Fast-Flip®

Rags To More Rags By Christmas

May 15, 2009 Now That's Funny

There are students, and then there are those close relatives who ask advice without the courtesy of buying a home study course. That’s fine, some relatives think you owe them a living and don’t want to spend the money, even for the sake of changing their lives. At real estate investment meetings, where I was president, at speaking engagements where I sell products, and over the phone where investors call, I give free advice even to those with no money or who are on the fence whether to take that next step or not. Most of my freebies only converse with me a time or two and then realize eventually there’s a price to be paid for information. There is one exception, though. I’ve been giving advice for two years to a relative who constantly asks for advice, but has not once taken it. At this moment, I don’t know why I even accepted her calls. It all began a little over two years ago when she got the urge to invest in real estate and to change her life. She hated her job and wanted to ultimately work for herself. Certainly, I could relate to that! After all, I’ve lived it. Early on she would tell me of a property that she was interested in and I would tell her not to buy it because the price was above retail, or because it needed too much work for her. She would buy it anyway. Problems would arise either through poor cash flow or repairs and, hopefully, my future advice would bail her out of her latest fiasco. She called about 6 months ago to explain that she had another situation. Her problem was that a tenant had moved, giving her the 30 day notice required, painted the apartment at his expense, steam cleaned the carpets, and left it spotless. How was this a problem? She wanted to know how she could beat him out of his $750 deposit! When I explained to her that she was wrong and needed to get out of the landlord business, she stated: “You never give your deposits back!” I explained that when I don’t return a deposit, it’s because back rent, or damages, were due. Once she called to tell me that she had a lawn that needed mowing and what she had done, seeking approval. She stated that while the husband was out of town, she confronted his wife on the front porch, demanding that the lawn be mowed immediately. When the wife argued that her husband did all the mowing, she offered to mow it herself for the tenant for a fee. When asked by the wife as to the amount, “Fifty dollars,” she replied. The tenant declined. Can you imagine the fury the husband felt when arriving home from out of town? His wife was picked on by a mean landlady. In the past, I’ve written tales about landlords being mean spirited. Not knowing who she was then, you now know. About 18 months ago she called me about a leaking roof at one of her newly acquired buildings, of which I advised her not to buy. (Her purchase price was $10,000 above wholesale.) I told her to repair the roof leak at once because when it last rained, it dripped on the tenant’s bed along with a handful of drywall. I informed her that at this early stage, perhaps a patch job could buy her some time. I gave her two names of roofers who both reported back to me that they both had, indeed, given her estimates. I simply assumed that the roof had been fixed. About a month later she telephoned again to discuss other scenarios. I asked about the roof leak because she hadn’t brought it up and I was curious as to what had happened. She yelled that I told her to ignore it and not worry about it. I told her that was ludicrous. I had even referred my two roofers! I again advised that she better fix it immediately to avoid a lawsuit. She said that the tenant was moving out anyway and it didn’t matter. A couple of months ago, she telephoned me at midnight, explaining that the entire ceiling had caved in and wanted to know what to do. I told her that she should have fixed the roof a year and a half ago and I didn’t want to discuss it any further, particularly at midnight. The conversation came to an abrupt halt. To make a two year history short, she bought everything that I advised her not to and major problems arose from every deal. Financial disarray, poor cash flow and needed repairs without the money to make them, were the cornerstones of her real estate investing. Nothing made money. Everything suffered losses. At the beginning, she had a nice home and retirement money set aside. Now she has no retirement established, nor does she live in that nice home anymore. She now owns all that mistake ridden rental property and resides in a trailer. She called two nights ago discussing landlord woes and then abruptly announced, “I’m writing a book!” Surprisingly I replied, “On what?” She bragged, “On real estate investing. There is so much that I know that isn’t anywhere in anyone else’s book. I’m already done with five chapters.” She then asked, “Can you help me find a publisher?” I was astounded. I’m sorry, but shouldn’t there be some element of success before advising others? Is the goal for novice investors to go from rags to more rags? I doubt it. I stated that the last time I was on the phone with my publisher she had joked about a writer who had called her because her publishing company had a book at the bookstore just like the one that he had written. The writer couldn’t understand why she wouldn’t want another book on the same topic. I assured my writer/investor/relative that my publisher already had a landlord book. Further, I added that whomever she contacts would want her credentials/experience, which has made her an expert. She couldn’t get off the phone fast enough. I recalled how my publisher flew from Oregon to visit with me and confirm my background and expertise. I visualized someone from New York flying in to Columbus to sit in her doublewide to maul over all of the money she’d made! Don’t get me wrong. I’m not opposed to anyone writing a book, or living in a trailer. Further, I’m not trying to set limitations on her. What troubles me is that, if packaged appropriately, someone could take her advice seriously, and that would be quite a disservice to the reader. To that, I am opposed. I can’t help but wonder what she’ll entitle her landlording book. Here are a few titles she could use:

Learn How Not To Invest in Real Estate

From Rags to More Rags in 90 Days

Live in a Trailer by Christmas

Maybe there’s a place for her in infomercials. Certainly, she would epitomize what we typically imagine their knowledge base and experience to be. As I hung up the phone, I predicted that she probably would no longer call for advice. I also realized at that moment that was the end of my advising her if she called again. She was the expert. Why should she waste her breath on me? It’s amazing how she knew-it-all the whole time anyway. It just took me to bring it out in her. Now that’s funny!

Tags: Landlording, Rags, Repairs