Can I Make Money In Real Estate Without Doing Rehabs or Dealing With Tenants?
Question: Can I Make Money In Real Estate Without Doing Rehabs or Dealing With Tenants?
Hi Joe, Investing is a great idea, but I prefer to be a realtor because I just want to make income. I don’t want to be a landlord – I did that a few years ago and it was a nightmare.
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Read Transcript for “Can I Make Money In Real Estate Without Doing Rehabs Or Dealing With Tenants?”
In this video, I’m going to tell you how to set up deals so that you can avoid all of the headaches of being a landlord and having to deal with tenants.
“Investing is a great idea but I prefer to be a realtor because I just want to make income. I don’t want to be a landlord. I did that a few years ago and it was a nightmare.”
Joe: Boy, I can tell you some nightmare stories about being a landlord myself. I had a situation in one of my houses where a guy changed the oil of his motorcycle on my living room carpet. I had some people rip out their electrical plugs and call the health department and I had to put them up in a hotel while we got it fixed. I had a brothel in one of my properties (not that I ran – we had to call the police and get it out). I had some drug dealers that were working out of one of my houses. We had to get them evicted. At least those people are easy to get out because you can just call the police and they take them away.
Joe: I hate to be a landlord. I absolutely hate managing property. I don’t ever want to paint a house, fix up a house, clean a house, clean out a toilet, etc. I don’t ever want to talk to my tenants. I don’t want to go and collect money. I don’t ever want to have to file an eviction. I never want to go to court. I never want to do any of that stuff.
Joe: But I still own a lot of property and I do it by hiring property managers. You can get good property managers pretty cheap. For 8 to 10% of the monthly income, you can get someone to take care of all of that junk for you, and believe me, if you own a lot of properties, there’s going to be a lot of that junk to take care of. When you add up the dollars for it, what they’re making is pennies.
Joe: I’m happy that there are people out there who are willing to do it. But I don’t think it makes a lot of sense unless you have 100 or 200 properties and then you can hire other people to do it for you. I have one student who has 100 of her own properties. She manages all of her properties plus she has 200 or 300 other properties that she manages for other investors, and it makes a lot of sense for her and it makes her a lot of income. She doesn’t actually do it. She doesn’t have to do the eviction. She has people that work for her that do that. So, you can do that, too.
Joe: I don’t even want it as part of my life, so I don’t do that personally. It makes sense when you have so many properties to eventually set up your own property management company. My problem is that I have them all over the state and country so it makes it more difficult to have a centrally located property management company, whereas she’s got them all in pretty much one neighborhood or vicinity. So, you have to pay attention to what you’re doing on that.
Joe: Now, you don’t even have to keep properties. One of the things that we do as investors is we just make quick money – we do the quick flip type of deal where we buy the property, then we turn around and sell it and we make a big chunk of money. But we don’t buy it with money. We don’t use real cash. We don’t buy it with credit and we don’t take any risk in the deal. If we can’t sell it then we don’t even close it, so we just put it under contract, get control of it, and then go out and find a buyer for it then turn around and sell it. We use that method in the “For Rent Method”, “Subject-To” deals, “Multi-mortgage” deals and with a lot of different things that we do with expired listings. You can do that with all of those things to where you don’t keep the property and you don’t have to be responsible for it.
Joe: I’m going to encourage you to take a second look at owning property for the long term, because your retirement account just isn’t going to get you there unless your dad left you a trust fund. Your $2,000 a year in your IRA or whatever it is that you want to put in there is not going to get you where you want to go when it’s time to retire. Your social security is not going to get you where you want to go when it’s time to retire.
Joe: Your return on investment on rental property is much, much, much higher. It’s ten times higher than it is on stocks and mutual funds. The reason it is is because of leverage, and it’s actually higher than that because you don’t have much money invested in these things. That’s the beauty of real estate – you can get control of a ton of assets with no money and it’ll go up in value and it’ll make you rich in 4 to 15 years, and you’ll be wealthy or a millionaire just by owning the property and not doing anything with it or to it. So, you need to own rental property.
Joe: There’s no reason why you can’t get involved at the beginning and just start making money. With the techniques we’re using here, if you just want to be a realtor, to increase your listings and sales and to increase your commission in sales, it’s going to be phenomenal because it’s going to bring in a ton of leads as well. These things are going to be of immeasurable use to you as you work as a realtor. Thanks.