soon to be new user of the CS course - Posted by Matt G

Posted by HR on February 18, 2001 at 08:03:05:


soon to be new user of the CS course - Posted by Matt G

Posted by Matt G on February 14, 2001 at 01:48:37:

My name is Matt, I am 22 years old, and soon to be a CS course user. I was first of all wondering, I ordered the kit recently, and wanted to know how long it really takes to receive the course in the mail because I am anxious as ever to begin using this kit. Secondly, I am curious, are any of you in the northwest area (around Salem, Oregon). OK, now for the part you probably always hear from new beginners, I of course, as anyone else, had seen the infomercial many times, and finally although, still very skeptical, I decided to take my chances (the only thing I really could loose is my initial investment of approx $220., and even then I could send it back and get all but the shipping cost back out of it, blah, blah, blah) and I bought it, since I bought it though I have seen a few web sites and am now extremely anxious to begin using this course, for this I wanted to thank ALL of you people in here and in the Yahoo! club for all of your testimonies of the successes you have had. From reading your posts, I figure I ALWAYS have somewhere to turn if I have questions, not only that but I have seen almost NO negative responses, which is really great. Anyway to wrap up this message I wanted to appologize for the rambling and invite any comments you want to contribute.

Once again thanks for all your posts, Believe me it helps the newbies.

Matt G.

Re: soon to be new user of the CS course - Posted by B.WeaverTN

Posted by B.WeaverTN on February 14, 2001 at 11:54:48:

I just got my CS Course, and am in the process of reading/listening to the tapes. So far it’s good, except there is too much of the infomercials thrown in, so you have to weed through that to get to the meat. I think it will be ok though, used with the vast amount of information on this site.
About the cost though, I got mine for $86 incl. Shipping from Ebay. It was a '98 revision, but still in the shrinkwrap. (there’s no money back offer though). That was my first experience with Ebay, but I was very pleased.

Good Luck!

Re: soon to be new user of the CS course - Posted by KR-(AZ)

Posted by KR-(AZ) on February 14, 2001 at 04:54:15:


I was born and raised in Oregon and started my real estate investing career there 13 years ago. I now live in Arizona, specializing in apartment complexes and GOLF.

I would suggest that you focus on two markets up there. One, obviously, would be Salem. It isn’t a big hot-bed for real estate and that will work in your favor for finding motivated sellers. (I would suggest, however, that you read some of the how-to articles regarding marketing that are also located on this site).

The second area you’ll want to focus on would be Portland (sheer numbers are in your favor there). You won’t have as much luck on the west side (like Beaverton or Hillsboro) as you will in the Northeast and East sides (make sure you’re east of 40th St., which is kind of the informal red-line). Gresham and Tualatin might turn something up for you.

One final note from my direction. I have a friend in Scottsdale (kind of like Lake Oswego in the desert) that does nothing but follows Carleton Sheets exactly to the letter. He hasn’t modified anything in the program to fit his style/location/market conditions, etc. (which is kind of insane when I think about it).

The point is, he’s doing things robotically in the toughest real estate market in the entire state and HE GETS MORE PROPERTY EVERY YEAR!!

You’re welcome to email me directly if you wish. I fly to Oregon throughout the year and am pretty fresh on your market (all my family is in the Great Northwest).

I suggest you do things in this order, though:

  1. Read every how-to article on this site
  2. Study your sheets course thoroughly
  3. Read every how-to article again
  4. Start posting questions
  5. Get a game plan (in the form of daily tasks you will do to achieve your real estate goals…which you will have IN WRITING)
  6. Put your game plan into action daily

If you keep at it every day, you’ll bump into success along the way. It just builds from there.

Every time you put things into practice (whether you buy anything or not in each instance) you are going to get better and better at it. It WILL become second nature to you.

Take care.

p.s. I started out young, jobless, and with terrible credit, so you’ve got no excuses :wink: I’ll see you on the golf course soon.

Re: soon to be new user of the CS course - Posted by ScottAG (CA)

Posted by ScottAG (CA) on February 16, 2001 at 01:42:40:

I think the “infomercial” snippets are included mainly for motivation. The CS course is not only about REI, but also improving self-esteem and confidence.


Re: soon to be new user of the CS course - Posted by Michel

Posted by Michel on February 14, 2001 at 16:23:21:

What do you think of Tucson for potential?

Re: soon to be new user of the CS course - Posted by KR-(AZ)

Posted by KR-(AZ) on February 14, 2001 at 16:51:14:

Regarding the Tucson market. I don’t like it as much for the apartment complexes (which is my main focus), but I have a couple partners down there that do single-family home rehabs and bought about 55 of them last year.

However, those 55 properties were a combination of houses bought in both Tucson and Phoenix.

I do have another investor friend in Tucson that bought around 40 of them last year, so there is probably enough volume if you do it right.

There is one thing that is unique to the Tucson market that people in other regions don’t think about. Snowbirds. You see, Phoenix is growing at a rate of 88,000 people per year, but many of them are coming here to work.

In Tucson, however, it is even more of a snowbird haven because it isn’t as much of an urban sprawl as Phoenix.

Here’s my experience with snowbirds. There comes a day when either a spouse dies, or they get too ill to travel to the sunny desert. The house sits and sits and sits. They’re usually not very proactive about getting rid of the property, but they will respond if you contact them.

I’ve dealt with people from Wisconsin, Illinois, British Columbia,etc., who, for one reason or another, weren’t really using the house any more.

You just have to be the first person to contact with them “that they like!” Never underestimate the power of being sincere with people. If you care about the needs of the people you’re doing business with, you’ll make your deals. (Don’t overlook suggesting taking care of the needs of their families, like college funds to set up for grandchildren).

For the Tucson market (if you’re inexperienced) I would focus on the vacant houses first and see what you can find. You could probably make a nice living just buying unwanted houses from snowbirds. That will get your feet wet in the market and you’ll have a better idea where you want to focus from there.

I hope this gives you some ideas.

Take care.

Re: soon to be new user of the CS course - Posted by Michel

Posted by Michel on February 14, 2001 at 18:09:56:

I sincerely appreciate your comments. I’m still in Dallas, but since all the in-laws live in Tucson and it’s just a matter of time before we move, I believe your advice will be very helpful. Thanks again and keep in touch.

PS: I was also thinking about appartments.

Re: soon to be new user of the CS course - Posted by KR-(AZ)

Posted by KR-(AZ) on February 14, 2001 at 18:43:55:

If you’re looking at apartments, I’ll give you some magic numbers.

Once you have 3 commercial (more than 4 unit) properties, commericial financing is much, much easier to get.

To get commercial financing (w/15% down), the property will need to be more than 20 units (large enough for full-time onsite management. We average paying managers $40-50 per unit {$800 to $850 for 20 units, around $1775 for 40 units, around $2800 for 70 units})

You will find a whole lot more owner financing with apartment complexes with little or no qualifying.

You usually do have to have some cash, or a partner’s cash to get into apartments most of the time.

But, to put it into perspective, I once put $40,000 (of a partner’s money) down on a $1,050,000 apartment complex purchase (no qualifying. It said so in the contract.). The place was actually worth $1,215,000, so that’s just over 3% down. We actually got close to $19,000 in prorations plus the instant equity.

In reality $50,000 seems to be the magic number for cash down payment.

I know this stuff might be a little premature for you, but if it’s something you’re thinking about for later on down the road, you’ll know some of the unwritten rules.

One more thing. When we buy apartments in Phoenix, we have never paid more than $40,000 per unit. We also need to get a 20% cash-on-cash return. (On average, we find 10 properties out of every 168 that fit our criteria).

Post your messages back to CREOnline once you get going. You’ll get lots of help. And you’re welcome to drop me a line once you get to Tucson and get started.

Take care.

What was your first deal like - Posted by Mark - IL

Posted by Mark - IL on February 15, 2001 at 24:49:20:

I would be curious to know what your first mult-family property was like. I own a few sfh’s and would like to get into multi. Did you manage them your self or did you have a out side co. do that.

Thanks for the info.


Re: What was your first deal like - Posted by KR-(AZ)

Posted by KR-(AZ) on February 15, 2001 at 03:28:56:

Actually, the first property I ever bought was a duplex with one empty half and an owner that lived about two hours away. It ended up costing me about $42 out of pocket after all of the prorations. (Can I count that as no money down? Sure. Why not.)

The husband of the family had his cousin-in-law move into the other side of the duplex. The husband (Doug) took care of the property for about 4 years before they moved. I had my sister (who lived near this Springfield, OR duplex) drive by once every couple months. Other than that it was primarily the art of “SCREENING TENANTS” that I learned to be extremely valuable.

I bought 9 single-family homes over the course of the next two years and, if I knew then what I know now, I would have lease-optioned them. Again, other than a “general maintenance” inspection every three months conducted by myself or a family member, they pretty much ran themselves (an example of a contract would call for a discounted rent of $800, instead of the typical $950 agreement IF the rent was postmarked by the 1st of the month and IF there were no plumbing or handyman calls during the month.) Of course there was maintenance, but they usually paid it themselves.

Let me go down the list and see what I’ve done in the past to manage properties:

5-plex in NE Portland (next thing I bought after 9 houses in a row)- I knocked 50 bucks of a tenant’s rent to be the GESTAPO of the two-story complex, making sure that there wasn’t any excessive noise, domestic disturbance, etc. He was kind of a tattle-tale anyway

two more houses- told them if my maintenance costs remained low they could buy buy the house. In both cases, they not only maintained them, but eventually bought them. I wish I knew about lease-options back then.

8-plex: Another onsite busy-body. Tenant screening was more critical on this one, but it was the first place I bought where I got cash back at the close of escrow. No true onsite management.

10-plex: I actually stopped by the neighbor’s house at the end of each month and bribed her to be a tattletale (just to help me monitor tenants). Same deal with the 2-to-3 month “maintenance” inspections (with notice of course) and the “discounted” rents for no onsite calls directly to me. (They, of course were charged if toilets, etc. were found not to be working, so usually they call some cheap handyman and pay for it themselves so they don’t pay $150 extra for “regular” rent.

28-unit: onsite management gets paid around $1200 a month and a discounted apartment (not free).

The rest all have onsite management except for one. Larger apartment complex sizes range from 28 to 70 units. (All totalled now, 522 units)

Two of my size exceptions in AZ are one 15-unit that has EVERYTHING going for it, cash flow, location, solid tenant base, fast appreciation (and I got it $78,000 under appraisal with only a $40k down payment).

The other exception is our 192-unit (It IS an entity in and of itself. It took me 4 years to buy it, but it will NEVER lose money over the long haul. I couldn’t resist the place

Did you notice a pattern? No Management companies!! I ended up having to set up an in-house management company that basically manages the property managers, handymen, lawn care services, etc.

That’s it. Let me recommend a pretty good book for you and you can just glean from it:

Landlording: by Leigh Robinson.

I know there are other books out there, but this one is pretty comprehensive. I don’t claim to know everything about landlording, but here’s the way I see managing them.

2-7 units: You’re on your own
8-19 units: Tenant Tattletale, “maintenance” visits
20+ units: Onsite management, you manage the personnel

Portfolio of 60 units (4 x 15, or 3 x 20, etc), it’s probably time to set up an inhouse management company.

I hope this helps.

I swear someday I’m going to write a book about the escapades of some of our “Tenant Tattletales.” They basically get paid to snitch on as many tenants as possible and some of the things they get worked up about are hilarious. (For example one of our “managers” of a smaller property swears that one of the families catches and eats mice. ( I happen to know that the father of that family has his wife overcook his steaks because he wants to make sure all the impurities get cooked out of it.)

These Tenant Tattletales are the same types that claim to be abducted by aliens. They leave out NO details, even if most of the details are made up. They’ll keep no secrets from you.

I hope some of this points you in the right direction.

Take care.

Re: What was your first deal like - Posted by Steve (OH)

Posted by Steve (OH) on February 15, 2001 at 12:41:02:

KR, what do you mean by an in-house mgt company? I have a few duplexes and sfh’s and also a 12 unit and manage them all myself (some with a partner). Just curious about how you structure this.



Re: What was your first deal like - Posted by KR-(AZ)

Posted by KR-(AZ) on February 15, 2001 at 13:43:20:


Keep in mind that it’s always going to be relative to the total number of units you have, the amount of time you have and the amount of cash flow you have.

SFH’s seem to mostly run themselves if you screen tenants correctly and encourage (bribe) them not to call you (see the post above).

Let me answer your question with a couple of questions:

If your goal was to buy 2 properties a month, would you still have time for property management?

You see, if you enjoy the deal-making as much as I do, there comes a point where you WON’T have the time (or probably the desire) to manage 20 duplexes.

Second question for you relates to cash flow. Let’s say you are netting $100 per unit and you have 25 units. There’s no way you can hire your own “in-house” manager and make a living. So the question is, how much money do YOU feel you need to earn on your real estate before you hire someone that works directly for you?

That’s what I was referring to as far as in-house management. We have one person whose entire job is to do management-related tasks (She earns around $3600 a month plus benefits). She is the one who keeps in contact with the onsite apartment managers, responds to major disputes with tenants, controls the advertising, arranges “maintenance” stops on the smaller properties, makes sure the carpet and appliance schedules are being met, keeps track of market rents, etc.

Keep in mind that it is a full-time FULL-TIME job for our office manager to keep track of all of our units (including the remaining properties in Oregon).

My job is to be out making deals. Other people may have the time to do property management, but I know I don’t.

If there came a time when you accumulated, let’s say 40 units, you might feel like paying someone $40 per unit to run around taking care of details so you could continue to have the time to make deals (and golf). I would recommend that you have an office ( at the very least a home office) for the person to work from.

If you average picking up 2 units per month this year and they each make $100 net, you’ll have added $1440/mo. to your income (2400 minus $960 to your in-house manager) by the end of the year. Now you’ll be up to 64 units to manage.

When you end up going this route (and you will if you continue to accumulate property) I would recommend the following things:

  1. Have a business plan that clearly describes where you’d like to be 1 year, 5 years, 10 years, 20 years, 30 years from now.

  2. Make it clear to the person you are hiring that the buck stops with THEM. Our property managers and in-house manager attend Landlord and Renter clinics, crime prevention clinics, etc. They are also provided with resources to learn effective communication/negotiation/dispute resolution.

  3. Have a regular review (every month) with your in-house manager. They can basically give you a run-down on things like if an onsite manager is moving soon and will quit, if there are potential legal problems with an old sewer line on one property, if your properties are keeping up with market rents, if anything major is happening in the neighborhoods, etc.

If your goals are clearly defined, you’ll be able to develop a good working structure for your in-house manager.

I know it’s kind of a lot to think about, BUT, you look like you’re headed that direction with the number of properties you have right now and then adding more in the future.

I hope this answers your question. Anything else, just let me know.

Take care.

p.s. our in-house manager used to be an onsite apt. manager and DOES have her real estate license as well.