So You Want To Be A Landlord Part II - Story 1

So You Want To Be A Landlord Part II

Well, maybe you don’t want to be, but you’re in the position that I mentioned in Part 1 of this Series.

Before you take the plunge, allow me to share a few stories with you: nothing fabricated; all TRUE. How do I know? They are mine, and mine alone to tell J
Story #1

I get a call from Susie (not her real name) enquiring about my house for rent . I must emit “soft touch” radar, because the next thing I know Susie is appealing to my Christian charity and asking me to save her and her child from homelessness. I should have ended it right there. I knew from what she told me that she couldn’t qualify under any traditional guidelines. It wasnt long before I took pity on poor Susie and told her I would rent to her if her parents would be willing to meet with me and co-sign a contract.

Her parents, who obviously didn’t want Susie living with them, agreed to co-sign for her rent payments. Whew! Ok, so I figure if I rent to her I shouldn’t have any problems, at least collecting the rent. Partially right, here’s what happened.

Susie paid her rent on time and took good care of the property until…. UNTIL her boyfriend was released from prison. #1 I had no knowledge of the boyfriend. #2 the boyfriend was not on the Rental Agreement. But I can guarantee you boyfriend was sharing the house with Susie, who was now not paying rent. I don’t think Susie’s parents approved of boyfriend because I stopped getting the rent.
When I went to collect I was greeted by a shirtless, tattooed, guy who obviously had nothing better to do in prison than work out. If I were to guess where the rent money was – I would say in his veins. He didn’t look happy; didn’t act happy. Just asking him for the rent money made my butt pucker.

After they moved out I had to patch a hole in the living room ceiling made by ballistics (translation: it looked like he blew a hole in the ceiling with a shotgun). I was also told later that while they were living there, a mutual friend who didn’t like how boyfriend was treating girlfriend, during an argument, shot boyfriend in the leg on the porch. I had good reason to be uncomfortable when collecting (or trying to collect) the rent.
___________

Check back soon! I have plenty more stories to tell. And if you need help selling or managing your Fresno California property don’t hesitate to call me. My stories might sound negative but I am POSITVE I can help you.

© Randy “Lazarus” McAtee
Owner/Broker Lazarus Realty
559.301.1647

Fresno California Real Estate Statistics

Information for SELLERS in Fresno

Here are the MLS STATISTICS for the last 24 hours (as of 9:05 p.m.) This chart speaks for itself but if you want to review a post in which I explain the numbers go here.

If you're reading my post on stats for the first time then the most important thing you need to know is that these statistics show a market that is totally out of balance in favor of the buyers. For example: in a balanced market the ratio of price increases to price reductions would be close to equal.

For every 1 home that went pending or contingent 4 homes came on the market.

Many of the sellers who are making price reductions have already had their homes on the market for 99 to 120+ days.

If you need to sell a home it has to be priced right. Homes that overpriced from the beginning become market-worn and stale. Buyers ask how long a property has been on the market and the longer the property has been on the market the greater their incentive to make a ridiculously low offer. Dated listings are stigmatized and become more difficult to sell as time wears on.

Bottom line, this is no time to be "testing the market". If you need to sell or want to sell in this market, which has a huge inventory of unsold homes and stale listings, start right by pricing right.

Call me today: 559-301-1647

I will provide you with a free Comparative Market Analysis and help you with a marketing plan to GET YOUR HOME SOLD.

Investing in Fresno Real Estate

I could have titled this: HOW NOT TO BUY REAL ESTATE.

I received a call from a gentleman who saw my number on a sign I had on a property I own. He told me he was from L.A. and wanted discuss investment property with me. He came by my office and the first thing I learned was he just closed a deal with another Realtor on a piece of commercial property.

He showed me a flyer his with a picture of the property just purchased, and told me he bought it for $225,000 cash and wanted to buy some more property in the area. The more we talked the more he opened up and it turned out that while he DID buy the property for cash, a substantial portion of the cash used to make the transaction came from an equity line on his primary residence.

I then asked him the question I would ask anyone who buys real estate as an investment: "So Mr. ________ 'WHY did you purchase this property'?"

His answer: He believed that one day he could develop it (at which time it would be a good investment) but until then he was going to rent it out. So I asked him how much he intended to rent it out for and he said he was hoping he could get $900-$1,000 per month.

It turned out that his payment on his credit line for the financed portion of the property is right around $1,000 per month. So here is what I laid out before him:

M. ______ if you put $225,000 cash in the bank at 5% interest you would collect approx $937.00 per month without doing anything: no risk, no hassles, no taxes, etc.

Every month that you hold this property you will have the following fixed costs:

• Taxes: $225.00


• Utilities: 60.00


• Insurance: 65.00


• Managment: 100.00 (unless he decides to manage it himself)


• Payment 1000.0


• Total $1450.00 PER MONTH

If you rent this property for $1000 per month it will cost approx $450.00 per month to carry it - not including deferred maintenance and vacancy factors.

SO - MY TWO QUESTIONS:

• 1) HOW IS THIS A GOOD INVESTMENT?


• 2) CAN YOU AFFORD TO PAY $450.00 PER MONTH TO HOLD ON TO IT UNTIL SUCH TIME AS YOU DEVELOP IT?

Believe it or not - he had never been asked these questions and I could tell his wheels were starting to seriously spin. He left my office and returned to L.A.. A couple of months later we met in my office again. He had contacted the City of Fresno and an architect to get an estimate of development cost (something he should have done BEFORE he bought the property) and from the information he gathered the cost to develop the property exceeded the potential income.

So now he asks me, "CAN YOU HELP ME?"

Conclusion: I found him a tenant that did a lease/option and the lease payment is close to break even for him, the option money put some cash in his pocket, the option price (if exercised) will give him a profit ---- HE'S HAPPY.

If you're going to buy real estate as an investment you need to know WHAT YOU'RE BUYING AND WHY YOU'RE BUYING IT. How simple is that? If its an investment then you need have numbers that show a reasonable RETURN ON INVESTMENT (ROI). The first thing you should ask your agent when he says that he has a good investment property is SHOW ME THE NUMBERS.

If you're interested in purchasing INVESTMENT PROPERTY in Fresno, don't hesitate to call me.

© 2007 Randy "Lazarus" McAtee - owner/Broker Lazarus Realty and Fresno's Foremost Blogging Broker.

Fresno Farmer's Market

WHAT I LIKE ABOUT FRESNO

On Saturdays mornings in Fresno there's just about nothing I enjoy more than strolling through the local Farmer's Market at Blackstone and Shaw. The San Joaquin Valley is one of the worlds richest and most abundant bread baskets and Fresno is right in the heart of it. And what better place to experience the cornucopia of the region than a Farmer's Market.







I love the shirt on the girl in the background (above)

You can view more of my pictures of the Vineyard Farmer's Market here.

So you want to be a Landlord - Part1

HELP! – I CANT SELL MY HOUSE – I NEED TO RENT – NOW WHAT???

Is this your situation?

• You have your property listed but no offers

• You cant lower price further without losing money (i.e. I would have to come up with cash to close
• The mortgage payments are eating you alive.

The first thing you need to is call me educate yourself with the laws regarding Landlords/Tenants.

You can get plenty of information off the Internet. This California Courts Self-Help website is good for starters.

WARNING #1: Having been a landlord I can tell you many tenants KNOW their legal rights; you need to know what your legal responsibilities are.

visit my main blog site