Steve Penner, REALTOR / Owner of Moneyledgers (Royal LePage / Moneyledgers Software)

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Rainmaker
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Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

Until / unless you are 100% positive you can DIY, you need management. And most property managers suck. So you need to carefully vet, get recommendations and ask a lot of questions especially about screening, maintenance, collections, evictions, so much more.

You need to get with your financial advisor CPA tax person first. You probably will want to put your properties into their own LLC but you need advice re every financial implication.

Those are the basic basics. If they haven't run screaming at that point, then start finding them properties. But put the fear of God in them first. It can be profitable or it can break you. And it can fry your nerves real quick.

Feb 13, 2018 08:45 AM
Rainmaker
176,472
Susie Kay
Ultima Real Estate - Plano, TX
North Dallas Specialist

Find out whether they currently have a rental or they are a newbie.  Nothing is wrong with newbie but I know there are more time and hand holding and education involved.  Finding a good tenant who will pay on time and take care of the property is not easy.  Here in Dallas during summer if the AC is broken he needs to find somone to fix it asap.  They many ended up having to pay tenants their hotel room.  They may also need a property manager, consult with an attorney and CPA.  I think the bottom line is lay everything on the table, good and bad, and let them decide whether they'd like to continue or not.  

Feb 13, 2018 11:30 AM
Rainmaker
352,708
Greg Large
ERA Real Solutions - Grove City, OH
A Tradition of Trust

let them know that it can be a great investment, but being a Landlord is not for everyone.  I had an Instructor once who claimed in order to be a Landlord, you need to be able to evict a widow and her three children on Christmas Eve.  Perhaps a *slight* exaggeration but a lot of truth in that statement.

Feb 13, 2018 08:54 AM
Rainmaker
370,018
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

Have a company handy to run credit checks. Know the laws on evicting deadbeat tenants. 

Feb 13, 2018 11:08 AM
Rainmaker
75,634
Erika Rae Albert, Austin Real Estate Expert
E*Rae Realty- Powered by eXp Realty LLC - Austin, TX
Exceeding Expectations in Every Transaction

I'm very upfront about the amount of work, time, and worry it may entail, and I always have a great property management referral on hand if they're not up for it.

Feb 13, 2018 09:03 AM
Rainmaker
2,520,512
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

The answer is longer than I can post here.  It is a long discussion. Beyond the real estate and management side of the equation, I always tell them to consult with the CPA and/or financial planning advisor as well. 

Feb 13, 2018 08:45 AM
Rainmaker
744,988
Thomas J. Nelson, Realtor,CRS,e-Pro
Big Block Realty 858.232.8722 - La Jolla, CA
Co-Host of Mail-Right's: Real Estate Agent Podcast

Why?

What's your goal?

What's your plan?

Self Manage or Property Management Co?

and about 25 more questions...

Feb 13, 2018 10:07 AM
Ambassador
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Fred Griffin
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

    Long discussion. 

    This is a great idea, investing in rental property is one of the best ways to create and preserve wealth.  Having said that,

    What are you trying to achieve?   Are you looking to buy a single family, duplex, quad, or an apartment complex?

    Have you, or a close relative or associate, ever been involved with rental properties?   

    Have you met with your CPA about the financial ramifications of investment property? 

    Are you familiar with the Florida Landlord Tenant Act (F.S. 83)?   

    Will this be DIY, or do you intend to use a property manager?   

     Have you talked with your Insurance agent, about insurance on the property, and general liability? 

     Etc. etc. 

Feb 13, 2018 09:57 AM
Rainmaker
1,657,253
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

Watch the movie Pacific Heights !!! Then hire a Professional(full service) Property Mngr. !!!!!!!!!!!!!!!!!!

Feb 13, 2018 09:52 AM
Rainmaker
4,066,325
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

I don't even want to think about those days... I use to own many units and managed all of them myself... but I got away with alot in those days!!! laws have changed.... I can't take a front door off if they owed me  money!

Feb 13, 2018 09:26 AM
Rainmaker
899,988
Corinne Guest, Managing Broker
Barrington Realty Company - Barrington, IL
The Best in Buyer Representation

With brutal honesty, not everyone is cut out for it. You have to be prepared for tenant issues, and say thanks when you don't get them.

Feb 13, 2018 09:25 AM
Rainmaker
2,212,868
Nina Hollander
RE/MAX Executive | Charlotte, NC - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

To think long and hard about it before they do anything! And before they get too far down the road, we see if the numbers will actually pencil out.

Feb 13, 2018 09:25 AM
Rainmaker
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Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Steve Penner I educate them the ins and outs of owning rental properties. Then I send them to their CPA to learn about the tax implications of ownership.

Feb 13, 2018 09:10 AM
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4,395,574
Roy Kelley
Realty Group Referrals - Gaithersburg, MD
Roy and Dolores Kelley Photographs

Have a business plan and your financing in place before any purchase.

Feb 13, 2018 09:01 AM
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Debe Maxwell, CRS
www.AtHomesCharlotte.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Candice A. Donofrio gave you a great answer. If they want to purchase a rental, I share experiences with them from other investor clients. Some people are cut out to be landlords, others, not so much!

Feb 13, 2018 07:01 PM
Rainmaker
463,836
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

You have many great answers here Steve Penner 

Feb 13, 2018 04:23 PM
Rainmaker
3,534,653
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding and Marketing

Candice A. Donofrio gave you the perfect answer.  It is amazing how many think this is EASY without have a reality on their numbers.  A

Feb 13, 2018 10:31 AM
Rainmaker
1,004,547
Ryan Huggins - Thousand Oaks, CA
www.HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

Learn how to manage, read the horror stories, get on Bigger Pockets, learn how to do background checks, find good contractors... or higher someone to do that for you.

Feb 13, 2018 10:27 AM
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Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

Luckily I work wirh smart investors.

Feb 13, 2018 03:39 PM
Rainmaker
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Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker

Kathleen Daniels summed it up well. The conversation can indeed be a long one specific to the caller

Feb 13, 2018 02:47 PM
Rainmaker
28,827
Cathy Starkweather
La Rosa Realty, LLC. - Celebration, FL

If they do not currently own rental property (my first question)... I ask them "why" they want to own investment/rental homes? Many have false expectations of true revenue and a reality check slaps them pretty quick after a conversation. If they understand or are open to the realitsic dynamics;  the amount of work managing themselves or;.. the good, the bad, the ugly of PMC's then time for more education. I give them insight as a property investor and have them speak with other investment owners is a good idea. If they are still interested, on to the next phase... more education, blogs, detailed estimated ROI to go over and of course suggest/discuss the importance of establishing an LLC.

Feb 13, 2018 02:18 PM
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of Manchester NH's Leading Agents

It is sometimes easier to talk to them while looking at homes. That way they can see. I can add insight, ask questions and let them know what they are in for if they are new investors. 

Feb 13, 2018 10:29 AM
Rainmaker
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Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I don't.

Feb 14, 2018 05:42 AM
Rainmaker
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Tony and Suzanne Marriott, Associate Brokers
BVO Luxury Group @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Find a good property manager!

Feb 14, 2018 05:17 AM
Rainmaker
489,462
Brenda Mayette
Miranda Real Estate Group, Inc. - Glenville, NY
Getting results w/ knowledge & know-how!

Run!    LOL

Feb 14, 2018 04:49 AM
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Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

I ask questions to find out how much experience they have and what their exit strategy after they buy a property, after that we develop our plan and follow it. 

Feb 13, 2018 11:40 PM
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Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams fox cities - Stevens Point, WI
Forestland Experts! 715-204-9671

I have been one for a very long time, I would offer to coach them.

Feb 13, 2018 10:48 PM
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Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Steve Penner - it is not for the faint of heart! You must have a thick skin....

Feb 13, 2018 10:11 PM
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Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

I suggest we meet and that is when I find out if they are a bonafide buyer for rental property.

Feb 13, 2018 09:57 PM
Rainmaker
3,428,809
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

I show them what I go through

Feb 13, 2018 03:04 PM
Ambassador
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Paul S. Henderson, REALTOR®,CRS,
RE/MAX Professionals. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

Consider a property m

Feb 13, 2018 02:14 PM
Rainmaker
1,427,881
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

I would recommend that they use a good property management company.

Feb 13, 2018 12:07 PM
Rainmaker
2,223,759
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Hire a good professional to manage it....

Feb 13, 2018 11:36 AM
Rainmaker
2,346,030
Richard Weeks
Dallas, TX
REALTOR®, Broker

Hire a good property manager

Feb 13, 2018 09:42 AM
Rainmaker
3,339,460
Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

I do not work with many investors, not my niche, but I have had a few, and make sure they have a good nest egg, just in case.

Feb 15, 2018 07:53 AM
Ambassador
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Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

in my market it's short term rental and there is great money in it.  I tell them the management company I recommend and the cleaning service I recommend.

Feb 14, 2018 09:13 PM
Rainmaker
3,817,801
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Candice has answered

Feb 14, 2018 09:11 AM