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Monday, August 29, 2011

Eviction Court

I have been cruising along quite steadily without hitting any roadblocks in my landlording business. A few speed bumps along the way and 3 uncontested evictions, but no other major issues. The first eviction was for a guy who I had purchased the property from. Apparently, he wasn't all there so his brother settled up with me after he moved out.

The 2nd eviction was for a tenant who lost her job because her son was shot twice while walking down the street and she spent her time at the hospital instead of going to work. I can understand that, but at the same time, the doctors are much more qualified to deal with the patient than mom is and from my experience of driving by the house and seeing him and his buddies out there late into the evening, I am 100% positive his mouth was part of the reason he ended up with two bullet holes in him. Regardless, the person who shot him is a sissy and should have taken it up with him in the backyard the way neighborhood problems among the youth should be dealt with.

The 3rd eviction was a tenant who was just a total jerk. I believe he also lost his job, but he started harassing me and giving me a hard time. I have every intention of suing him as soon as I can track him down. I have my ways and I have found the last two locations he lived, but he had already moved before I discovered he lived there. I created a fake Facebook account and sent him a friend request which he accepted. I know he is still in town and working again. I just can't figure out exactly where yet.

This summer, I hit the roadblock; 2 evictions at the same time and so far one of them is getting a little nasty. The tenant sent me a text msg stating he will see me in court. I didn't actually expect him to file an answer, but he did. I then had to show up in court with my attorney which cost me $225. I say 'me' because this dirt bag tenant most likely not ever get a real job and therefore he will be totally uncollectible.

I showed up in court for our schedule appearance and of course he didn't show. My attorney told me that it is much better if they do show because you beat them fair and square in court and it is done. If they don't show, they can go back to the court later on and whine and complain that their cable went out on their big screen TV so they couldn't finish level 5 of their favorite Xbox game and therefore need a new court date. Believe it or not, they can and have gotten new court dates according to my attorney!

Today, I received an email from my attorney claiming the tenant requested an Ex-Parte. An Ex-Parte hearing is a hearing heard with 24 hour notice, it is usually done to delay a lockout, which this appears to be the case. My attorney informs me that I do not have to be there for the court appearance. I am thinking, "why wouldn't I want to be there for the court appearance?!" This scumbag answers my eviction costing me $225, doesn't have the ca-hones to show up wasting my money and the tax payers money, then requests more time to move out?!?!?! Talk about ridiculous.

Why can't I request they move out sooner because I have a mortgage to pay and will need extra time to get the place ready for my new tenant? I have every intention of going tomorrow. I hope I get a chance to speak with the judge. If he even thinks for one second that it is OK to allow these people to stay an extra hour, I am going to let him know what I think.

As far as I am concerned, when you decide that you will not be paying the rent on-time, start packing and looking for a new place to live because that is the moment when you have decided to move out.

I'll let you know how it goes.

Sunday, August 28, 2011

5 Year Anniversary

Five years ago today (08/28/2006) I purchased 2035 Western ave for $200,000. I purchased this property from a wholesaler. I don't remember what his wholesale fee was, but I believe it was $5,000. I used an equity line of credit and paid cash for the property. I spent about $5,000 on rehab (I had no idea what I was doing!). To find a rehabber, I asked one of the other investors I knew if he could refer me to someone. The guy did a great job on this property even though he turned out to be a total tool on the next deal.

Western ave is a 2 Bed 1 Bath in a not so great area of San Bernardino. It is hard to believe I paid $200K for a 2 bedroom house in a not so great neighborhood, but the numbers made perfect sense back then. I sold it on 11/16/2006 for $272,000 and made about $25,000. The funny thing about this deal is how little I knew what I was doing.

Even though I was a licensed real estate broker, I had no idea how to sell a property. (They don't actually teach you that when you are studying for your license.) I didn't know what disclosure were required or how to even negotiate a counter. I was totally clueless! I was able to list the property in the MLS. It took me a few tries to get all the required data in there. Once I got an offer, I called up a neighbor who has her license and asked her to handle the transaction for me. I think I paid her about $2,000. I got copies of all the disclosures and kept them in a file.

The point (moral?) of this story is I was determined to succeed as an investor. I might have jumped into the pool headfirst without checking to see if there was water in there first, but I knew the integrity of the wholesaler I was buying from and every thing worked out well.

I had a lot of problems (lessons?) dealing with that property from homeless people sleeping in the garage, disposing of an old RV and an extremely old rusty car, to someone breaking in, and having to evict the woman the wholesaler purchased the house from. It was a fantastic learning experience for me. Unfortunately, after this deal, I got into 2 or 3 even worse situations, but I am all the better for it now.

These days I own quite a few houses and several small apartment bldgs. The cash flow is doing very well and I mainly focus on wholesaling properties.

How long ago did you start, and where are you at today?