Financial Freedom Group Blog

Bandit Signs (and where to put them)

In my post on Finding Great Tenants, Curtis asked were to put the signs.

If you are putting out hand written signs (the best for a property you are trying to get handled, we know because we tested it) for a property that you have available for rent/sale or if you are putting out preprinted signs (you can use hand written signs too, we tested it too and you get good results either way) to buy more properties you want to put them at the busiest intersections around your property.  I place them on wire stakes so when someone is stopped at a light or stop sign my sign is right there for them to see.  You can also put them up on telephone poles but the utility companies my quickly take them down.  Use 18 X 24 inch signs.

Also, make sure you check with your local authorities to make sure putting out signs are OK.  (My method of checking was to put them out and see if they called me.  The technique nearly got me $45,000 in fines in a new city.  Test it out with a few signs first then roll out a larger campaign.  An 800 number keeps you anonymous too.)  In one city the ordinance was that you could put them out Friday to Sunday.  I went out at 12 midnight on Thursday night/Friday morning and then picked them up late on Sunday.  This can be a good strategy to stay in good graces with the city.  Most city workers don't work on the weekend so if you have them up from 6PM Friday to Sunday night you are in good shape.

Signs are by far the best way to get your phone ringing if you are either buying or selling a property.  It is a lot of work but the payoff is worth it.  You will only have to do it for a little while before you can outsource it to someone because you are making good money from all of the houses you are buying.

Collect Rent On Time and Make More Money

There is a payment option that we implemented when we turned around a property management company that ended up working very well.  We named it Easy Pay.  With Easy Pay you will collect more money and it will be easier to collect than the old fashion payments.

With Easy Pay we allow the tenant to have flexibility with their payments.  Most people get paid every two weeks so we set up a system so that we can help them pay their bills on time.  We allow people to pay 1/2 of their rent every two weeks when they get paid.  We give them the choice of paying on the first, the old fashion methode (and that is what we call it because who wants to do anything old fashioned) or every two weeks with Easy Pay corresponding to when they get paid.  There are two benefits to Easy Pay for us.  First, the tenant has the money when rent is due.  Second you get 26 payments which is equal to 13 months of rent.

Now the tenant does not have to budget their money for the big one time payment and they don't have to worry about late fees, eviction, etc, because they have the money and they pay it to you. 

The down side is that you are literally collecting rent every week.  You need to make sure you have your systems in place to keep track of all of the money. 

We let the tenants know that Easy Pay costs more but nearly everyone that was paid every two weeks (that was the only way you could qualify for this program) signed up because they saw the benefits to that option. 

Here is a real life example of payment plan working well.  One of our mentorship students was having trouble collecting rent from a tenant they were always paying late.  I mentioned that she should offer them Easy Pay  because the tenant got paid every two weeks.  She told the tenant of the details and how Easy Pay worked and the next thing she knew she was getting a hug from an ecstatic tenant!  Her rent has been on time every time since she implemented this awesome payment option.

America loves financing terms.  If you can finance someone for a few weeks and allow them to pay on their schedule it will pay off for you with great cash flow, satisfied tenants, and on time payments.

Friction

Negotiation Quick Tip.

If you are negotiating with a seller of a property and they offer you exactly what you want don't accept it immediately.  Argue the point a little bit by saying: "So you couldn't do _______" which is asking for a little more than they offered.  They might say no and you end up with exactly what you wanted or they might give a little more. 

Here is why this is important.  If I say the price is $200,000 and the buyer says, "Great, lets do it."  I am going to feel like I should have asked for more and did a poor job negotiating.  If the buyer were to say "Wow!  $200,000, that is a lot of money!" I feel like when I get my $200,000 price, I did a great job negotiating with the buyer.  You want the seller to feel like they did a good job negotiating.  Don't accept proposals outright, create some friction there and your deal is more likely to stay together.