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The Power of the Word “No”


When I was a youngster, I had the great opportunity of working for a famous best-selling writer.

He took big risks on me and put me in charge of a series of important projects – including flying me to Kingsport, Tennessee to publish one of his books at the tender age of 22.

Then he put me in charge of renovating a big hotel in Florida, and then half a million sq. ft. of office space in Los Angeles.  I had hundreds of people under my charge and I was 23.  (He once told his son-in-law “if you need a miracle, send Cynthia.”)

But the biggest risk he took was when he put me in charge of the PO (purchase order) line.  In other words, if I signed off on a renovations expense – the check issued.  The dude was a risk-taker.

But it was a calculated risk.  Before I got the power to sign POs, he made me stand in front of a mirror with a witness for one hour and say “NO.”

That seemed kind of fun for about five minutes.

After that I had to get creative.  Have you ever considered how many ways there are to say “no?”  There’s Shakespeare “no,” Bible “no,” Beatles “no,” Rolling Stones “no,” big meanie “no,” nice “no,” cheerful “no,” angry “no,” conservative “no,” enthusiastic “no,” hear no evil, see no evil, speak no evil.  You get the idea.

At the end of the “No” drill, no was just no.  It didn’t come with a bunch of baggage and mis-emotion.  It wasn’t necessarily tyrannical or oppressive.  It didn’t immediately cause a reaction in me or the people I dealt with.  I also learned that you can actually say no without using the word.  For example, you can say not okay or not approved.

Over the years, and especially in business, I’ve learned that when you say no, if you go on to kindly educate the person as to why – they will often thank you.  I am repeatedly surprised when I get thanked for saying no.

For instance, I probably get one or two requests every month to let a tenant out of their lease.

I explain that the bank has to rely on me to collect the rents each month so that their mortgage gets paid, and the property is kept up.  Likewise, I have to rely on good qualified tenants to keep their contracts and pay their rents so I can keep my contract with the bank and our service providers.  If we let everyone out of their lease when it was inconvenient for them to fulfill their contract, we wouldn’t even have a business.

Plus, I’m required by law to treat all of our tenants the same, so if I let one person out of their lease I have to let everyone out of their lease or I may get in discrimination trouble which could carry a $10K fine.

That’s the bad news.  The good news is that I will work like a mad woman to re-rent their unit as fast as possible to mitigate the damages.

Tenants appreciate it when you explain the business reason why their request is not approved.

Every once in a while if a tenant gets belligerent (which happened recently when a tenant’s boyfriend tried to verbally rough me up) I might get snarky and say “what you’re really saying to me is ‘hey I want to break my lease and I don’t want to suck up the costs of my actions, so I want you to suck up the costs of my actions.  And if you say no you’re just a big meanie yucky landlord.’”

That usually ends the conversation.

Here’s a horrible example of some landlords that couldn’t say no:

When I was practicing law an adult daughter hauled her parents into my office under protest.  The parents (I’m guessing in their mid-70s) had a young family living in their rental house that hadn’t paid rent for years.  Years.  (I’ll save you from the giant convoluted stories that the landlords bought instead of collecting rent.)

The retired landlord had gone back to work so he could pay the mortgage on the rental house because the young family wasn’t paying rent.

That was a landlord that could not say no.  It was easier to go back to work than to confront the deadbeats and say nyet.

You can’t be successful in business unless you have the ability to say and hear the word no.  Learn to use it and succeed.

[Photo credit: christopherdale via photopin cc ]


Does Your Credit Score Affect Your Insurance Cost?

Credit History

As landlords, we all know how important it is to run credit checks on rental applicants.  I’m looking for the words “As Agreed, As Agreed, As Agreed” down that right hand column.  I want to know if the applicants keep their agreements.

As investors, we all know how important it is to maintain a great credit report to get the lowest loan rates.

But did it ever occur to you that your credit report affects your insurance premiums?

Carrie Van Brunt-Wiley, Editor of the blog gave permission to reprint her great article on the subject.  Enjoy!

“Your credit score and your insurance payments- what’s the connection?

“You’re likely not surprised when your loan officer asks for your social security number- a thorough credit check is standard when applying for a loan. However, many consumers are caught off-guard when a homeowners insurance agent asks for their social security number.  It’s widely debated, but quite commonly practiced- for an insurance carrier to use a customer’s credit score to determine their insurance premiums.

“What does your credit score really mean to your potential insurance carrier?

“While many businesses will use a consumer’s credit score to determine eligibility for a line of credit or to discern whether a deposit should be held for an advance of services, insurance companies actually perform a different type of credit inquiry that they use for a very different reason.

“A “Soft” Credit Check

“First and foremost, it’s important to know that when an insurance company runs your credit they are actually performing what is called a “soft” credit check which accesses only your credit score and is not reflected as an inquiry on your credit report. As you probably can surmise, this is different from a “hard” credit check that a lender, for example, may run which does show up on your credit report as an inquiry. Since credit inquiries from “hard” credit checks can hurt your overall score it’s good to limit these types of credit checks when shopping for a mortgage, for example. However, since insurance carriers only perform a “soft” credit check you can feel free to shop for multiple insurance quotes without worrying about hurting your credit rating.

“What they use it for

“Here’s where a lot of confusion, and sometimes even frustration, can set in from a consumer’s perspective. Once an insurance company has your credit score, they use it (along with many other factors about you and your home, car, etc.) to assign you an “insurance score”. This insurance score reflects your potential risk to the insurer.

“The insurance carrier then takes your risk potential and calculates your premiums. The more risk you pose, the higher your premiums will most likely be. This is where the real question comes in:

“What does poor credit history have to do with my potential to file a claim?

“If you’re asking this question, you’re not alone.

“There is much debate over the use of credit scoring as a way to determine risk, and therefore assign rates to insurance consumers. However, insurance companies defend the practice saying that studies have shown a direct correlation between a person’s credit score and their likelihood to file a claim. Therefore, consumers with a lower credit score often pay higher rates for insurance.

“Whether you agree with the practice or not, qualifying for better insurance premiums is just one other way that you can save money by keeping a good credit rating.”

Carrie Van Brunt-WileyAbout Carrie Van Brunt-Wiley
Carrie Van Brunt-Wiley, is the Editor of the blogs. Carrie graduated from the University of North Carolina at Wilmington with a BA in Professional Writing and Journalism. She has been managing research and content development for the network of sites since 2007.


“Biggest Mistake New Investors Make in Due Diligence”

tenement house

Thanks to attorney and multi-family investor Charles Dobens for this excellent and insightful article on due diligence, which we found on the MultiFamily Insight Blog:

“What is the biggest mistake new investors make in multifamily due diligence?  Due diligence is where many new investors start to go astray.  They find a deal, make offers, get an offer accepted, put it under contract and then start the due diligence process.  During the due diligence process their entire focus is centered around the real estate. They interview and negotiate rates with property inspectors.  They set up a date and time that they will go through each and every unit looking for the most egregious example of poor management so that they can go back to the seller and negotiate a repair allowance.

“The owner of a bad property will see this coming a mile away and be prepared for it.  They will inflate their purchase price to make you pay the repair allowance WITH YOUR OWN MONEY.  They will play hardball with you and structure the terms of the repair allowance such that the dollars come out of the deal in an in-kind transfer and not in cash.  You, at the end of the day, end up with a property that has a list of needed repairs and no cash to fix it.

“But that is not where your focus needs to be.  Here’s where the new investor goes astray.  After the property inspector has completed his task and submits his beautiful 100-page report that you pay for, you will review it and look at the last page that gives a dollar amount as to the needed repairs.  You then go back to the broker and open the negotiations all over again and I can assure you, they are lying in wait for you to return.

“But the problem with this over-dependence upon the inspection report is that, no matter what the inspector finds, it can be fixed with one thing – Money.  Just name your price and the roof is fixed. Get three bids and the foundation is fixed.  The brokers focus, along with yours and everyone else is on the real estate.  This is exactly where you should not be focused.  More…


“Own the Ground You Walk On”

MalichyToday Malachy, a little Pekingese, won best in show during the 136th annual Westminster Kennel Club dog show Tuesday, Feb. 14, 2012, in New York.

I’m a big dog lover, so I was very interested.

I heard one of the judges say that he loved the way Malachy “owned the ground he walked on.”

My life kind of passed before me as I remembered all the times that I did not feel like I owned the ground I walked on, and all the times when I did feel like I owned the ground I walked on.

But for the purposes of this blog post, I’ll stick to how it relates to landlording. 🙂

The first time I felt like a stranger on my own property is when Josh and I bought an 8-plex.  I arrived on a Saturday to clean a vacant apartment.  A little punk tenant immediately confronted me, and told me what he wanted to do to me and how he wanted to do it.

Holy crap!

My blood pressure went through the roof and I decided I better take a walk down the street.

I called my son, who was on the way to help me, and told him what just happened.

Then I wished I hadn’t done that.

So, I called the police and asked them if they would come have a talk with the punk, because my son is 6′ 3″ and the punk was 5′ 3″ and my son was probably going to come and defend my honor!

That was the first time I felt like a stranger on my own property.

The next time it happened was right after we bought an 18-plex.

A non-paying couple decided to try to start a mutiny.

They cornered me on one of my first days on the property and told me how horrible the area was and how horrible the property was…basically all of the reasons they had amassed to defend their position that they should not have to pay rent.

My guess is that these horrible oppressive tenants are why the former owners sold us these properties!!

I served them.  I evicted them.  I renovated the units.  I rented the units to nice people.

Now I own the ground I walk on.

Don’t let horrible oppressive tenants make you feel like you don’t own the ground you walk on!


Fund Your Fabulous Retirement with Cash Flow from Rental Property

Nest EggRecently, I got an email that went something like: “Sure, right, easy for you to say.  You can buy rental property because you have a law degree and money and credit.”


Let me just say, that when I started investing in real estate with my son, I was fresh out of law school with huge student debt, in my mid-40s, no money, no time, no retirement plan, and barely any credit.  Plus, I had just finished a 14 year stint as a single-mom.

Yep, I was really special.

We made only a tiny bit of profit on our first investment, after investing a whole summer of work.  (We made the mistake of trying to be flippers.  Now that I think of it, that was only one of a huge number of mistakes!)

We went negative on our second investment, a condo, which went down in value about $25K the first year we owned it because of a ton of foreclosures in that development.  The condo is now worth double what we paid for it with a nice positive cash flow.

On our third investment, an eight-plex (which we had no business buying), we found out at the last minute after investing $15,000.00 earnest money, $3500+ for an appraisal and inspections, etc., that we couldn’t qualify for the loan.  I wasn’t willing to walk away, so I broke down and begged a relative for the loan.  It was horribly embarrassing.  The relative gave us the loan and took a first position lien (because the property was a good investment) at a whopping 8.5% interest.  We had no track record, so we paid through the nose for the first three years that we owned that property.  My son and I did all the work (in our spare time after hours and weekends) for the first three years.  Plus it was negative cash flow and Josh and I had to work to feed the creditors.  (Please don’t follow this example!)  After that we were able to refinance at 6.5% interest and we finally had positive cash flow.  Today, 8.5 years after the purchase, the property is worth twice what we paid for it and we are currently refinancing for about 3.85%.  Booya!  Now we’re talking cash flow.

So don’t be a big stinking crybaby!  (To paraphrase Donald Trump.)

Let me tell you what is way more valuable than money or credit.  It’s the burning DESIRE, the drive, the motivation to be successful, to win, to be self-made.  This is the entry ticket to the game.  If you have this great desire, it’s game on.

You are going to make mistakes.  You will sometimes lose money.  You will experience frustration and aggravation and nasty little punks that get all up in your face.  You will start out working long hours.  You won’t know how to do a thousand things.

But over time, you will experience pride and accomplishment.  You will have a ton of fun making things look great and renting it to nice people, and you will fund your fabulous retirement before you know it.

You may have to be creative, especially to start.  But if you actively look and actively make offers, suddenly you’ll find a property and a situation that will click.

Now get out there with a smile on your face and put together a great retirement…one cash-flowing rental property at a time!


My Tenants Have Piercings, Tattoos, Blue Hair & Great Credit!

cute tenant with blue hair(I also rent to some really hot bachelors – in case some of you ladies want to get on my waiting list!) 😉

Some landlords shoot themselves in the foot by trying to prejudge which prospective tenants will be good, based on physical characteristics. This will get you into discrimination trouble, and it’s unproductive.

I remember many years ago, when my Mom managed a 90-unit complex that my Dad built. There was a club-house with an office. I think the statute of limitations has run out now so I can tell you that once my Mom locked the door and hid under her desk when a “skuzmobile” full of smokers pulled into the parking lot. This is not advised!!! (But it is a pretty funny family story.)

I have a system (for apartments) where I don’t even meet my prospective tenants until I’m there to sign the lease. So I have various funny stories about that.

One day, a few years ago, I arrived to sign a lease. There was a girl with blue hair and her hippy boyfriend waiting at the door. I said, “Wow! You have blue hair……but I could care less because I’ve seen your awesome credit reports so you can have any color hair you want.” They were my great tenants for about 3.5 years.

(I asked her what was up with the blue hair, and she said she was just trying to freak out her parents. She also worked in the prop department at the University Theater so it was part of her shtick. The hippy boyfriend was a registered nurse.)

I fell in love with them on paper (good credit, good rental history, good employment, no criminals or sex offenders). We don’t have a hair color requirement!  More…


How to Write Killer Rental Ads

MarketingMy son and I are about to close out our best year ever.


Yep, right in the middle of a bad recession.

So it occurred to me, while I was perusing Craigslist for rent ads today, that I might have a few secret weapons that would be of help to other landlords.

Try this exercise:  Go to Craigslist and check out the ads in some rent range that is
applicable to your rental units.  Below are a few of the headings I saw listed.  Hover your mouse over each one and see which one makes your finger WANT to CLICK:

Single Family Home for Rent
Just Painted – Nice Floorplan
2 Rooms Nice Location
Large Condominium
Clean 1 bdrm apt – Downtown
Nice Apartment Available
BOOYA!! Classy 1BR + Cozy Gas Fireplace

The last one is my ad, of course 😉  Hey, I was excited to see some great headlines too, some I wish I had written!  But most were yawners.

Your prospective tenants will never see your ad if the headline doesn’t make them CLICK.  The headline is the Ad for your Ad.  Work it! More…


Can Your Assets Survive a Lawsuit?

Agony of DefeatThe way you hold title to your property is often the determining factor to whether you will lose everything in a lawsuit. You can be sued more and more today because of your “legal status,” not because of your “actions.” The trend is away from finding fault. This is due to the  significant expansion of both “vicarious liability” which allows you to be sued for something someone else did, and “strict liability” which means you are automatically liable by statute and there is no defense.

Here are some distressing examples:

In environmental law, you do not have to be the person who made the mess. If you were ever in the chain of title, you can be sued after discovery of the environmental situation. For example, lead paint damage is a “strict liability” offense. And you will almost certainly find that your insurance excludes coverage for lead poisoning. This can destroy retired people.

If you have put all of your assets into a trust and one of the assets in the trust is sued (example: lead paint liability) then you could lose everything in the entire trust. (Remember, the purpose of a trust is to avoid probate. A trust cannot shield your assets from legal attack.)

If you are an employer you can be sued for the actions of your employees committed while acting within the scope of employment. “Negligent hiring” is the latest hot winning theory to confer liability onto an employer for actions taken by an employee outside the scope of employment. This occurs when an employee commits a wrong or violence against someone following an employer’s failure to research the background and character of the employee before hiring the person.

On June 26, 1985, the Supreme Court said that you could lose an asset due to joint ownership. As an example, if Mom and Dad put their home into a joint tenancy with their kids to avoid probate (often referred to as a “poor man’s will”), and any of the joint owners (the kids) is involved in a divorce, loses a lawsuit, or gets in trouble with the IRS – Mom and Dad could find themselves homeless.  More…


Use Niche Marketing to Upgrade Your Tenant Clientele & Increase the Value of Your Rental Property

RoommatesIs there a disconnect between the highest and best use of your rental property and your marketing niche?

That’s a really important question that has given my partner/son Josh and I the ability to create an increased cash flow, an improved tenant clientele, and increased property values on all of our units over the last few years.  Of course, we didn’t ask the question exactly that way, because “niche marketing” has only become all the rage in the past several years.  But the thought process is the same.

There’s some fun and profitable lessons here, so let’s explore the subject.

First of all, niche marketing is defined as the marketing of a product or service to a small and well-defined segment of the market place, typically a market whose needs are not being well served.

Some various residential rental property niches might be: high end, low end, ghetto, on the way down (deteriorating), on the way up, mid-level rentals, seasonal, senior housing, student housing, low income housing, subsidized/Section 8, etc.  Then each one of those categories could be broken down into even smaller segments.

You need to always, always, always invest primarily for cash flow, so whichever niche you choose should lead you to an increased cash flow.  To flesh out the idea, here’s some personal examples: More…


Pride of Ownership

Playing FootballThis morning I rented a house to a cute trio of roommates in a popular area.

This evening, on my way to pick up my dog at doggie-day-care, I happened to drive by the house again.  The new tenants were out in the front yard playing football.

I wanted to cry.  It was the cutest darn thing I ever saw.

We took the house back a couple of weeks ago, when the last tenancy ended.

My great handyman prepped and painted the interior, power washed the exterior (hey it’s white!), painted the front deck, repaired the fence, pulled the basement carpet, repaired the swamp cooler, changed the locks, plus a few other odds and ends.

My great landscape contractors cleaned up the yard and upgraded the entry landscaping to give the house better curb appeal.  When they finished, the landscape contractor texted me “now this house will sell itself.”  He was right. More…