I recently went to the clinic for some treatment. When I got to the front desk, I couldn’t believe how rude the girls were behind the desk. They acted as if I didn’t even exist. When they were finally finished talking, one of them came over and asked me what I wanted. I almost left their business because during those few seconds when I just arrived, I felt like an unwelcome guest.

In this article, I’m going to share with you three tips to improve the customer service of any rental company.

You think your business is different, right? You don’t have to worry about customer service. Sorry, you do. In fact, good customer service is the secret sauce for keeping your rental customer long term.

You have to keep in mind that your customers expect to be treated with courtesy and dignity. Those first few moments they meet you are critical.

When they come into your place of business and they feel like they’re not welcome, they are going to leave you fast. If you don’t show them how much you care about them as a customer they’ll go somewhere else. That means you won’t get their money.

When they call you to get information about a property, give it to them cheerfully. Here are three tips to improve your customer service skills.

1) Don’t be rude when they’re calling to schedule an appointment.

2) Be professional and helpful when they ask you questions. That’s courteous and shows that you’re and outstanding business person.

3) Remember the golden rule. Treat them just like the way you would want to be treated if you were walking into a business the first time.

When you do these things you’ll be better than most of your competition, and that can help set you apart from other property management companies or landlords in your city.

I really like buying properties that were built in the 1920’s and 1940’s for rental properties. Why buy such an old house? Simple. I can get these really cheep.

However, there are certain upgrades you need to make so they will be more valuable to your rental customers. When they are more valued by your customers, they will stay longer and you will get a better cash flow for the property.

In this article I’m going to give you three tips on the types of improvements that I would recommend you make to these types of properties.

1) Increase the Energy Efficiency
The first improvement is to increase the energy efficiency property. One of the best way to do this is to make sure you don’t have too many windows. Many times these older homes have way too many windows because they were built for time when the only air conditioning was by opening the windows.

For instance, if it has more than one window in the bedroom I will usually close off unnecessary windows. Usually I have one window per bedroom, and sometimes as many as two. I’ll be sure that I do that in a way to so that wind can not get through.

Another good idea is to make sure that there’s plenty of installation in the attic. When you buy a house, make sure you look in the attic to see how much insulation you have up there. It should at least cover up the 2 x 4’s.

2) Improve the Layout
The second tip is to improve of the property. In older homes, there are often way too many walls and partitions. For example, in a duplex that I recently renovated, there was a wall partition separating a living area from kind of strange room that didn’t make too much sense. It was either a terrible bedroom that you had the walk through to get to the rest of the duplex, or it was a dining room which probably wouldn’t get used as a dining room anyway.

I decided to take out the wall partition. I made it into a much nicer, larger, more open living area. It makes the duplex much nicer and more appealing.

3) Upgrade Plumbing, Electrical, and Heat and Air
OK. The house is almost 80 years old. That means those pipes and wiring might be that old if hasn’t been replaced.

That’s expensive, though, isn’t it? Yes, it is expensive. But it’s probably inexpensive compared to the alternative.

It’s far better to go ahead and replace those systems with newer more up, to, date electrical, plumbing, or heating and air if it cuts down on your maintenance cost. Also, if you continually need to get maintenance done, your tenants are going to get very frustrated because things are not working properly. I recommend that you update those items in a cost effective way so that the house will be more functional.

In my last blog post I talked about 2 ways that a newbie real estate investor could get financing. One of those ways was by having 50 – 50 partner with a money partner who will finance the transactions.

In this article, I’m going to share how a newbie can get a money partner to finance your deals.

The real question becomes how do you convince that person who has the money and the credit to become your partner. When I was starting in real estate, I partnered up with with a CPA who became a money partner for us. Prior to our introduction to this guy, we had already done several deals. We could show him that we had real experience under our belts.

We put together a presentation with our success complete with what we paid for our properties, what we had to fix them up, and what the cash flow looked like.

It’s not essential that you know the individual personally. In fact, I was introduced to that person by a mutual friend who put us together for a fee. Was the fee worth it? Absolutely.

I don’t think we would have been able to put that partnership together if we hadn’t had experience under our belts already.

You can use this approach if you already have that type of experience. All you need to do is put together a presentation like I did that shows people you know what you talking about.

If you don’t have that experience, does that rule out this approach? Absolutely not. You can still put together a deal like this.

It’s definitely not going to be a little tougher sale, but it’s not an impossible sale. I’ve seen my clients put together this type of deal and make money doing so.

What you have to do put together a good presentation. It will need to show the types of the properties that you would be Buying. You will need to put down specific information like purchase price. What you plan to do to rehab the property. You will need to show what the cash flow will be. Get tons of specific details worked out before your meeting. For example, have your contractors already lined up and ready to go.

The one thing that’s different is that if you don’t have a track record it’s going to be a lot easier to approach someone who is family or a close friend who really wants to see you succeed.

If you go in with this type of information and a lot of certainty that you can pull this off – YOU CAN. You’ll have a good chance of convincing your potential money partner to actually become your 5050 Partner.

One question I get asked all the time is “Scott, if I’m just getting started in real estate, How do I get financing?” That’s a really good question, especially now given the difficulty in borrowing money from banks and mortgage companies.

In this article I’m going to give you my two top tips for getting financing if you are just starting out.

1) Find a Money Partner
The first tip I’ve got for you is to get into a partnership where you are doing all the work involved in the real estate transactions. You find the properties. You supervising the rehab. You provide for the property management.

The other party, your partner, will be responsible for all of the financing. That means they will put up the money and credit to fund the project.

But at the end of the day, you are 50% owner of these properties. The down side is that you are giving away half of the deal.

When I was just starting, for a whole year I bought ten properties with a partner in this manner. These properties were long term rental. I still on those partners those those properties in partnership.

2) Borrow from Friends and/or Family
The second tip is to rely on friend or family as a private lenders. Private lenders are cheaper than 50-50 partners in the long run.

However, most of the time it’s a great for you AND a great deal for the private lender. If they’re looking to make a good return on their money you can be an excellent opportunity for them. For example, if they’re going to the bank to buy a CD, they might only be getting 3% or less. But if you are borrowing that money from your private lender on real estate you can offer them 8% to 10% interest secured with a mortgage.

My private lenders have been critical to me since the banks have tightened up their lending standards.

Are either of these easy? No way. But if you are just getting your start as a real estate investor and want to buy properties for the long term, they represent a great avenue for you to get the financing you need.

The next question is how to approach a prospective private lender or money partner. I’ll leave that to another blog post.

The federal government is putting together “sweeping” new regulations for the banking sector. What does that have to do with us as real estate investors? Plenty. Let me explain.

One clue that the feds are serious about this is the recently suit filed against Goldman Sachs. Goldman Sachs is the largest of the investment banks. The are trying to fan public anger against the banks in a time when Goldman just announced that it is shelling out $5 billion to its top executives.

To get a better context on what’s really going here, let me give you a little background.

The banks have always had lots of money. With money comes political power. A powerful, out-of control banking sector led to the great depression.

After the great depression, the federal government had enough leverage to put laws in place that greatly limited the amount of risks that banks could take. For example, it took banks out of the investment and securities business. The result of these regulations was a relatively stable financial market from the 1930’s through the 1970’s evidenced by very few bank failures during that period.

Starting in the 1970’s, their was a trend toward deregulating the banking sector. Arguments were made by banking sector advocates that laws put in place after the great depression were now “out of date” with the new technology.

The banking crisis of the late 1980’s, which resulted in huge numbers of bank failures, was a direct result of the deregulation of banks.

Even though we faced period problems like the S&L bailout in the 1980’s, congressman and senators who were heavily backed by the banking sector quietly put laws in place that gave banks the ability to grow much larger. For example, some of those changes included the following:

1. Removing restrictions on interstate banking,
2. Allowing commercial banks to get into the investment banking business, and
3. Prohibited the Federal government from regulating most derivatives.

There is a long list of other changes that could also be added.

In addition, these banks were adding all sorts of creative new investment products beyond making loan. One example was the mortgage loans which were bundled together and sold as securities. The banks wrote the loans, but were not on the hook if the borrowers failed to pay back the loans.

These financial products were complicated enough to make assessment of the risk very difficult for the consumers of these investment products to understand. Investors continued to pump massive amounts of cash into the market into investments that were much riskier than they understood them to be.

The net effect of these activities was to create a massive bubble in the housing market fueled by these investment products and the companies that created and sold them.

As you will recall, the fall out from the financial crisis was a loss of some 8 million jobs in the US. The Federal Government created the $700 million TARP fund to bail out big banks.

Oh yes. And many ordinary people like you and me will remember it best are those who lost a large portion of their retirement nest egg.

I will admit I had nothing riding on the stock market at the time, so I had no direct losses through investments.

So what does it all mean for the ordinary real estate investor?

First, there are incredible purchase opportunities right now. If you are like me, you’ve been buying up foreclosed homes that were once part of those bundled mortgage securities products. Those who have the cash and/or credit to buy bank owned properties have made some excellent buys in the last couple of years. Those deals are still coming in, and will continue to do so.

Even though “the economy” shows some signs of improving, you will continue to see great purchase opportunities that resulted from the economic crisis for next few years.

Second, these are anything but normal market conditions. Don’t expect the great purchase opportunities we’re seeing right now to last forever.

The federal government is going to pass new banking legislation. Their lobbyists supporters in the congress and the senate will be fighting “real” reform tooth and nail, but the financial sector is not going to be like the wild west when this thing is over and done with.

It’s likely that the federal government is going to be successful in putting the brakes on the risky tactics of the largest banks that created the current financial crisis. I think it’s going to be a very long time before risky banking practices create conditions for another housing bubble and collapse. Recall that after the great depression, reforms put in place created a very stable financial system for decades.

So what are we left with? Great purchase opportunities now. Movement toward slow and steady growth in the future.

Decades of slow, steady growth would favor a strategy of buy what you can while the buying is good…and hold onto it. I’m putting my money where my mouth is, because that is my strategy right now and for the coming years.

I remember watching Wayne Gretzky when I was growing up. I’ve always been a big hockey fan, and I loved watching the great one play. Let me toss in few highlights for those of you who might want to jog your memory.

The great one had some excellent advice for anyone who was striving to achieve more. I’ve included two of those in this article below.

1. Focus on the Fundamentals
The great one once said, “The highest compliment that you can pay me is to say that I work hard every day, that I never dog it.” He was an absolute master with the puck, and one of the things that made him so great was his focus on the fundamental of the game.

Real estate investing is not so much different from the game of hockey. The great ones focus in on the fundamentals of their game, and never get away from those fundamentals.

I’ve noticed that when I get away from the basic things that make you money in real estate investing, my bottom line suffers because of it. The basis of real estate investing is having a deal to work with. One of the most basic principles in real estate investing is that you make your money when you buy properties. You get paid when you sell the property.

That makes the offers you make very important. When I get away from doing marketing to generate leads so that I can make offers, I don’t make money. It’s that simple.

Lately, I’ve had a lot of the cash I typically roll from deal to the next tied up in rehabs and properties ready to be fixed. In the past, I would have just stopped making offers until I had my projects finished up, but they up and down is not healthy for my business.

2. Make Offers Especially When the Timing is Bad
The great one also once said, “You miss 100% of the shots you never take.” True, so true. I’ve learned to discipline myself to go out and make offers regardless of my cash situation.

It’s actually a healthy habit to develop because the lower my cash reserves are at the moment, the harder I push sellers to give me very favorable financing terms. In fact, I’m doing a purchase on a 6-unit property right now in which includes:

1. Most of the financing from a zero-interest loan I’m getting from the seller,
2. Taking over a loan subject to the seller’s existing financing, and
3. Taking out another loan to pay for repairs and a small down payment to the seller.

I think you call that a hat trick.

Earlier this week I caught a story that National Public Radio (NPR) ran on a California family that had a dream of buying a house. Up until now, it had always been out of reach financially. However, with four bedroom properties close to $200,000 in some of the areas where they were looking, their dream was now within reach.

But the problem they were facing is that they were being outbid by local real estate investors. Interestingly, NPR was referring to them as “vulture investors”. They seemed to take issue with real estate investors buying the properties to renovate and resell for a profit.

So help me understand this. NPR has a problem with investors going in and buying properties that the banks clearly want to sell – and fixing them up? What would they prefer – these properties sit vacant until they rot away to the foundation?

It occurs to me that many of these properties are likely so run down that no one other than a real estate investors who specializes in rehab will buy the property. Also, owner occupants get all sorts of bidding advantages on, for example, foreclosed FHA homes. They usually get 2 weeks or so to bid on properties until the bidding opens for investors.

Oh, and let me mention that as the reporter covering the story pointed out, the family did end up find a house for the good price they were looking to get.

It just makes you wonder if some do-gooder in Washington isn’t dreaming up some type of special government program to punish “vulture” investors for trying to make a profit. Perhaps a 100% tax on profits which could be redistributed to some housing subsidy program. Don’t thinks it out of the question…stranger things have come out of Washington lately.