on charts and spreadsheets and all that stuff. And that, that is not my style. It's not all about like crunching numbers down to the, you know, to the minute detail, you know what I mean? I kind of I was going to say go I go with my gut a lot and that that definitely is part of it. But, you know, I'm just old school due diligence, looking at in the market and see what's happening, see if it makes good sense for rentals, making personal relationships with people and connections and then use an all that and putting it together to be able to make by on sale civil decisions. So I'm not super-duper technical as far as like, you know, using all of these crazy tools and spreadsheets and charts and all this stuff to make decisions. I just I'm I'm old school, so that's what I'm trying to explain there. I hope that makes sense. The next line down, I use basic market analysis over nitpicking those tiny, tiny details. That's what I mean by that. Now, I always, you know, both myself and I always suggest to my students is to begin with the end in mind. And I say that because I feel like a lot of the people that enjoy my courses are, are beginners. And in order to get started and go down the right path and end up reaching your goals. You gotta have an understanding of what that looks like. I mean, why are you doing this in the first place, you know, and I mean I mean, wholesale and retail flips, rentals, all of these categories are things that if you don't really, really know why you're going after it, it could be a soul crushing experience. It can be a very expensive experience. However, if you have a very clear understanding of what you're trying to accomplish, why you're getting into all of this and why you're going to be, you know, going through all this trouble to learn something new, then it all make sense. So what is it you're trying to replace IT job? Are you are you look into travel more like that? That was a big motivation for me. But regardless of what your reasons are, eke out to have a clear picture of what you're working towards. So in my courses is also a big focus on encouragement and motivation. You know, I can, I can give you all of the all of the instruction you could possibly need down to the detail. But I can't make you do it. You know, I mean, That's kind of one of the biggest challenges I think in making these courses is actually making them in a way that is going to inspire action. You know, I, I don't, I don't want you to just take this course and, you know, read through it and, you know, go through the material like you're watching a TV show and then when it's all over, you turn it off and that's it. Now, I want you to learn this stuff and eat implementing it as you go along. That is the goal. So I put a big focus on, you know, trying to push you and motivate you and to try to get things done. That's just my, my personality. And there's going to be quite a lot of that in the course. I am absolutely a hope for the best plan for the worst kind of guy. And rental properties. Or it's a it's a it's a, it's a good niche in real estate to have that kind of mentality, I think because you've always heard kind of nightmare situations with rental. So tenets, trashing houses are these nightmare evictions are all these weird situations that can occur when you have essentially strangers living in a property that you own that don't really care for it. To the same degree that you do, weird things can happen. And a lot of people get into rentals without the right and, you know, attitude as far as planning for the worst, you must plan for the worst when it concerns rentals with a vacancy, when it when they go vacant or when they're damaged, or when they need rehabs, or when you gotta go through eviction. It makes an entire world of difference when you are planning for that from the beginning, instead of reacting to the surprise bad situations when they happen. That that is a, it's a motivation killer. I have bought many, many distressed houses from landlords who are wanting to get out of the business. And I don't say that to scare you. But rentals, I think represent like probably the cornerstone of an investor's strategy, wholesaling and flips, they have their place. But as far as building long-term wealth, generational wealth and investing in things that's going to pay you month after month after month, regardless if you're working, you're not rentals are where it's at, but they have that kind of a bad side to them and you have to be ready for it. So that's what I mean by hope for the best plan, for the worst. It's not all bad. You know, rentals are amazing, but they can really, really bite you if you're not ready for it. And we're going to concentrate on getting you ready for it. Didn't you ready for the bad as well as with the good? And lastly, I tried to be as accessible as possible to my students because, I mean, you know, as I'm putting together these courses, I'm trying to have forethought as far as we know, what people are needing to learn and what questions they may basically trying to address questions before they're asked. I tried to do that as much as possible, but I can't do it. I can't figure it all out ahead of time. So if you have questions, if you have feedback and ways that I can make the course is better. Or if there's ways I can help you along the way, be sure to just reach out and I'm there for you. I think that sums up this module here. So let's move on. 3. Why This Course Was Created: Next, I want to talk about why this course was created in the first place. And I, I kinda hit on this in the last module there. But primarily this course was designed to meet the needs of my students. I'm always asking my students what they want to learn next. And this course on rental properties has been, you know, a very commonly requested course for quite some time now. So I'm really happy that this is available now. I really think a lot of people are going to enjoy this and get a lot of benefit out of implementing what's in this course. So the courses are designed based specifically on student feedback. And I enjoy helping people translate knowledge into action. The, again, I can put all of the information out there that people need. But I really put a heavy, heavy emphasis on trying to motivate people to put that knowledge into action, actually taking the steps so that they can look back and see, hey, I'm making progress. And that's what it's all about is making progress towards your goals. Rental properties are a very strong foundation for long-term growth, and I call it a cornerstone strategy. And I always compare basically to me, there's like three main main investment categories when you're talking about residential real estate investing, retail, Phillips, wholesaling, and rentals. Of those three rental properties are the ones that are going to be making you money, whether you are working or not, they are truly passive investments, whereas retail flips, I mean, those may take you two 3-6 months to do one of those and you may make a big chunk of money, but if you stop working, then the project stops. The same goes with wholesaling. I've I've closed hundreds a wholesale deals. But if I'm not working, I'm not making phone calls. If I'm not selling properties and talking sellers and everything else that makes those work, the paychecks stop. But with rental properties, when once they're set up and properly managed and everything, it is what you would call mailbox money. You literally go to the mailbox wants month, take your checkout, and there it is, your rent payment. And in addition to cashflow, rentals are doing another incredible thing that you don't get from wholesaling or retail flips. And that is they are appreciating in value. So we're going to get much more deep into, into all of that stuff. So I also like showing students how a difficult project process becomes easy with practice and propagator. Sorry, struggling through this. Like I said, I'm just a regular dude. I've tried my best not to fumble over my words, but it happens, this is real. But I like showing people how a difficult process becomes easy over time. And it's like riding a bike. For me now, rental properties are easy. It's a process that I've been through many, many times. I've own rental properties for years and years and there's really very few situations that I haven't come across that I don't know how to deal with. And because of that, it's it's like riding a bike. It's very easy. It's very natural to me and I am not intimidated by it. However, early on when I was just getting into it, I was just setting up my first rental. And you're going through all those those steps for the first time. It's very uncomfortable and it's very unknown territory. But it's an amazing thing. How after you get through the process, 123 times, it becomes easy. And that's what I really want to, you know, I want I want you to have that same experience and that same perspective on rental properties. Because again, it's a scary thing at first, but it comes very, very easy. When it becomes very, very easy, then man, it's natural to put these things together. You've got your network setup, you've got deals come in and you're making offers. You're doing closings, you're running rehabs, you're talking to your general contractor, you're getting the house 1010 again and managed and then you're starting on the next one. And then it's just a process that kind of grows and snowballs from there. And your comfort level has a huge impact on your success. So I want to get you through the steps. Really. I want to get you through it so that you own a rental property and it becomes natural to you, like riding a bike. That is my goal with this course. And ultimately I want to help people reach financial freedom. Now that's a, you know, that's one of those kind of cliche terms now. And financial freedom means different things to different people. I mean, for us, for my family, it means for us to be able to turn off business for an amount of time, whatever amount of time we choose, and go travel. And again, traveling for us means cruising around the Bahamas and the Caribbean on our sailboat. And so that's our financial freedom. I don't know what it looks like for you. You might have a different dream, you might have a different goal. And that's very, very important. You need to have that dream, that goal. And you know, again, you're working with the end in mind towards those goals. So that's critically important, but I want you to have that financial freedom. Yeah, so that is why this course was created. So without further ado, let's move on. 4. The Goal Of This Course: The goal of this course is for you to actually own a rental property of your own. Now I'm saying this from the perspective of, you know, like I'm talking to a student who obviously has not owned a rental property before. This course is going to have value for you, whether you're trying to buy your first property or your 12th property, but ultimately, you know, I'm really zeroing in on the new investor, the new kind of soon to be landlord. And I want you to own that first investment property. Now, once you to experience and become comfortable with the entire process required to find by Rehab, tenant and manage rental properties because that's where the true value is. Owning the rental property is. I mean, that's a real milestone, but the real value comes in getting all the way through the process and taking all of those hundreds of tiny steps that ultimately equate to you owning the property. Because again, the real value is learning the process and seeing how it's really not that intimidating once you get all the way through it. And that's where the real value is because that's where you get the confidence. That's where you get the experience, and that's what you can really use to take your business to the next level. And I want you to be able to competently repeat this entire process over and over on your next property and your next property. So lot of the fundamentals that I'm going to be teaching you in this course can be applied to various aspects of real estate investing. Because we're gonna be talking about, you know, building a power team and making offers and contracts and closings and such as that. And a lot of those topics, um, they they're going to be used in various niches of real estate, like wholesale and retail flips multifamily. A lot of this foundational knowledge is it's, it's general, so it can easily be applied to different strategies. And then there's a ton more detail we're going to be going on that is laser focused in the niche of rental properties. But keep in mind, the, this course was designed from the ground up to give you the knowledge that you need and the encouragement and the motivation for you to actually own your own rental property. 5. This Course Is Both LINEAR & MODULAR: This course is both linear and modular. And can you hear that you're probably because he talked about. But what I mean by that is there's basically two perspectives that you can look at this course from. So the lessons are setup in a step-by-step format. You can certainly implement every step in this course in step-by-step order. However, in real life, when you are lets you know when you've got one property under contract and one property again, rehab owner, one property you get, you know, attendant placed in, you know, you're gonna be kinda more spread out and all over the place. And that's what I mean by things that are more dynamic and real life scenarios. Every deal is different. You're gonna become an across all kinds of different situations. Let's say you're going after one rental property that is completely vacant, that's going to be needed rehab, you go one after another rental property over here that is it is already tenanted, so you really just have to take a repayments on that one. And let's say you get a smoking deal on another rental property that the landlord is dumping for next to nothing because he has a problem tenant, it's a nightmare situation in each is desperately wants out, so you're going to have an eviction on your hands. That's what I mean by every deal is different. I mean people is what makes this business so incredibly dynamic. And the thing about these courses is there's, there's no way that I can possibly address all of the the dynamic situations and circumstances that you're gonna come across when you're dealing with people. You know what I mean? So I make every effort to do the best I can to kind of give you solutions for the standard problems you've come across. But in real life, these deals can be just really, really crazy. So the course is linear and modular, meaning that some parts are purely, purely foundational. And you're gonna go through those in a step-by-step fashion. And you're going to set everything up once, for instance, building a power team and your market. That's not something that you have to do on every single rental. So that's part of the linear process. Or let's say, if you change your mind and want to set up in a completely different market, that is where the course kinda becomes modular because then you can refer back to that specific module and set up a new power team and that market. So you can refer to sections as needed, or you can go through the entire course and step-by-step fashion, in which case it is, it is going to be more linear. So the linear format is very easy to understand because obviously you go through every line step-by-step and just implement it as you go. But realistically, every application is diverse and that's which case. It's going to make more sense to refer back to the, the individual modules of the course on an as-needed basis. So the, so being modular, you can refer back to different chapters like you would in a book. So if you need to, you know, let's say you're buying a new rental property, you need to refer back to strategies on finding deals and making offers. Great, but let's say you need to add a new member of your power team, which may have dropped out for one reason or another. Let's say you need to you need a new general contract because the one you have isn't isn't up to snuff. So then you can refer back to that specific section. You don't have to start absolutely everything over. So the course is built kinda like a reference resource. If you need to jump into different sections as needed, feel free to do that. Or if you want to go through the whole thing from beginning to end, you can do that as well. And we're gonna be covering both basic knowledge through this course to help you build that foundation that you're going to be working on from beginning to end. And then it's also going to cover many, many advanced skills as well. So this course is both for the beginner and the advanced real estate investor as well. Hope that makes sense to me about the whole linear versus, you know, modular thing. I just want you to know that it basically for every new rental property you by every new situation that you find yourself. And you don't have to start this course over at the very beginning. Just refer back to the specific chapters that are gonna give you the answers you need and then work from there. Alright, let's move on. 6. How This Course Is Structured: Let's talk about how this course is structured. So we're going to start off by building a strong foundation of just fundamental knowledge. And that's gonna give you the knowledge base you need in order to start putting together the pieces from their. Next, you're going to be building a strategic team of real estate professionals. That is the power team. You've heard that term over and over again. It is one of those terms that's a bit cliche and overused, but it is extraordinarily important, our strong parroting. So we're going to cover that. Next. We're going to decide if you need to you need to invest locally or remotely in rental properties. Whenever possible, I do encourage people to invest locally. There's definitely benefits to that and risks to investing remotely. However, sometimes your market will not make sense for your specific investment goals. We're gonna talk about pros and cons there and how to decide what market to invest in and whether you need to invest locally or remotely. You need to get your funding in place and also be working on getting your pre-approval in place. Basically, you need to be in a position early on to be able to make decisions and moves on rental properties. And we're going to talk about how to get pre-approved for a loan and all that stuff. We're going to talk about investment analysis on rental properties. How to know when to pull the trigger on a on a property and make an offer also what offers to make? How to analyze the return on investment and all of that stuff. We're gonna be covering, all of that. We're going to talk about offers, contracts and closings, how to make offers. We're going to talk about different contracts. You need to put deals together. We're going to completely cover the master lease agreement, which will get a copy of in this course, which you can you can use just as it is or modify it. And I'll talk to you about how closings we're managing that entire Escrow period, what to expect, and how to be sure that closing, you know, stay on the rails and don't fall apart. It can happen. But we're going to do everything we can to prevent that from happening. I'll show you how we talk about casting out and managing Renovations. You gotta know, actually upfront and your due diligence period like pan of water innovations, you're looking at what your costs are going to be. And after the closing, we'll talk about how to actually manage that rehab process so that you get the right renovation for your rental property. And once the property is renovated, we'll talk about managing or we're talking about screening your tenants and placing the correct tenants. There's there's essentially two ways to do it or that you set up the property with a property manager. They're going to be basically running that process for you, although you can absolutely have impact on the tenants are placed, it's not entirely up to the property manager. You can give them specific criteria and instructions and still control the process, even though ultimately the bulk of the leg work is going to be managed by a property manager. Or I'll also show you ways if you choose to self manage the property. Different ways you can screen tenants, different tools you can use so that they can kind of screen themselves and you can kind of automate the process as much as possible. And for sure, going to show you tricks and tactics on how to place the very, very best tenants. That's one of the most important parts of this whole course honestly, is just, you know, setting yourself up from the beginning to have a vino, a headache free rental, and enlarge part. It comes down to putting the best best quality tenants possible in there. And I'm gonna show you how to do it. We'll show you how to manage the rental on a month to month basis even after tenants are placed in there. It's not just, you know, it's not just a situation you can just forget about. I mean, you still have to stay on top of things and be sure that everything is being run correctly. And I'm gonna show you how to manage that rental after tenants are placed. And then after you get to that point. But once you have you've been through the whole process, your rental property is Rehab tenanted and managed. Now it's time to start spreading out from there how to scale things up or your second your third property, your 12th property. We know it actually becomes easier and easier and easier the further you get through that process. But again, you know, talking about encouragement, I want to encourage you not to get discouraged and bogged down and feel like this is an incredibly complex process in the very beginning. Because if you do that, you're, you're missing out on all kinds of rewards. And there's, there's so much for you if you can just stick with the process and figure it out. The first one is the hardest. I'm promised you. And then once you get past this first when things get so much easier. So yeah, we're gonna talk about scaling up and sticking with it so that you can get the results that you want and meet your goals. And then finally, we're gonna talk about exit strategies for rental properties. I'm always a proponent of holding onto a rental property as long as possible. I mean, if it's if you've made the right decisions and place the right sentence and done the right rehab and your market is right and everything set up ride, he ought to just hold onto that thing forever, really. But there's different times when you may want to liquidate a property for various reasons. But when you want to liquidate, there's certain exit strategies that work best for rental properties and some that don't. And sometimes your marketplace really the biggest factor in deciding what's your exit strategy should be. So we'll talk about weighing, you know, your market to determine what direction to go on rental properties. And there's actually some tax implications and such as that. And to consider when you're talking about liquidating rentals. And we're gonna talk about all of that stuff. So generally speaking, that is an overview of this course. So after this, we are going to be getting into what I call foundational knowledge. We're getting into the meat of the course next. So that's coming at you. Here we go. 7. Why There's Special Emphasis On Single Family Homes: So let's start off by talking about single family homes. Within this course is going to be a strong emphasis on single family homes. And now single-family homes, that is a it is a detached, single property that one family lives in and pays rent. It's not a duplex triplex and departmental rooming house. It's nothing like that. Your standard three-bedroom to bath house or, you know, 4321 even. But the three 2's are generally the most common. There are lots of them. There's plenty of opportunities. The opportunities are literally right under your nose. Single-family homes are always in demand and always will be. And one of the reasons we're gonna be focusing on those is that they have the most flexibility and investment options. I mean, they're easy to get into, they're easy to get out of. There's plenty of opportunities. It just makes good sense to focus on single-family homes within this course. So the course content is easily applicable to small multifamily houses. Like duplex is tribal axes quieter places. Basically the rule is anything with five units or less is considered residential and beyond that it's commercial. So basically five units are less, the overwhelming bulk of this course is going to apply to those properties. So if ultimately you're looking to get into small multi-family, this course still gonna work. However, I'm just telling you now that I am putting a special emphasis on single-family homes for anybody who's interested in getting started with rental properties and becoming a landlord, single family homes. It's just where it's at. I mean, they're there. And again, it's really comes down to two main things that are easy to get into, because there's plenty of opportunities out there and they're easy to get out of. So if you do get into a situation and you know, you need to liquidate it for whatever reason they're the easiest to get rid of. So that's one of the reasons I, I always try to steer people towards single-family homes. So you're gonna hear me talking a lot about single-family homes throughout this course. But just keep in mind that even though I'm really, you know, laser focused on that, the overwhelming bulk of the teachings in this course we'll apply also to small multifamily. Alright, let's move on. 8. Factoring A REALISTIC Rate Of Return: So here we are going to talk about factoring a realistic rate of return when you're looking for investment properties. And we're going to talk more about how to run the calculations and such as that. But what I wanna talk to first, it's just kind of getting the right perspective on rental properties. And it's all basically about avoiding a very, very common mistakes that lots of landlords make. And that's basically that they make their decisions based on best-case scenarios. And when you do that, you're setting yourself up to lose. Whereas if you take a very realistic approach to running your numbers, you know the numbers are not going to look quite as good because they're much more conservative. However, whenever you factor in a realistic rate of return using a conservative approach, you're gonna be in much, much better shape whenever you have problems, whenever you have attended problem, or you've got to renovate the property between tenants or any number. Thanks. So a realistic rate of return. So owning rentals is all about positive cashflow. If a rental costs you more to own than the amount of money it brings in, you lose. You know, there's more to it than just simply covering your mortgage payment. That's another kind of odd thing that a lot of landlords kinda figure is, you know, if they can buy a property and the rental amount is equal to or slightly greater than the mortgage payment, It's good to go. That's not a good approach to take and need to be more conservative so that you can absorb the bumps in the road that will inevitably happen. So the key here is to be realistic. The property will be vacant. Sometimes you gotta be ready for that. The property will need maintenance from time to time. And you gotta be ready for both of those situations when they happen because they will. So whenever you're running your numbers on a property, don't try to force the numbers to work. You know, in a main, again, maybe from a pie in the sky positive approach, you know, the rental payment is equal to the mortgage payment. You know, you might be thinking, hey, it's a go, but it's not. You gotta have a cushion in there to be able to absorb the problems that happen. So plan ahead to absorb problems that happen and inevitable cost along the way, like maintenance between tenants. But on the flip side, you can't be way too careful either. That's another way to, to, to lose. Actually. You gotta be kind of in the middle. On one hand, you've got the people who don't factor for problems and mistakes. And on the other polar opposite side of it, you've got kind of the mentality that they're looking for such an outrageous deal. And that that they're never going to buy property. So yeah, it is very, very possible for you to be too careful and lose out on deals because you're being an extremely to tear careful. So you gotta find the middle. You gotta find kind of that area that's going to work for you. And it's gonna get you into the properties that are going to help you reach your investment goals. And it's all gonna work around how your specific market works. We're gonna cover all of that stuff. So let's run through an example. Ok, so here we have an example. Now, this is just kind of, it's not a specific property of drafts, but these are very real world numbers. So let's say this property here, it's going to bring in $850 and monthly rent. So on a on a property like that, if you have a 100% financing just for the sake of keeping the numbers, simple, mortgage payments going to be probably somewhere around $400 a month at a 4% interest rate. You back off that for a $100 for the mortgage, you back off a $100 for taxes and insurance, again, just round numbers and back-off, $85 for property management, and that's based on a to 10% of the rent that comes into us where that eighty-five dollars comes from. So 10% of the monthly rent. And then finally, this is the factor that really sets this up as being a realistic approach. And that is to back-off and an additional 15% to cover vacancy costs or maintenance along the way. So that that 15%. You may find that in your market it needs to be 10% or 20% or 15%. It just matters that that percentage factor there can adjust in your market. But generally speaking, 15%, I find it to be kind of a good safe all round number. So probably start with that and then adjust from there. But when you back off those costs from your monthly rent, you're left with a $138 of monthly cash flow. And that doesn't sound like much. And that a hundred and thirty-five thirty eight dollars would actually end up being $265 if it were not for having to back off that vacancy and maintenance costs. But again, you know, the a $138 doesn't sound like much. But you gotta remember that you're not only cash-flow positive and this situation, which is the main primary criteria for a rental property, but you're also accruing that $400 a month in equity. I mean, it's kinda crazy. I always kinda forget about this, but, you know, a lot of people just get hung up on the cash flow not being enough. And again, in this situation, you're making a $138 a month in cash flow. But in addition to that, your tenant is paying your mortgage, and that's another $400 a month. That is basically just a crewing towards equity. And then again, another layer in addition to cash flow and your equity being paid down, is that the property is very likely appreciating in value as well. So this property that let's say we have an $85 thousand mortgage on. Realistically, we bought this property under market. So this house maybe worth, let's say, let's say a $100 thousand, you know, so you've got $15 thousand in equity right there. But even though the property is worth a $100 thousand and now usually the it's going to be appreciating and values that are a $100 thousand and another couple of years is going to be a hundred and five hundred and ten and a hundred and twenty. It just depends on the market and how fast your market is appreciating. So this is one example. I wanna run through. One more example here. And this is, this is an example of a property that is free and clear. So you have 0 mortgage on this one. This represents a property. Let's say this is probably not going to be your first investment property because in all likelihood you're going to have to have financing on your first one, however, on your maybe your third, fourth, fifth property, when you've been able to use the combined incomes of all of those property to aggressively pay down a single property, which is a specific strategy we're going to cover. You're going to end up with properties that are free and clear. And this is where things really get exciting in the world of rental properties. So in this same $850 a month rent, but this time there is $0. Going out for your mortgage payment. Still have the same a $100 in taxes and insurance, $85 in property management, and a $127 going out. Or that's actually just being saved that you're keeping back for vacancy and maintenance. And again, that's 15% of your monthly rents. So now you have $438 of monthly cash flow. And that's not even taking into account that a $127 that you're setting aside for vacancy at maintenance said without that 15% buffer for vacancy and maintenance, you're actually looking at $565 a month on a single property that is owned free and clear. And again, this is not something you can expect. First property well, I mean, you can I mean, if you if you have in this case, if you have $85 thousand in cash to buy this property, this is what you could be looking at, but realistically speaking, this is kind of the situation you're going to be getting into after you have 3-4-5 properties and you're able to aggressively pay down the principal balance on one. And then when this one is paid off, you put all this money towards paying down the principal balance. And the next one, again, we'll talk about all that stuff. But again, this bottom line here, let's say this is pure cashflow that can be plowed into other rentals to aggressively pay them off. Yeah. So yeah, that is that is the part about just being sure that you're having a realistic out view or Outlook on the rate of return that these properties are bringing in. And this is especially useful whenever you're sizing up properties. You're running the numbers and trying to decide if this is something you're going to make an offer on and how much of an offer you're gonna make. So be realistic. And again, that is, you need to be in the middle. You don't need to be crazy conservative and you don't need to be, you know, just, just whatever the other end is there, you gotta kinda find that middle ground so that you can be making realistic offers based on realistic outlooks on these properties. Yeah, that's it. 9. The "Debt Snowball" Strategy: Okay, so the debt snowball strategy. We briefly mentioned this and in the last lesson there. So the idea here is that you ultimately want to be aiming towards owning rentals free and clear to maximize your cashflow and to use the additional income that is coming from those free and clear properties to be applied towards new properties, to aggressively pay down those balances. That's the whole idea with a debt snowball strategy. This strategy, this is, this is words that are used in different areas of, you know, finances. In this case, we're obviously applying it to rental properties. But I mean, this same strategy can basically be applied to even just like your personal finances and your bills and pay and down car balances and such as that. But the same idea applies to real estate. So again, it's aggressively using rental income to pay down the principal balances. So what you do is you basically make let list just for an example, let's say you have five properties. On four of those properties, you're going to be making the minimum payments on those. And then on the smallest debt there is the smallest principal balance. You're gonna be putting all of your power into paying down that smallest balance as quickly as possible. So on the small ints balance, you're paying significantly more. And then, as you know, debt is paid off is that smallest balanced becomes 0. Now you have even more income profit that you can apply towards the next smallest balance. So it is a practice and delayed gratification and kind of the difficult part there is, you know, I mean, with with rental properties, you know, ultimately you're looking to be, you know, enjoy that cashflow. I mean, that's, that's where the whole financial freedom thing comes from his being able to use that rental income to fund a lifestyle of your choice. But when you're going after a strategy like this, that's not exactly rental payments that are going into your pocket or to fund that lifestyle. Those rental payments are going into attacking those those principal balances. But, but again, it's delayed gratification. In the end, you're going to be able to enjoy that cashflow. But especially early on when you have, I would say three to five properties. Using the debt snowball strategy is, is especially important. So as those properties are paid off, your cashflow is going to increase drastically. You're going to have more freedom and control and less debt that is spread out over your portfolio of properties. Now, again, like I mentioned, this strategy can be applied to more than just rentals. In your personal life. If you got bills that are stacking up and that kind of thing, you can actually apply this strategy to pay down those bills, you know, college dad or medical bills or credit card bills or whatever, you know, you make the minimum payment on the smallest balance and then put all of your finances into paying off that minimum balance. And then when that was paid off, then you put the additional funds into paying off the next bounce. And I mentioned this because, you know, at this stage in the game, you should really be trying to work on your financial situation, maximizing your credit store, score, paying down debt, amassing down payment, you know, that kind of thing. So that's why this is particularly this can be applied to personal bills and balances and also it into real estate. So this is the path to free and clear rentals, the debt snowball strategy. So just remember this. It's, it's something that's going to come in really handy when you get a handful of properties that you're working on. And even, even right now before you even have properties, if, if that's the situation you're in, you can use a strategy to set yourself up and improve your financial situation so that you will be in the best position possible to get loans to finance rental properties, alright? Debt snowball strategy. 10. Cashflow VS Appreciation: Let's talk about cash-flow versus Appreciation. These are two very key terms that are very important when trying to size up rental properties that you need to meet your specific goals. And depending on what market you are in, you may find that your market will actually limit you in these two factors. I guess. Just kind of a general example is the war zone versus just kinda your standard bread and butter. Middle-class neighborhoods. So like in a war zone, for example, or whatever, some hoodie area of war zones. I mean, just not, not great areas. You know, people will still need rental housing in those areas. You know, you've heard the term slumlords and stuff like that. I mean, I am people often go after this particular type of rental because they cashflow like crazy. I mean, especially in back in 2008 to 2012 when the market was so low, I'll tell you in Atlanta, I bought and sold and rented many houses that were in rough areas of town. I mean, I remember buying houses multiple times for 1020, $30 thousand in rougher areas. Now, those were houses that they were rough. They were in refer kinda high crime areas with not great school zones and high tenant turnover and such as that. But man, they were cashflow machines. I mean, it would be properties that would cashflow to the tune of, say, 30% ROI demand. But on the other side of that coin was situations where tenants that would not pay were more common. Other times I'd have houses in those areas there were just as had tends there were would pay just as reliably as anywhere else. But then to compare that back to, let's say, just kind of a more standard middle-class rental area. In the middle-class rental area, you're gonna be paying more for the houses. You're going to be experiencing less tenant turnover. Turnover. People that are generally gonna take better care of the houses, but the cash flow is not going to be quite as high demand. So you have to kinda chews, again, kind of what your goals are, what you're comfortable with IRI after crazy, crazy cashflow machines? Or are you okay accepting a much lower cash flow rate? Not to have a more stabilized rental with less tenant turnover people, they're going to take better care of your houses. But a property that is going to likely appreciate rapidly. And between whole cashflow versus appreciation argument. The reason I'm, I'm talking about these things is what you'll find in most areas is that you'll find that the market leans one way or another. For example, I would call like Los Angeles would be, that's an appreciation. Margaret, cashflow is going to be scarce. I would think that probably get into a rental that's kinda cashflow of five to 10% is going to be probably pretty dang good. The House is going to be crazy expensive, but they're going to appreciate like crazy. And then again, on the other side of the coin you got rough areas of Atlanta that are going to be, you know, cashflow light like crazy, but they're not going to appreciate because it's just a rough area. Okay. So neither of these are bad investments. It just depends on what you're after your goals and what's your risk tolerance is as an investor. So the thing is, seldom can you have both and a house, you know? And again, usually houses are going to lean more towards the cashflow side of things or more towards appreciation. You can have both. But houses that are going to be super high cashflow and appreciating rapidly are very rare. So don't be held back by trying to find investment opportunities that are going to be the absolute best of both worlds there out there. But it's kind of like it's like the rental it's the unicorn of the rental properties, you know, in a main. So, you know, decide, you gotta decide. Again, what's your investment goals are if you're after those crazy cashflow opportunities or if you're after appreciation and if you're specific market that you live in locally does not align with your investment goals. That's one of those situations where you have to decide if you're going to be up for investing remote. Yep. So do not be trapped or held back by looking for these situations where you're going to have the absolute best of both worlds, understand that most of the time you're going to have to pick either a cash-flow situation or an appreciation situation. 11. Choosing Your Investment Market: All right, so talking about choosing your investment market, tying back to the previous lesson, you know, are you, are you after cashflow or appreciation? Which one of those more suits, your investment goals again, you can't have both, but don't get stuck trying to have it all. Now when you're thinking about what market to invest in, do you have the funding and reserves available to be able to invest in your local market. And again, I'm going to use kind of a crazy example of California, Los Angeles because again, those are, generally speaking, there's a lot of expensive markets in California, especially like Los Angeles. I mean, houses sell for like 500 thousand to $700 thousand for like, I mean, just kind of a standard three-bedroom to bathhouse. In other words, like, you know, I'm gonna compare Atlanta, which I know well to Los Angeles. So in Atlanta, you know, if you take that, if you take a 100 to a $150 thousand house and Atlanta suburbs around the city. And then you take that house to Los Angeles. Magically, that house becomes a $0.5 million house. I mean, that's how crazy the rental market is. And rents like Atlanta housemaid ran for 850 to $1000. In Los Angeles, that same house would rent for say, 2200 to $3 thousand. I mean, it's just crazy. But that's what I mean about do you have the funding and reserves available for your market? If you're in a very expensive market, it might make sense for you to invest in a remote market like wherever it lands or wherever we're just, just other less expensive markets because you're funding in your reserves, make more sense. You're going to be able to do a lot more in a remote market. So that's something to think about. If you are considering possibly investing remotely. What's your comfort level like for investing remotely? I know if you're starting this course off, you may be like, well, I don't have any resources and I don't know about investing remotely. We're gonna cover more of that stuff so that you can decide. But there's really not a huge difference to investing remotely as locally. Whenever you have your properties set up the right way, you know, if you have them, you know, under control of a property manager, you have your power team set up and such as that. It's like it's pretty much the same game. It's just that the house is 1000 miles away or whatever, you know. And I mean, you know, if it's a hands-off managing situation, your property managers taken care of everything. What is the difference? And and and really the difference is, I know that you probably have more intimate knowledge about your local market and that's a valuable thing to have. But if your investment goals will not be fulfilled in your local market, you don't have any choice but to look at investing remotely. And it's gonna take some conversations with real estate agents, are property managers or other investors that you may know in the remote market that you're considering investing in. But it really doesn't take all that much time to get a fair understanding of a remote market. So don't let that hold you back. But you do have to have the comfort level and resources in order to invest remotely. So. You have to decide also, are you going to do everything yourself? Or are you then to have a property manager? Manager property? If you are not comfortable with having your properties managed by a property manager, your options, you're going to be pretty limited as far as the whole remote investing versus local investing. You know, conversation there. I mean, you're pretty much going to be stuck with managing your properties locally. If you're going to be doing it yourself, you've gotta be able to lake over the reins a little bit and have a property manager take care of the situation if you're gonna invest remotely. So that's a big consideration. Local is better for sure if it makes sense for your situation. I always encourage people to invest remotely when your investment goals can be accomplished within your market, but sometimes they can't. Again, your market may be too tight. Maybe that's not enough. Maybe there's not enough opportunities out there for you to, to buy houses. I mean, sometimes, you know, these crazy hot markets, warehouses were being sold and hours of a listing that's going to be tough. Or if the market is more of an appreciation, Margaret, you're looking for cashflow, that's going to be tough. You know, sometimes you have to get outside of your market in order to achieve your investing goals. So you have to consider these things. If you are in a market that does not work for your investing goals, don't try to force it to work. I mean, it's gonna be is gonna be aggravating. You're going to be making mistakes and, you know, you're just not going after the right vehicle to help to help you achieve those business goals. So don't try to force a bad market to work. You probably know pretty well whether your market will work for your investing goals right now. If it will, great, if it doesn't, you gotta start putting the pieces together to invest remotely. That's all there is to it. If you're local market will not work for you, but you are just dead set against investing remotely than maybe consider changing strategies altogether. I know this kind of runs contrary to the whole idea behind this course, which is focused on rentals. But you don't really have any options if you're dead set on investing remotely. But the writing is on the wall that that market does not work for your investment goals. You gotta change strategies, salaries to it. Maybe go after flips are wholesaling a retail flips generally work best in a seller's market when things are easy to sell but difficult to buy. You know, I mean, because there's just there's less opportunities out there for the buyers. And that makes your properties easy to sell, easy to flip. So maybe go after retail flips wholesaling, On the other hand, you can do wholesaling in any market, market down market, buyers market, sellers market. It just depends. On one case, the deals are going to be easy to buy and difficult to sell. And on the other hand, they're going to be difficult to buy, an easy to sell. So, you know, you may just have to change your strategy around, you know, if you are dead set on investing remotely. But again, if you're dead set on investing remotely, and the reality is that rentals aren't going to work in your market and maybe considered retail flips are wholesaling. But generally speaking, again, even if you have a market that does not work well for, for your rental goals, I would encourage you to look into investing remotely. It's not as scary as it may seem. Okay, so I hope those insights might kinda help you size up your local investment market and decide if it's going to be best for you to invest locally or if you consider strongly whether you should invest remotely. So yeah, I hope that helps. 12. 2 Basic Ways To Buy Rental Property: Now we're going to talk about two basic ways that you can buy a rental property. So the first option is buying what's called a turnkey rental. If you're, you know, getting MLS listings are looking through different houses that are possibly pre-sale. You've probably come across that term, that term before. Turn key. What that means is it's a property where somebody else has already done most of the work typically and other investors since it's a tenanted property. So this property includes a tenant that is already in place and on lease, the property is already been renovated. So usually you don't have to worry about doing any additional rehab on the property. But being that it is a turn key property and that somebody has already done the work and has added value. Typically, you're going to be paying a premium price for this property when you buy a turnkey property, usually you're going to be in to that property for more than you would be if you had bought the property, rehabbed it, place that tenant and all that stuff, so you're paying a premium for that added value. Even though the property is tenanted and the rehab is done, you are still a 100% responsible for everything. This property doesn't come with a warranty from the previous owner, and there's no guarantee that that tenant is going to stick around. So and also, you you didn't have any control over the rehab. So if there are certain ways you wanted things done, you're kind of given up some of that control. But again, it's a tenanted turnkey property, so you have to just decide if that's what you're looking for. If that money makes sense, you still have to fully check out the deal. It can be a great deal or it can be an absolutely horrible deal. Again, going back to that rehab, you know, if you have certain standards, the things that you want done, certain materials used, you're given up some of that control. Sometimes these turnkey deals can be they can be situations where a landlord is actually trying to get out of a dud deal, but they've kind of repackaged it and made it look as good as possible. Maybe they're not telling you about problems with the tenant. I'm not I'm not trying to scare you away from turnkey properties. I'm just trying to I'm trying to communicate that you need to be careful. It's one of those trust but verify kind of situations. Don't take everything at face value. You have to have to get a copy of the lease and check this stuff out, get a copy of the tenants background check, verify everything before you get into these deals. Otherwise, you could be possibly buying somebody else's bad situation. So I, again, I just want to reiterate that turnkey properties can be great, but you have to verify that the work that somebody else has done is up to your standard, and that's including the property itself and the tenant and the property manager, if they're kind of part of this whole deal. The other way to buy a property is doing all the work yourself. And that kind of ties into a specific strategy called the b RRR strategy. Some people just call this the burger strategy. But what that means, it's an acronym and it means by repair, rent, refinance, had repeat. I kind of lose track of all those are sometimes too. So, so again, you know, I want to just walk through that acronym one more time. So, you know, you buy the property, that's the bait. And all the R's are first you repair the property, you fix it up and get it ready to be tenanted. And then you rent the property, which is actually placing the tenant in there. And then once the houses stabilize the tennis is on lays, everything is good to go. You can refinance that property to help fund the purchase of another rental property. In which case, we're getting to that final r, which stands for repeat by repair, rent, refinance, repeat. And again, that is the better strategy. I don't really like saying that for some reason the whole birthing just seems kind of weird to me. But again, the B RR, RR strategy, so very common strategy used to buy rental properties because you can roll kind of, you know, you make progress on one property, then you can use this property again that stabilized to help refinance the next one. Then you get that one setup and you can use that on the next one. So it's very good for scaling and helping you, you know, you know, kinda keep building that rental portfolio. So another really nice thing about this particular strategy, the strategy or the do it yourself strategy is that you get to experience the entire process. Everything you get to from the beginning of the process to the very, very end. And there's extraordinary value in that for somebody who on their very first property, they go the turnkey route. They're missing out on some of the experience, you know, I mean, they're not kinda getting the full, you know, the you know, the full experience. And what I mean by that is they're kinda short. They're cutting themselves short as a real estate investor because I think for your very first property, I think that it is best to go actually the do it yourself route, honestly, while the turnkey route may be easier, the do-it-yourself route is the one that I think is going to set you up best for long-term success and growth and understanding as a landlord. And again, you're going to experience everything, not just a little part of it, like what you would be getting with the turnkey property. With the do it yourself strategy, that be RRR strategy. You can get houses at better prices again, because you're not paying that premium for a rehab tenanted turn key property. Again, I do recommend this strategy for beginners purely on the idea that you're going to be able to experience the entire process yourself. And therefore, you're going to have a deeper understanding for the entire process that you can then apply to the entire future of your business? Yep. The kind of little sub point here is that I especially encouraged people to do this on at least their first property. If you want to go the turn key route on your second one under on future properties, you know, fine. But again, on your first property, I recommend doing it yourself and not going the turn key route. Doing all this stuff yourself. It can absolutely seems scary. It will seem scary. You'll second guess yourself and wonder if you're making the right decision on things don't have to refer back to, to this course or to a mentor or anything like that to for reassurance. And again, it can be uncomfortable, it can be scary, but it's all part of the process. Learning and growing as an investor. So again, just final point. Turnkey can be great. Gotta verify that it's a great deal. But I recommend to actually doing it yourself and not going the turn key route on your first rental at least. And then consider going turnkey route based on the situations and the specifics of the deal on your second property or for future properties, that kind of thing. But that sums up the two basic ways to buy rental properties. 13. Your Power Team Members: Alright, let's talk about your power team and the members on your power team. Now I have a list here of different types of people that are real estate professionals here. Now this list is, it is basically in order of these people are in order that you should be basically recruiting them and your power team at, for instance, mortgage broker. I mean, why is that right there, right off the bat one that's right there at the top of the list because, I mean, you should be calling a mortgage broker like right now, you know, you should be talking to these guys and kind of working on your financial situation again, working on your credit score, getting you're going down payments saved, such as that. So call a mortgage broker right now so that you can get your pre-approval for a loan and be ready when we get to the point of start and make offers on houses. See that's why That's right up front. Next in line is a real estate agent because once you have your mortgage broker enlisted to your team, now it's going to be time to connect with a real estate agent. So you can start getting some opportunities coming down, but you get start taking shots at and make an offers on. Next is well, in the next two IS inspector and appraiser. Both of these guys are going to be helpful to have in the latter stages of due diligence is actually an inspector you're probably going to use pretty early on even before you get to your escrow period so that they can inspect the house and determine if, you know, if the house is going to meet your needs. If you might need to be able to get a reduction in price to make your offer work. Just checking out the house than the appraiser is going to be coming in when it's time to when the contract is already been submitted to escrow, the appraisers is going to be going into the house and appraising the house to be sure that it makes sense against the loan that you're gonna get. And then next in the process, when it comes down to closing time, depending on what state you're in, the Title Company or closing attorney is actually going to be closing on the property for you or immediately after closing, you're going to be needed to talk to your insurance agent to have the property insured, wants the property is ensured. Know you've closed on the property and all that stuff. Your general contractor, you're gonna meet with your GC. You're going to be walking through the house, talking about the rehab that you need done. And then general contractor is going to be actually managing their innovation process for you. And then once the house is renovated and ready to go, it's time to place a tenant. And to do that, you're going to be named and get in touch with a property manager unless you're going to self-manage their rental, which, you know, I always recommend. Go in the property manager route. Eventually you're gonna get to that point anyways, I think that it's better to get to go ahead and start working with property managers early on so that you're just setup from the very beginning to scale. So yeah, you get the property manager starting to screen tenants and eventually placing a tenant, get a tenant in there on lease, and then managing the property, and then finally, collecting, connecting with local investors. They're at the end of the list because I consider them to be very, very multi, use local investors or some of the best people to now. I mean, if you're looking for houses to buy, you can connect with some of these guys. Maybe they have something they want to liquidate. If you need to sell a house, maybe they are looking for a turn key rental that they could buy from you. Local investors are are great for referrals even I mean, they know the good closing companies and they know the good contractors and all those guys. It actually like any of these players of your, your power team here can be used to network with other people. So yeah, really the hardest part of building a power team is really connecting with that first really good person. And then things kinda tend to kinda snowball and grow from there, from one recommendation to another. But these are the standard players to your power team. And also, remember, this is generally the order that you're going to need to be connecting with them in order to get you through that entire process of buying, fixing tenants ten intake, and managing rentals from a to C? Yep. Alright. That's it. Let's move on. 14. Connecting With Your Power Team: Next, let's talk about getting connected with those power team members that we mentioned in the previous lesson. So the first good connection is the hardest part. Because I mean, whether you connect with a good agent or a good mortgage broker or good title company or some good local investors. I mean, those people or that person is going to almost always giving you at least one other good referral. And then you can take that referral and connect with somebody else. So again, the first one is the hardest part. Connections happen very quickly after that first 11 of my very favorite ways to, to, to connect with people is go into the local Raya meeting. So real estate investment association is what REI a Raya stands for. So, you know, any local city, almost, almost all decent investment markets. They're going to have some kind of real clubs. Some of them are insanely huge, you know, in the big capital cities and then, you know, other ones can be really small, having just a handful of people either way, it, that's good. So go into these meetings, you can almost always get in touch with some good local real estate investors and start talking to people and getting connected and network with people. Another good way to do it is set up a LinkedIn account. If you already have one, you can use that to actually do some searches, either in your local market or even remote markets. Get connected with people. You just go into LinkedIn for one thing, if your profile isn't already completely set up and filled out with a picture on it and that kind of thing. Be sure your profile's a 100% set out before you do this. Otherwise, it's just kind of tacky. People don't know actually who you are. But get your profile completely set up and then you can run searches. So I mean, regardless of when market your end, you can just run some searches that say something along the lines of, you know, Atlanta property manager bearing. And then here comes a big list of Atlanta property managers are cincinnati general contractors, and there's a big list of those guys. So, you know, it can be great for sure, like something like LinkedIn. But what I want to say is when you're networking and trying to connect with people and build a meaningful power team. You need to be at the very least, talking on the phone with people, you know, take that relationship further than just like email messages and stuff like that on LinkedIn or Facebook or something like that. Go out to lunch with these people. Or if it is actually a remote situation where you're hundreds or thousands of miles away, have a phone call or a Skype call or something like that. You gotta kinda make that extra effort to make these relationships meaningful. Because these power team members, they should be people that, you know, on us. I mean, on a somewhat personal basis, you know, in a man, I mean, it's a professional relationship share, but these need to be people that you know and trust and build a long lasting professional relationship with. So again, that's why I say try to get away from messages and emails and focus more on going to launch her Skype calls or phone calls at the very least, that kind of thing. So just start talking to people. Be proactive, be personable, real, and professional. That's very important. People see right through you if you're trying to be something that you're not. So just be honest and real and professional and genuine with people and it goes a long, long way. So nothing is set in stone. What I mean by that is, you know, you gotta start somewhere. If you connect with people and you find out that they're not what you thought they were, they end up being a bad connection or whatever it happens. I mean, it probably will happens it I've I've been burned many times with different connections and whatever it finds somebody else. I mean, there's very few places in the real estate industry as far as professional job titles and things where people aren't just kind of commodities. I don't know if that's the right word or not. But what I mean is like real estate agents. Just connect with a real estate agent if you like them, great. If you don't, there's literally a million more of them out there. So find somebody else that you like. I'm not trying to be rude about real estate agents so that that logic applies to really anybody, investors, Tyler companies, contractors, plumbers, any, any of that stuff. You've got to find the relationship she alike. When you find somebody alike and they do good work, he take care of them. You nurture that relationship. When they don't meet your expectations. You know, you find somebody else. It's easy as that anyone can be replaced or upgraded at anytime. So just focus on covering the bases at first, focus on basically filling those slots of your power team list. And then the quality will improve over time and with experience. And then your power to and will get better and better and better over time. So I hope that helps out. Those are ways that you can connect with those power team members. 15. Where To Find Rental Property Deals: Where to find deals on rentals. We're gonna go through basically just a pretty basic list of different ways that you can pursue opportunities to make offers on an order, start buying your rental property. So the first thing I suggest you do is to connect with a good friendly, you know, investor friendly real estate agents, somebody who actually specifically works with investors. That's a good question to ask. Some investors, they specialize and work and with, you know, first-time home buyers and such as that where other agents they specialize in working with real estate investors, find an investor friendly agent, and then have that agent set up a, a MLS search profile for you. And what that is, it's within whatever city you want to be investing and you give them specific criteria. And the criteria can be beds, bath, how will the house's price range, whether it has a car Porter, not size of the land that it's on, you know, any number of things like that. And then that search profile will automatically send you listings that meet that criteria as those listings are, become active in the MLS system. So that's a good basic way to start getting some deal flow coming your way that you can start browsing and perusing and analyzing and hopefully making some offers on as kind of an add on to that thing. You can actually you can talk to agents and have them send you to expired listings too. Especially if your market is pretty tight and you're having a hard time getting enough opportunities to make offers on if you're looking for distressed real estate in particular, a lot of times expired listings can be situations where the owner is more, you know, motivated to sell because they've had the listing online for a certain period of time, the House did not sell. So it's just kinda one of those clues where they may be more willing to drop the price. So expired listings can be a good way to go. And those again, come through real estate agents, local investors and wholesalers. That's another good one to connect with. Wholesalers. Like myself. I do wholesaling. You know, we send out email blasts and we haven't investor list that we stay in touch with whenever we have opportunities for sale, then, you know, those are advertised. So if you can connect with local investors and wholesalers whenever these guys are liquidating properties are wholesaling or selling properties in general, you can be notified of those opportunities and that could be a great way to find good deals on houses. Local property managers. Some of my favorite guys of networking with to find deals on houses because guess who? Property managers now, landlords and guess what happens, the landlord sometimes they get into situations. Houses and bad tenants and such as that. And they get bombed out on the whole situation and they want to liquidate, they become motivated to sell. Now, property managers are great to get in touch with. Just talk to these guys, let them know what you're looking for and you want to follow up with them once a week, once every two weeks just to kinda build that relationship and let them know you're serious. And man, not gotten some of the best deals from property managers. So again, it just all comes down to building that relationship and connecting with the right ones. And whenever you get a great deal from him, you know, you compensate them, you take care of your team members and that's when it's a big part of what your power team is all about is taken care of your team and send them business and and building those relationships. But yeah, I love property managers for finding deals. If you are buying locally, you can talk to the mailman who deliver mail to the houses. Vacant houses are, again, some of my favorite deals. Houses that are basically abandoned and are just sitting there empty, decaying, falling apart that are, you know, it's just one of those clues that it's a very distressed situation and you can often get great deals on these vacant houses. And one of the best ways to well, it's basically tapping into the boots that are already on the ground, is connecting with these mailman just when you find somebody on their route, literally go up to their to their car and just tell them, you know, who you are and what you're looking for. Give them a business card and let them know that you'll pay them $1000 for referring to any any vacant houses that you're able to buy. Obviously, you're not paying $1000 just for a lead. But when they give you a late and it results in new buying a house and give them a thousand dollars or 5 thousand or what, whatever makes sense for you and your goals and your market. That's how you compensate these people. Craig's List, I have gotten deals off of Craigslist. It's not one of my favorite ways to get houses. I mean, again, my market is in Atlanta. I don't know if Atlanta's just really kind of bad about Craigslist or something like that. But I have become very wary of scammers and such as that on Craigslist, maybe your market is different. It's not really my favorite way to get houses, but in your market, maybe Craigslist is different. I definitely wouldn't rule it out. But Craigslist can be a great way to find deals, especially ones that are being sold for sale by owner, by other landlords, are such as that. Local attorneys or title companies are. I have so many great ways to fight and how does I love? I love local. I love the attorneys for getting deals on houses. These guys. Now in Atlanta I use closing attorney, so that's just what I'll talk about in your state. Maybe he's title companies, but attorneys know that the deals that for one thing they know one's deals that have fallen through, you know, they've done title work and everything else on some of these deal sometimes and self that happens and the deal derails before closing and everything falls apart. Maybe you could be the guy that can swoop in there and pick up the pieces and bring these deals together. If you can be that guy, BOB, some of these closers. You'll be their favorite person, I promise you, because they've invested time and money into title searches and all these other fees and having their paralegals do all this work. And then when the deals fall apart, it just cost them a bunch of money that they cannot really recoup. Unless somebody like yourself can come in and pick up the pieces and close these deals. So yeah, closing attorneys, that that's just one example. The deals falling apart thing. A lot of these guys are they're very, very well networked. I mean, they know the guys who are regularly closing houses with them. And they can be great for networking with, and they can be great for staying in touch with and getting some deals from closing attorneys and title companies are great. If you're buying locally, consider maybe putting up some band at signs. Those are those little corrugated white plastic signs on the side of the road that essentially say we buy houses are different verbage along those lines that can get your phone ringing. So you definitely need to look into kind of the rules about that kind of thing in your local area code and that kinda thing. You can't get fined for putting those signs up. But some other areas, you know, you'll be an intersection sometime there'll be 50 signs on the corner. So, you know, just determined if it might make sense to use banded signs in your area. Could your primary residence be used as a rental? And maybe kind of a funny thing to think about them in your house that you live in right now. Could you actually put that up as a rental? I say that because tie-in back to some previous lessons, I mentioned that we travel a good bit. We actually put our primary residents up for rent when we went off traveling, when we went to the Bahamas and on our sailboat, I mean, we were gone for most of the year. It actually ended up being that that particular house, I think it was rented out for two years, but we actually put our primary resonance up for rent. Depending on what your situation is, your goals, what you're trying to accomplish. Maybe maybe that could be something to look into. Primary resonance could be rental. Ours was Yeah. So just start talking to people. I'm talking about again, closing attorneys, real estate agents, property managers, mailman, inspectors, appraisers, really just about anybody in the real estate space and certain people outside of the real estate space can be excellent to work with. And by talking about outside the real estate space, the mailmen example is a good example. They are acutely aware of the houses in their neighborhood. The houses that have the mailbox overflowing with male and the grass is four feet high. They know. But the thing is they're not actively involved in the real estate industry. So that's one of the things that make them kinda interesting people to, to network with. But he had just started talking to people, start letting people know who you are, what you're looking for, what you're trying to do. And you'll be amazed at some of the opportunities that are right in front of you, maybe even in your local neighborhood, you know. So get the message out there and you'll be absolutely shocked at the opportunities that are right under your nose. I'm in, there's always, there's always drama going on in people's life situations changing and work situations changing and people are relocating and people renting houses all around you. And because of all this diversity in this kind of abstract, chaotic environment, I mean, there's opportunities everywhere. You just have to become more aware of them. And the way to do that and start connecting with people, spread out. Let other people know who you are, what your looking forward, get more eyes out there looking for things. And when you have those relationships and those opportunities come up or you can connect with these people and a deal comes together, take care of him. Because when you do that, you'll get more details from a promise ship. So those are some ideas on ways to find deals on rentals. 16. Analyzing Deals: Let's talk about some different resources that are out there for helping you analyze the rental income for particular properties. So I'm going to refer you to a few websites that I'd like to use and they're pretty simple and in fact, they're all, they all work very, very similarly. So what it makes sense to do is usually to run your search, the same search for the same property and each of these websites, and then just kind of compare the numbers. And when you do that, you'll kind of see a certain theme. For instance, one website might say the rent is 850, and other website might say 1200. Another website might say 900. And if that were the case, then I would be leaning more towards kind of the average of the three, which is maybe $900 a month. That's just kind of a rough way of thinking about it. And the thing about this is you just have to kind of get close on this stuff. And again, like I mentioned earlier, you want to be a little bit conservative, but you're not trying to, this isn't, this is not science. You know, to man, there's no way of knowing to the dollar what the rent is going to be. You just have to kind of you have to kinda get close, as close as you can realistically, but don't try to nail this thing down to the, to the dollar. So I'm going to, let me switch this over. I'm going to share my screen with you so that you can see what I'm doing and I'll show you kind of how, how I go about doing this. Ok, so you are looking at my screen now and I have a window open for the website Zillow. This is actually one of my favorite websites. I've just I think probably just because I've used at the most. But Zillow Redfin truly they all work very, very similarly and listen, there's probably other web websites and resources out there that can help you figure out, you know, rent. There was one that I used a lot called rent o, but they switch to a subscription-based model. And I kind of found that Zillow was really just as accurate for my uses. So instead of using Renato meter, I just carry on using Zillow and read fan, a truly that kind of thing. But anyways, you go to right there. And then you're left with this bar right here that you can type in a, a city or a neighborhood, or an address or something like that in so I'm just gonna put it in. I'm gonna put in my city and town here. I'm going to coef Georgia him about an hour outside of Atlanta to the north. And then you bring up listings like this. And let's just say that let's just grab this house right here. There's a $118 thousand house. Just knowing knowing my area and saying this is a 2232 square feet, this sucker is Alamo listed about $30 thousand too high. But that's aside from the point we're trying to see what it would rent for. So what you do is this whole left or right menu here we'll scroll and just go down to the section where it talks about rent value and there it is, right there. It's called the rent HHS estimate. And to be quite honest with you, I'm not certain where this number comes from. I to the best of my knowledge, I think the website read Fen pulls a lot of their data directly from the MLS. This one Zillow, I'm not sure where it comes from. But generally speaking, this is the value that Zillow puts on this particular property from a rental perspective. Now what you could do, I'm not going to do it because it's easy enough, but I would I would take this same property address right right here at the top. I would copy that and paste it directly into the same search bars at the top of the pages on zeal, on Redfin and Trulia. And then just compare their rental numbers. Again, this one says 1100. The other two might agree or they might disagree. But regardless of the fact, you'll be able to kind of see a theme that seems like it supports the rental value of this property. Now, that is how you can go about trying to kind of figure out a rental value using these websites. There's not that much to it. You go to the website, put in the address, you look at the rental value, you compare them. That's all there is to it. What I would suggest you do beyond this or even in addition to this, is to consult with a local property managers. So again, if I was trying to get a second opinion basically on the rental values of this city to co-ed Ga let's say I was an out-of-state investor, wanted to rent houses into code Georgia. I would call up a property manager in this city and talk to them and just tell them what you're looking for and get an idea, kind of a rent range of values for this city. In this city, Generally speaking, just because I'm familiar with it, you basically look at it, read ranges from 800 to $1200, you know, maybe the TBD tip top rent range for this town is probably maybe $1500 and that would be for like 56 Bedroom, very nice executive style house, you know, in a man. And then on the other end, I would say maybe as low as six to $800 and that would be for smaller, older houses and kind of, you know, the rougher area of town. So I'm familiar with a rental ranges in this town and I'm familiar with rental ranges for most parts of Atlanta and the suburbs. But for somebody like you who may be considering investing remotely, This is the way to do it. This is the way to figure out those those rental ranges. Run those website, run those searches through some websites like Zillow truly a Redfin, and then get a second opinion from a local property manager. Salaries. Do it, hope that helps. 17. Calculating Rental Yield: Let's talk about calculating your rental yield or calculating your ROI, which is return on investment. Basically, we're trying to come up with a percentage based number on how a particular rental opportunity stacks up to other rentals in your area to see if it's something you want to make an offer on or not. So you've probably seen rental yield percentages before or ROI, you know, 20% return on investment, 10%, whatever it may be, that's what we're going to become an upbeat width here. And I have three different examples using using examples out of basically a rough area, which would be kind of a heavy cashflow market. A mid grayed area, which is kind of a blend between cashflow and appreciation. And then a high-end market, which is a very, very highly rapidly appreciating area where cashflow is going to be a bit less. So we're going to compare those three just to kinda help you understand for one thing how to run through this, this, this math here. And two, to understand the impact on ROI based on different markets. You know, rough market may grade Margaret high-end market. Let's get into it. The first example here is a cash flow market example, and this is just kind of picture in your mind. I'm using the market of Atlanta and I'm using what would be called a D class area, which is there's kind of this letter scale a, b, c, d, and d is the worst, AE is the best. So this is basically a bad area of Atlanta. So just kind of picture this in your mind as we go through this. So for this house, rent is to be expected at a, at a rate of about $850 a month. So you multiply that rent by 12 to get your annual rental income. So the annual rental income on the next line here is $10,200. That's 850 times 12. So $10,200 and you divide that into your investment amount. So I am dividing it into $50,000.50 thousand dollars. What that is there that's basically all of the outlay for this particular property. Whether it's you put $50 thousand into a turnkey property or let's say you buy for 40 and put another 102 it, however you slice it, $50 thousand is your, your total investment amount. So you divide ten thousand, two hundred and fifty thousand dollars. And then that gives you a multiple of 0.1 to you. Then take that and divide or multiply it by a 100 in order to get your percentage. So just to clarify that I felt like I stumbled a little bit. You have the decimal 0.12, which comes from dividing that ten thousand, two hundred and fifty thousand dollars, then you multiply. That answer, 0.12 into 100, that gives you the, the percentage, the rental yield, the ROI. So in this particular case and this Atlanta D class neighborhood, the ROI on this particular investment is 20.4 ROI. That's pretty darn good. I would say. It's kind of difficult to reach that kind of ROI in many markets. But inside a div class neighborhood like that. Like I said, they're cashflow heavy, but appreciation polar. So this example is a very high cash flow, but it represents an investment that is somewhat risky. Because again, you're getting kind of a rough area, not grade schools, high tenant turnover, high crime, that kind of thing, but it's crazy. Cashflow opportunity. All right, so let's move on to the next example. So this is example number two. This is what I'm using the word of blended market. I just kinda came up with that word. It's just representing the example that's between a cashflow heavy market and appreciation heavy market. And this is going to be something that's similar to kind of Atlanta suburbs. You know, normal kind of middle-class neighborhoods that are around the city of Atlanta. So in this example, we are taking the rent, $850, same rent them out, multiplying it by 1212 months a year, and you end up with the same $10,200, but in this case, it is a heavier investment. So in this case we're laying out $85 thousand. And again, that could be $85 thousand flat for a turnkey tenanted property that you don't have to do any rehab on, or maybe you bought the house for $60 thousand and put another 25 into it. Either way, that's the total investment layout. So that's going to give you a multiple of 0.12 and then you multiply that by a 100 and that gives you the percentage 12% ROI. So in this example, this is a general mid grade investment. The return on investment is not nearly as high as in that D class area of Atlanta. But it's going to be a safer investment where the tenants are likely going to stick around for longer than you're hopefully going to take better care of the property and you're going to be in a better position to realize some appreciation on that property too. So next, we're gonna move into example number three, which is an appreciation heavy market such as Los Angeles. And this is just the numbers that are in this example. These are just kind of averages for Los Angeles, which this, some of this number, these numbers seem crazy to me, but this is, this is real stuff. This isn't appreciation heavy market. So in this example, the expected rent is $2200 a month, multiply by 12 for your annual income, which is $26,400. That is then divided into the total investment, which in this case is $650 thousand. That's a chunk of money. Again, that could be 650 for a turnkey property or 650 thousand total. Maybe you put maybe about the hot property for 500 thousand, but a 150 into it for for rehab, that's how you get 650 thousand. So you take, that gives us a decimal, 0.12 again, multiplied into a 100 gives us a rental yield in this case of only 4.1%, which is not much. And you may be wondering like why on earth was somebody want to own this kind of property? You've got a ton of money and it's only bringing in a 4% return. But the thing about this example is It's an appreciation heavy market. It's going to be a very tight market, is going to be hard to find these opportunities because houses are sailing very quickly and they're very, very expensive, which makes the return very, very low. Even though the rent is higher, the return is still very low just because the property values are so high. So in this example, it's a very low ROI, but very rapid appreciation. And what that means, again, is in a property like this, you may be happy just owning this chunk of real estate, even though it's not really making you much money on cashflow at all. However, that $650 thousand investment amount that you put into it may let's say in five years, this may be an $800 thousand property. The property value itself is appreciating rapidly in these kinds of markets. So in these markets, you're not going to be after cashflow so much. You're gonna be looking at Appreciation over time and turn in that $650 thousand into say, $800 thousand while your mortgage payment is being paid by the tenant and you're making a nice, you know, 4% return on your investment. So those are three different examples of calculating rental yield and also kind of playing in those factors of is it a cashflow heavy market and could the rougher areas is a kind of a mid grade market and kind of your middle class areas? Or is it going to be a depreciation heavy market in these crazy markets like Los Angeles and lots of Canadian markets and such as that. Yeah, so I hope those examples kinda help flesh out, you know, comparing those cashflow heavy markets with appreciation markets such as that. So yeah, I think that sums it up. Let's move on. 18. The "100x Rent Rule": Next I wanna talk about something called the 100 times Rent rule. And right off the bat, I want to say that this can be a very, very handy little kinda quick cheater tool to use to help you. Basically determined the maximum amount of money you can spend on a property based on its rent. But this can actually be somewhat of a dangerous thing too. So you gotta remember what it's used for. And this is just kind of a quick and dirty rule to try to quickly without even using a calculator. Just kind of analyze how good a rental deal potentially is. This is not the end-all, be-all Best way to to do your due diligence. So it is not that this is a quick and dirty handy tool. Okay? Alright. So with that said, let me explain this a little bit better. The 100 times Rent rule, this is also known as the 1% rule. It's the same math. It just kinda goes by two different numbers. It's also known as the 2% rule, which is a very, very extreme example. And the 2% version of this probably would not work very well unless it's in a very, very depressed market. The 2% rule would have definitely worked. For instance, like back in the crash 2006 to 2012. But nowadays, the 2% of version's probably not going to work very good at all in most cases. So do not take this rule literally. It is not perfect. It's a quick and dirty way to get a rough idea of value. So here's how it works. So you take rent, amount of the house, the the amount that you think the House would rent for, whether it be $600 a month, $850 a month, $15 a month, that $1500 a month. You take that amount and you basically multiply it by 100. So for the example, we've used $850 a couple times so far. So if you take a house that would rent for $850, you multiply that rent by 100 and that you're basically adding two zeros. And that gives you the amount that you could potentially invest in this property equal to both of your your purchase and your rehab. So again, $850 a month rent times 100 equals $85 thousand. That is your max investment layout for this particular property using the 1% rule. It now the reason this is also called the, the 1% rule or the 100 times Rent rule is let's you know, you got $85 thousand here. 1% of $85 thousand is $850. So that's why it's called the 1% rule. It, it goes one way or the other. It just depends on whether you're multiplying or dividing. So this rule is far from perfect, but still handy to know it can be modified to fit your own uses. So your rule, while this is called the 100 times Rent rule, to make this rule applicable and your market, you may have to change that multiplier. The 100 times role is, it's handy because, you know, it's just so easy. You basically just add two zeros to whatever the random out is to get your, your total investment outlay, your max investment outlay. But you may need to modify this rule to make it fit your own uses. So what you need to do is basically test this rule in your market, perform due diligence on a property, figure out what the rental amount is and figured out what the average property values are for your market or your neighborhood that you're investing in. You gotta figure out those two basic averages that rent them out and the property values. And if it just so happens to work out where this 100 times version works, great, you're golden. You can use this as one of these little shortcut tools to help you quickly analyze properties. However, you may find that you need to modify that percentage or that multiple, that multiplier. Again, you may, you may find that a 125 times rule may work better for your market. Or you may find that if it's, if your market has lots of opportunities and it's more of a buyer's market. You may find that you need to go down on that at a 100% rule. Or if it's a seller's market, you may find that you need to go up. Anyways. The idea here is, I want to communicate that there's this handy little convenient way for you to quickly determine your rental values. And it's basically just having, having this arbitrary multiple in your mind that you're multiplying the rental amount by Start with a 100 times role. See if it works for you. If it's if it's not working quite right, all you do is kinda changed that multiple to a number that does work for you and your market. And then you can use this as just kind of a quick told to quickly determine if a property is going to be worth spending more time on or not. And if it is, you know, go deeper with your due diligence. If it's not, then that's the beauty of this rule is it's so fast and easy and simple, then it's gonna save you a lot of time by just running through those opportunities and ruling out the ones that don't work by using this rule. And the ones that do work, you're gonna take this to the next level for deeper property analysis. So that is the 100 times Rent rule. 19. Making Offers On Houses: Making offers. Alright, so now is the point where you've got some opportunities coming in and you are ready to start attempting to try and get some houses under contract that you can buy. So you're gonna come up to basically two different kinds of situations. Houses that are listed with a realtor, they're going to be on the MLS. You're going to have to work through the realtor. And you're also going to become an up with situations where it's properties that are for sale by owner and you know, it's a private seller. Maybe landlord has their house for sale. Maybe you come across a property on Craig's List or some other for sale by owner website. But anyways, it's a private seller, is not represented by a realtor. In either case, you're going to have to be putting, making an offer with a contract. Now, if it is a realtor, the realtor is gonna use their states contracts. So whatever if you're in California and you're investing in California, you're going to use the California realtors contract. Here in Georgia, we use the Georgia Georgia Association of Realtors contracts called the GAR form GAR, Georgia Association of Realtors. So if it's a listed property, we've gotta go through a realtor, they'll provide you with the property. In fact, are the contract. In fact, what they'll usually do is they'll put everything together. Fourier let him know kinda what your terms are, how fast you can close, how much earnest money you're putting down offer is. And they're gonna basically pre flesh out the contract and then you'll just sign it. You can usually e sign it, send it back to the realtor, they'll forward it to the to the owner of the property. So that's kinda nice in that respect. If it is a private seller, you are typically not going to be able to use a Realtors contract. In some states, you cannot use realtors contract unless you are actually a realtor. In Georgia. I I mean, I've used the realtors contract in certain situations where I was dealing with a seller who insisted that I use the official Georgia realtors contract even though there wasn't a real utter involved. I'm not I'm not a 100% positive if that was completely above board or not. But I mean, the deal went through age five. But generally speaking, we don't deal with a private seller. My preference far and away is to use my own custom contract. I don't like the realtors contract. You're way too long. They're like eight pages long or six or eight pages. And there's just so much there that usually does not apply to most real estate deals. I mean, they're so stinkin thorough and it's hard to rein in scuttle this crazy verbage and it's very, very legally, he's kinda talk. My own personal contract after I've developed it for a decade or more, is very simple. It's only two pages long and it's very kind of user-friendly. It's not, it's not intimidating for sellers to read. They can easily read through it and understand exactly what's going on a sign and get right back to me. It's clean, simple, easy to use. If you're I, I offered that contract and I've got another course on real estate contracts. Just look that up. And I provide you with a complete suite of contracts. I'm not trying to sell that too much, but you can't get a contract for me if you want it. But if you're going through a private seller, I would recommend using not the realtors contract you can get one online is just a purchase and sale agreement. And then modify it to fit your own uses. But I do vastly prefer meeting directly with the owner of properties when at all possible. Now, when it's a realtor listing, it's rare for you to meet with the owner. Usually, the realtor is representing the owner, so you never get to see the owner, never get to talk to, they'll never get to ask them specific questions, although the realtor will facilitate as best they can. But I just feel like I'm getting like the straight scoop. When I'm able to talk directly with the owner, I suggest it's my preference. And of course, you're saving a 67, 10%, you know, realtors commission depending on what state you're in and that kinda thing. So my preference far and away is to deal directly with the owner. However, if this is your first property that you're buying, you may find comfort and knowing that there is someone there, you know, the realtor that can help guide and facilitate the process for you. So there's no right or wrong answer. Real to reverse is dealing with the owner. Just know that it's my preference to deal directly with the owner. I also really prefer to make the offer in person where whenever possible. So I will literally have a folder with all the property information, go to the home made with a homeowner, and then before I leave, I will fill out the contract 2p and hand it directly to the homeowner. That way they have a live contract. The only way the only thing between them, you know, having the house sold is their signature on that contract and then we submit that thing, that closing and get things done. So it's very expedient, it's very personal. You build rapport with the owner. It shows them that you're serious and prepared being able to do that right there in person. So I really like that. So yeah, I leave them a written offer right there on the spot. Now, regardless if you're using realtors, contract or contractor of your own, you need to have some verbiage there to protect yourself. And the primary thing there that is in your favor is a way to get out of the deal. It's called an inspection clause or a weasel clause. I don't care what you call it. I don't care if it sounds derogatory. That is something that you need in your contract, things happen, you know, deals, change, surprises, come up with inspections and appraisals and all this stuff. And I mean, you've got to have a way to get out of the contract if it is determined that the deal is not right for you and it can't be made right for you. So just be sure that there is an inspection clause or a weasel clause in your contract. And basically that says, you know, if the House doesn't pass inspection than a contract is null and void. And that, that same general vino, idea is communicated all kinds of different ways, you know, in contracts. But just be sure something to that effect is there. Now, if you are buying remotely. Or I don't know, even if you just prefer to, I guess send your offer via priority mail. Now, the main benefit to that is for one thing, it's very expedient, takes like two days to get there. The other thing is you have a tracking number. So if you send the offer to somebody, you can know exactly when it was delivered and there's basically proved have delivery when you use priority mail. And that ties into something that I like to do called the double offer strategy. That that's, I'm sorry that I read that wrong. The double envelope offer strategy, that sounds kinda funky, but man does it weren't good. And what it is is this, Let's say you're sending an offer to somebody remotely. And this, this has the same benefits to priority mail, has the tracking number, but with an added step, I basically send one priority mail envelope with another prepaid priority mail envelope inside it that is addressed back to me. And then included in that outer envelope are two copies of my offer. So what that does is I send that whole packet to the owner and then they opened it up at their mailbox. And then there's two copies of that offer inside it. If they if they accept the offer, they sign both copies, they keep one. Then in the second envelope that I pretty pay it in mail to them that can put my copy of the offer that or the contract inside that l l envelope and send it right back to me. So it's very expedient, it's very efficient. It's very convenient for the owner. I mean, literally, if they were to take a pen to their mailbox, they can handle everything right there at their mailbox, you know, open it up, sign both copies, put it back on the return envelope, send it off to me and it's right there at the mailbox. They didn't even have to go sign and scan and print and mail things. It's super-duper convenient. And again, there's tracking number. So you you know, when the first package was delivered, the first outer envelope, and then you also know when they are sending it back to you and you can track it all the way back to your home address or office or wherever. So double envelope strategy, super-duper handy. I've gotten all kinds of contracts accepted because of that, it seems really official and really makes you seem professional. And boy, I really like doing that. You don't wanna do it just all the time on every opera that you make, you want to do it when you know that there is a really high percentage that they're going to accept your offer if you were to just do the double envelope strategy on every single opera, you made it be extraordinarily expensive because those, those envelopes are like, I don't know, whatever it lets you say $10 a piece. You don't want to be spending $20 on every single offer you may occur that would get really expensive, but used in a certain time and place when you know, they're most likely going to accept your offer. Double envelope strategies, awesome. Alright, so I think that there's some good pointers on helping you make offers. Let's get into how to get more offers accepted. That's coming up next. 20. Getting More Offers Accepted: Alright, getting more offers accepted. First off, have a follow-up plan for your offers. Whether you're making offers on MLS properties are for sale by owners or whatever. When you make an offer, you must have some kind of system in place that's going to help you track when the opera was made and schedule a time to follow up on that offer. I don't care what it is. It could be post-it notes all over your desk. It could be a notebook with a bunch of nodes. That could be a spreadsheet, it could be a calendar, whatever works best for you. There's no right or wrong way to do it, as long as you have some kind of a follow-up plan for your offers. Another thing is when you're, when you're negotiating, try to let the other guy when a little, you know, and I mean, it goes a long way to help show that you're not just going to try to bully them. You know, in the deal I guess, showed them that there is some flexibility. Obviously, the deal still has to work for you. It still has to figure buying criteria and the numbers have to work in that kind of thing. But if there are ways where you can bend a little bit, do so. And it can be edit, can actually be ways that don't actually impact you. For instance, let's say, let's say you normally put $1000 down, earnest money. Well, let's say the seller wants to see 5 thousand to see if you're serious. Okay. But down 5 thousand. But remember, you've got that inspection clause or that weasel clause and escape clause. It's all the same thing. It lets you get out of the deal without risking your earnest money. So whether you have a $1000 and that blank or $5 thousand or a $100 thousand and your earnest money blank. It does not matter because it's protected by your escape clause. So that's just one little example of a way that you can kind of give a little where it doesn't actually hurt you or impact the deal. But other ways are short and timeframes for inspections or maybe quicker closings are maybe going with the seller is closing attorney instead of your own closing attorney if that work. So just keep that in mind. Let the other guy went a little bit. So another thing you can do to help get more operas, except it is to get the contract signed and then make an amendment. So here's what I mean by that. First of all, an amendment is an additional form that is included with the contract that changes the terms within the original contract. So what I mean by that is let's say that the best price you can get on a property is $80 thousand. But you really need to have it at $70 thousand for your numbers to work. Well, the seller seems pretty motivated. They seem like they want to work a deal with yet that are just really stuck on getting $80 thousand. Well, and a situation like that where you're close to getting a deal accepted. I say go ahead and write the contract up for $80 thousand. And then when you send your inspector in, have him try to look for ways to basically justify your offer. Almost always when you send your inspector and they're going to find different things that roof needs. R0 replaced A's new HVAC unit. It's got some plumbing problems or leaves, it's kinda moral problem and the basement, things are gonna come up that are gonna help you justify the additional $10 thousand discount. That is going to get you to that $70 thousand prize point. That's going to make the deal work. But you're at $80 thousand on the contract. So what do you do? Well, you get the inspection done. Now you have validation that an additional discount is warranted. So you put together an amendment. That's another simple one page form saying that we, you know, we're amending the purchase price on the day original contract to $70 thousand because, you know, the the items you found in the inspection and obviously the seller does not have to accept that. However, since you already have the contract together with them, they're kind of emotionally invested in the deal. Now. They've they're kind of locked in and their mind on you buying the house. And in most cases it's going to be more appealing to them to modify the contract and continue going forward with you than it is to start all over. So that is what I mean by get the contract signed and then make an amendment. Yep. So that man, I'd probably more than half of the houses that I've I've done exactly that. And that's helped a ton and helps you get a better price on the property. So next, be personable, but not fake or Uber professional. This is just a matter of how you're coming off to the homeowner. You'll want to be friendly. But she had man, you don't want to be fake and you for sure don't want to be some super-duper, hot shot real estate investor is Cauchy and pushy, that kinda thing. So do not do that. So that, that kind of feeds into this next point. Don't be pushy, threatening or desperate. Things like that. Man, people see right through it. And boy, you make a bad impression on somebody, even if you could be the guy that is their solution to their real estate problem. Boy, they, they don't want to deal with somebody they don't like. So be careful about how you're coming off to these people if you want to get more offers accepted. And lastly, act quickly and deliberately. And a situations, you know, a lot of times for these sellers, you know, one of the things that's really important to them is they won't this done fast? Selling a house that's usually not something that is a particularly pleasant or enjoyable process. And a lot of cases, especially when it's a motivated seller, they just want it done. So do what you say you're gonna do. Stick to your timelines. Don't drag your feet. And yeah, act quickly and deliberately. Hemingway, when proud an opportunity to get an opera excepted, get it done when they get the contract back till you get it sent. Title company, your attorneys to be right on the ball to get the ball rolling as soon as possible with that kind of thing. And that'll help you out to. And just to wrap up this slide, I got to reiterate that first again about having a follow-up plan. If you want to get more offers accepted, follow up, follow up, follow up, follow up, and then finally, follow-up. I know that's annoying to here. But that's one that is the biggest mistake I see people make when they're trying to get houses is accepted and they're trying to get more offers accepted as they will make a single offer. And then it is, it is either rejected or ignored. And they never do anything else about it. They never follow up. There are only two times when you should stop following it up. And that is when you have bought the property or somebody else hasn't brought the property, as long as it's active and per sale, you got to follow up and you would be shocked at how many more deals you will get by simply following up on a regular basis on these deals. Alright, how that helps, that is how to get more offers accepted. Moving on. 21. Get Your Funding In Order: Okay, now we're getting into the section where we are going to be talking about funding your rental purchases. And so first, we're going to be getting your funding in order. I mean, you gotta begin that pre-approval getting downpayment is working on your credit score, all that stuff. So that is what we're talking about now. And primarily we are talking about using the b RRR strategy through all of this. And again, that is by Rehab, rent, refinance, repeat. That's tried and true strategy for, you know, if you're going to be using banks to buy rental properties, which most people are. So you want to be getting that pre-approval from a lender. You also want to be working on paying down your personal debts, credit cards, student loans, cars, or anything like that, you want to be getting yourself and as good of a financial situation as you can to qualify for the best loans and the lowest interest rates and have financial reserves, you know, should problems come up with your rental sets that another thing that these people are gonna be wanting to see, lenders are certain amount of reserves. A lot of people, a lot of times they say, you know, six months reserves per property, that kinda thing. So yeah, you're gonna be wanting usually about 20% down on properties was six months reserves is what lenders are going to be looking for. And as good of a credit scores, you can get. So 20% down. On average. Rentals near area go for a $100 thousand, you're going to need 20 grand, $50 thousand, you're going to be anything ten grand. So just think about what the rental prices are in your area to determine like what kind of down payments we're talking about here. So another thing that you could possibly use to help you buy properties is an IRA account, your 401K, you can do what's called a 1031 exchange, which is basically moving the funds from one investment into another. Self-directed IRAs, like equity Trust is a company that has self-directed IRAs to be quite transparent here. 1031 exchanges and working with self-directed iras is something that I'm not that experienced with. I think I've only done it one time. But depending on what your situation is, if you've got that, you know, retirement account and you've got money sitting there, possibly transfer and that over to a self-directed IRA would be a way to get you into rental properties. So it's something to think about is just food for thought. If you've got one of those accounts. Again, work on cleaning up your credit score as good as possible as what you're aiming for here. So if you haven't looked at your credit score recently, there are websites like check my score. And it's super-duper cheap. I mean, you get it runs you through all of the three credit bureaus, Experian, Equifax and all that stuff. And you can learn exactly what your credit score is and also learn what you need to do to help improve it. So that's another good thing to do right now. So as far as buying rental properties, conventional loans are a very, very common option for funding these deals, probably the most popular options, conventional loans like you would go to a bank and get alone on a rental property and FHA loan. That's what a conventional loan is. Another thing to possibly consider are what is called asset-based lenders. So an asset-based lender is somebody who they're not as concerned about. Your credit score and your background, and all this stuff. What they want to know about is the asset itself. How far below market are you able to buy this? Usually there's, you know, sixty-five percent of value or something like that is what a lot of them will lend on. They're basically looking at the asset itself. They want to know that if they lend you the money on the property, if you default on the loan, are they going to be able to liquidate it to get their money back? And that's essentially the perspective of an asset-based lender. But based on you, your qualifications and your experience, and your access to conventional loans, maybe asset-based lenders would be worth looking at to give you some more options. Private money is a very interesting options. One of my favorite ways to, to buy, to fund deals, whether they be wholesales, flips, rentals, private money is great. It is basically borrowing money from a private individual. I mean, your grandmother could loan you money to buy an investment property. That's usually not the case. Generally, I would advise probably not borrowing money from family members. That's just not a recipe for good situations usually. But he had a private lenders a lot of times these are just private investors who have a certain amount of money that they're trying to put to work. And you can be that guy that uses their money to fund your property and in exchange, you are paying them interest on that loan amount. So that's a very simplified nutshell. What private money is about? And then one last option would be owner financing. Now, I know private money and owner financing, these are kinda getting into realms that are possibly best reserved for people that have some experience. Because owner financing you're going to have to be actually negotiating specific terms on a, on a financing arrangement. And that's not something that's just really Bernoulli's. I wouldn't think ie I don't think I would recommend new guys to be going that route. But for other guys who have a little bit of experience, you've done a few closings. You've, you know, maybe you've got a couple of houses already. Owner financing could be a way to go. Now, usually when you go on the owner financing grout, there's going to be something else going on with the property. A lot of times a lot of times there's some factor that is preventing it from being sold by a traditional means. And it could be any number of things. Tenet problems, market problems, neighborhood problems, just whatever. A lot of times there's some kind of problem going on behind the scenes because otherwise, why would somebody who could just sell their house for an outright cash sale? Why would they consider stretching that situation out for an owner financing deal? So anyways, there's plenty of owner financing opportunities out there. You just have to start looking for them. But understand that a lot of times there's there's some factor that is causing this owner to be motivated enough to consider owner financing instead of just an outright sale. So just keep that in mind. Okay, so next we're gonna talk about different types of rental property loans. So that's what we're getting into next. 22. 8 Types Of Rental Property Loans: Alright, this next section is just going to be basically sharing bullet points with you. This is just a kind of relay options to you that may be worth exploring depending on what's your own personal situation is your market. I'm trying to trying to share with you funding opportunities that may work for your situation. Now, I'm not going to I don't have specific sources on these. These are basically just types of loans that may or may not be a very good fit for you depending on your situation. So hopefully this next section will give you some options of different loan types that you can look into. So I'm going to just rattle through these pretty quick. There are eight different types. The first is a conventional loan. This is known as a conforming loan, and these are offered by mortgage brokers, traditional lenders such as banks and credit unions that are guaranteed by Fannie Mae and Freddie Mac. If you have, if you own a private residence, if you own a property that you are living in right now, it is quite likely this type of loan that is on that property. These loans generally have low interest rates and fees. If you have a good credit score, down payment of 15 to 25% is typical. A lot of times that would be waived if you if you were a first-time homebuyer, lunchtimes yours, first-time homebuyer incentives that are rolled into these conventional loans. And these particular loans. As an investor, you can have up to ten properties on these loans. Now, I've heard some people say five properties. I've heard other people say ten. As best I know, ten is the right answer, but I could be wrong, correct me if I'm wrong, but that basically sums up what a conventional loan is. Alright, next we have FHA, multiunit financing. This is a multifamily loan backed by the Federal Housing Administration or the FHA. And these are offered by mortgage brokers or banks. These are good for new construction or rehabs. And the downpayment and credit score is less important than with traditional lenders on these properties. You can use existing property rental income to help qualify for the new loan. So what that means is, let's say you're buying attended tenanted property. That property income can be factored into this equation to help you qualify. So that's kinda one of the good things about this particular product is if it is rented, if it is making money, that's actually a good thing that can help you get approved. For this particular type of loan. You must actually reside in the property for at least one year. So that's the FHA multi-unit financing. The third type is VA, multiunit financing. So the va stands for Veteran Affairs. These are basically military personnel, people that are that are enlisted or have been enlisted in the military. So multifamily loan backed by the US Department of Veterans Affairs. These are offered by mortgage brokers and banks. They're available for active duty members, veterans, and eligible spouses. There's no minimum down payment or credit score, which adds a lot of flexibility for these loans. And, you know, if you have been enlisted or in the military, that's one of the great things about it is they're kind of easier to get into. You can purchase up to seven units and the borrower must also reside in one of these units. For I don't I don't have it all in there, but I believe it was actually one year. So that is the VA multiunit financing. Number four is the blanket mortgage loan. And these can be used to finance multiple rental properties under a single loan. They can be used for any type of income producing property. They're offered by mortgage brokers or private lenders. And the properties are cross collateralized, meaning each property collateralized has other properties within the lung. Downpayment credit scores, interest rate and loan term vary based on the 1R, the lender and specific properties. And it is possible to refinance existing individual property loans under one of these blanket mortgage loans. So you may end up finding that, you know, if you've got, let's say you have multiple conventional loans like we talked about in the first slide, you may actually get better interest rate if you were to refinance all of those under a single one of these blanket mortgage loans. So that's something to consider. Okay, number five is a portfolio alone which can be used to finance single or multiple rentals. Same lender that are offered by mortgage brokers are private lenders. And portfolio loans are held by the letter and are good auction for creative financing. Now downpayment, credit score, interest rate, and loan terms can be customized to fit the needs of the borrower. But one of the downsides with these poor failure loans is that, well, it's kinda, it's kind of a pro and con for at the good thing is that they are less stringent with borrower requirements. But the bad thing is because there are less stringent, that means higher phase prepayment penalties and balloon payments where the entire loan balance is due at the end of a short-term loan period. So this kind of a double-edged sword here. This is, this is kind of an asset-based loan where they're looking more at the fundamentals of the assets themselves and much less at the, the borrower is requirements. But because of that, that alone is a bit more risky for the lender, which means higher fees, prepayment penalties, et cetera. But that in general is a portfolio alone. All right, the sixth type of loan here is a private money alone. I've talked about this a few lessons back. I like private money loans. They are offered by private lenders. They're good source for funding for future investments based on current property performance. They're extremely flexible in terms of fees. I mean, you can really negotiate some kind of situation that just works well for you and whoever you're private lender is, some private lenders may participate in the project in exchange for lower interest rates and or fees. A lot of times, they may want to be more involved with the process just to ensure that the investment is going to be successful and that their money is going to be saved and that kind of thing. Personally, I've never had had a private lender work closely with me and my projects. But I guess maybe it's just because I don't know, once you have some experience and things like that, private lenders are going to have much more faith and confidence in you and probably not as No, it's not going to be it's going to be less likely that they're going to want to be involved in the project, I think. So. This private money alone has maximum flexibility for deal-making. The terms are infinitely negotiable, just whatever works for you. But generally speaking, private money loans are not available for newbies. And that is simply because most private lenders are going to want to see some history, some experience. They're going to want to know about some of your past projects in order to have that confidence to loan you money. And newbies just aren't going to have that experience yet. So that's why it's probably not a great deal for newbies, but I love private money loans. It is my personal way to finance deals. So that's the private money loan. The seventh type of loan is probably one that most people are familiar with is called a hillock, or also known as a home equity loan. So a home equity line of credit draws on the accumulated equity in one property as a source of funds to buy another. So if you've lived in your primary residence forever, you know, whatever for years. And it's got quite a bit of loan paid off or maybe it's maybe you own it free and clear, there's a lot of equity there that can be used to, to buy another property. So this is a type of second mortgage that works similar to a credit card with monthly payments and let alone amount that is secured by the property. They are typically at a fixed interest rate. And with a home equity line of credit, you can typically borrow between 7580% of the property equity had depends on the borrower and it depends on the lender. But that's kind of a typical percentage. Interest rates are generally higher than with conventional financing. And this is a good source for funds when and if needed. And the reason for that is, regardless of what the market is like, regardless what the investment opportunity is like. I mean, you could get a home equity line of credit and use that money on really just about anything you want it to. That can be kind of a dangerous thing if you're spending it on stupid stuff. But it's nice that it gives you that extra added flexibility if you're in some kind of a position where there's a great deal on a property and you want to spring on it and you can't get pre-approval from a lender or some situation like that. Essentially, if you're having trouble getting funding elsewhere for a project or a purchase. This is one that is usually easily accessible as long as you have enough equity and your property to qualify for a home equity loan. Number eight is seller financing, which is also known as seller carry back owner financing or a purchase money mortgage. I've not heard it known as a purchase money mortgage all that much but so are carried back and owner financing is very popular names for it. Sellers must own the property free and clear in order to offer seller financing. It's a good option for buying when the market is in a down cycle or for property that won't qualify for additional financing. In a previous lesson, I talked about seller financing. I was talking about how oftentimes there's usually something kinda going on behind the scenes that is motivating the owner to consider owner financing or seller, seller financing. And that's exactly what I'm talking about here. Like if the market is in a down cycle or a property that won't qualify for a conventional financing. Those are examples of those kind of situations that would, would incentivize a seller to consider seller financing. Loan terms, again, are completely customizable. Whatever you and the seller come up with a credit score is irrelevant. It's just not a factor whatsoever. Low or even no downpayment is possible with seller financing. And again, hidden on this point is usually these properties are distressed in some way. You know, in order to incentivize that Similar to take seller financing rather than just selling it by some more conventional method where they would just be done with the deal, you know, domain. So that wraps up a different types of rental property loans. Depending on what your situation is, your market, your experience, your funding situation, just all that stuff. Some of these options are going to be more appealing to you and some may not be an option whatsoever. Depends on different factors that you have to kind of figure out on your own. But depending on what those factors are, some of these options are going to be like, you might be like, oh, that sounds interesting. Or definitely not thou and definitely not that one. But o seller financing, we could consider that. So, you know, you just have to determine which of these eight options are best for you. And I will say this, there are options, you know, outside of even these eight options, there's all kinds of different loan programs and stuff like that out there. But these represent basically the eight most common. So hopefully between these aid options, they'll really kind of get your gears turn in so that you can come up with financing options that work best for you. 23. Could "House Hacking" Be For You?: So next here I want to talk about an option that, to be quite honest, this is not going to be a great fit for most people. However, for certain people, this could be an incredible option. And that's why I think it's worth sharing. And this is basically a way to finance a rental property and potentially, you know, gets you into a very, very low interest rate accessible loan. And actually kind of get you off to a very, very good start. Because what we're talking about here is not a single family home. We're talking about a duplex that you would be buying and you would be living in one side of the duplex while the other side is rented out by your tenant. And there's there's major pros and cons in this and this example here. And basically, the other thing is, this strategy has different names. What a lot of people will refer to it as is house hacking. And it's, again, it's not for everybody but, but great for some. So here's one of the best parts about house hacking is that if you do this, it qualifies as a primary residence. And again, remember, we're not talking about a single family home. We're talking about a an attached duplex where you live in one side and a tenant lives in the other. So these are much cheaper to finance than a rental property law. I mean, primary residence loans are, have a cheaper interest rate because, you know, as the owner of the property, you can have a vested interest in it. You're going to take good care of it. You're going to be there a lot. And it just represents low risk for the lender. Whereas with rental properties, people are living in them that do not own the home. They do not have a vested interest in the house. They generally don't take great care of the properties, you know, domain. So it's more risk to the lender. So they charge higher interest rates on rental properties. But this is different because it qualifies as a primary residence because you're living there. The thing is, these kind of situations could qualify for an FHA loan with something around a 3.5% down payment. So super low downpayment, FHA loan. But I have what you call these parenthesis. No quotes. I have quotes around could write here because the thing is FHA loans, generally the property has to be in good condition. There can't be any kind of weird problems with it. It can be some kind of distress situation and it has to be it has to meet that basic criteria in order to qualify for a standard FHA loan. However, we're talking about rental property here, investment property. You're trying to buy something that you can buy at a discount, that's gonna make your numbers work and all that stuff. And it can be tough to find a really great deal on a property that will qualify for an FHA loan. Again, FHA loans generally made the property is not distressed and it's in good shape when properties are not distressed and in good shape we're going to be paying more money. Form. You see what the conflict is there. That's why I have the parentheses quotation marks. Quotation marks around could there. But in the situations where this, you can get that qualification, it can be a very good situation as long as you are up for dealing with some of the other downsides which run it talks about. So the strategy definitely has benefits and drawbacks. One of the benefits is that the tenant that is living in the other side of the duplex be paying all of your mortgage payment. So you could literally be living for free inside your primary residence while attendant is paying for the full mortgage. They could also not be paying completely full mortgage. But you understand potentially you can have attended paying your primary loan your primary residence loan payment. Let's just kinda crazy to think about. So yeah, you can possibly cover your payment completely. This builds equity twice as fast in the instance that you are pending against the loan and the tenant is also paying against the loan. So you basically have to peoples simultaneously go and, uh, to pay down the principal of this FHA loan. Now, one of the downsides is living closely with your tenant. It could be a weird situation. How could you live right next door to your tenant? It could potentially be kind of an awkward situation because it's one of those dynamics where it's kinda like, you know, you're the boss and the employees there and I don't know. It's kind of a I don't know. I don't really know how to describe it. I mean, for me personally, I feel like it would be a little awkward living right next door to attended, but maybe you are different. I don't know. If you could imagine the situation where maybe the tenant next door is being troublesome, magnitude much noise, not make payments, not taking care of the house. They have keeping a messy yard, having noisy visitors over. I mean, any number of kinda weird stuff like that can happen. Can you imagine going through even an eviction right next door to your property? It could be weird. Obviously, you're giving up some privacy and freedom. But this house hacking strategy could be an incredible option for some people, especially if it's their first rental property, but obviously not so good for everybody. So you just have to determine if this is something worth looking into. Potentially, this could be an option for you. I'm certainly not trying to steer you in that direction, but do consider it. Because for the right person, that can be an incredible way to get into a rental property. So could this be an option for you? I don't know. For some people it could be incredible. For others, it could absolutely just not be searched this soap it worth considering at all. So just determine if it's something right for you. House hacking grape or some nop or others. Look into it. Moving on. 24. Managing The Escrow Period: The escrow period is the period of time between the initiation of closing and the actual closing. So basically, when you have a contract accepted and you send it in to your closing attorney or title company and you tell them go for them to order or good to get the title and the appraisal and all that stuff. That's the initiation. And then the day everything is signed, the money is sent everywhere. It needs to go the paperwork side, everything is done deal. That is the escrow period, the time between initiation and closing. So the escrow period, whenever this period starts in my mind, this begins what I call phase two of due diligence. Phase one was running your numbers, nationalizing rent and seeing how much rehab is going to cost and all that stuff to determine how much to offer. Phase Two of due diligence is the inspection occurs, the appraisal occurs to verify that the properties actually and the property value and alone makes sense with each other. The title search occurs. Hopefully the title is clean and clear. If it's not, then sometimes deals die right there when there's some kind of title problem that cannot be overcome. Most of the time, however, the Title Company can remedy whatever title problems. It can usually kind of stretch out the timeframe of the closing by a lot. Sometimes other times it could be some kind of minor title problem that is really no big video. By the way, these tidal problems and stuff, this isn't any kind of responsibility of your own. It's not it's not on you to remedy these title problems. They usually occurs, you know, it's it's what you're closing attorney and tile company do they will work to rectify those issues. You may or may not be involved in that process. But they'll let you know. But generally speaking, even title problems aren't that big of a deal. It just usually add some time for them to, to figure out problems and that kinda thing. Phase two is also where you're going to be going through all of your H2A documents. If there are homeowners association, if you're buying a condo or something like that that is involved with homeowner's association. This is when you're going to be able to review all of those documents, be sure everything makes sense, and then transfer into that homeowners associations so that, you know, it's it's all legit. The homeowner's association, all the costs of landscaping, and sometimes they have a pool and sometimes there's a gate and or maybe it's on a golf course, any number of things. I don't I don't generally like buying houses that have homeowner's associations involved with them. But hey, some sometimes you can't, especially with apartment buildings or condos and such as that. A lot of times there's homeowners associations, but this phase two of due diligence is what you're going to be reviewing all those HLA documents. And then after the escrow period is when the closing occurs at the end of it. That is when the paperwork is signed. And signing of paperwork is something that can be done either right there in the office of the closing attorney or the Title Company, or it can potentially be something that is just handled remotely. You can assign a lot of the stuff. Usually the official closing documents, they're gonna want paper copies of those so that they actually have to mail you a packet of all the documents that you're going to sign, like sign with a pen on live, real paper. And then it's gonna get emailed or mailed back to the closer. But yeah, that is basically the escrow period. Usually not too much is done during the escrow period. Well, not too much is done by you. You know that the inspectors and appraisers and tile companies, they're all going to be working hard. Your job through the escrow period is basically just to kind of ensure that everything is staying on track. And if anybody asks you for anything particular regarding and special inspections, appraisals, tidal, if they need you for anything, you gotta be Johnny on the spot and be sure that you're helping them as fast as possible, as expediently as possible. Because you don't want to be the guy who holds up this whole process. So you're there to basically kind of oversee and away and to just basically be available in case anybody needs any kind of specific help from you. So that's basically the escrow period. You know, not not too big of a deal really, but just kinda part of the process. And then after Escrow, that's one of the closing Vickers. So let's talk about closing next. 25. Closing Day: Okay. So the closing is about to occur. I mean, the closing is a big day. I mean, I I still get excited on on closing days and maybe even a little bit anxious too, because I'm like, ooh, hope some kinda crazy thing doesn't happen on the, at the last minute to wreck everything it and, you know, weird things have happened. But generally speaking, if if everything's looking good up to this point in the process, things generally go off without a hitch. So what happens on closing day? Well, the closing process is orchestrated by the closer it's nothing that you specifically have to do. I mean, you just have to do what the closer tells you to do. And it's usually kind of a it's usually not that eventful of a situation anyways, but everything is handled by the closer. But regardless of that, it's good for you to kind of keep tabs on the process and kind of oversee things and be available should they need you for anything particular. But closing days when all funds are wired into the escrow account, all signed documents are collected and confirmed. Utilities are transferred to you or the tenant's name, depending on how ever you want to set that up. The lease is transferred to your name from whoever the previous landlord was. A you know, if it's a if it's a turnkey rental and there's already somebody tended to there, then the lease is transferred into your name. It's a if it's a vacant property, obviously, there is no lease yet, but this would be the day when the lease is transferred. But when all that stuff is done, you're done. You've closed on a rental property and it's yours now. And I always especially for somebody who's bought their first rental property, it's always kind of this feeling of that may be a little bit of a doubt and kind of this combination of excitement and doubt and stress and all these other things going on as like, alright, now what the heck do I do? Well, this is really just part of the process. There's obviously more work ahead of you at this point, but man, you've done a huge, huge chunk of work when you get to this process. But I definitely do understand the feeling of kind of I always kinda compare it to I have a 10-year-old daughter, but I remember that first day whenever we were back home. And it was just there's no doctors know Midwife. No, no, nothing like that. It's just mom, dad and baby. And you're kinda like looking at this thing in your life. Now what, you know, because you're responsible now, things have just gotten real. And that's kind of a similar situation here to closing day. Things have just gotten real, but it's a very, very good thing. This is a huge, huge milestone. I mean, if you've bought the right property, you've done your due diligence. I mean, you've you've done nothing wrong. It's all part of the process. And now it's, things are about to get exciting because now we're going to start talking about renovations and talking about tinting, and trying to get this thing set up so that it's making you money. So let's move on. We're getting into renovation mode. 26. You Bought A House... NOW WHAT!?: So you just bought a house. Now what the heck do you do? Well, first off, congratulations. As I said previously, this is a huge milestone, especially if this is your first house. I'm in. Great. It's never an easy thing to do, but the process does get easier and easier the more you practice it as far as finding deals, Meghan offers and closing and the financing aspect of it, that's not easy stuff, but it becomes very, very natural with time. So congrats on making it this far. So the next thing you need to do is get the property insured. So through this slide here, I basically just put in kind of average numbers. You know, what I'm familiar with and my mark at these numbers may certainly changed for you. But generally speaking, insurance, you know, 1200 bucks a year is basically what you're going to be looking at there. So call up your insurance insurance agent, get an insurance policy on this house. Next, you want to be sure that the locks are changed. Hits not too much of an expense, especially if you're just placing like, you know, two or three exterior locks, usually around 200 bucks, something like that. D trashing the house. This one can definitely be expensive. If it's just a basic D trash, you know, 200 bucks, something like that. However, if this is a house that you're buying from, like a hoarder situation where it's piled like ceiling, the floor with crap. Just I mean, trust me, I've I've I've bought hoarder houses on more than one occasion. And you definitely wanna be factoring in the cost of the D trash into your offer because this can be substantial, I would say about $5 thousand to completely do a a very, very serious D trashing like the kind where they bring out the 20 yard dump stirs and fill that sucker up with everything from furniture to close to newspapers to dead cats. And you just would not imagine some of the things that come out of hoarder houses. So if it's a serious hoarder house, it's going to be pricing, but hopefully you factored in that cost if it, if that is the case. The next one is consider installing an AC cage. This cost between three hundred and five hundred dollars for the installation and the cage. And in case you're wondering what the heck that is, an an air conditioner, a AC condenser cage is literally a metal cage that goes over top of your exterior air conditioner condenser? The part that sits outside in some areas, especially around it like, well, I shouldn't say especially around Atlanta, but it's not an uncommon thing at all to have an AC condenser cage on your air conditioner around in Atlanta? I'm not as familiar with it and other markets, but pretty common occurrence in Atlanta. Atlanta, such a bad feel like it'll be hard on Atlanta say in that. But I mean, basically it comes down to if you were in an area that is prone to air conditioner condenser theft, install an AC cage. It's as simple as that. About 300 to 500 bucks is what you're looking for that expense if it's necessary. Also, you want to go around and meet with the neighbors, just kind of in the surrounding area, you know, and just just talk to him, shake their hand, give them a business card, let them know who you are, let him know you just bought the house across the street, you know, give me a call if there's any kind of kind of trouble. I know. Now this is a probably should have said something about this when we were talking about making offers. But this particular step is actually good to do. Actually, even before you own the house, you know, before you go under contract with the house, you know, talk to the neighbors and just talk to them, tell them you're looking to buy this house and they don't have any problems or anything that's going on in any weird stuff like that. A lot of times you can learn some things. Sometimes it can be weird, you know, gossip, drama stuff, that kind of thing. But the main reason you want to meet the neighbors is so they know who to call in case there's some kind of an issue or a fire, whatever, any number of things, they can be. More eyes that are there to help you out should the need arise. So leave me a business card so they know who to get in touch with should they need to. So it's just one of those good steps that's there to take. And again, I'm sorry, I didn't tell you to do that before the stage in the game, but the information's out there, I guess that's what matters the most. So next, also put together a scope of work. This is basically where, you know, you walk through the house and try to determine, you know, all the little projects that you're going to want to have your general contract or take care of all of the little renovation projects. New floor in the kitchen doesn't need new appliances, does it need a roof? Just painting on the walls, new toilet, just any number of things like that. You're going to want to put together a scope of work and then communicate that scope of work to your general contractor. The scope of work is what the general contractor is going to go by in order to perform the necessary rehab on the property. So that's what your scope of work is. You can even walk through the property with your general contractor as you put together your scope of work, that's another way to do it. But you're going to be you want to be very conscious of what is really needed. When concerning the renovation for a rental property. You want to be very careful that you don't go overboard. There's a very distinct line drawn between a property that you would be doing a retail flip level renovation on and a rental property level renter renovation on their very, very different things. And some people get that very, very wrong, which can be a very expensive mistake to make. And we're going to be talking much more about that in upcoming sections. So yeah, these are just some basic things to do immediately after closing on a property that you just purchase. 27. Rental Property Renovation Standards: Let's talk about rental, property renovation standards. In the previous slide, I was talking about how you want to be careful not to turn this into some kind of retail fled because it is not to have you do that kind of level of renovation on rental property. It's just money wasted. So you have to have certain standards that you're going by for a rental property versus a retail flip, which are going to be going usually higher-end renovations and appliances and finishes and all that stuff. This is not one of those. So rental standards can vary market to market. So what I suggest you do is actually do a walk through of some rentals that are available in your market to get a feel of what kind of standard it is and that your market and the market that you're going to be investing in. Some markets are going to be very, very basic finishes. Other markets have a higher standard even on, on, on rentals. And you want to be sure that your begin competitive. It's, this is kind of a little bit of an art here, trying to figure this out because you want to do a good enough renovation where you're meeting the rental rental standards of the neighborhood because you want the tenant to be happy. You want to justify the rent that you're going to be charging, but you don't wanna go overboard. So obviously you're not the one living there. You're not trying to make this all swanky for you. So, you know, try to separate your living standard from the standard of the tenants that are going to be in the property. And again, don't get sucked into doing a retail flip renovation on on a rental property, you know, keep in mind, this is a rental, not a retail flip. It's kinda easy to lose sight of that sometimes. So just always keep in mind that it's a rental. Don't don't don't let things get out of hand. Don't let your general contractor either, you know, even steer you in the wrong direction. You gotta have the specific standard in your mind and stick to that standard and don't go overboard. Now, as far as materials and finished in such as that goes, think modest, hard wearing and cost-effective. Tenants can be very hard on rental properties. So you want to be using materials that's going to they're going to hold up to the abuse. Basically. You are the one that is emotionally and financially invested in this property. And tenants, they don't look at it the same way. They just need a place to live. And because of that, they often don't treat things the way you would be trading things if you were the one living there and taken care of it, they're just generally kinda harder onStop, so be ready for that and you use the right materials. I like to do what's called tenant proofing to rentals. And then we're gonna get more into that in the next lessons here. But basically ten Improving mains, having some forethought and using strategic materials so that you can prevent common and expensive where before it happens. And that's tended proofing. That's what we're going to talk to. And that's what we're gonna talk about in the next lesson. 28. "Tenant Proofing" Your Rental: So tenant proofing your rental. This is a pretty simple concept, and it really just involves having some forethought. As far as, you know, kinda what the high where items are going to be inside your rental unit and the things that are commonly replaced between tenants and such as that. I mean, you're trying to really just for one thing, be careful about what you're spending money on up front if you're doing an initial rehab. And also think about the items that are commonly replaced or worn out between tenants. So here's here's kinda just some pointers here. First of all, this is another stupid mistake that I just see people make. And again, this is, this is going back to just think and you're doing a retail flip instead of a rental, but do not use hardwood flooring and a rental property. It is incredibly expensive. It's very high maintenance. It is not water tolerant, and your tenants are going to trash it. I mean, they just are there gonna be dragging furniture across it. There are gonna be scuffing it up. They have pets are going to be, you know, scratching it. Things are gonna be spilling water on it and make it it wore. But I'm telling you just just don't do it, don't do hardwood flooring. What I like using is what's called a laminate flooring. Then one of the most common brands that I know of is life proof. You can get it at Home Depot. It's I mean, it's a premium product. I mean, it's it's definitely not something I would call cheap. But man, it's tough. And it's very, very tough stuff. I mean, you put that stuff down and I mean, if things go well with your rental amine crap, that stuff might last ten or 20 years or something like that. You can replace like single boards out of it. If one gets just really bad messed up. It can be a little bit of a project, but it can't be done, but it's tough stuff. And it's great. I liked the life proof fluorine. Now, you want to be careful with laminate flooring because sometimes even with laminate flooring, they can be susceptible to water damage. Sometimes even laminate flooring uses materials inside the laminate, inside the layers that will swell up and buckle and all that stuff. So just be sure it's a very waterproof product like life proof. Now life proof, it'll kind of expand and contract with temperature changes. But inside a house that's going to be staying around 70 degrees or something like that. It's really not that big of an issue, but I like life proof. Certainly avoid using carpet. Meant why do people put carpet and bathrooms? I just don't understand that. Usually it's not too common now, but and a lot of houses that I buy less carbon in the bathrooms. It's just so graphs. So stinking grows. It stains at holds, odors and where's poorly. You can see like the common walking paths around furniture and such as that. You know, again, it's a rental property if it comes with carpet that can be salvaged and used in claimed and it looks halfway decent. I would save leave it in there unless it's in the bathrooms, get it out of the bathrooms. But if it's in living rooms and bedrooms and places like that, fine. If it's good service or pull carpet, I would leave it there until it needs to be replaced. Honestly. Generally, if you do just absolutely have to use carpet for one reason or another, maybe get some great deal on it and you just want to use it. Darker is generally better, had just Usually what happens to carpet as it gets stains and stains are generally dark. So darpa, darker carpet kinda just kinda helps hide stains better than really light carpet. You can do what's called adding a felt pad rule to your master lease. And what I mean by that is just basically adding a line item inside your release that says the tenants must use felt pads on the feet of their furniture. Some of the worst damage that happens to flooring is when people are moving furniture around, dragging it across floors, move in, you know, whatever, recliners and couches and stuff like that and dragging it across the floors, you know. But fell pads when they put them on the fingers of the furniture really help prevent that kinda damage. And to help encourage that to happen. Just Adeline and your lease that says landlord has applied Linux, tenants with a pack of felt pads to be used on furniture, feet, any furniture or scratches. That Is that occurs during the tendency of this lease is the responsibility of the tenant and will be withheld from the security deposit. That's just kind of a rough line off the top of my head. You know, that you can put in the lease, but doing something like that helps encourage them to take care of the floor and to use felt felt pads on their furniture. It's just a thought, just something you could possibly do to help protect your floors. So as a part of that felt pad rule, also be sure that you take good before photos before they move in. Again, the thing is you can write in really whatever you want to you in the lease, as long as it makes good sense, this felt Pat rule is a good place to add something into the lease, but unless you can back up your claim of the tenant actually causing specific damage to the property. There's really not much you can do. However, if you haven't felt pad role in lace and you have very good before photos of the of the fluorine before the tenant moves in, and then you have photos afterwards that show obvious scours, gouges and scratches in the flooring. Now you have grounds to to withhold wherever you need to from their security deposit to fix the damage that they caused on your flooring. Alright, here's some additional tips on tenant proofing your rental. Use gloss paints instead of flat paints or egg shell on the walls. Close paints are just way easier to claim. They might be a little more expensive than those other pennants. Usually the more gloss that's in paints, that definitely makes it a little more expensive. But with gloss paint, you can just wiped down and clean the walls where eggshell and flat. They just can't really do that. They just kinda hold dirt and fingerprints and stuff like that. So consider using gloss paints to make the walls more cleavable between tenants. I'm gloss pains, By the way, I mean, this will probably help you save like, I mean, if you have to repaint the whole house between tenants, you're probably looking at two grand I guess, something like that. But if you can prevent that cost between tenants haven't afresh things up, you can just wipe everything down. No, I mean, that's money saved. So yeah, cause page can be a good idea. Install door stopper is behind every door. I mean, the reason that is is where doors swing open into walls and the door knob jabs and the sheet rock. I mean, those I mean, it makes a bigger hole. Endorsed operas can help prevent that. I mean, those big holes in walls. I mean, those are not my cost you a 100 bucks or something like that, to have those fixed costs endorsed operas are much cheaper than that. So doorstop ors or another thing, also ensure that anything that is hung on the walls, pictures, mirrors, just anything like that that is mounted into the walls. Ensure that they are into studs and not just stuck into drywall. And people just have this habit, a stick in these pictures and all that stuff straight into drywall without even trying to look for a stud. And if it's a big heavy mirror or a picture or something like that, that's not going to just rip off of there. That's kind of important. The other thing you can do concerning that is just you gotta consider how far you want to take this. I mean, you can put it in your lease that tenant is prohibited from hanging anything on any walls. You could write that. You can enforce that. You could you could put that in the lease. However, I don't know that the tenant may not like that so much that they don't want to stay in the rental. I mean I mean, if it's somebody that wants to stay in the rental for a long period of time. They're gonna kinda wanna make it feel like home. And you're going to have to just deal with holes in the walls. But what you can do is protect yourself with the lease itself. I mean, just again, consider adding line in the least that says something to the effect that any damage cause to the walls or the paint or the sheet rock, any damage caused by the tenant will be withheld from well, sorry, let me rephrase that. The cost of any damage to the walls caused by the tenant will be withheld from the security deposit. So what's something like that would essentially mean is that a the tenant can dig and hanging pictures and stuff on the walls. I can put holes in the walls, but they are going to have to either repair or pay for the damage that they cause to the walls and hanging those pictures up. So you just have to determine which direction you want to go with that. And I've talked to a couple different times about ways you can modify your lease. We're gonna get into a section where I'm going to be first of all, I'm going to be supplying you with a master lease form, the one I use as part of this course, and you can modify it to suit your needs. Were going to go through all of that stuff, so just don't worry, I'm talking about kinda modifying the lease a few types. Don't don't sweat it. We're going to go through all of that stuff that you're very clear on how that works, so that you can make those determinations of whether or not to modify the lease. But yeah, regardless, smart tenant proofing can save you all kinds of money. And some ways it might actually cost a little money up front as far as using the raw materials and gloss paint and all that stuff. But it's money that you're going to money well-spent. It's it's smart money to spend up front to tenant proof your rental. Trust me on that. I'm telling you it's good money spent up to a point. Don't don't go insane, just modest improvements to tenant proof. Your rental. That's money well-spent. 29. What's A General Contractor?: What is a general contractor? Well, first of all, a contractor is one who fulfills the requirements of a contract. And this is the world of real estate. This could be any number of people. It's plumber, electrician painter, roofer, flooring installers. These are all examples of contractors. Now, a general contractor is kind of a tear above those guys. A general contractor is the guy who basically manages all of the other contractors. And that kind of relationship that the general contractor would manage what's called sub-contractors. And again, those subcontractors or plumber electrician and you know, all those kind of guys. So the general contractor is basically the guy who is managing the the entire job site, all of the projects that are going on on that job site. The general contractor is as the head honchos. So imagine an example where, you know, it's a it's a full on kitchen renovation. I mean, there's a lot going on there. You know, there's there's flooring being replaced, There's counters go in and there's cabinets going out, there's plumbing happening, there's some light electrical happening. I mean, there's a lot of people kind of all involved on this singular project. And if all of those people who are just, they're all at once, they'd be crawling all over everybody and very frustrated and making mistakes, they would just be a bad situation. But the general contractor's job in a situation like that are in that kind of example is he coordinates and schedules and manages all of those people so that everything gets done kind of in a smooth and efficient manner manner. And I say that right. So generally speaking, a general contractor whose job is to oversee day-to-day projects and act as a communications liaison between the subcontractor and the owner, which is you see again, the general contractor is a key player on your power to you. And it's like, it's, what's kind of interesting is like, you know, you've got all these different people on your power team and they're all critically important. And at different points of the project they all singly like, seem like they're like the most important part of your power team, but they're all just critically important. But a general contractor is one of those guys who man a good general contractors, one of those guys who can just make a huge difference and the success of a renovation, and how smooth and seamless it is a badging or contractor if there's like weird conflicts between him and the subcontractors or somebody who doesn't return your phone calls or somebody who is, you know, there's all kinds of reasons that a general contractor can be bad, just like any other person in real estate. But the good ones, the genuine ones, the professional ones, the ones who do what they say they're gonna do, their their invaluable. And that's why you need to just when you're putting together your power team, you need to ensure that you are really getting the best people on their possible, you know, and it's fine. Especially when you're starting off kind of digressing a little bit, but concerning your power team when you're starting off, you need to just kinda get place holders at first. General contractor appraiser, you know, real estate agent, you know, just just place holders. And then you're gonna work on kind of improving those people, you know, as as you go on. But yep, general contractor is hugely important, which is why we are going to drill into how you can go about finding an excellent general contractor. So that is what's next. 30. Finding A GREAT General Contractor: All right, so let's find a great general contractor. How do you go about doing it? Well, first off, you may or may not know of a website called Angie's List. Angie's List is kind of at the I'll see what sort of the web cycle. Okay. There's a website called a Yelp. And Yelp is where you review basically businesses and restaurants and stuff like that. And you leave reviews and you can search and find good restaurants and businesses and stuff like that. Well, Angie's List is kind of like the Yelp of the the the contractor world when you're looking for, you know, plumbers, roofers, and all this stuff. You can find them on Angie's List. You can read reviews and kind of read their bios and all this other stuff. However, I gotta say that I would recommend you not use Angie's List or at least use it very carefully. And the thing I don't like about it is that contractors or, you know, anybody who uses Angie's List as a as a as a patron, I guess. They can pay to have like higher tier accounts. That kind of, in my opinion, kind of artificially boosts their, their exposure and their reputation and such as that. So I kind of have the feeling that Angie's List you're not really getting the straight scoop. When you look on Angie's List. I could be wrong on that, but I feel obligated to share that feeling with you. It's so Angie's List, it seems a bit artificial to me, but it could still be a resource. Just tread with caution and keep my opinion in mind. If you do, personally, I prefer to get other people's recommendations. For general contractor, you can ask other investors, real estate agents, closers, that kind of thing. I think that's a better way to do it. And to to, to to connect with those guys. 3m meetings are a good way to do it. Rei a real estate investment associated Station meetings are just generally good for networking with people. You might even find general contractors at the real estate meeting. Or if not, then you can certainly find real estate investors. And without too much talking, find somebody who, who has rental properties are as doing. And Phillips talked to those guys and see if you can get a recommendation from that is a very, very good way to find a general contractor and way better than using Angie's List? In my opinion. You can check the Better Business Bureau BBB website for no to read reviews on general contractors. I mean, if they're legit and I have a business and all that stuff, there's a good chance they're listed on BBB. So you can check that out. Absolutely. Made with these guys and person, ideally at a job site so that they can walk through it with you and kinda give you some feedback on your scope of work and what they would suggest haven't done that kind of thing. That's a great, great way to get to know these guys. Or if they have a, an active project site that they're working on. That's a way that you can check out their work and further verify things, but definitely, definitely meet them in person so that you can get to know them, get to know how they conduct their business and gets another personality. I mean, to me, that's an important element I rented. You really need to kind of get along with each other. Whether they're just a real heavy hitter and their and their and their world of general contracting or not. I feel like the personality and the how well you guys get along as a relationship. I think that's, I think that's very, very important. So again, another very good reason to meet with these people in person. But regardless what you do, I suggest meet with at least three general contractors. You might end up with three grade general contractors. I don't know. But what's probably going to happen is if you mate with three, you're going to end up having one that really just out shines everybody else for one reason or another. Maybe you guys just click. And that's very, very important. That's a good thing if you do. But you have to meet with multiple contractors in order to, you know, have have something to weigh against, you know what I mean? So yeah, definitely end up with three. And that way you can determine which one you like best. And you can always have kind of a backup if you want. And if you need to get multiple bids for a project, there you go. There's your three contractors that you can use to get bids right there. Yeah. So those are good ways to find a general contractor and some tips to help you track them down and to determine which general contractor is going to be best for your uses. 31. Working With General Contractors: Working with general contractors is something you're going to be having a lot of experience with if you stick with the rental houses are fixed and flaps and something like that. I mean, they're they're good guys to work with, but there's some things you need to know in order to protect yourself and to be sure that your projects go off without a hitch. And one of the best tips I can give you is simply to get at least three bids from different contractors from any major jobs or projects that you're haven't done. Now in these beds, it's not unusual at all to see big differences in the numbers, like 50% differences. I mean, some guy might bid 10 thousand on a project and other guy my bid $15 thousand on a project, that's a 50% difference. But the thing is, the lowest bid is not always the best one you should go with. I mean, it, it's easy to think that it's, it's a competition for whoever is going to get the lowest bid, but it's, there's more to it than that. You really have to go with the guy who's going to get the project done right? Timeline could be a very valid factor. Some some general contractors, maybe a month or two l between project timelines. And if you need somebody to get it done quick, maybe the cheapest guy isn't, you know, the guy for you? Quality certainly a factor. So just be sure you're looking at things from all angles and not just simply whoever has the lowest bid, that's not necessarily the winner. You know, general contractor should be able to justify every line item on their bid. So as they go down it and they're listing off different elements of the project. I should be able to talk in detail about this line idle and why it costs that and be able to back that up instead of it just be in some kind of arbitrary place holder with a dollar amount there that's no good. Every line item should have a specific purpose and they should be able to back those. Bids should include timelines for completion. That is very important. I mean, every contractor should be able to put a specific timeline on the projects if they cannot. These are things that could really hold you up in the long run and stretch out these projects for months and months and months. So be sure that there are specific timelines on these bits. Always plan for surprises and contingencies. I mean, things come up. I mean that $10 thousand bid that was the lowest one could end up turning into a bigger project. Projects, they grow, things, change, contractors aren't purpose or aren't perfect. I mean, all they can do is kinda give you their best gas and what a project may cost. They may come in lower underbid. Seldom. But it's very common for them to actually tip for projects to cost more than contractors bid. So plan for a 10% contingency is what I do so that, you know that $10 thousand bid, tack another $1000 on there. So that's, that's another 10%. That's a contingency so that there's not surprises there. It happens, and it's not a, it's not a great situation, but you should be prepared for it. So be realistic and have well-defined goals. Always be available for the estimate when the contractor gives it to you. So you can actually go through everything line by line when it's pertinent and on the contractor's mind, that's the best time to actually go through everything right there fast. Not a few days down the line when the contractors working on other projects, we're putting together other bids. Try to stay, you know, try to stay available for the contractor so that you guys can talk and communicate as expediently as possible. Now please also remember remember that a general contractor's estimate, even though it's free to you, it is certainly not free to them. I mean, they're having to put tie their haven't take time out of their day to check out your project and put together a bid. And so be respectful of that. It's not just this. I mean, there's a cost to this contractor for putting these pieces together. So be respectful of that. If you end up getting multiple bids on a project and you obviously are only going to be going with one of these guys. The other guys are gonna be rejected. Don't just leave those guys hanging. Followup with them. You know, be the bigger person there. That's not a great weight and bigger person, just beep. Be respectful, be honorable. Communicate with these guys the way you would want to be communicated with. And if you've reject their bid, let them know so that they're not just, so that you're not leaving them hanging. You know, it's just the right thing to do. Always make your payments to the contractor on time. And in the next lesson we're gonna be talking about different draw schedules and such as that. When there's a when you have a schedule for a payment, make those payments on time. That's that's your side of the responsibility. Don't want drag these guys out, you know, it's it's a two-way street. It's a relationship that you're trying to build with these guys and making your payments on time, it's going to help them out. And ultimately it's going to be helping you out. So just be conscientious and courteous and responsible with making those payments on time. And lastly, have some trust and these contractors and focus on building that long-term relationship because everybody is going to benefit. When you conduct yourself and a responsible professional manager, sorry, a responsible and professional manner. Everybody benefits. So do the right thing, have some trust and build that relationship? Yeah. So those are some tips on working with a general contractor. 32. How To Pay Your General Contractor: This next section we're gonna talk about paying your general contractors. So let's just start off with kind of the first stage of this, which is the downpayment. There is no hard standard for a down payment for a general contractor. It's probably one of those things. It just varies mark-to-market, state-to-state, even city to city. It can just vary a lot. But whatever you do, never pay a 100% of the project cost up front. There are certain contractors that that demand a 100% of the payment up front. I can't imagine that they're getting very much business with that particular payment model, but I mean, I don't know how and maybe there's certain markets where that's the norm. But for me, it's very, very far in the thing. I can imagine that it definitely does happen on a 100% upfront payments. But it's a very dangerous way to do business and I certainly would not recommend it. For me. Even 50% up front would be unusually high. Just so you know, and again, I'm I'm trying to be cautious not to talk people out of something that may be normal in your market. But for me, those numbers are very high. For me, anything up to like 10% is going to be much more normal as a downpayment. Anything from 0 up to 10% is what I would consider normal. And then what you're going to be left with after that is like some kind of remainder. I mean, if, if it's a 0% up front than 100% of the cost is going to be broken out into a schedule. There's going to be paid over the term of the project. And it depends on that payment schedule can vary a lot depending on, for one the over the cost of the project. If it's a very expensive project, then it's probably going to be divided into smaller payments. If it's a smaller project, it's usually going to be a smaller number of, you know, bigger payments. But it varies a lot. I'm just trying to kind of flesh out kind of what you might expect here. Kind of what's similar to what's kind of normal for me is they divide it into what's called thirds, fourths or fifths, meaning that the project cost is either thirds would be the project is divided into three draws. Fifths would means it's divided into five draws. And it's usually paid out over different kind of major milestones in the project. And again, this is all kind of it's a very dynamic thing and it really depends on the project itself. The timelines, the contractors own unique way of doing business so that there's no hard and fast way here. It depends on the general contractor and market standards and your market. But regardless, you know, working with the contractor should be a very personal thing. So, you know. To ask the contract or what is normal for them? What kinda draw schedule would work good for them? Ask them about the downpayment. If they're suggesting anything that sounds strange to you. Get another opinion and ask another contractor, ask another investor kinda what's normal in your area. But if they are kind of operating on what is kind of the norm in your area, then I would say probably a try your best to accommodate them so that they can run the project without being hindered. Trying to work around some kind of artificial schedule that may be you are suggesting or more comparable with try your best to accommodate the contractor, as long as you can verify that they are doing business in and up and up way and in a way that is consistent with the market standards for your area. Okay. So talking about form of payment, I don't think it really matters all that much. How you pay the contractor as long as you're using a method that is trackable, are basically a way that generates some kind of a receipt, check, credit card, PayPal. I mean, these are all valid methods. I would say probably don't deal in cash. I mean, it's it's up to you. I certainly wouldn't deal in cash, but regardless of what you do, always collect a receipt for that draw in the project which reflects the amount of work done within that portion of the project. And you have a hard monetary figure of the amount that you pay the contractor. Everything just needs to be trackable and traceable and is just as good business. You're going to need to have receipts for tax purposes. The contractor is going to need receives for the same reason and such as that. But I'm kinda driving this home because, you know, there's there's contractors out there that operate much, much more loosely than what I am comfortable with. And depending on your personality, it may be easy to kind of go along with a really loose flying contract or like that. Don't don't accept that kind of thing. You know, focus on the relationship with the contractor, build that out. But do good business, always get receipts. This is an important, important step here. So you're moving around a lot of chunks of money. You don't want these chunks of money to disappear on you and it has happened. And it will happen to you if you're not careful. So watch it. They'll very last point here I want to make about pang of general contractors a consider given these guys a bonus upon project completion. Again, this goes back to just taking care of people. I cannot count the amount of times that I have taken donuts to my closing attorney's office just to just as kind of a gesture of good faith. I mean, it's like I mean, those guys appreciated. It's just kinda one of those nice things to do and is critical of a role as your general contractor plays in your business. Show these kinds that you care. This isn't mandatory. You know, I mean, it's nothing that's expected of bonus like that. But that's in my mind kinda what makes it even more special. Is that something that you certainly don't have to do? But going that extra mile and making that special effort to really show them how much you value them for helping you out and be in your general contractor and doing good business. It all comes back to you in the end, I'm telling you, when you take good care of your people, they will take good care of you. And that is the kind of, that's the kind of message I'm trying to relay here by encouraging you to possibly give your contract or a bonus. Again, it's not mandatory, but certainly something very worth considering, I think. Right? So that concludes how to pay your general contractor. After this, we're getting into a section that is going to focus on ten tinting your rentals, which is another very serious area that we want to we want to get this right. Yeah. Tended to rental, so that's what's next. 33. Understanding The Fair Housing Act: Okay, next we're going to be talking about the Fair Housing Act. Now when it comes to parts of this course that are very important and very valuable to you. This ranks very, very highly. And what the Fair Housing Act is. It is basically a set of rules that has been put together to protect tenants from discriminatory practices concerning rental properties. And, you know, if you go against the Fair Housing Act, if you are not placing tenants in a manner that is going along with the rules inside the Fair Housing Act. You are setting yourself up for some major fines and treble. So pay close attention to this and even beyond what I'm going to be telling you here, I advise you to probably do some homework yourself on the Fair Housing Act. It's not super technical or long or complicated, but it's something you need to be very familiar with. Okay. So let's just go through this real quick. So the Fair Housing Act, it is illegal discrimination to deny rental housing because of race, color, religion, sex, disability, familial status, national origin. Basically, if you are denying somebody rent in your property based on any of those, you're probably going to be in big trouble. So be very careful there. Alright. So on a state-to-state basis, criminal history and income requirements can vary. So before you place a tenant, you're going to be doing a background check and income checks and such as that. Depending on your state, you may have more or less flexibility based on those two parts of it. And those two parts are criminal history and income requirements. So you need to do specific research based on your state to determine kind of, you know, how big of a factor those can play in whether to accept or deny a tenant rent in your property. So do your homework here to get clarity. And regardless of what you do here, have your attorney review your screening documentation and process. So, you know, do your homework on the fair housing act, kind of tweak and tune your master lease agreement accordingly, and then have your attorney double-check everything. It's you know, it may cost you a 100 bucks or something like that for them to check out your documentation and your process, but that is money very, very well spent. So excuse me, proper screening process and records are your best defense against a claim. It's true how you set up your screening process can actually give you a layer of protection against a discriminatory claim. You know, if your tenant comes at you saying that you're being unfair and they tried to file some kind of claim against you. Your screening process itself and the records you keep can help protect you. That's why it's so important to have a good process and keep records. So we're gonna be getting it all that stuff next. So I'm not going to leave you hanging there, but it's very, very important. So do not mess around here when it's concerning the Fair Housing Act and talking about the specific finds that you can incur if you are actually found guilty of discriminatory practices when placing tenants. I believe I know in this line I said twenty thousand fifty thousand a hundred thousand dollar fine. For some reason I feel like the first level of fines is something like ten or $12 thousand. I may be mistaken there. But the fines basically they start off smaller, you know, ten or $20 thousand, I think, for the first instance. And then if you get in trouble again concerning this, the fine goes to 50 thousand and then the third time it goes to a $100 thousand. And honestly, I don't know what happens if you if you continue getting in trouble here. But either way, no matter how you slice it, the fines can be very, very substantial. And again, this is not something to mess around with. Learn about the Fair Housing Act and do whatever you can to align your business and your process in line with the requirements of the Fair Housing Act. All right, so that wraps up this slide and we're moving on. 34. Choosing A Property Manager: Okay, so next I wanna talk about choosing the right property manager. As far as, you know, the, the members on your power team. A great property manager is very, very important. I mean, especially if you're investing remotely, but I mean, really, you know, it's still very important to even if you have a property manager taking care of your properties in your local market, this is a person that if you've got a good, solid, capable property manager with good communication and they're really on top of their game. They can make owning rental properties of very pain-free experience for you. However, having a property manager that is, you know, not doing good business, not placing good tenants, there's communication sucks, you know, there's all kinds of reasons that it could be bad, but they can make it a real nightmare for us. So this is a person you have got to get, right? So the best way to find property manager, in my opinion, is to ask local investors, you know, their recommendations on property managers. And again, if you go ask a handful of investors who they think the best property managers are the worst property managers. You're going to see a theme between the opinions of those real estate investors and based on those opinions and based on whatever kind of theme you say, you know, you're going to see kind of the same names popping up over and over. That is going to point you in the right direction. So whenever you, you know, you've got a property manager, you're talking 2M, you're learning about their process and their phase and things get a breakdown of all of their management fees. You know, their their fees are going to range is going to be usually it's kind of a percentage based thing. A lot of times maybe some property managers shop right on some kind of a flat fee situation. I don't know, a $100 a month there. Who knows? Again, sort of like the same way a general contractor fee schedules and such as that varies. Same thing with the property manager. But within your market, usually they kind of operate in a similar manner, but across state lines and such as that their fees and kind of policies can vary quite a bit. Another thing to check into is there cancellation policy? You know, I like I said before concerning these people have your parity him, you know, you always want to be looking to improve it. You know, if somebody works out great, go deeper, build that relationship, encouraged them, reward them, demand. But if it's not working out and you gotta get out of it, you got to improve it. You gotta find somebody better. So this is a reason to check into their cancellation policy. 30 days is common. So the property matters should also be doing accounting and bookkeeping for you too. So you have good history of all your records and for tax purposes and that kind of thing. So concerning the property manager, fees that you should be kind of expecting and on the lookout for is a base fee and that's usually six to 10% of the effective gross rent. So on a monthly basis, you know, life, it's basically six to 10% if it's a $1000 rent just for the sake of using round numbers than their base pay is going to be $6,200 per month for just kind of standard management. Now the leasing fee is usually kind of hovers around 12% or maybe as much as 15. It can vary, but the leasing fee is usually a bit more in this phi applies to the period of time where they are working towards getting the house tenanted. And that's what this is talking about. And usually that fee is going to be a bit more expensive because honestly this is probably where they're doing. Generally going to be doing the most work and the process. So they get compensated a bit more during this period of time where they're placing the tenant. And this is what this leasing fee is. Another thing that you're probably going to see you or you may or may not see is a maintenance fee. Generally, I feel like this is unnecessary when maintenance items happened to me in my mind, that's usually part of the property manager's responsibility and should kind of be rolled into their base fee. I kind of consider maintenance to be kind of included in that base feet. That's the way I look at it. Some other property managers may not see it that way. And you may see another line item for a maintenance fee in the Atlanta market. Again, the market that I'm most familiar with, maintenance fees are generally unnecessary, but, you know, it may be different in your market. So just kind of exploiting some ways that you can go about finding a property manager, kind of, you know, what to look out for concerning fees and such as that. But again, this is one of those people that at some point you're just going to have to take a shot with somebody. You know, it's going to be an educated guess based on opinions and feedback of other investors and such as that trying to find somebody to initially go with. And then from there it's a matter of either keeping them on, you know, building that relationship or, you know, ended up having to fire somebody different. And that's just kind of the name of the game when it comes to working with real estate people on your power team. Alright, so that is how to choose a property manager. And now we're gonna get into tips on placing tenants. 35. Tips For Placing Good Tenants: Tips on placing tenants. Okay. First off, I'm starting right off again with talking about this fair housing act. A little bit more. Familiarize yourself with the Fair Housing Act. It everything else is, I think is actually secondary to that because again, I want to get this Fair Housing Act. That is really the way to get into just a whole lot of trouble and in a very small amount of time. So be sure you've got that right and then everything else is going to be much easier. And I'm also going to provide a link somewhere on this page to where you can find more information on that Fair Housing Act. Definitely be sure to avoid discriminatory practices and use a tenant screening process to to grade tenants as you're placing them. In the following slides, I'm gonna show you how to actually grade your tenants and how to set up kind of an automated process for helping you select tenants and also where the tenants can actually do some of the pre screening on their own, which is going to save you some time. And then it's also going to create a record that like I said, it's the record of how you're screening tenants can actually serve as kind of a layer of protection against liability when it comes to possible claims that the tenants make, you are going against the Fair Housing Act discriminatory claims. So it's going to help protect you from that. When you're placing tenants. You gotta be patient. You've gotta be realistic. And what I mean by that is ultimately it is going to be in your best interests to hold out for quality tenants rather than rushing ahead and really paying for inpatients later down the road. I have had to wait months really for just the right tenant. It depends on the market. You know, maybe. I don't know. It's just a variety of factors really. But you do want to hold out for good quality tenants. Now, this kind of this kind of mentality, I think, is probably going to flex a bit depending on your rental Are you are you go and after a kind of a Class D rental debt, cheap rental is going to be this crazy cashflow machine or you go and after some really high-end, super expensive executive rental, that's going to be more on the appreciation side. You know, your quality of tenants that you are expecting is probably going to have to flex a little bit depending on your market and kind of what's your rental is setup for more cash flow, more appreciation. But regardless of that, you know, don't rush ahead. Don't be in a big hurry to just throw somebody in there. You need to verify if you're working with a property manager, worked with them to verify the tenants that they are choosing because, you know, your standards may not be the same standards as the property manager. And I was sometimes the property managers maybe in kind of a big hurry to just get somebody in there to get beyond the tenant placing process because that's kind of in my mind in my opinion, that's probably where the property managers doing the most intensive work as far as screening tenants and placing tenants and such as that. So I feel like the property property manager may have incentive to maybe rush ahead and possibly get somebody in there who may not be the best fit. So you gotta kinda double-check the property managers work before they finally put somebody in that property. And finally, the last point on here is, you know, do use the property manager. I always encourage people to start using property managers as soon as possible in the process. Because ultimately it's man, once you once you get up to 3612 rental properties, the property manager is gonna make all the difference in the world to you. But, you know, you may have kinda some growing pains as you become familiar with using a property manager or as you are looking for a really high-quality property manager, there may be some struggles along the way and that's just part of it. You know, you may think, well, I'm going to avoid those struggles by doing everything myself. And I think that ultimately in the long run, you're going to be shooting yourself in the foot with that mentality. You know, if you, if on your first or second rental, you wanna do absolutely everything yourself to really learn the nuances of of every step of this rental process. Fine. But don't fall into that trap of being the guy who has to do absolutely everything themselves because you feel like you're the only person that does it, right? That's kind of a dangerous mentality to have. I thank and it's a very limiting mentality. So yeah, definitely. Go ahead and accept the fact that you're going to use a property manager sooner than later. And you're going to be setting yourself up for long-term success as a result of, you know, making that decision to use a property manager. So those are some basic tips to place tenants. Next, we're gonna talk about the tenant application form. This is a really cool, you know, it's just kind of a document to help collect tenants information. And then beyond that, we're gonna talk about more tips on screening and placing tenants. So that's what's coming up next. 36. The Tenant Application Form: Okay. So what we're going to talk about here is the tenant application form. This is a super simple form that is that is just designed to to collect basic and relevant information on the tenant concerning a property that they may be interested in renting. And the reason this is important is it does it does a few things. Simple but important things that, I mean, it collects their basic information which can then be used to to order background checks and credit checks and such as that. It gives you information on their employer. It gives you references that you can use to double-check. Yeah. I mean, you can use it to doublecheck or this can be supplied your property manager to help them out. But this is basically a a form that you would have printed off and left at the property. And then anybody who comes to look at the property, the tendon application form is sitting right there on the table. They can use it to put their information in. And then you've got a rental application. It could also be used to mail to prospective tenants for them to fill out and send back to you. And then the other thing about this again is that this gives you a record of the tenants information that can be used to help support or actually, let's say it can be used to defend you against any kind of claim, a discriminatory claim, you know, I mean, so basically let's just say I don't know, whatever. Let's say that you deny a tenant rentier your property because their credit score is too low and they say that their credit scores fine. You're just being racist and denying them rent. Well, you can refer back to this rental form and say that their credit score is 100. And there is here there is the information you need for a defense. Let's just kinda wanted to random example, but it gives you pertinent information on the tenant. Also want to let you know that as part of this course, I'm giving you this form. You can put this to use in your own business. You can modify it however you see fit. I just have kind of a place holder address. Up here at the top is 123 Elm Street in Atlanta. You can just delete that and put I mean, you can just delete it all together if you want or put a blank there. We could write in the property address or type in the address of whatever property that you are looking to tenant. So again, a really simple form, a single page. The main things here that are absolutely most important are three things. One is the applicant's name right here, this first blank and line, the date of birth right here. And finally the social security number. And why those three pieces are so important is that is the three pieces of information you need to successfully run a background check on somebody, just those three, name, date of birth, social security number, and that's it. However, there's lots of other information here that would be good. You know, obviously married or single total number of applicants. Applicants, occupants. My goodness, credit score, you know, you definitely don't want to take this at face value if it's just something that the tendons is filling out, you know, it's not going to be uncommon for them to put kind of an inflated credit score on their monthly income. Desired move in date. All this information is good. It's going to help you kind of just kinda size up the tenant, but you do not want to place a tenant based solely on the information given in this form. You definitely wanna do credit scores, background checks, check with references, that kinda thing. Their current landlord and phone number is also very important. So you can double-check if they've been a good tenant with a previous landlord, current employer, and such as that to verify that they've got a good, solid job that's not going to be fallen out from under them first month into the release. And then finally, is there some other references down here that you can use to to again, just to double-check everything. And then finally down here, the applicant acknowledged that the information let me scroll this. Oh, I can't I can't move it. Okay. Sorry. Alright. Applicant acknowledged acknowledges that the information is correct. I'll references can be contacted and a credit report, a background check can be ordered at a cost of $50 bill to the applicant. So, you know, if you do want to roll forward with the process and do that credit check and background check. That $50 is actually on the applicant. Yeah. And then finally, they signed a data. So that's really good. Very simple. Again, this is a good practice to use this to collect their information. As you are looking to tenant Your rental properties. And one more time, this is available to you as part of this course. So download both the PDF form and the OD tea file. And what those are is like the ADT is basically like a Word document type file. So if you want to make modifications to this, you would modify the file and you can use Microsoft Word or open office to open that file. And then when you haven't modified and set up the way you want it, just export it again as a new fresh PDF. And then that's basically your working copy that's you can use to print off or to email around that kind of thing. So that's it, that is the rental application. So let's move on. 37. Screening Tenants Automatically With A Google Form | PART 1: Screening tenants with a Google form. Now what I want to teach you here is how you can sort of automate your screening process using what's called a Google form. Now, a Google form, if you don't know, is I mean, any any place on the internet where you fill in like your name, email, phone number, that kind of thing. That is a form and then that gets sent off somewhere. And and that information is collected somewhere in a database. I'm gonna show you how to set up exactly one of those kind of processes using a Google form. So this helps you automate your screening, screening PICOTS, excuse me. This helps automate your tenant screening process. Goodness. Hey, every time I'm stumbling over my words like this, I hope I hope it just helps solidify the fact that I'm just like, I'm just a normal guy, you know, I mean, I mean, I figured out this stuff. I know how it works with man. If if I can do this kind of thing, if I can have rentals and wholesale and flip houses, you can do it too. I mean, I'm just human. Everybody trips over their words, a case in point. So thanks for bearing with me on that. Alright. So with this form, the tenants help screen themselves to a degree which kind of gives you an element of automation to the process. I mean, anything that helps save you time and helps ease your workload. I mean, that's a good thing. So this is kind of a little bit of automation for your business. And it also adds a layer of legal protection. So again, they're going to be submitting their name, email address information, and some other information in there too. And if they fit your criteria, great, they're going to be able to move on in the process. If they do not meet your criteria, then they are going to be denied right there and they're going to know up front. But in addition to that, it is creating a record that can be used to defend you against some kind of discriminatory case. I hope I'm not scaring you about that. I personally, as much as I've done in real estate, I've never had any kind of discriminatory claims, so it's not a difficult thing to avoid, but it's something you want to be prepared for because the, the repercussions can be severe. So let's not get into hot water concerning that. So Google form, it's free and easy to set up a Google account. You just need a Gmail account. And with having a Gmail account, you're going to automatically have access to the ability to create these Google forums. And I'll show you how that works. And I'm going to show you how the form works and I'm gonna show you how to create your own form. So that's what's coming up next. This is going to get a little bit technical. I'm going to show you kind of a pre-made form one that I already made. And then in addition to that, I'll show you how to set up a form of your own. Alright, so let's get into it. So what you're looking at on the screen right here is what the tenant the perspective tenant would be seeing if they want to apply for your rental property and if you choose to use this this Google forum process. So here it says rental application, and then beneath that it has the property address. And then beneath that there are three important points that now these are just place holder points. You know, for instance, this is a non-smoking property. No animals are allowed, and the minimum gross income requirement is $3 thousand a month for this particular property. So. Already before the tenant has done anything whatsoever, we've put gun the screening process. Now, again, what you need to know is these are just points that I put in there. You can put different points of your own if you don't mind smoking and your property fine. If you don't mind pets being your property fine. You can modify that stuff. But if there are certain criteria that you want the tenant to meet, this is a good place to do it before they move on any further. So the first question here that they need to answer is, Will you answer the following questions? Honestly, I mean, that sounds pretty simple, right? I mean, they're gonna say yes or no. I mean, everybody's gonna say yes, right? Well, the reason I have this question here is it's kind of a psychological thing honestly. I mean, we're all human, we wanna do the right thing. And by going ahead and saying up front that we're going to ask answer the following questions. Honestly. It kind of it puts a little pressure on the tenant, you know, domain. It pushes them to actually answer the following questions. Honestly, I think so that's why I start off with this question. And the little red asterisk here. This means that the question cannot be skipped. So if they do not answer one of these and they tried to click this next button, nothing's going to happen. So that's why you set up this where it is a mandatory question that they must answer. So that's the first question. Will they answer the following questions, honestly, yes. Moving on, click Next. Do you smoke? Again? In that first slide we said it is a non-smoking property. So if they do smoke and they click Next, then look what happens. Bam. You don't meet the minimum criteria on the property. They automatically just grain themselves out of this process. And that's it. You just saved yourself some time by not having to mess around with this tenant that does not meet your property requirements. Okay. So that's an example of how this this Google form prescribes for you. So, but let's go back here and we'll start over. Alright, so first question, yes, we're going to answer them honestly. Do I smoke? No, I do not smoke. Next. Do I make $3 thousand a month? Again, if they do meet your requirements and they make $3 thousand a month, they're going to be able to move on. If they do not, then it's going to end the survey forum, again, automatically pre screening them out. But we're going to say that they do make $30 thousand a month. I'm going to click next. Again. The same situation here. Do we own animals? There would stay on the property. If they do own animals, they are going to end the survey and not meet the minimum requirements. However, if they do not have animals, then they're going to be able to move on. And there's some, there's some, some technique and strategy here with the words I'm choosing. I'm gonna better explained that in the next lesson. But let's go ahead and move on from here. So they're going to say, no, we do not own animals next. All right, so now that they meet the minimum requirements, now they can enter their information into these three blanks. Name goes here, phone number goes here, email address goes there. So that's their basic contact information. If you want to collect additional information beyond that, you certainly can. But I'm trying to just set this up in a way where you can see kind of how this process works and then you can modify it for your own uses from there. So basically they, they enter their name, phone number, email address, they click submit, and then that information gets sent to a Google spreadsheet where you can begin collecting all the information from all of your prospect of tenants, at least the ones that passed. That's pre screening form. So that's basically how it works. That is the that is the rental application pre screening for it. It's super simple, but it's a very powerful tool that again helps you pre-screen tenants and gives you a layer of protection by collecting that information on tenants for the ones that do not meet your requirements or for the ones that do technically meet your requirements, but they are still denied rent for one reason or another. It gives you information and gives you that layer of legal protection. So I think that really wraps this up. And the next one I'm going to show you how to actually build this form. So let's get into that. 38. Screening Tenants Automatically With A Google Form | PART 2: Okay, so let's talk about setting up that Google form so that you have this that you could use to screen your tenants and kinda add that layer of automation to your business. What's funny is this, this is like a fourth time I've tried to do in this lesson, this forum. It's a, it's a great thing and it's actually very simple to set up, but I do not set these things up often enough to be like super smooth with the process. So it's been a bit of a struggle. So what I'm gonna do is I'm actually going to, I'm going to use my screen here. I'm going to leave up this, this original form that we already went through and use it to kind of refer back to. And hopefully this can be the take or I can get this done for you. Alright, so some things on my screen are probably going to be kind of grayed out, are blurred out or whatever because you're basically looking at my Gmail account right now. Let me be sure this is recording. Oh yeah. Alright, we're good. Alright, so this is inside my Gmail account. To make this work, you gotta have a Gmail account. If you don't have one, you know, either get one set up or just forego watching this lesson and setting up the form. So assuming you are inside your Gmail account, you want to go over to this section here top right where these nine dots are. Click that and then click drive. That's going to bring you into your Google Drive account, which is included inside kind of the standard Google Gmail account. And again, you're looking at the inside of my account right here. So all this stuff is blurred out. But what you need to do is go over here top left to this section that says new. Click that and then go down right here where it says Google Forms and click that. And this brings up a new, fresh, blank Google for. Now the way you can tell these, I'm going to be going back and forth. So the new one here is going to be kind of this purple background, the, the original that I have already pre-set up and populated as green. So that's kinda how you can, you can tell the two apart. So first off, as you can see here, looking at the original form, we have six sections. So we're gonna go ahead and set up those six sections. That's pretty easy. So going into the new form, you see right here on this little menu on the right side here, it says Add section. So let's just do that. Okay, we have one of two. I'm just I'm just looking right here. The section one of three. Bam. Okay. Three of 44 or four. Click it again. Five of five, click it one more time, and that gives us six sections. Okay, so now I'm going to refer back. Let's see, I got the first one is rental application, smoking, monthly income, animal policy. Congratulations. And then the final one is don't meet the minimum criteria. So let's start fleshing those out. The first one, rental application. Ok, easy enough, and refer back to the next one down is smoking. Feel free to adapt these and kinda use whatever verbage you know, you want to. This is just kind of run it through a rough example and hopefully I'm going to get it right this time. Alright? Minimum monthly income is the next. Okay. The fourth section here is the animal policy. Okay, looking good so far the fifth section is referring back. Congratulations than the last one is you don't meet the minimum criteria. Okay. So congrats, you, litigations, spelled that tuition's every gap. And then finally the last one here, you've gotta fill this and this is where they're gonna go. If they do not meet any of the criteria, you gotta set this up and put it somewhere. So we're gonna put it right here at the end. I'm just going to copy that and paste it right here into the new form. Okay? Alright, so now we have the titles put into the six sections of that form. So next, focusing on this first section here we're going to put this form description in. And that is where I used this basic criteria here. So let me copy that from the original form and bring it over to the new one. So again, feel free to adapt this to your uses. I put in the, this is basically assuming this is a non-smoking house with no animals allowed and a minimum gross income of $3 thousand a month. Again, don't don't feel like you got to use my criteria. You can use criteria of your own. So basically for the next one to three for questions is just gonna be a yes and no kinda situation. So let's set that up. So for this first section here, we need, well, first of all, you've got to be sure this section is doing the right thing. You want this to be on multiple choice. Bam, that's on multiple choice and we need a yes. And we needed and we also need a question here. So this this question is, will we answer the following questions honestly, again, this is kind of a psych, psychology, psychological thing. We want them to basically go ahead and say yes, I'm going to answer the following questions honestly, that way. Basically they feel bad if they, why we don't want them lying. So it just helps you get the right answer out at my thing. Okay. So let's, let's just go through all of these sections and put the questions and the answers. So that's question one, smoking. The question is, do you smoke? Easy enough. Okay, so section two here, smoking. You can see this one looks a little different. It's like where do I where do I put the question in that? What you need to do is you need to get it right here, this little bubble with the plus sign, say Add Question. And that brings up your little spot here where you can say, Do you smoke? Bam, you're going to be again, you're gonna need a yes. If they do smoke, you're going to need to know if they do not smoke. Easy enough. Next section, minimum monthly income. Again, it looks a little funny because you need to add a question which is, do you earn at least 30 thousand a month? Ok. Again, this is a yes. No. It's automatically put in that no. And they're forming what's kinda neat. And then animal policy, we need to add a question for the animal policy, which is, let's see, how did I phrase this? Do you own animals that would stay on the property? Let me go ahead and put that in there and then I'll explain why I word it like that. And then it kind of seems like a weird question. First of all, this is concerning like pets on your property, but I don't like to say I don't want to ask, do you have pets on the property? Because sometimes people would say that's not a pet. That giant dog bear that seeding the carpet and tearing up the door frames. It's not a pet. That is a service dog. You understand some people try to get around the whole pet policy thing by saying that it's a service animal. So by saying that using the word animal instead of pets is just much more broad and kind of prevents problems there. So just a little tip. In case you want to restrict pets from being in your rental property, consider using the word animal instead. And again, I like to say on the property instead of in the house because maybe you don't want pets like all in the property at all inside or outside. So you want to be distinct there between what you're trying to accomplish. Are you okay with them being outside but not inside? You know, maybe you don't want them on the property at all. That's kinda the situation I'm referring to here by using this particular phrasing of this question, I don't want them on the property at all. That's kinda how I roll. Alright, next, let's see what did we do for congratulations, I think I just put in this little kinda congratulatory message here. So let's carry that over from the from the original. And what I just copied over was just a message that says you meet the minimum criteria for this rental property. Fill out the form below with your information to submit an application to rent this property. So now we need to put in some blanks, as you see here, going back to the original form, name, phone and email is what's needed. Let's figure out how to get that in there. Let's see, I think we need to do this add question thing and then change it to short answer. Yeah. Okay. So right here in this kind of grayed out area, we're going to say name. And then they're gonna have a blank to put their name in. Let's add another one that says phone number. Again, we want this to be on short answer. And then a third one for email. Again, you can put in more options here if you want to less I kind of find that name, phone number, and email is sufficient for my uses. But you may want to change it up and that's just fine. And say anything we're missing there, I don't think so. Finally, let's look at this last one. Let's see you don't meet the minimum criteria. I think that's all it really needs to be there. Okay. So with that done, the form is basically fleshed out. Now what we need to do is kind of we need to kind of programme the form a little bit so that it sends him to the right places. Because again, depending on what they answer we wait, may want them to skip the forum entirely and just give them the message that they don't meet the minimum criteria. That's what we're gonna do here. So here's how we do this. Well, first of all, here's one other little thing where you see this little slider here that says required. You want to turn that on for all of these sections. If you don't have this turned on, it basically gives them the opportunity to skip sections. And we do not want that you want to go to all of these questions and go, go hit that required little option there. So that's the first thing. Now let's do the programming aspect of it. So what you do here is you want to go to this little section here with the three dots, click that and then see this little part here. It says go to section based on answer, you want to add that in. And that gives you some options here. So basically you want to think here. So on this first one concerning, Will you answer the following questions honestly, if they will, You want them to continue? If they won't, you want them to go to the end and skip everything. So here, okay. So if they say yes, continue to next section, that's what you want. If they say no, we want to send them to the last section that says they do not meet the minimum criteria. Okay, some simple enough. We're going to repeat this kinda process on each of the questions. So smoking, we will again, we want to add this little section thing. Do they smoke? If they do smoke, we want them to not meet the minimum criteria. If they do not smoke, we want them to go to the next section. You see what we're doing here. All right, same thing regarding monthly income. We want to enable this little section, you know, programming thing here. If they earn $3 thousand a month, Yes, we want them to go to the next section. If they do not earn $3 thousand a month, We want them to go to the last section because they don't meet the criteria. Okay, you're gonna do the same thing on the animal policy. Enable this section based answer thing. Do you own animals that would stay on the property? If they do own animals that would stay on the property, that they don't meet the following criteria. And then we want them to go to the last section if they do not have animals than we want them to go to the next section. Let's see, I think with that done, then, I think we're finished off here and let's let me let me just let me just double check, see if there's anything else I need to tell you. I don't think that there's anything else here. So now we will test out the form. So let's, let me show you how this works. Let me, let me name this form something so I don't get lost here. I'm gonna say, I'm gonna say, I'm gonna call this one form demo because I'm just demonstrating this process for yes, so now the form is named. Now what we're gonna do is test it out. What you can do is go to this little eyeball thing that gives you a preview of the form. So in other words, this is what your applicant will actually be looking at when they see this form. So let's go through this. Well, we answer the forums, the questions, honestly, I'm going to intentionally get this wrong. No, I'm not going to answer it honestly. Bam. So it worked correctly. We do not meet the minimum criteria. Perfect. So for so for this question it worked right? Let's change the answer to yes. Now this should allow us to go onto the next one. And it did do we smoke? I'm going to say no, we do not smoke, which is the right answer. This should allow us to go on. It did did we earn $30 thousand a month? Yes. This should allow us to go on. Do you own on animals that would stay on the property now I'm to intentionally get this one wrong. Yes. I own animals that would stay on the property. Next. I don't meet the minimum criteria. Alright. You see how this works, right? So, so far so good, it's working right? So let me let me change my answer here. No, I don't own animals that would stay on the property. Now or to the name section. Now what would happen here? I'm just, I'm just going to fill this in with gibberish, but otherwise this is going to be putting their name, phone number, and email address, and sending that information to you. So let's just click this to verify that this works at heart. And it's now something's going I have a problem here because it says I don't meet the minimum requirements. I wonder why that is. Alright, so I have a problem and then go, let me go back and see if I can figure out what's going on here. Let's see. Acquired or answer phone surely. Isn't that smart where it knows that I put in gibberish. Oh, okay. I think this is what I think this is what I did wrong. I think what I needed to do. Oh, okay. Here's what I did wrong. As you can see at this bottom section will not bottom section five of six, where I put in my name, email, email address, and phone number. What I have right here is at this section, what I do next is it just automatically sends me to the next section which is six. So regardless what I put in, it's going to send me there. That's wrong. What you need to do is at this little part here that's beneath the section, changed this to submit form instead. Alright, I think that is right now. And by the way, and Google Drive, All this stuff is automatically saving. Whenever you do this, you don't have to manually save it. Let's test this format one more time. I think we got it right now. Yes. I'll answer it honestly. No, I don't smoke. Guess I earn $30 thousand a month. No, I don't have animals plus just put the JIT version because I don't think that matters. When I click Submit. Boom, all right, it's working right now. This is the message they'll get when they, you know, they do the form correctly. Now let's check and see. I'm going to show you where your answers actually end up. So inside your Google account, basically, when you're looking at your rental application here, you've got these two sections up top. This is the questions. This is what we were looking at to fill up the whole form. And you've got this other section that says responses. What this looks like. It is kind of this pie chart setup where you can see me. I don't know, to me, this actually isn't as helpful. But you actually do have a Google form that is tied to this form. I'm sorry, I may have said that wrong. You have a Google spreadsheet that is collecting the information from this form. And in order to access that spreadsheet, what you do is you need to first create the spreadsheet, which is here. See this little button. Let me, let me navigate to it again. Here's your, you know, here's the inside of your form. If you click over to responses, then you have this little button here that says Create spreadsheet. Do that, click the button. And then don't change any answers here, just say create. And what that's gonna do is create a spreadsheet that is going to collect the answers. And now what you see here is, this is the neighbor's answer that I said is, you know, as you can see here, here's the answer to the first question. Second, Third, do I own animals? And then here is where would be their name, phone number, and email address. And the more times this form is submitted, this is just going to keep filling down through this section with all of your applicant's information and whether they smoke and if they have pets and their email address and phone number, all their contact information is going to be right here. And again, there's two, there's two main parts that are just highly beneficial here. One, is it adding that layer of automation to your processes where your tenants can actually screen themselves for your properties. But the other part of it that's very, very important is it's giving you that layer of legal protection where you're collecting the tenants the the tenants of personal information because whenever they are denied your rental for any reason, you have a record of exactly why. You can say you were denied because you smoke. This is a no smoking property. You were denied because you have pets. You can't have pets and my property. So when they come at you for some kind of weird claim or something like that, you have this record that you can you can look back on and provide for that that layer of legal protection if needed. Again, I've never had any kind of problems like this. But if I did have some kind of a problem, a claim for discriminatory practices, you know, I have that protection and it can keep me out of hot water. And this is good practice for you to do the same, to have that same protection. So that is how you set up one of these google forms and how it works and how the information is collected and such as that. So I hope this serves you well and we are going to be moving on from here. Let's see what do we get into next? We are going to be talking about tenant background checks. So that's what's coming up next. 39. How To Run A Background Check: Okay. This next lesson is on tenant background checks. This is going to be a very simple and there's no reason to get complicated about this stuff, but a background check just it is a report that you can order that gives you all kinds of information on the tenant, has their credit score rented, their employment history, all kinds of information on their family. I mean, it's just kind of it's the stage you go to once you have a viable tenant, and it's somebody who looks good on kind of your preliminary screening, then you take it to the next level and run a background check on them before you actually accept that tenant. So when you get one, again, it's after the preliminary screening, after you've gotten their basic information through your tenant application and you've talked to them. And now it's to the next stage where you want to verify everything. So it's kinda one of those trust but verify situations regardless of how good attendance seems, you know, on the surface, you want to take it to that next deeper level in order this background check on it. So that is why the tenant background check is important. How much they cost? $20 to maybe as much as $50. I guess they're usually not all that expensive. But the price is do range depending on what kind of provider you're going with and where to get them. There are there's probably hundreds of places, hundreds of different websites you can go to out there. Basically all you need to run a background check on somebody has their name, date of birth, and social security number. With those three pieces of information, you can dig up all kinds of information on these people. Now, one thing I want to say is you do need to have their consent. I mean, I think I mean, I always do you need to have their consent before you run a background check on somebody? If you look back at my tenant application form that I've provided you, at the bottom of that form, you can see where they sign and date that thing. And it's basically gives you permission to run a background check on their tenants, so that is how you have their consent. And lastly, just one place that I like to get these forums a place I've been going to lightly to run background checks on people as a website called rent prep. So let me fire up my screen recording software here really quick. And I will show you how to order a tinted background check on red, proud or actually, I'm I won't go through the whole process, but let me kind of show you their website real quick, right? or tennis screening service starting in 1895. Here you can see kind of different stuff you get with their report. So if you just go right here and type in screening products, go to background check. Here are different packages that you can order through rent, background check, 18 bucks, and you can see everything that you get in it. There's kind of some additional rider cost and things like that. If you want to go deeper with the search humming, I do. I'll, I'll go, I'll I'll get like, the the most thorough the most thorough background check I can on somebody just to verify it's one of those things. When you've got your property and its rehab and it's ready to go, you don't want to drop the ball. Some well-placed like this, you know, go deep, you know, learn as much as you can about them, verify everything. And this is kind of the big last step before you place that tenants, so don't drop the ball here. Even if even if you spend 50 bucks to verify somebody, it is money very, very, very well spent. But yeah, rent in turnaround times very quick on these things. You go ahead and put in your order, you'll have the report back, usually within 24 hours, and then you can go about placing your tenants. So yeah, rent I like those guys elected reports because very cost-effective. And that is who I bet ASU I suggest going with. So I hope that helps you out, but that isn't how you can go about ordering a tenant background check. Beyond this, we're going to be getting into a very big lesson concerning the master lease agreements. So that's what's that's what's coming at you next. 40. The MASTER LEASE AGREEMENT: Ok. Master lease agreement. Let's just kind of do a kind of a preliminary little quick chat about what's going to be coming up here because the master lease agreement is its major. I can't remember how many pages it is. Like, I think seven, I think something like that. I mean, it's a it's a big hunk and document, but it's honestly, it has been really simplified about as far as I can get it. While still having everything in there that you want to protect you from liability and manage the rental period and such as that. But what we're going to be doing it as a complete line by line walk-through of the master lease agreement, line-by-line explanations of absolutely everything so that you understand exactly how everything works and why it's there, and what it does for you. Again, you can download a copy of this master lease agreement for your own uses as part of this course, there's two different versions of the file I PDF version and an OD t version. The OD T is basically an open and open office format which can be edited with Open Office, which you can download for free or Microsoft Word. Openoffice version is what you would use to make any kind of modifications if you want to change it up to fit your uses. And then the PDF is you would use it's the working copy. If you need to e-mail it around. If you you know, if you want to send it to somebody to assign that kind of thing. It's again, just call it the working copy. The, the ADTs, the editable version PDF as a working copy. Lastly, before we get into this, I want to say always before you put any kind of new form to use new contract to use in your real estate business, run it by your attorney or title company and have them just verify everything for you just to be sure that you're not missing something and to be sure that you're you know, you're you're working in accordance to the Fair Housing Act and within your your state's laws and that kind of thing, always have your attorney approve it. Now, with that said, I've been using this master lease agreement for years and years, specifically in the state of Georgia. I can't make specific claims on whether it'll work specifically in your market or not. I mean, I'm I mean, I would use it in another market after I have an another attorney verified for that state. But I'm confident that this would work for your uses. Granted, that your attorney approves it. So yeah, I think that's pretty much it. So with that said, we're going to get into this. It's going to be a little granular. I think we're literally going through this thing line by line. I would suggest just kind of buckled down. Let's get through this thing. I'm sure you're going to learn something from this. And it's just good stuff to now. It's, again, it's not the most exciting thing to go through something like this line by line, but I think it's necessary. So without further ado, let's get into the master lease agreement. Okay. This is it. What you should see on your screen here is the master lease agreement. I'm I'm sharing my screen with you. So let's say this thing is, it's actually only five pages, I think in a previous lesson I said it was six or seven, so that's good. It's smaller than what I remember. Ok. So this is it let's get into this. So this is the master lease agreements starting off section one. This is where the parties will sign tenants will sign here. Landlord being you, he's going to sign right there in that next blank down. Okay. Tenant degrees to rent from the landlord, the following property, subject to the terms and conditions detailed in this master lease agreement. The next line down is the rental address. This is where you're going to put the address of the property that's that you're putting up for rent. The rental amounts are right here and you have two blanks. One is going to be for the monthly, rent them out. The next is going to be for the security deposit. A lot of times what I do is it's just basically another month's rent or you can do with $1000 or really whatever amount you want to do for security deposit, as long as it is generally in-line with what's kinda typical for your market. Next is the term of the lease, meaning that the timeline of delay, so the term of this lease will begin on, you know, date and end on another date, whether it be a six month lease or a yearlong lease, you put the actual dates in that lease or in those blanks. If written notice is not given to the end of the lease by either the tenant or the landlord, the lace will automatically continue on a month to month basis. So if when you go beyond the end date on this lease, then it automatically becomes a month to month lease, meaning all of the terms of the latest still apply, the pet policy and the everything else is still the same. It's just becomes a month to month lease, so that can be kind of a handy thing to have, although I do recommend, you know, remedying that, you know, as soon as you can, but depending on what your situation is with the lease, maybe you want it to be on a month to month situation. Next is the rent payment. This is just talking about, you know, the payment itself and who it needs to be made to. So the tenant will pay the entire monthly rent payable in advance on or before the third day of each month, partial payments will not be accepted. That's an important line to have in there. And then this blank here gives specific payment instructions whether you want the payment wire to a certain account are sent to your property managers office wherever you want this payments sent to. You can detail that in these two blanks here. Late payment charge, regular payments are due by the third of each month. Tenant agrees that if rent is not received by 05:00 PM on the due date, tenant shall pay late payment charge of $100, and he dishonor check shall be treated as unpaid rent and be subject to a handling fee of $50 and must be made good by cash money order, certified check within 24 hours of notifications. So this section here just kinda puts a bit of pressure on the the tenant to to make payments on time. If they don't, then they're gonna start accruing. There's light payment charges. Seventh blank here is details of the property manager. I'd like to include their name, phone number, and email address or, you know, actually, I would prefer to include their name and their phone number because I I would I would prefer for the ten and not to be corresponding with the property manager by email. I would like for them to be on the phone with the property manager if it if need be occupants. This details the number of people that you can have on the premises are occupying the premises. Additional tenants here, you know, you don't want additional tenants. So persons other than those specifically listed in this agreement shall be strictly prohibited from staying in the rental unit for more than save seven consecutive days or a total of 20 days and any 12-month period. For purposes of this section, staying in the rental unit shall include but not be limited to long-term or regular house guess, live in babysitters, visiting relatives, et cetera. Tenant shall notify the landlord and writing anytime additional tenants cannot occupy the premises without first way I'm sorry, I read that wrong. Tenants shall notify the landlord and riding anytime the tenant expects any guest will be staying in excess of the time limits in this paragraph. Additional tenants cannot occupy the premises without first being approved by landlord and are subject to full screening procedures if additional tenants are accepted. This is also subject to additional rent and security posit bang required. This is an important line because men, I mean, people will have whatever their mother law moves on or their friend that she lost her job or any number of things that can be, you know, canon encouraged tenants to start having additional gas, just staying there rent-free. You want to have control over that. And that is what this section gives you. Again, I feel like this is a very important section, but every line in this lace agreement is there for a very important reason. And this one is certainly no exception, very important. As is this next section. Assignment and subletting. Tenant will not sublet any part of the premises, assign this agreement without prior consent of the landlord. You do not want subletting, go on. Subletting is where you would rent your property to somebody and then they would they would extend that rent to somebody else. Basically, they would lease out your least property to somebody else. You don't want that happening. There's a time and a place for it. But generally speaking, that's not what this course is about. So that's what this line is talking about. No subletting allowed. Utilities. Utilities are the responsibility of the tenant. You may choose to change this. Maybe you want the utilities to be rolled into the rental amount. You know, you can certainly do that. Usually the way I set it up is where the tenant to the utilities are the responsibility of the tenant. If you do something different, you certainly want to modify this line here. That concludes page one. So moving on to page two, housekeeping and simple maintenance, the tenant shall keep the Premises and a clean, sanitary, and neat condition and in conformity with all health and police regulations, the tenant is responsible for changing any Bert lightbulbs, smoke detector batteries, and HVAC filter if the premises are not maintained in the same condition as at the inception of the lease, subject to normal use, and where then the landlord Chaldea tucked the cost required of claiming and simple maintenance from the security deposit. Pretty self-explanatory, basically says that, you know, they are responsible for keeping the place clean. And, you know, normal wear and tear is fine. But anything beyond normal wear and tear they are responsible for and the cost of repairing such damage is going to be on them. Conduct. Section 13, the tenant and or guests shall not disturb the piece of the premises and its surroundings. Disorderly conduct will result in the termination of this agreement. And addition, tenant is responsible for all actions and damages caused by the tenants. I guess we don't want the tenant like getting out of any damages or problems that occur for being able to blame it on their gas, you know, it wasn't me. It was my guessed it causes problem. No, it's still on them. If they're going to have people over to the property, that they are responsible for them. And that's that and that's the way it works. Notices, section 14. Any notice is deemed served on the day on which it is either mailed by first-class mail to the tenant at the premises or attached in a secure manner to the main entrance of that portion of the premises of which the tenant has possession. And example of this, Let's say you're basically serving somebody for an eviction, that this is where sagas about you would actually place that notice on their front door or mail it to them by using first-class mail. And you're using first-class mail because there's a tracking number so you can give some trace ability to, you know, if you need to serve them with any particular notices. Section 15 here, remedies and attorney's fees. Nothing in this agreement shall limit the right of the landlord to terminate this agreement as provided by law if the landlord engages and attorney or in any legal action brought by either party to enforce the terms of this lease are related to the premises, that landlord shall be entitled to recover from the tenants, costs, expenses, and or reasonable attorney's fees. It's basically says, if If the tenant brings If the tenant gives you reason that, you know, you need to get an attorney involved to handle some kind of manner, basically those cost or on the tenant, because otherwise, if it weren't for the tenant, you would not be having to pay those costs. So that's what this is talking about. 16 landlords remedies. It is expressly understood and agreed by in-between the landlord and the tenant that one if the rent or any part there should be in a rears meaning behind or two, if the premises are left vacant, or three, if the tenant defaults on any of the obligations or agreements in this lease, than the landlord may either a terminate this lace immediately providing the tenant written notice of such termination, or be without terminating this lace, retake possession of the premises or any part thereof, in accordance with all applicable law, and remove or evict the tenant or any other person occupying the premises. Upon such termination of possession, the tenant shall be liable for the balance of the rent herein reserved until the expiration of the term of the lease for all costs. Default, including, but not limited to, cost of storing any belongings left on the premises by the tenant, attorney's fees and court costs incurred by the landlord and obtaining possession of the premises and for any required repairs and cleaning. But the tenant shall receive credit for the amount of rent actually received by the landlord from any replacement tenant during the balance of the term. If at anytime possession shall be ended by the landlord as set forth in the lease, the tenant here by a craze to peaceably returned possession of the premises to the landlord. Holy moly. I know that's a mouthful and that's very, very complicated. What this is basically outlining is just how what the landlords capabilities are within the bounds of the lease in order to rectify or correct any problem that is that arises because of the tenant or the tenants guest or the tenant not paying their rent. I mean, as a landlord, you need to have some kind of you need to have options in order to correct these errors and get this property situation repaired and fixed so that you're making money again and not losing money. And this section just basically details what's your remedies are. Alright, so without getting too far into the weeds, trying to explain that further, I'm just going to move on from here. Alright. 17 and dimness and indemnification and non liability of landlord. Tenant agrees that the landlord will not be held liable for any damages or entered injury to the tenant or any other person or any property occurring on the premises or in common area there. The tenant technologies that renter's insurance is the tenants sole remedy for any personal injury or property damage. That means if the tenant is hurt, tenants guest is hurt and whatever they fall and hurt themselves or whatever any number thanks. Or something breaks on the property, you know, anything like that. It's not on the landlord because that it is actually the tenant's responsibility. And if the tenant seeks damages are seeks. If the tenant basically tries to come after you, the landlord because of some kind of liability or damaged property that they own, the soul liability of the tenant or, I'm sorry, the sole remedy that the tenant has, is there renter's insurance policy? It is not the landlords responsibility to make the ten at whole should they be injured or lose property, something like that. This is why I have this last Lyman here that the tenant acknowledges that renter's insurance is their sole remedy. The tenant the tenant is not, isn't it? At least in my mind, I don't think there ever obligated to have renter's insurance. But by not having renter's insurance, they are forfeiting, you know, any any right. They have to, you know, if there's some kind of injury or loss of property, that kinda thing. That's why it's always encouraged for their renter to get their own renter's insurance policy. It is an additional cost to the renter for sure. But it is it's in their best interest to have a renter's insurance policy. So moving on, Section 18 now, liability of landlord, The tenant waves whoops, sorry. Here we go. The tenant waves and releases any claims that May 10 have against landlord or landlord's agents for loss, damages or industry to person or property sustained by the tenant or tenants, officers, agents, gas invitees, OR anyone claiming by, through or under the tenant other than the willful misconduct of the landlord. So basically, the responsibility of any kind of injuries or damages or something like that is basically on the tenant unless it's gross mixed conduct on behalf of the landlord. So not withstanding plus I am right here, so not withstanding anything to the contrary contained in the lease, landlords the landlord or its agents, shall not be personally liable with respect to the terms, covenants, and conditions of this lace or eating obligation or a liability arising and connection there with the tenant shall look solely to the equity of the landlord and the premises for the satisfaction of any judgment against landlord or any remedies of tenant in the event of a breach by landlord of any of its obligations under this lease, it being agreed that the landlord or its agents shall never be personally liable for any such judgment or obligation. Such. I should probably change this word because I don't actually know how to define it myself. But anyways, such XS cool, patient of liability shall be absolute and without any exception whatsoever. So again, this is just talking about the liability liability of the landlord in the event that there is some kind of injury or damage of property or loss of property, you know, on on, you know, within the terms of the liaise concerning the property or the tenant. All right. So that wraps up page to a five and we start a new clip here, and then we'll keep this rolling. Alright, here we go. Section 19, default by landlord. In the event of any default by the landlord, the tenant exclusive remedy shall be to commence an action for damages. Prior to instituting any such action, the tenant shall advise the landlord by written notice specifying such default with particularity. And landlord shell there upon have 30 days in which to cure any such landlords default provided, however, that if the nature of the landlords default is such that more than 30 days required for rich cure, the landlord shall not be in default if landlord commences performance within said 30 days and thereafter, diligently prosecutes the same to completion, and no event will landlord be responsible for any consequential damages incurred by tenant, including, but not limited to, loss of profits or landlords default after such notice. I'm sorry, sir, I read that wrong. Let me let me let me go after that sentence one more time, starting right here. In no event will landlord be responsible for any consequential damage incurred by tenant, including, but not limited to. Loss of profits or interruption of business as a result of any landlord default. Unless landlord fails to cure any landlord default after such notice, tenants shall not have any remedy or cause of further action against the landlord. This line and here, I'm trying to come up with examples of where this may be needed. And the thing that comes to mind is, let's say like whoever is responsible for managing the property, I guess whether it be you or a property manager, There's just some kind of major problem. Let's say that let's say somebody that the landlord or property manager just ends up in the hospital, and then the tenant has some kind of a problem with the property that goes on and on addressed. I guess some something like that could maybe be a situation where it could actually cause a problem for the tenant, where it impacts the tenant and impacts their stay in the property, maybe that would be where a situation like this would come into play. But basically this section kind of outlines the timelines where the landlord has certain periods of time of time to address those problems. And during that period where you are addressing those problems, no additional damages should be consequential damages should be incurred. I think that's probably the best way to define this section. When we're getting into a lot of these section where there is some of this kind of, you know, legal ease, you know, very attorney heavy language. If there is any questions, I would say, you know, consult an attorney on this because I, you know, I'm not actually an expert at communicating some of these. I'd certainly understand why a lot of the stuff is there. But as far as communicating specific instances on when this may or may not come up in your business. You know, I have a hard time kind of coming up with examples sometimes. So if you need further examples, let me know asked me a question and if you need to take it a step further with there, certainly consult with your attorney about it. All right. But let's keep this thing moving. 20 major maintenance guarantee. The tenant understands and agrees that all appliances are the responsibility of the landlord. These include but are not limited to refrigerator, dishwasher, stove, garbage disposal, air conditioner, and heating. Landlord agrees that these major appliances will be fixed and timely manner after identifying a problem, the problems description must be provided in an email or letter either to you if you're self-managing or your property manager, if you're having somebody else management, the landlord will pay for repairs that are due to normal wear and tear. The tenant will be responsible for any repairs that are caused by the tenant or their guests. So concerning any of these items, It's something that they actually broke through damage or misused or something like that. They're responsible. If it comes down to wear and tear. You were responsible. And that's basically what this is talking about. 21 repair and maintenance, tenants shall report any leaky faucets, running toilets, broken, or frozen pipes, or any other problems immediately to the landlord. Otherwise, tenant shall be required to pay for all damages resulting from Nick elected issues. Tenant will properly used and operate on electrical, gas, heating, and plumbing facilities, fixtures and appliances on the premises. Repairs resulting from misuse. Of such will be paid for by the tendon. Again, as similar to that last one. You know, you know, if something just breaks or wears out or something like that, that's all in youth landlord you got to you got to repair those kinda things. However, if there's damage that goes unreported for a long period of time and it results in flooding or further damage to the property. Neglected issue such as that is on the tenant. And that's what this section is talking about. 22, abandonment. Any goods, vehicles, or property left behind after termination of the tenancy shall be considered, abandoned and disposed of and the landlords sole discretion. Pretty straightforward. Compliance with the law. Tenants shall not violate any applicable local, state, federal law or regulation in or about the premises. Good. Renter's insurance, we talked about this previously. This is a very important landlord is not responsible for any loss or damage to property owned by tenants or guests. It is understood that the tenants should carry a renter's insurance policy for fire, flood injury, damage, or loss of personal property. It is on the tenant to insure themselves and their property inside your rental if they forego renter's insurance and they experience some kind of a loss. It's not on you. It's own them. 25, non waiver and accepting payments. Should the landlord accept any partial or late rent payments? This let me scroll this up a little bit. Let me start this ever should the landlord, except any partial or late rent payments, this in no way constitutes a waiver of the landlord nor effects any notice or eviction proceedings previously given waiver by either party restrict performance of any provision of this agreement shall not be a waiver of any prejudice of the parties right to require strict performance of the same provision and future or any or any other provision. What this means is if you do happen to accept a partial payment, sometimes you've gotta get whatever money you can't, you know, I mean, it's better than losing a whole read payment. You can take partial payment. But if you are doing so does not excuse them from any other terms in the lease. In other words, if you accept a partial payment, that is not setting some kind of a precedence, meaning that, Oh, well, they can many partial payments every month now, if they make a partial payment, they are still on the hook for all terms within this lace. It does not change anything. Should you accept a partial payment and you are not waiving any rights that you have within this lace. That's what that's talking about. 26 pets. Pets are not allowed on the property and either inside or outside, pretty self-explanatory. You may want to change this on your lease. Like I said, another section, you may want to actually say animals here instead of pet so that people don't try to get a service dog in there instead of, you know, a PET. By putting this pet. Contingency here in the ladies, I will say this. You are limiting yourself big-time on the tenants that are going to be able to to rent your property. I'm probably the majority of people own pets. And by putting this in there, again, you're going to be just limiting yourself. So be careful with this one. It's perfectly fine to have in there. The property is definitely going to be taken better care of our it's not going to be susceptible to damage and such as that for sure. It's also, you're gonna be you're not gonna have as much liability since that maybe somebody's dog bites and neighbor, stupid situations like that. But again, you're going to be limiting yourself if you do have this line in there, so just be aware of them. 27 extended absence. The tenant will notify the landlord in advance if the tenant will be away from the premises for 30 or more consecutive days, you can change this timeline if you want to. During such an absence, landlord may enter the premises at times reasonably necessary to maintain the property and specs for needed repairs and maintenance. Pretty straightforward. If they're going to be away for a long period of time, they need to let you know. And if they are away, then you are able to access the property to do the things you need to do to take care of it. 28, satisfactory inspection. The tenant has personally inspected the premises and finds them satisfactory at the time of execution of this agreement. This is another one of those, you know, seemingly innocuous lines, but it's very important and basically says, you know, the tenants gonna go on the property and check it out and approve everything, and then they're going to sign the lease. Hey, everything's good to go. You know, there's been situations where, you know, a weekend delays the attendant comes back them and lack of a you know, what about this? We've got this problem here. No, I don't like this every year and, you know, it just kinda prevents problems like that. You know, tenants can be kinda weird vanity sometimes. And this just kind of helps kind of set that standard and proves that they signed off on the condition of the property before they moved into it. 29 showing period during the last 75 days of terms of this lays the tenant agrees to keep the Premises and a condition suitable for the showing you the premises to prospective tenants. Thing I've read that wrong, but anyways, let's keep going. Ten. It also permits the landlord to show the property to prospective tenants is pretty simple. Even though I read it wrong. This allows you and showing period. And as you are approaching the end of the active lease, this lest you get new prospective tenants and there to start lining somebody up so that you don't experience much downtime between tenants. So it gives you a showing period while the current tenant is nearing the end of their lives and they have to maintain it to be in Micah, good, sharable condition towards the end of the lease. That's what this is talking about. Alright. Moving on to page four. We're more than halfway high signs. The landlord may place for rent or for sale signs on the premises pretty self-explanatory. It just allows you to promote the property for rent or for sale. I see that this, these to be a colon here instead of a period, there's little, those little mistakes bug me. I'll fix that. Alright. Lets say 31, use of premises. The premises shall be used as a dwelling unit and for no other purposes, tenant shall use in a reasonable manner all facilities, utilities, and appliances on the premises, and shall maintain the premises and facilities and a clean and Sarah sanitary condition at all times and upon termination of the tenancy, shall surrender the premises in good condition as when received. Ordinary wear and tear excepted. Tenant further agrees to make all utility payments on time during the term of this tendency and will be considered in breach of this agreement for non-payment and will be held liable for any resulting added charges and damages. Pretty self-explanatory. It's just, you know, talking about wear and tear. Thank God. You know, anything beyond normal wear and tear they are responsible for and they are going to be paying their rent and utilities and such as that on time, you know, any non-payment or any utilities bills and such as that that are in arrears and again, they are responsible for it. That's what this section 31 is talking about. Plumbing, rentals, tenants, and toilets, right. That's what everybody's biggest fears are. And plumbing is probably near the top of that list of those classic tenant issues. So 32 plumbing expenses or damages caused by stoppage if ways, pipes, garbage disposal, overflow, bathtubs, toilets, wasp, patients, wash basins caused by the tenants conduct shall be the tenant's responsibility. This is I mean, it's been, you know, flood damage and water damage and such as that can be I mean, one of the worst ways that you can cause just a lot of damage to a rental property in a short amount of time. So we gotta outline this and be sure that, you know, if they clog up a toilet, floods the house and causes all kinds of damage, ruins the floors and everything like that. It's all in the tenant is on the tendon. And again, this ties into why they need renter's insurance. If they call us some kind of horrible damage to the property, renter's insurance will cover that kinda thing. Alterations. Yeah. This is another like every time I go over all of these lines, I'm just, I'm thinking back to these instances where I've I've dealt with these kinds of issues. And this is just kind of one of those common ones that come up. Alterations, people wanted to paint property or changes, put painted or changed floors or put holes in the walls are mounted, TV, just all of these things like that. The tenant shall make Let's say tennis, shall I read it wrong? I'll chime. Tenant shall not make any alterations to the premises without landlords prior written consent. Important. All fixtures and appliance is present in the premises before move in must remain when the tenant vacate. You'd want that stuff to stick around and not move away when the tenant does. In addition, locks may not be changed or added without landlords prior written permission. You don't want the locks changing without you knowing about it for sure. But there are certain situations where you may want to change the locks while attendant is there for sure. You have permission is granted. A copy of any new keys will be given to the management within three days after the change. Makes sense. 34 vehicles. Only authorized vehicles may be parked on the premises. All vehicles kept on the premises must be operational and have current registration tags, decals, and license required, required by local and state laws. Any vehicles not meeting these requirements are unauthorized vehicles will be removed from the 106 pence after being given 72 hours notification, vehicles must be parked only on pave designated area. So this is to protect you from, you know, I don't know, a bunch of like derelict vehicles, pile and oper, somebody starting up some kind of shade tree mechanic business, you know, on the property or having a bunch of vehicles parked on the grass where that's going to be like, you know, the graphs and kinda hurt in your landscape, that kind of thing. Reporting 35 tenants shall notify manager immediately of all equipment malfunctions, failure to supply services, or maintenance and repairs needed. That is important. You know, this just kinda puts more pressure on them butter and just kinda helps verify that if something is wrong, it is the tenants duty to report in a timely manner to the property manager yourself, whoever may be managing the property. And indemnification, section 36, tenants shall indemnify, defend, and hold landlord harmless from any claim, loss, liability related to any activity on-premises of tenant or any guest, including all attorney's fees. The tenants duty to indemnify shall not apply to or prevent any claim by tenant against Manager or injury of damages to tenant or tenants property for which manager may be liable. Okay. So section number 37 here, security deposit, that's the amount that you withhold in escrow to go towards, you know, any kind of damage or such as that at the termination of the lease or at the end of the lease, or as needed to repair any damages. The sum set forth on this lease has been deposited with landlord upon execution of this lease as a security deposit to remedy any default by tenant and performance of tenants obligation under the lease, and to repair damages to the premises caused by the tenant, not including ordinary wear and tear within 30 days after termination of the lease and delivery delivery of possession of the least premises to landlord. Landlord Shao refund the deposit or give the tenant and accounting of landlords claim to the deposit. If the cost of repairing damages exceed the amount of the deposit, ten and shall 3B responsible for all such excess costs. The tenant may not at anytime apply the security deposit to be used as the last month's rent or any sum two under this agreement. That last line is, I mean, all this stuff is important, but that last line about the attendant attempting to apply that to the last month's lays. That's a very common thing. That comes up a lot of times, but this just details out that's the security deposit, what you can apply it to when the tenant can expect to get it back. And, you know, details. I cannot apply the security deposit to the last month's lazy. That is, they are responsible to pay the laths months leaps, and cannot try to substitute the security deposit for that payment. Right to access. The landlord and or managing manager shall have the right to enter the premises in order to inspect, make repairs, or improvements, supply necessary or agreed services, or show the premises to prospective tenants. Purchasers are contractors, except in case of emergency agreement to the contrary by tenant, or unless it is impractical to do so, landlord shall give the tenant at least 24 hours notice of landlords intent to enter and may enter only at reasonable times ten, it shall not unreasonably withhold consent for a manager to enter the premises, just talking about the manager or you were the property manager and your rights to access that property and how you have to be reasonable with the tenant. But the tenant does have certain obligations to allow you into that property, to do what you need to do. Section 39, liens, except with respect to activities for which the landlord slash manager is responsible. Tenants shall pay, do all claims for work on or for services rendered or material furnish to the premises, and shall keep the premises free from any liens caused by tenants failure to meet obligations. So not about, you know, there's various ways where lanes can end up on the property contractors or even utility companies and such as that lanes can end up on the property. But it is, again, the tenant's responsibility to keep the premises free of lanes caused by the tenants, failure to meet the tenants obligations. That is what it's talking about. And now we're getting into the final page here. So let's just keep this Rolon and we will wrap it up. Damage and destruction. In the event of the premises is damaged or destroyed by fire or other casualty, either party may terminate the lease in the event of damage sorry, in the event damage was caused by the tenants action or neglect, tenant will be held responsible for damages. Physical possession. If the landlord is unable to deliver possession of the premises at the commencement of this lace, that landlords shall not be liable for any damage caused thereby, nor shall this lace be void or avoidable. But tenant shall not be liable for any rent until possession is delivered. Tenant may terminate this lease if possession is not delivered within ten days of the commencement of the term here of that's to me, pretty self-explanatory validity of each part. If any portion of this agreement is held to be invalid, it's invalidity will not affect the enforceability of any provision. Meaning if for some strange reason. Some part of this contract is how don't know, con, is at some kind of conflict of interest or anything like that. If for some reason one small part of this agreement does not make sense, it does not render the bulk the rest of these Agreement void. Everything else is still in effect and enforceable. That's what this is talking about. 43 grounds for termination. The failure of tenant or gas to comply with any term of this agreement will be grounds for termination with appropriate notice and procedures required by law. This holds attendance feet to the fire. They got operate within the terms of this lease. If they do not, that is grounds for termination. 44, this talking about smoking. You may or may not want to have this line in there. It's up to you. In this instance, it's saying that property isn't non-smoking property. No smoking is permitted in the property. If the tenant or gas smokes and the property that tenant will be charged a 1 $1000 cleaning fee. It cleanly fade usually means the house has to be repainted floor I'm in carpet, has to be replaced or, you know, cleaned really well. I mean, somebody who smokes in a property for a year, I mean, it can smoke sticks around in a property forever until it is remedied and the cost to do so can be expensive. $1000 cleaning fig. If the tenant continues to smoke in the property after the first warning, This will be grounds for immediate termination. 45 renter's insurance. We've hit on this couple of times, very important. The tenant is hereby advise to purchase a suitable renter's insurance policy to protect themselves and their belongings from liability, damage, or loss? As far as I know, there is no obligation for a renter to have an insurance policy. As far as I know, they can choose not to, but they're putting themselves at risk to do so. And that is what this line is talking about. 46 document review by tenant. The tenant acknowledged acknowledges reading of all of the stipulations contained. This agreement agrees to comply and has received a copy, says this prevents the tendon from saying, oh, I got the lease, but I didn't read that. I wasn't aware of that. And well, it says right here that she did and you signed it. So, you know, again, it just kinda gives you leverage. And then all that is left is blinks for the tenants to sign and the signature of the Landlord. And that concludes this five-page master lease agreement. Again, this is included for your uses in this course. Be sure that you modify this to suit your own uses. You may want to change things or omit things or add things are regardless what you do, be sure that you have your your lease agreement approved before you actually put it to use just to verify that you are absolutely operating within the terms of the laws and operating within the bounds of the Fair Housing Act. Okay, that concludes this lesson. 41. Minimizing Tenant Turnover: So this next little bit here is talking about minimizing tenant turnover. And I mean, by tenant turnover, I just mean when one tenant leaves and other tenant comes in, you know, it's best to put a tenant in there. That's great. And then hopefully they stay for years and years and years. But tenant turnover happens. So let's talk about some ways we can probably cut down on tenant turnover. So first off, I mean, tenants just like to know that, you know, you're you're you care about them and you care about what they think if they're having any problems with the property and that kind of thing. So one thing you can do is just ask the tenants for how the rental is doing and you can do this maybe twice a year, you know, you don't want to bug them too much, maybe every six months. Just ask him like, how things are going with the rental and they'll give you feedback on it. You'll learn through maybe some things you can improve that kind of thing. But just the fact that you are asking them and you are valuing their opinion shows him you care, and that makes a difference. Another thing is, you know, the market changes and you may need to raise the rent. When that happens. Just, you know, you definitely don't want to do it very often. I would say I would say maybe just once during the entire tendency of your rental. I mean, whether they're there for whether the tenant is there for a year or five years, maybe just raised the rent once. They don't like that. I mean, you back when we used to rent a house, the rent was raised honest. And it was like it was just a kick in the teeth. It was like really, you know, because you agree to rent this place for a certain amount of money and you just kind of feel like, I don't know, you kind of feel it just kinda rubs you the wrong way, I guess when when you settled into a house and you feel like this is your home and where you live. And you've you're used to that certain rent payment and then it goes up a $100 or whatever. You know, it's not a great thing. So you can increase the rent, but be careful about it, be sparing about doing that, and be very respectful when you do it. Okay. Another thing about minimizing tenant turnover and this one's pretty self-explanatory and common sense, but meant this may actually be the most important one. So let only the most qualified tenants rent your property in the first place, you know, even if it costs you a month or two or three or whatever, just up front, be patient and be very selective about who you're putting in there in the first place because, I mean, this this has really the biggest effect on tenant turnover. You got some good guys in there that are planning on stay and they got good reliable jobs and good references and everything else. They're probably going to be great tenants and they're probably going to stick around for awhile. So just put the most qualified ones in there in the first place and you'll be setting yourself up for last tenant turnover. Consider allowing pets. You know, it's not an uncommon thing within lease agreements for landlords to say no pets allowed on this property, and it's understandable because pets cause damage and the PI on stuff and whatever it, there's all kinds of reasons to not want pets. However, in doing so, you are vastly restricting the number of people who will want to rent that property from you. So really consider if you want to possibly allow pets to, to come into your property. Another thing that people like to say, especially younger people, is ways that the rental property can be smart. And that's basically just he I'm talking about like smart programmable thermostats are maybe fancy LED lights and living rooms. It couldn't work off of a remote and stuff like that, just like modern electronics and stuff like that and you know, modern appliances, that kind of thing. That can really go a long way for making people want to stick around and having a good savvy modern, smart home. Obviously there's more expenses involved in that kind of thing. So you've gotta kinda way if that's something that it might make sense for you to do, give them more than what they expect and the rental. This is one of those things where again, it's just kinda showing the tenant that you care about them. I think I mentioned earlier on in another kind of class that I take really, really good care of my closing attorney. I'll take them don't and stuff like that. And you can do the same with your tenant, you know, if it's their birthday, send him a birthday card. You don't know me. And it's just those little things that say, holy cow, it's like, wow, they really don't really do care about me, you know, domain. It's, it becomes kind of a more personalized thing. Be flexible in a slow market. What I mean by that is, in a market where there is an abundance of people who would want to rent your property. You, you're going to have an incredible amount of people to choose from. And in those cases, just be more flexible with who you are placing in your rental because you're going to have so many options is going to be kind of overwhelming, so just be flexible. Be very slow to choose who the right tenant is for your property just to ensure that you don't place the wrong people in there, that's going to lead to higher tenant turnover. The rental arrangement. It is a little bit I don't know if I really like this example too much, but I'll try to roll with it any ways. But the relationship between a tenant and landlord is a little bit like a parent and a child, that the landlord being the parent and the tenant being the child. And what I what I mean by that is you have to show them or it's if you're trying to keep them to stick around and minimize tenant turnover, you gotta show them that you care about them. He gotta give them a good property that they feel at home with. You gotta give them a rental amount that they're comfortable with. You can't be like, too bossy and overbearing, you know, that kind of thing so that you run him off and it creates this tension where they actually hate the landlord. But at the same time, you have to again, show them that you care. And, you know, like like I says, and I'm a birthday card or a Christmas card or or different things like that just to let them know that you value their relationship and you appreciate them as being a good tenant, that kind of thing. So the parent-child thing, I guess what I'm trying to say is it's kind of a blend between being responsible and strict and having a clear set of rules. But then also kinda having that soft side two and let them, letting them know that you really do appreciate them and showing it in little ways like the birthday card example. So that's, that's what I mean by it's a little bit like a parent-child relationship. Yeah. So again, kinda back to that parent-child thing. You are in control, but you've got to show them that you care is well, and that can go a long, long way towards making your tenant stick around for as long as possible. Yeah. So those are some little tips and helping you minimize tenant turnover. 42. EVICTIONS: Dealing with an eviction. So if you're watching this section, hopefully it is because you are not having to actually deal with an eviction. Hopefully you're watching this section just for just to gain some common knowledge, that kind of thing. But yet dealing with evictions and is usually what a lot of people think is really the worst part of being a landlord. And I guess to some degree, that's probably right. But the reality is, even when you have to deal with an eviction, it's not the end of the world, you know? I mean, it's certainly not a pleasant thing having to remove somebody from from a property that you own and from what really was their home and in a lot of cases, but I mean, it happens I mean, is it is a tenant landlord relationship and each of you have certain obligations. And if the tenant does not, standing up to their side of the deal, didn't. I mean, they, they gotta get out and then that's the time when innovation may be necessary. So innovation is often the most dreaded part of being a landlord for sure. They're never fun, but you'll likely have to evict somebody at some point if you are in this game long enough. I mean, it's it's just kind of part of I mean, it happens that life changes like there was all kinds of things at you and you and I have to deal with it. And, you know, people written houses, tenants have to deal with it too. So, you know, it happens. The rules and processes for evictions will vary from market to market for sure. The laws and things that I am certainly most familiar with is the market of Atlanta, Georgia. And I would imagine that it's probably not all that different in various markets. But you will want to research the eviction laws for your specific market and just become familiar with those. And it's a good thing to know even beforehand. Don't, don't research this stuff as needed and, you know, don't don't become an up against an eviction. That's you have to do and be learning. I would suggest kinda learn this stuff now, honestly, probably learning about how evictions work may help you to avoid having to evict in the first place. So, you know, it's just something worth considering. Evictions do often occur. Well, let me say this. They occur most of the time because of non-payment. That is usually the issue. There's all kinds of other reasons it could happen you now disturbing the peace or I don't know. Her problem. Dogs are just I don't know. I just just really anything that goes against your master lease agreement could be grounds for eviction, but the most common reason of all is most certainly non-payment. People get behind on payments and, you know, they have to get out. In those cases, you can try a pay rent or quit notice. And what that is simply is it is a simple notice. It's like a one-page forum that you literally put on the front door of the property that says pay, pay, pay the rent, make up your back payments or quit, meaning. Police get out. There's also a cure or quit and noticed that can be put on a door. What a cure or quit notice is, is when payment is not the issue, it's something else. They could be again, it could be noise or maybe they have animals in the property or and they're not supposed to or any number of things that go against the terms of the lease, NOT specifically. Talking about payments. That's when you would use a cure or quit notice, meaning they need to cure the issue that is in violation of their master lease agreement, so that can be used to generally speaking, eviction is the last effort for remedy. You really want to try to get those payments to get them caught up. But at the same time, you don't want to be too soft on the matter. You need to be for strict and operate within the terms of the lease. But when that doesn't work, then it may be time to go forward with an actual eviction. And you didn't want to be sure that proper warnings proceed the eviction. In other words, you don't want to you know, a payment is one day late and then you serve him with an eviction. Yeah. I mean, you you gotta you gotta actually mistakes happen for sure. I mean, absolutely got to rule out that it's just some kind of mistake or some kind of an actual like medical issue or something like that that are they've been dealing with something else. Any number of things can happen, but you wanna give them a little time, give them proper notices, proving that you know what's going on and basically creating a record that you have attempted to collect those payments are remedy the mistake. And again, create that record to prove that if you do have to go all the way to eviction proceedings, you have basically exhausted all your other options and you want to be able to prove that. Because that's important. Again, you can possibly come up against violations of the Fair Housing Act if you seem like you were just jumping straight to eviction light. In other words, if you come off as being somebody plus satellite, weren't this, if it can be perceived that you were just looking for some kind of little minor issue, an order to stick these people with it in order to get them out of a house. That could be a big problem. And so you don't want it to be perceived like that. And that's why you want to kind of basically create that record by by notifying them of later end, by trying these pay rent or quit notices or cure and quit notices, things like that to create that record and protect yourself. So yeah, that's that's a big part of it. I've got another section of this, so let's move on to the next slide. Okay, so like I said, you know, you've tried everything else and if everything else has failed and it's time to move on to eviction proceedings. Like it's time to just get these guys out of there. In this case, you want to provide the notice I'm sorry, provide the tenant with a notice to evict. Letting them know that this is happening. And how you can do that is you can send to us priority envelope or I'm sorry, you can send the notice to evict in a US priority envelope and also type a copy of it to their to their front door. I like to do both of those. That just shows the court that you are making every effort to effectively communicate your intentions to these people. So again, us priority. The reason you want to do that and send the notice to evict to him that way is because it creates a trackable record. You can you can tell like, you know, when you sent it and when they received it. So it's a tangible, you know, thing proving that you actually sent that to him. And then also you want to take a copy to their front door. And and I would say take a photo of the copy that's on their front door too, because you want to eliminate the possibility of them being able to say, I didn't get anything on my front door. Oh, yes. You did. Show him the picture of it taped to the front door. You gotta it becomes it becomes a game of a game. How don't, that's not a great word, but it's a, it's an issue of trying to create this regular to protect yourself and kind of think of him ahead of any kind of ways that the tenant may try to kinda wiggle out of it or blame you for some kind of discriminant or discriminatory, you know, tactic or anything like that. You've got to protect yourself and think ahead about those things. So if they still do not sort out the issue, then it's time to file the eviction at the court house. And then what that's gonna do is the core is going to issue a summons, they're going to set a court date, issue a summons to the people, and basically say You need to be in court on this day or you know, to to for the eviction. You need to get at that point, you need to get all your documents and prove together for a hearing. So all of these documents, you have the picture of the notice on their door, you're tracking number of sin and the notice via UPS, the cure quit notice, you know, all that stuff. You want to compile all that so you can have proof here. Here. I have done my part. You know, they have not done their part. So that's what I mean by getting all your docs and proof together for a hearing. And then if you win the hearing, they will have to vacate the property. If you've done everything right up to this point, you've been operating within the lease agreement and you've made these extra efforts to try to correct issues before issuing this notice to evict the then you will when, you know, you have to do something pretty wrong to, uh, to lose a hearing. So what do we do with this last line is worded a little funny, but it says, if they don't, the sheriff will remove them. What I mean by that is going back that excellent. If you win the hearing, they will have to vacate the property, but they don't vacate the property, then the sheriff will actually come out there and remove those guys from the house. That line was just written a little funny that last one there, but yeah. Again, what I mean is if they do not vacate the property, the sheriff will come in and remove them. And that's basically kind of a play-by-play of how the eviction works and kind of a timeline that you would go through if you get to the point of actually having to deal with an eviction. So that's kinda how it works. Next, I wanna talk about mistakes that you could make is a landlord will when dealing with an eviction. And we've got to be really careful with this stuff. So let's talk about that next. 43. Landlord Eviction Mistakes To Avoid: Okay. Landlord eviction mistakes. All right. Let's just rattle through some of this stuff now. A lot of this is pretty common sense. But crazy things have happened and I don't want to be sure that you don't you're not doing any of this crazy stuff. Okay. First of all, you cannot hire somebody to forcibly remove the tenants. There's a process you have to go there. And even though you might certainly feel, you know, like hiring somebody to just get these non-paying suckers out of your house. I get it emotionally because you can be pretty fired up about these situations, but you cannot hire somebody to drag the tenants kicking and screaming out of the property. You can't do it. Ok. You cannot change the locks without them knowing. So when they go to work or wherever you can't have a lock, smith go in there and change the locks while they're away. That's a that's a big known and all this stuff is big nose, but just don't do it. You cannot have the utilities shut off on them. You know, he can't turn off the power and the water and things like that to try to encourage them to leave the property. You cannot remove their their belongings while they're away. You can't harass the tenant. You can't threaten the tenant. He can't do anything like that. You must have a very solid basis for eviction. Like I said in a previous lesson, you do not want it to be perceived by the court or anybody else that you were just looking for some kinda dumb little reason to get these people out of your house. You have to have a solid basis for a victim, and you gotta have that record. And you've got to exhaust all options for trying to remedy the situation before doing the eviction. And you've got to have proof of all of that stuff. Certainly controlling your emotions. Do not make stupid mistakes along the way and do some of these crazy things like changing the locks are higher and somebody pulled the tendons out. These things have happened. That's why I mentioned in it. And your emotions can certainly be running high at these kind of, these kind of situations, and you've got to control them. You must operate within the lease and the law and not let your emotions take control of you, otherwise, you risk becoming the defendant. You know what I mean by that? If you do something really wrong and the tenant can come after you and make make some kind of case against you. You could actually be the ones defending yourself against some kind of a lawsuit. Do not let that happen. So those are some basic landlord mistakes, as crazy as they sound. These are things that people do and they paid the price for them. So just be sure that this is not you. If you do end up having to deal with an eviction, alright, so hope that stuff helps. 44. Exit Strategies For Rental Properties: So in this section we're gonna talk about exit strategies for rentals. Now it's, it runs a little contrary to the general theme of this course, which is you buy a rental that you hold on to it forever and just benefit from cashflow and appreciation. But things happened, plans change, business strategies, change, markets change, and you will probably eventually want to sell one or more rental properties. I mean, it happens I'm always move in houses around and I I'm kind of in a mix of kind of three different segments of real estate wholesaling, rental properties and retail flips. I do the most wholesaling. Second to that is as rentals, and then I do the least amount of retail flips. But what happens is a lot of times you buy houses and ideally if you're buying them right, you have one or two or three even exit strategies lined up before you even buy the property. What that means is if you experience some kind of problem or plans change or you have a financing issue or just any number of things, it gives you the opportunity to pivot, take that property down a different road. You may buy a property that you're intending to use as a rental, something changes. And perhaps if the market and everything else makes sense, maybe you can do a retail flip on it. Or let's, let's look at it in the other direction. Let's say you're going after a property to do a retail flip on. But then after closing, you learn some things about the market or the neighborhood or something that makes you doubt your ability to to sell that house as a retail flip. Well, if you bought it right, and it's set up for multiple exit strategies, maybe you can pivot and use that properties are rental instead. So that's what I mean by by being able to kind of blend different niche strategies together and such as that. But generally, one of the most common ways to sell a rental properties, to sell it as a turnkey rental. If you've gone through the effort of buying it, fixing it tended, eating it and all that stuff. You have added value that property, and you can sell it as at a premium price to another investor who wants to come in and buy it as a turnkey, ready to go, cash flowing tenanted rental property. So that's an option. If you've just had an eviction or just had a tenant leave because their lease ran out, something like that. You can just sell the house as a vacant property. A lot of times other investors will actually prefer to place their own tenant rather than taken one that's already in place. So Selim House vacant could certainly be be an option. So that's something to consider. Also consider if you could possibly do a retail flip if it makes sense in your market, you, again, you don't wanna go down that road unless you know that it's going to be a viable strategy. Because with a retail flip, you're generally going to be pouring more money into the property using higher-end finishes and just really making that thing shine so that a retail level buyer can buy it and you do not want to go that route. Unless you're positive you can be able to sell it. So just be sure it makes sense in your market if you go down that road. Do learn about capital gains tax and 1031 exchanges. Those I would say it's outside of my realm of expertise. But dependent if you're making short-term profits on these investments and things like that, capital gains tax is certainly going to have an impact on, on the taxes you pay on those profits. 1031 exchanges, again, if you are possibly selling this property to buy something else, a 1031 exchange could be a viable option for you. But again, I'm just kinda giving you these topics so you can look those up on your own because I I don't feel comfortable advising on that stuff even though I have a little experience with it, had I definitely know about capital gains tax, but the 1031 exchange, I don't have enough experience to confidently, you know, teach. So yet learned about that stuff for sure. It's talking about, you know, short, short-term capital gains tax. That's when you own a property or a profit producing asset for less than one year, those are the taxes you would pay on those gains and those rates that you would pay on those depend on your income. And one of the places where I pay short-term capital gains taxes all of the time really are, the vast majority of the time is wholesaling properties. I've done some lengthy wholesale deals where I've just bought something and held onto it for a long period of time, longer than a year, and then sold it and thereby avoided short-term capital gains tax. But that was kind of an odd example. Usually wholesale deals are very short-term, but sometimes they get stretched out depending on what I'm doing with them, but I pay it often when wholesaling for sure because that's a very short-term strategy. Lots of closing, lots of volume, very short terms, and you really get dinged with capital gains taxes. But I mean, you could do the same even with retail flips and such as that. So just educate yourself on capital gains taxes for sugar when you're talking about potentially liquidating a One of your rental properties because it's going to apply to you most likely. Capital gains tax it's worth like look at into when it comes to liquidating assets are transferring for one property to another. I'm actually referring to a 1031 exchange. That is what's worth looking into when you're talking about, you know, liquidating one rental property in order to buy something else and that something else could be another property, it could be stocks, it could be anything that's going to be an investment asset two. So again, possibly that the 1031 exchange would be something worth looking into. And that has to do with, again, tax matters. And I'm not I'm not I'm not a real strategists when it comes to that kind of stuff. So double-check yourself on that. But yeah, generally speaking, Turkey in turnkey rentals are an excellent way to go. I've done all kinds of those. In fact, I always keep that in mind as an exit strategy when I'm buying just about any house. I mean, if a house is a deal, you know, buy it and then figure out what to do with it. But often, I almost always like to have at least two exit strategies. And for me, my normal exit strategies are wholesale rental property or or selling it as a turnkey rental. And then sometimes I'm able to even get a fourth strategy and there, which would be possibly retail flipping it. But that's, you know, it doesn't often lineup that way, especially when you're talking about rental properties and rental areas and you know, that kind of thing. But it could work for you. But yeah. So that's a that's a little information on, you know, trying to kinda size up exit strategies for your rental. I certainly wouldn't be encouraging people to sell them, you know, unless it's needed, but, you know, the time certainly comes when you need to liquidate. And hopefully this section here will be helpful when it's time for you to liquidate or rental property. 45. Putting It All Together: This next section here is called putting knowledge into action. Because I mean, up to this point, you've been really absorbing all kinds of knowledge and instruction and, and that kinda thing. But how do you put it all together? Like what do you actually do to start taking action on this stuff? Well, here are some things. Started analyzing some deals. You know, if you know what markets you're investing in, start checking out some deals, running some numbers, and trying to kind of get a feel on what you, what looks appealing to you. And start going after actually put some deals together, make it some offers, and start connecting with people, networking calls, some brokers, some investors, property managers and contractors, and start really trying to put that power team together. And remember, once you connect with the like one solid player, very likely things are gonna kinda snowball and there'll be able to give you additional recommendations beyond that. Start checking out some property, start doing some walkthroughs and actually getting inside some houses, talking to some Realtors, you know, talking to some general contractors, do some walk-throughs with those guys and you can really learn some stuff and just kinda get comfortable being around houses and size and things up. Start practicing your due diligence and rental analysis. You know, if you've if you've got some if you talk to a realtor and got kind of an MLS search set up, you're going to be getting all kinds of houses to look at, you know, start chicken out due diligence, start making your offers on those properties. I mean, literally make some offers on those properties. It cannot it will not hurt you. This is one of my biggest fears and when I was really just getting started, I was terrified that I was gonna make an offer on a property. The opera was going to be accepted. And then for one reason or another, I was, I was going to want to back out of the deal, but I was going to then be forced to buy the property from something called specific performance, which is which is basically a term meaning you must perform on the contract that you signed. I was so scared that I was going to be forced to buy a property and not be able to get out of my contract. If it's just a fear I had, maybe you have the same fear. But what helped me overcome that fear was understanding what escape clauses were about, inspection clauses and things like that that essentially allow you to get out of a deal and really any point in time without even losing your earnest money. So start making some offers on properties if you've got the correct escape clauses and thing like that and there, you've got nothing to lose. I'm telling you start making some offers. I'm absolutely get familiar with the fair housing act as I've drilled home a few times in this course. This is a very important part of this course. You know, if you're operating within the bounds of the Fair Housing Act, you're very likely not going to have any problem what so ever. But it's still something that you need to be very familiar with so that, you know you're running your business correctly and you're going to be keeping yourself out of hot water. Definitely verify your master lease agreement. I've given you a copy of that master lease in this course. It may or may not be set up perfectly for you just the way I have it. There's very likely going to be some things you want to change. In fact, I encourage you, you know, go all the way through it and make whatever changes you see fit, and then have it approved by your closing attorney. Setup your tenant screening form. That is the Google form that we set up where tenants go in. They they answer questions and kinda pre-screened themselves, you know, go back through that lesson and set up that form and then it'll be ready to go when you are work on improving and maxing out your credit score. You know, run a, run a credit score, you know, search on yourself. It costs like $10 or something like that. It's super-duper cheat. And it'll kind of give you an analysis on where you are right now. And then you can start, you know, basically improve and that credit score or work on pay and down bills, ketchup, any late payments, that kinda thing basically just we're going to try to get you in as good a position as possible so that you'll be ready for getting funding for your deals. On the, on the same kind of topics, save up or down payments. Remember it's down payments usually going to be kind of around 20% of the purchase price of the property. And then once you've got that stuff taken care of, go ahead and get pre-approved for a rental loan. And then at that point, you are literally in a position to win. An offer is accepted, you're pre-approved and ready to go. You can pull the trigger. And there's your first rental property. There's really not that much to this stuff. I know it's a lot of information and I'm trying to present it in a way where it's not so incredibly granular that it leads to kinda paralysis of analysis. I tried to kind of hit everything in a level where I'm giving you information that you can implement. And then the rest is going to be learned through simply making things happen. And that is the final course in this slide. We're to the final point in this slide, make things happen. You've got to actually start putting some real action into this kind of, it's another one of those cliche things. Take action. I mean, but I mean, you really should at the end of every day, being able to look back and be like, think about the things you actually did that are going to amount to something. I made an offer on this house. I followed up on that offer. I contacted this general contractor. You know, you should be able to look back every day and be able to actually identify and count those things that are tangible, meaningful. And that's what I mean by making things happened. I'm happy that you're going through this course and learning all this stuff. But that's only part of it. You gotta, gotta get into the rhythm of actually putting these things into practice. So start making things happen. 46. What To Do From Here: So what to do from here, essentially, this course is over. So congrats for making it all the way through. I mean, I know this was a this was a huge chunk of information and know if this is your first time through and you've never bought a rental before up to now, you still may feel kind of unsure about what to do. But, you know, congrats, I mean, you have the knowledge now, now you just have to start implementing it. So from here, please leave a positive course review. I mean, it helps me out and helps me get more exposure. And my courses get recommended and that kind of thing. And also helps other students out because the more recommended my courses get and the better the score is, the more people are able to see this course and hopefully benefit from it. I mean, I put a real emphasis on trying my absolute hardest to get the best information out there. And to make this kind of a good, a good kind of a back and forth communication thing between myself and my students. And I take feedback and I implemented into the course and it's always evolving and growing and improving, really tried to put my students for. So please consider leaving. Positive review on this course. It helps me and it helps students out as well. Also, please consider sharing the course with other people who may benefit from it. If you've got friends or family who you think may, you know, like what you saw here, consider sharing the course with him. I hope I can help them out to these courses. When I start off coming out of the gate, I tried to cover my basis. I tried to give a good foundation of knowledge and teach as best I can, but it's just impossible to know like all the little details and all the questions that, that somebody else may have because everybody's different. Some people may really understand a certain, you know, section of the course where other people, you know, they they need additional details and such as that. I don't know unless you tell me. But if you have ways that I can improve the course, please let me know and then I will integrate new lessons into the course that addressed those new issues. Yeah. Finally, go through the course again. And this time focus on implementing steps that you skipped or avoided. Be honest with yourself about what real actions you've taken through this class and that are going to contribute to you reaching your goals. Realistically speaking, you've probably gone through this whole course, I imagine. And just kind of absorbed everything probably without taking a lot of action along the way, without actually implementing the steps. And that's okay. That's actually the way I would do a two I would kinda do a once through and just kind of see how everything's laid out and understand kinda the flow of everything. But then what I suggest go through it again and this time, take it seriously. This time, your second pass through, focus on actually implementing every step along the way. And I think that's what's really going to translate to really getting the most benefit out of the course is kinda doing that to pass method. I think it works good, um, and I know it works good for me. Hopefully, it can kinda be a good a good way that it can work good for you too. So, I wish you the best. Thank you very much for watching this course. I wish you the very, very best in your real estate investing success genuinely, if there's anything I can do to help you out and just let me know. And that's really it from there. I've got one more lesson for you. So check that out and we'll wrap this thing up. 47. SPECIAL BONUS: We Can Help You Buy A Rental!: Okay, what we have here is the very final lesson in this course. Now I want to communicate something very special to you. And that is that we have a consulting program where we can help you buy a rental property if you'd like to buy rentals, but you need that one-on-one guidance throughout the process. We have a solution for you. I mean, the thing is, everybody learns differently. Some people may take the information in this course, they may jump right on it and not even any additional help. They're just that confident kinda personality. And they can just take that, that instruction and run with it. If you're somebody quite honestly like me, I mean, I actually need a little more guidance and I need to be pushed and motivated and held accountable, you know, that kind of thing. I mean, quite honestly, that's the way I am. If you're that kind of person who needs that, that push and that accountability, then this could very well be a good option for you are consulting package will give you the confidence and assurance you need to successfully find by Rehab tenant and manage rental properties. And that's what this whole course is about. The consulting package can basically work essentially one of two ways. I mean, if you're the kind of person who wants us to come in there and just do all of the legwork for you, find the property by it, you know, the whole works and then just present you with this property. We can do that completely hands off for you. Or the way that I recommend and the way that I think really serves people best is we can come in and work very close with you. And basically you would be the one doing all of the work. We would be purely kind of innit in an advisory role, kind of working you through the process and just ensuring that you're making the best choices. You're not making any mistakes. And we would just basically be kind of like a coach or a consultant just in your corner to be sure that you're doing everything is as good as possible along the way, the end result is the same. Either way, we are providing you with a tenanted, rehabbed, cash flowing rental property. But I'm just letting you know that there is kind of a choice there, whether you want the hands on guidance where you would be really learning everything in depth. Or if you would like a more hands-off role where we would just be essentially providing you with a rental property completely hands off. Either way works for us. We're after helping you achieve your goals and get those, get the rental portfolio started. And our ultimate goal with this class is to, for you, for you to own a rental property of your very own, where this is more than just giving knowledge and just crossing our fingers and hoping that it works. This is providing you with a tangible solution that she could take. I mean, if you can do all this stuff yourself, great. I feel like I've provided ample detail and knowledge that you should be able to follow to do it yourself. However, if the missing pieces, needing that encouragement and motivation and accountability, we're there for you. For more information on this are service that can help you buy a rental property, go to nitty gritty real, four slash pages, forward slash rentals. The URL is right there at the bottom of this slide. I hope you'll check it out. So with all that stuff said, Ben clearly signing off, wishing you the very best and your real estate investing success.