Let’s get one thing straight. I can’t nail a board in place or fix a leaky faucet. I wouldn’t know where to look. I bought a pick-up truck once, and as soon as I realized I would be the delivery man from Home Depot for all my rehabs, I traded into a small sports car. Try and get some drywall or lumber into that 2 door 911!!!!!!
Next, I learned to treat people real nice. The lower they are on the totem pole, the greater the return you will get for giving them basic common decency and respect. It’s in short supply. Plus, I pay them well. And guess what, after 10-15 years of doing this, my workers/partners on my real estate will work harder and longer and do more for me than they will actually do on their own projects. I’ve seen this a hundred times over.
So, let’s go back 15 years. My wife and I had jobs and we had 10 rental units. Guess what. We couldn’t look after them. Bad tenants, bad decision making on our part, and just plain doing the wrong things and we were burned out. We sold them all at a loss and said “I guess we won’t do real estate again,” and went back to being average. (Remember you are unique, just like everybody else!)
Fast forward 5 years. I miss real estate with a passion. So, I go to a new city and buy some multi- unit buildings that need total makeovers. We are talking 60% vacancies and the tenants that are there are either former cast members of the movie “Deliverance” or poster kids for drugs and booze and no work. Also, we have money partners who put up the cash and the money to renovate; we set out to get rid of the bad tenants, fix up the units and replace bad tenants with brand new ones; ones that work, have cars, and even have their own furniture! What a concept! And they seem to have no aversion to paying their rent every month. Who knew?
Then we refinance, pay back our expensive loan money, and now have 36 units producing a great monthly income. Then we do it again and again and again – 33 units, 60 units, 87 units, 112 units until we reach over 500 units. All running smooth and all providing great cash flow and great infusions of cash on refinancing. And, even more amazing, all providing no stress, no strain, no threats of divorce or even worse, murder due to the ravages of dealing with tenants round the clock.
Surprise, surprise- we learned that Donald Trump doesn’t look after his own tenants. He has people. And these people we found were not only happy to do the work, but surprise again, they could actually do it a thousand times better than we ever could because that was their job. And they were good at it. And we were good at rewarding them for being good, and they got even better.
So, that’s my story and I’m sticking to it. Find someone to handle the daily grind before it grinds you down. Remember, the less “hands on” you are every single day, the better your business will grow and the easier your life will be. I had no idea what I was doing till it was done. Now I’m sitting in Starbucks relaxing, having a great day and someone else is dealing with the tenants. How great is that!