Hello Everyone,

As a slight introduction, this is my first experience on Mr. Landlord and the very beginning of my rental company. I am currently partnering with two others and we are in the development stages of our venture. Some background information, two of us will be graduating from college in two months with degrees in accounting and mathematics and the other has been an accountant for two years. We have just moved from the idea stage into the development stage and are trying to learn as much information as we can.

Any information is welcomed but as a new venture we are seeking information pertaining to where to begin, what to look for, and methods of financing.

Again, we appreciate any advice as new comers in the rental world.

Thanks!

I started meeting with professionals to put my team together when I first started and one of the lawyers said something that still rings in my mind, "So you want to be a landlord?" Haha.

Read all you can.

Filter through the nonsense for as much truth as you can.

Trust NO ONE in this business, especially your partners.

Realtors are not your friends.

Tenants lie.

Contractors too.

Hope you love paperwork.

Learn the basics on how to fix things around the house or have piles of cash to pay for it.

Properties should cashflow from day 1.

There are MANY MANY different ways to play this game. Get good at one, then move on to another.

You will learn something new with every house you buy and almost every lease you sign. Some of it will be life changing.

You'll probably bleed a little, curse some and even cry at times. It's ok.

Know your dream.

Be prepared to lose relationships with some people.

Be prepared to meet some amazing new people.

If you're just starting, I'd spend the next few years just studying RE.

Take an old successful landlord with gray hair out to lunch and LISTEN!!!!

That's all for now. Good luck.

Read this board every. day.

Flush a $20 bill... er $100. You'll laugh years later.

Go to St. Louis in May. Sit with experienced investors, buy drinks, and enjoy the education. Take notes. Lots.

Read all the books you can.

Your first deal will look good and then suck later. Don't worry about it. Just do it.

Don't be in a rush to buy.

Attend local RE meetings and clubs but be aware they're going to try to sell you things. The best advice is usually given away for free or less than $50.

Take an experienced landlord out to lunch and pick their brain. If you want to know the better secrets, take them for drinks instead.

Remember you're buying a rental, not a house for you so lower your personal tastes a bit.

Get your systems in order before starting. Leases, procedures, addendums, etc.

Read up on local landord laws in your state, city, county.

Use debt wisely if at all. It's better to have one house with higher profits than 4 houses that barely get by.

Remember bad things happen and things break, usually in 3s. Have cash on hand to handle them.

Try to have multiple sources of income. Rentals, flips, etc.

Watch your expenses like a hawk.

Read landlording books. As many as possible. Not all are good, but there are some gems out there.

Lee's right about flushing a $20 or $100. Robert J made this statement on here a while ago and it's true.

The issue with partners is they can let you down or build you up. My first set of partners was with my family. Honest, hardworking and wouldn't put off what could be done today.

Let me give you an example. I am a licensed contractor. So when a partnership property was purchased, I had the responsibility to make the necessary repairs and up-grades so the property could be rented quickly. Everyday vacant, was a loss of income.

My two partners wanted me to speed things up. They knew nothing about working with hazardous materials such as "lead paint, asbestos or mold". Some things can not be rushed.

So I completed the property within 30 days, way before our schedule. Now it was the responsibility of my two partners to market the property for rent, conduct showings and take applications. But no! One partner was too busy with work and family affairs while the other partner was traveling for the next 3 weeks. Neither of them decided to tell me about their plans because the figured it would take me months to remodel the property.

I'll echo what Robert and others said about partners. There is always one that does most of the work and one that does little and wants a full share which create resentment. In a partnership of three there will always be a 2 against 1 situations that will create resentment. Even in partnerships where there is a clear division of duties and how the monies are split, there will be problems.

I suggest the 3 of you each go out and find a property, do the due-diligence, buy it, do repairs, advertise and put in tenants. Everyone get experience on on all aspects of the business. Get together and share your experiences. You will find that one of you is better at the purchasing part, one will have more liking for the repairs/refurbishing, and one will be better at the 'people end' of the business, meaning vetting tenants and contractors. If all of you hate doing one particular thing--contract that out. I think y'all may find your way into a partnership AFTER you all have the same experience to draw on.

And of course, join your local RE/LL group.

Rental property is a get rich slow business. But if you buy right and manage properly it's relatively low risk.

Focus on being good managers. Properties will come over time as long as you are always on the lookout for them.

Immediately sign up for the Convention in St. Louis in May, and even more importantly for newbies, the Boot Camp in Orlando this summer! Learn from the master, Mr. Landlord.

great you've made your first decision-- I'm getting into R/E. Will back what several have posted--- no partners-- no crutches. You don't need "PARTNERS". Once you get going you'll need INVESTORS. When we started in 86 we thought long and hard. There were no groups around like this site. We did have RAND in Atlanta (Robert Allen Nothing Down) with about 500 members it was the days of RE classes and books galore. The days of I have one rental let me write a book.

You will learn much here-- not all good and not all correct for your spicific questions dig deep.

I'll echo the idea of no partners particularly when you start out. As time goes and people establish themselves, you and they'll have a pretty good idea of what they'd be looking for out of such arrangements. At the outset, most people are clueless about this and are mostly in love with the idea of having partners.

Be very careful who you take advice from in this business. You are swimming in an ocean right now and there are sharks circling you. The minute you open your wallet, the sharks will smell blood in the water and will swim come closer to.

Welcome!

First lesson: land lording is a people business. The houses are just our vehicle to wealth. The PEOPLE you interact with (Sellers, agents, other land lords, tenants, contractor, etc) will make or break you. If you're not good with people, you will not be successful. A mathematician and two accountants...that's all great for crunching numbers, which is useful. But do you guys enjoy dealing with PEOPLE? If not, find someone who does to be the face of your operation, or consider investing in the stock market instead.

Another vote for the Convention in May in St. Louis and reading here regularly. If you stay here thru May and go to the Convention, you'll have a crash course in what it took me almost 10 years to learn "in the trenches" in about 2 month's time.

Most of the folks I have met there are good and Mr. LL is diligent about getting quality presenters. Be sure you know when and where a particular style or strategy will fit your goals. Don't think that just because something costs $5,000 that it will automatically make you $500,000. It may, or it may not, depending on what you plan to actually DO with it.

Education is a key ingredient, but do not try to replace action with a price tag.

Side note: some of the best info I've gotten has been from a $50 bar tab and conversation up until 2 AM in the hotel lobby.

Bottom line: real estate investing isn't rocket science. It has been going on since ancient times. If anyone tells you they have "secrets" to share, they are either joking with you a little (which is fine) or they're scamming you. There are no "secrets"...it all comes down to knowing how to buy and sell properly and how to handle people.

ITA with what Landlord of the Flies said...don't rush, learn as much as you can! That's what I did.

I suggest buy single family homes to start with--doesn't have to be in a perfect neighborhood but something where you wouldn't be scared to live yourself or walk at night. A neighborhood where you can find tenants who have stable jobs. Not someplace where most of the applicant pool is on SSI and under the table jobs. If you want to deal with that niche later you can always do that when you have more experience.

Have a financial cushion for when you're rehabbing and searching for the first tenant. You don't want to be rushing to put someone in because you're going to miss a mortgage payment because you don't. Sometimes it takes months to find the right tenant.

I have an entirely different perspective on partnerships. Many of today's most successful companies were built by partnerships. And many of them were friends before they began the business and have remained friends.

The success of the partnership is recognizing each other's strengths and weaknesses and limitations. Roles need to be clearly defined and measurable both for the company and individuals.

No business can survive multiple chiefs. Each partner needs to be able to provide input and have their ideas and concerns heard but there needs to be one person designated as the final decision maker when there are opposing opinions.

As in all relationships, both business and personal, communication is paramount.

Welcome and best of luck to you in your new endeavors!

Partners can be a blessing or a curse. My husband and his sister started out in the rental business 30+ years ago. Made some strides, but because they have different outlooks on how to manage a property, it can be a pain.

My husband and I try to improve a property as we go along; she would rather be a slumlord. We try and follow procedures in renting a property; she would rather take shortcuts. We ended up doing almost all of the work; the exception being if we were out of town on vacation. We keep the books, keep the properties rented, deal with tenant issues and repairs. She gets a check each month.

We have tried to convince her to sell the properties now that the depreciation has worn off over the years. We want to take the gains and buy a bigger property (multi-family) that is large enough to hire full time management and we get a check each month without the work. However, anytime we have tried to sell them, she wants more than they are really worth, and so we are still stuck in the 80's.

In the meantime, we have gone onto other properties, and she is not part of the "team".

So just make sure your partners are all on the same page.

Have fun!

I would highly recommend that each of you qualify on your own and purchase separate units on your own. You all can meet once a week to review and compare notes but I highly suggest FORGET the partnership you are now friends and once the real estate partnership is in full swing. Then something goes bad one partners not doing his fair share or the other partner feels he's doing too much manual labor your friendship can go BAD. DO your parents trust your money management skills to loan you money on your first investment???

You may have to buy whatever you can afford individually at this point in time. And build from there. Not sure your market in TN. But if you can buy foreclosures and do some work on them its a great way to get started. That being said you don't want to buy a money pit either. AND financing may not be permitted due to condition then you will need to paying cash for foreclosure. IF one of you has the cash then they can act like the bank and collect the monthly payments from the other two. Go to your local bank and complete a mortgage application for each of you and see how the chips fall. Are your credits score over 700? Do any of you have a negative on your credit score?

This will help all 3 of you to understand what you can afford. Then go online and see what is on realtor.com in your area that you can purchase with your approved buying power. IF you are members of a credit union they may be a better fit for financing a mortgage. It will be a learning experience for all 3 of you. Finance/accounting majors included. Now its the real world not college text book or case studies.

Wish all 3 of you the best in your new careers and in your real estate investments. And may your bank accounts grow in leaps and bounds...

PLUS will your jobs be in the town or city that your rentals are located? Will you be living in one state and your rentals are in another state? Under a management company that you have no clue how they manage your rentals???

Buying a unit, home inspections? Updates that are needed and not needed. Painting? Replacing? Location? Poor? Fair? Good neighborhoods? Will you purchase as an individual or a LLC???

Knowledge of your states landlord tenant law? Screening process for tenants? Rental Applications? Application fee? Credit Checks? Criteria for prospective tenants what you expect? Inspecting present living conditions? Rental/Leases Agreement? Do not discriminate? What you can't and can asked a prospective tenant? Moving in Check lIst! Move Out Check list? Notice of Pay or quit? Notice of Evictions? Frustration will happen to you and how will you deal with the frustration of a rental?

Go to the Books on this site and click on it. Buy the Top Best sellers for the month. And read them. Make notes on the pages and IF something really makes sense to you reference the page at the front of the book for yourself.

At some point your mind will be filled with do this don't do this? Are we doing the right thing? Did we forget something? Did we make a mistake buying this dump? Did we choose the wrong tenant? I hate Tenants!! The Tenant hate me!!! That tenant is intimidating! I have a fear of ____? And you will overcome all of it!!!

AND DO NOT let family or friends who do not and will not understand your reasons for investing in real estate talk you out of it. They may be jealous or they may have been a landlord that DID NOT know what they were doing and did not educate themselves about being a successful landlord!!!

Sorry about the typos...

"I would highly recommend that each of you qualify on your own and purchase separate units on your own."

"AND DO NOT let family or friends who do not and will not understand your reasons for investing in real estate talk you out of it."

THIS is the site with the most valuable information!

The posters here have a wide and varied experience, with many regular posters having decades of experience. The number of rentals they have vary from a very few to hundreds. They can answer questions on a wide variety of topics from tenant selection and management to financing to maintaining the building. These guys and gals have done it all. Mistakes and successes and are here to share it with all of us and each other.

Mrlandlord Convention in May in St. Louis!!! Conventions are great! I have not been to a MrLandlord Convention, yet. But I have attended other conventions that are a great way to talk shop to people in the business. For the time you are there it will be like a frat party with a major difference. These folks have some year of experience dealing with real estate investing AND be careful to judge a book by its cover. OR take a glance at the parking lot there my be some beater cars and trucks. AND there maybe some really nice vehicles in the parking lot. OF course you will NOT see their bank accounts because no one will show you that but what you will see is a group of Landlords/Owners that have been to the School of Hard Knocks AND they are working on their 3rd or 4th PHD!!! NOW in your 20's anyone over 30 LOOKS OLDER Than your Grandma. Don't be fooled the gray hair, no hair, harsh tones sometimes, OR IF you see someone talking to themselves, it's NOT dementia they may be on the phone with a tenant that has an ISSUE. OR maybe the tenant is an issue and most likely the tenant created their gray hair and/or no hair...

What ever the method to help keep awake, most likely adrenaline, the 3 of you will walk away from the convention with a lot of great ideas. AND maybe you will consider a landlord nursing home or personal care facility may be your better option!!! Whatever the attitude or the look, sit and listen to the many stories that will be told and they are extremely enlightening stories to know the final outcome. I think you will find that the horror stories are a result of not doing the proper screening, not having an iron clad lease in place that will make your life as a landlord easier and make more money. AND NEVER make an excuse for making MORE MONEY. That being said IF you see green when you screen and sign the lease without screen, screen, screen you can expect to get burned by a professional deadbeat tenant!!! The ELTis a great tool to use in your lease.

BradK20 and others here use it and are VERY successful with it. The 3 of you will walk away from the convention with your minds ready to bust. You thought college courses were FILLED with life changing information. JUST WAIT for a chance to talk with many seasoned landlords who have thought they have seen it all and THEN a new twist throws them a curve ball and they deal with it. OR they change the lease to counter act another tenant creating a problem. You may have seen a two page lease at office max or online. HOWEVER you will see a 10 page lease or more by some of the landlords. WHY because Landlord Tenant Laws have made them change the lease and add more to the lease. PLUS tenant actions over the years have made them add more to the lease.

Go to your local Landlord / Tenant dispute court and sit in on the hearing. This will be extremely helpful to understand how judges view landlord / tenant disputes. The judge may rule against the landlord for NOT having his or her paperwork in place. OR rule against the tenant for breach of the lease.

You most likely will be younger than most of your tenants and that can be intimidating but don't worry thats ok. You will have the needed tools to over come this issues and be prepared to deal with a tenant when they do breach their lease. Again Screen, Screen and Screen to help reduce the problem tenant issues. Will you have a problem with tenants OH YES but you will work it out to your advantage!!!

My partner is awesome and help me get more properties than on my own. Just make sure you have everything in writing especially your exit strategy.

GGW,

Welcome!

My advice:

1. Only take business advice from happy, wealthy people. This does NOT include professors or people with a job.

2. They won’t come to you. YOU must make the effort to get around them. Find a local or even distance assoc.

3. Get your tushie in a seat at Convention. You wil learn more in that weekend than a semester of college.

You’ll meet multi-millionaires and yes, attitude rubs off.

You are the AVERAGE of your friends so make friends with some richies. You’ll never be wealthy without hanging around wealthy people.

4. If you are smart enough to post here you can do this on your own. Partners pnly slow each other down. It’s fun to dream with your buds but each do your own and encourage each other. Go to Convention together. Combine encouragement but not money. You’ll lose these friends if you do. Money changes relationships. If all three are strong you’ll each do fine.

“Planning, developing...” Learn at Convention and buy your first property. Academics tend to get stuck in Paralysis of Analysis and go nowhere.

I’ll be teaching at Convention and showing stuff we ise to make money that college profs have never heard of.

Deal: you get there and I’ll spend time with you.

If you think education is ever expensive, try on the cost of ignorance.......so the issue only becomes do you want to try to rediscover the wheel or do you want to accept the fact that the wheel is already invented.

There is more knowledge on this one web page shared than you find reading a book - if you elect to accept it.