103. 19 Most Common Challenges as a Landlord and How to Avoid Them

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I hope that you guys have been achieving your goals and continue to take action each day . I can tell you that we have , and most of the people within the Acaba Home Network have been doing so as well . I'm going to be joined tonight by my co-host , levon Ishmael , and he has a topic that we're going to be diving into for the initial part of this .

It's going to be geared around long-term rentals . I'm going to let Leibon intro that , but , again , this is an open session and after we do that , we're opening up to the rest of the group . Leibon , how are you doing ?

But we'll kind of go through the ones we have listed and I mean we're not going to really waste any more of your time , we're going to get straight into it here . The first not fully checking the credit , income and rental history of prospective residents .

I mean , I think this is by far the most common mistake people make is kind of just going by word of mouth , trusting what someone tells you . But you really got to verify everything , Right .

I was so excited of the fact that people wanted to pay me money that you know the first initial couples that came through they would just tell me hey , we fell on hard times , but you know , we're good for it , We'll pay you X amount up front and things of that nature .

And if somebody is guaranteeing six months up front on a long-term rental , there's probably something in that background that does not vibe right .

And so one of those instances actually led to that person giving a lump sum up front and then not paying anything else , and it took like two months to get them evicted because they can't make any promises and send the eviction letter and things of that nature . So highly recommend exactly what you said .

You need to have a defined screening process , which we have now and I'm happy to share with anybody that needs something like that for their long-term rentals . But it's very simple , right ? We have our screening process and we take everybody through that , regardless if we know them or not , and we treat our business like a business .

And so what I try to do is I'm not opposed to renting to family or friends or to doing business with family or friends , but you've got to make sure that you document everything upfront and that everybody is fully clear , upfront and it's written down , because if you don't , it can lead to some issues down the road because they're going to think like , hey , I

should be getting a discount , or hey , you know I'm going through hard times , you should just help me out . But at the end of the day , that bank that you have the mortgage with is not going to listen to you when you come to them and tell them hey , listen , it's all good . Just , you know my family's a little bit late . Can you just give me some time ?

They're not going to hear any of that . And so you got to make sure that you're treating all of this like a business . It comes back to that first tip , and if you're doing that and you're going to have those conversations upfront with family , with friends , and you're going to be good to go .

Now if you don't do that and you're like , hey , I'm just going to help somebody out , I'm promise you can go sideways quickly , even if that person's fully qualified and everything .

You just want to make sure that you get it down on paper and that you review it , take even more time to walk through all the documents together and say like , hey , this is , this is what I expect . If you're late , I have to charge this percent because the bank is going to do this to me and that's what we're signing like . Are you good with that ?

And kind of make it happen from there .

Yeah , okay , awesome , yeah , no , so what I was saying was yeah , to kind of tie into that point , that kind of ties into number three , not getting everything in writing and signed by both parties , like how it should be absolutely agreed , and I think this goes not even just for tenants , but just business in general .

They need some private funding , and so we've paired them with somebody else within the Acaba home network . Right , just creatively working , and we believe it's going to be a deal . We actually are meeting with everybody and bringing everybody together tomorrow . We've already talked for all the terms Everybody's agreed separately .

Now we're going to bring the two parties together and see if we can make it happen . But long story short , we're going to put all this in writing , right , we're going to make sure , hey , there's an email that goes out . Is everybody good with this ? Does everybody understand exactly what's going to go into this piece ?

And that's what you should do with your tenants . Make sure it's in writing , make sure that you have everything signed , and then you're not the bad guy , the bad guy's the lease , right , you can say , hey , this is what we looked at . This is what we signed . I'm sorry , but we have to adhere to this , otherwise we can get in trouble .

And I said , yes , but you know we should get it in writing , and writing could even be something as simple as an email between you two guys going back and forth saying hey , I'm going to give you X amount of funds to move out by X date , and then they them being the prospective tenant agrees by saying , hey , I agree with the terms above .

That way you at least have a paper trail . So kind of just creating that paper trail is more so the most important part .

So number four here , and it kind of goes into the point we were saying earlier not emphasizing , at the beginning of the term and annually , the absolute necessity of paying rent on time with no excuses , being hey , and to your point , now you're not really arguing with them anymore , it's you versus the lease .

And so one of the things that we actually did after my first couple of experiences with tenants is we started having something called a rent talk , and that's something that we talked about a long time ago , I want to say , when we first started this national group and , long story short , what a rent talk is . It's a PowerPoint presentation .

Not many landlords are doing this , but I would literally take somebody through the whole application process right and make sure they're good , and then , before we signed the agreement , I would set up time with them via Zoom or in person when I actually lived in Louisville , and we go through something called the rent talk and it's basically walking them through

exactly what our expectation is , exactly what we're doing for them , and I'm happy to share that with the group again at a later date . But it's like multiple slides and it lays out exactly what we expect and hey , if you're late , it's going to be X percent . And then we also lay out incentives In that rent talk .

I built something in the back of it called the Trittler Star Program or something of that nature . And basically , if they were with us for one year and didn't have any major violations or any payments missed , then on the renewal , which we're going to take rent up , we always clarified hey , rent's going to go up X percent . We usually do about 3 percent .

So we'd let them know up front but we would give them 25 percent off the first month's rent on the renewal right . So if they renewed with us , they already know that , hey , you've been good with us . And then on the second year 24 months if they renewed again , 50 percent off , and if they renewed again 36 months or longer , they get the first month off .

And so this was a win-win for both sides , because they had an expectation okay , rent's going to increase , but we're going to get a win , and things of that nature . It boosted the value of the property for us because now we can show that rents are higher , and for the tenants they felt like they had a bit more stability .

And what this ended up being is that first property that I had , we ended up having two tenants after we implemented this .

One that I put into the unit I moved out of , that stayed all four of those years until we actually sold , or really five years , four and a half years until we sold that property and he stayed because of that program and other things himself .

How important is getting that deposit , especially when it is a newer tenant , not someone that you've been renewing with constantly . Huge huge .

Today , you know , and they may be renting for , like we had somebody who's renting for 6,300 a month at a spot that we haven't negated , right , and for that person we're like , hey , this is all great , you can't move in until we have that security deposit and it's fully cleared .

And one of the key things you said is a cashier's check or certified funds hugely important . A cashier's check or certified funds Hugely important . Can't tell you how many people will try to give you a personal check .

But personal checks don't clear for up to seven , 10 days and you don't know if the money was actually there , right , and so it needs to either be a cashier's check or where the bank is backing that money , or do it online to where it's a payment that's not going to reverse , some things of that nature before you allow that person to move in and we make

that clear in the rent talk agreement , right , there's going to be a lot of people who are trying to put pressure on you . And one other piece if somebody's trying to put pressure on you like , hey , I need to move in this weekend , I'm getting you know , I got to get out of this house , dah , dah .

Why are you not planning a little bit further ahead that it has to happen tomorrow ? We just met , you know what I mean . Like , I need that cashier check before I can trust you , and so it kind of goes from there 100% .

that vacancy while we're trying to get it filled again . We even make sure that we have this in agreement to when we're taking over properties . I can tell you that I took over a fourplex last year that had tenants in it and we stipulated that one of them be vacated and another one was going to vacate a little bit later . So I was happy about that .

But that person was a little bit wishy-washy on when they were going to vacate , and so we made it very clear like hey , we're looking at the lease agreement and per lease agreement we need a 30-day notice minimum , otherwise we're keeping that security deposit . And so what ended up happening is they stayed a little bit longer , which is fine .

We worked it out , they paid a couple more months and then they gave us a 30-day notice really gives like 60-day notice when they were going to plan ahead , have crews ready to come in , do whatever turnover work we needed and get it advertised , and that's how it should work . So that's one major way .

Another way is if there's many , you know , additional damages and this is something we talk about in that rent talk as well when in tears is going to happen in a house , Like the tenant that lived in the house for four years . If we need to repaint the house , it's fine .

Like I understand people hand and stuff like that , but like if the carpet is been you know like cut up and and there's stuff that's to be like destroyed , we let them know like , hey , granite countertop sheet remain granite countertop for a long time , right , um , we just freshly painted these walls .

Unless you're like webbing , grease and things of that nature , it should be fine , for at least you know things of that nature .

And so we just make sure we talk about all that stuff up front and what they're going to get charged for if you know it's broken or things of that nature , and that's kind of what you would look for no a hundred percent Makes sense .

So I'll give you a couple of times where I've done this and one time where I've been burned and I didn't even know it . So with some of the midterm rentals that we have , one of the benefits is people know , hey , the utilities are included , right .

And so when guests are like , hey , we're going to rent this place out , we usually try to average what the utilities have been over the past couple of months and then we'll put in the lease agreement that , hey , we're going to cover utilities up to X amount .

So , for example , the one I gave you that was out in Decatur , I believe , we have it to where we're covering utilities up to or no better . Yet what we have is them paying the utility fee and then we cover anything above that . So the utility fee is $400 . And we know that the average there was like 375 . And so if they use a bit more .

It's fine because we're still saving them that piece . They've got some money , so that's one way to do it . Another way to do it is to say you'll cover up to X amount and anything above that you're going to bill back to the tenant .

But the main strain , and the reason they have this on this list that you pulled , is because tenants that aren't paying that utility tend to not care , right ? So , hey , let me just leave this water running . Doesn't matter , there's a leak , let me just leave it . It's the wintertime , so I've got the heat on , but I feel a little bit hot in my room .

Let me just raise the window as opposed to cutting the heat off . And now you're just burning through theile cash that you were supposed to receive . And so the other piece that I want to tell you about . So this is one thing that happened to me in Kentucky .

Right , and this wasn't even one that I had the utilities in my name , it was in the tenant's name , but I had this overall landlord policy , which essentially means like when a tenant moves out , it reverts to your name for the utilities moving forward so that you can get it rented by somebody else . Right , nobody wants to see a house that has no electricity .

And so we did this on this 12 unit property . And at some point along the way I see property management and like right around that time a tenant moved out and so it reverted my name . The tenant didn't pay their last bill , which was like $25 . I have no idea , right , I've got all my stuff on autopay .

The property management handling it and the electric company was sending all these notices to the former property management company and they didn't realize . Hey , you got to send it to the new guys and the old property management company wasn't forwarding it . So , long story short , it ended up hitting my credit and I didn't know until I applied for a house .

I was actually buying the house I'm sitting in right now and they're like , yeah , man , your credit actually went from like the 700s to like 600 diffy or something in like a week . I was like what ? So it was the loan officer that let me know yeah , you've got this utility bill on there .

I had to fight tooth and nail during due diligence and all this stuff to get it off . Thankfully , you know , they were able to remove it and boost my credit back to normal . But I would not have known if I wasn't buying real estate right . Not enough .

Right , 3% that equates to what like $30 , right , that's not a crazy amount . It would cost way more than that to pick up your stuff and move . But if you don't do that , then you miss out on the compounding effects of 3% over time and you miss out on the value that's going to add to your property .

And so we have those conversations up front like , hey , we're going to raise rent in one year X percent , right , to keep up with inflation and things of that nature , and it's adding to the value of your property and it's also making it be able to cover more of the expenses that may come in with that property .

And so I see a lot of people that don't raise the rents . And then down the road , now you're kind of stuck between a rock and a hard place because you're not at market rents .

If you try to raise the rent now , your tenant's going to be like , hey , you haven't raised it in years , I'm leaving because now you've got to jump it up from 1,000 to 1,500 with one job , which makes no sense . You've got to be able to stair-step it each year and even with the new tenants that we have , I try to build that piece in .

For example , at the Snellville property , initially each person was paying about 1,500 per month , but the median rent in the area is $2,000 or $2,100 per month , and so it'd be a major jump to say , hey , I'm going to raise you $600 or $500 . So what we're doing is just stair-stepping it .

This first year , I think , we raised it about $100 to $150 each , something of that nature , and then next year we'll do the same and then do the same until we get to that level . But I'm a huge proponent that you should be increasing each month , each year , because every year your costs are increasing .

Insurance hasn't gone down , right , taxes haven't gone down . The only thing that's remained stagnant is the mortgage , thankfully . But you want to be able to get some of that benefit over time and be able to make your property more desirable for when you want to resell it .

Immediately let's go ahead and get this thing started .

Right , you've got to set your standard and stick to it , and this is the importance of having it laid out , a gain plan , and also having you know kind of that rent talk with the tenants ahead of time , so nobody's feelings are hurt and we all know exactly what's in this lease agreement and they know what's coming Right .

And so I believe you should give it immediately , right , whatever that time period for them to pay , that's the time period , and if they're late , you've got to serve that notice so that you can actually start the process .

I'll give you another example of kind of what happened when I was initially the person doing this I didn't actually know how to do it Back in Louisville , right , one of the tenants that I inherited stopped paying , or not even stopped paying . They just paid super late .

Right , they paid crazy late , and then eventually they did stop paying , but I was just hounding and pounding or having like , hey , you know , I need the rent , sending messages , sending emails , knocking on the door , things of that nature and he would eventually pay . You know , after a couple of attempts , maybe two weeks late .

And then you know there was a time where he didn't pay , and it was for a significant amount of time , and I had to figure out how do I do this eviction process Right . And so I tried to send them a certified letter and I messed something of that nature up to where the process didn't actually start and I had to restart the process .

Then I finally went and found professional help that did it for me , and that's what I advocate for now . Story short , if you don't start that eviction process , the time never starts for your ability to take them to court , get a judgment and get them out . And so now you're just wasting dollars and energy trying to get this whole thing going .

And so now what I do is , in every state that I'm investing in , I have a lawyer that's an eviction lawyer , and if somebody is late or past the date that's due that we've agreed to , I will send it immediately to the eviction lawyer .

Yes , I have to pay them a fee Usually it's something like $300 or so , something like that and they will get that letter out to the tenant and then start working on the process of eviction and it's a lot smoother that way . Typically , when the tenant gets a letter , they're going to start paying on time .

If it was a one-time thing or an accident , and they'll know that you're serious and like , hey , you're taking this as a business or on the backend .

If they really aren't going to pay , at least you're able to get that process started , get the judgment and then you have that security deposit where it can actually make up for that month that you've missed , as opposed to now . You've missed two months and security deposit is just the band-aid because now you got to come in here and figure it out .

The market could change and they may not be able to get the value they need for this house , and so they send it immediately . You should send it immediately 100% .

Right , if there's something else wrong with the toilet , you can send people out and minimum you're going to get charged you know 45 to 75 for them to come out , and then maybe another you know 20 to $30 in materials to fix that toilet .

And then it can break down again the next week and you got to send somebody out and now you spent $200 in a blink when it only costs $250 to replace the whole toilet . You don't have to worry about anything .

So if somebody's like , hey , there's a toilet issue , whatever , if it's not the most basic thing , and I don't have some money already going there , we're going to replace that toilet , because then I know it's brand new and we're good . Same thing with appliance repairs .

I can't tell you how much I've spent on repairing washers , dryers , dishwashers and things of that nature .

And so now we have a standard practice hey , we're going to send somebody out to try and repair or take a look or assess it one time , and if they can't figure it out or they're like , hey , we got to send it back in , you just need to replace it with a warranty , right .

And so I think when you , especially when you're looking to like rehab a property and things of that nature I just gave you the appliance piece Well , you're looking at the materials to put into a rehab of a property . The major cost is going to be on the labor . Materials is not a crazy update on cost and it's worth taking it to that next level .

If it's going to be tenant group , for example , right , you could put . Um , you could put the regular like rollout hiding , right . But then that's not scratch proof , uh , it's gonna look bad over , uh , some time .

Or you can put carpet like carpets were getting cheap , right to put it in things that nature , but is it going to stand the test of time with a bunch of tenants ? I'd much rather would go in with luxury vinyl plank where it's water-based , scratch proof , to look the same 10 years from now .

And then when you look at countertops , a lot of people will throw in some laminate and things that nature . I'm like , hey , let's rip the bandaid off , let's put in that granite or quartz . This doesn't look amazing for many years to come . And now we are essentially taking our rental to the next level and we know this is not going to get damaged .

So number 11 , it's kind of piggybacking off the earlier point that we were talking about ignoring a problem tenant , hoping the problem will go away . It doesn't most of the time . It a lot of times will get worse , as you pointed out and kind of you mentioned that you no longer do it in-house yourself .

What are some kind of tips you have for people on handling kind of the ugly conversation with tenants ? I know you mentioned the kind of presentation , but kind of once it gets to that point , what do we say then ?

Right , you've got to lay out your business practices , but you've got to be spot on with those . And I literally just went through this last year for the first time in a while because the ones in Georgia I still manage , and so that one fourplex that we had there was multiple tenants there .

So I was like , all right , I need to make sure that we switch these guys over . So one of the first things we did is the tenants were paying via check and they were doing maintenance requests by like texting the owner , and we stopped all of that .

It was like , hey guys , I have this , this one pager right Introduction hey , this is , you know , new owners . Dah , dah , dah , dah dah . This is where you're going to go to pay rent . This is where you're going to go to send maintenance requests . I had like a little video in there and things of that nature .

So a little bit of planning ahead can save you a lot of heartache on the back end . But if you do run into that problem , tenant , you've got to have your process in place and remain firm Once they understand that , hey , there's a new sheriff in town .

It's either going to be one of two things Either you're going to be excited because you're more able to handle stuff quickly and you have a process actually in place , or two it's going to push them out quicker , which is good , so you can get a good tenant in there .

And I can tell you that putting these systems in place helps eliminate a lot of headache and urine , because you're not trying to make it up along the way . You're like , hey , this is just a system that can follow 100% , 100% .

Because if you send that payment ahead of time , where is the incentive for them to actually get it done and fit ?

But you want to similar to what we were talking about before put together a contract and an agreement where it's fully spelled out and everybody can agree with before you get started on that project .

And I'm typically in favor of giving about 25% upfront and then having different milestones right For getting X percent , x percent , and I typically try to hold back a minimum of 30% .

I'm typically trying to hold back like 50% , but a minimum of about 30% for the back end , when it's fully complete and we can have our punch list to knock out any punch list items .

So there's a nice juicy cure at the end because you'll find if you pay all those funds before the work's been finished or say the work's been finished but there's a punch list , slow down , minimal items , it's not going to get that .

It'll take like two months If the whole work took one month that punch list of five items is going to take two months to be complete because there's no urgency there .

How often should you be doing an inspection on your units ?

And then you want to check in about the nine month mark , right To make sure , like hey , at three months you should get a feel for , okay , are these guys beating up the property ? How's it doing ? Is it okay At the nine month mark , depending on if that tenant's going to leave or not , you should be able to get like a high level punch list together .

Now , it's tougher than it sounds to actually put this into practice , but minimum once per year and you know , if you can't do those twice per year , maybe you come at the mid year point you want to send somebody in there , maybe to do a filter change or whatever , but really to get eyes on the property and to make sure that everything is as it should be .

And if there's not some deferred maintenance , that's just tearing the property up .

Because you know , especially if you're the one paying , like the water bill or things of that nature , you can have a tenant that has a leak underneath the sink and it's just eating away at the bottom of the sink and now it's falling through the ceiling and they're just like , hey , we're good , it's not bothering us , but for you it's going to be a major issue

down the road .

Moving on to number 14 , giving back the deposit before the inspection is complete .

You know , and you may not get that in the first pass , so you don't want to put the pressure of you returning that deposit like immediately , or , hey , I'm just going to walk through with the tenant and then hand them a check that day .

You want to have it in your lease agreement that you have 30 days to return that deposit and just get a forwarding address .

And the reason for that is , if you find something crazy , if you find out that , hey , you know the tool that doesn't work because somebody flushed a bone down there or something at nature , you're going to want to have that security deposit back so that you can deduct from that piece .

And so we tell tenants hey , early days , typically we're able to do it within a week . Right , We'll send our guys out there . Hey , you know , check all the systems , you know , get it ready for the next tenant .

And that's kind of trying to do everything yourself , whether that be going through that eviction by yourself or trying to do some of the little repairs by yourself and not hiring it out to handyman . You know how difficult is it to run the show by yourself versus building that team out , and when should you kind of start building out that team ?

You have to get comfortable with pushing some of these things out and not trying to control everything . With your first property , you can absolutely especially if it's nearby . You can absolutely do everything , right , you can , just so you can know , okay , what's the cost , what's the time that it takes to do this .

But little by little , you should start to outsource items that are lower cost and time consuming . For example , one of the first things that I outsourced was landscaping , cutting the grass right , that can move those $30 for somebody to cut the grass .

Or I could go buy a whole lawnmower , have gas on the house , spend my Saturdays cutting the grass every other weekend . I was like you know what ? I think I can hire this out for $30 . We can afford this $30 . We can afford that piece , and if we can't , I need to figure out another way to find that right .

I had to go from there , and so it's one where it's definitely going to stunt your growth if you're the one doing everything and you want to outsource the lower dollar items first and then move to the bigger ticket items of the property management .

For example , I managed all the properties myself , just using software and knowing the vendors and things of that nature in Louisville until we got to 15 units . I had three units where I actually lived there , so I had eyes on it . And I built up to 15 while I lived in Boston and I was thousands of miles away and I was still doing it .

And I built up to 15 while I lived in Boston and I was thousands of miles away and I was still doing it . And I realized very quickly that I did not want to buy any more units . My realtor was setting me deals .

I was like , listen , I'm good right now because I'm still trying to figure out how to get Section 8 set up over here so I can get the payments for the units we just closed on . I need to get this noticed to all the tenants so that they know how to pay to our system . All this stuff was going on . I was like and I still got a full-time job right .

So it's a lot going on . I'm sure there was a lot going on and so , long story short , it was at that time that I knew , hey , I'm tapped out , I'm not going to be able to continue growing this thing if I don't start to bring on help .

It's going to hurt initially because you got to get to scale before you're able to really afford all this stuff , but you can't afford not to start pushing that onto other individuals that are hopefully better than you're going to be at this if you want to continue to grow . Same thing happened here , right , With the short-term rentals .

It was a little bit different . I was managing about four or five solo and then I started to look at my routine and my habits . I'm like , dude , it's like 9 , 10 PM and I'm focused on trying to message you things at nature . I'm like , yeah , this is not going to work out , especially if we want to continue to grow and build this thing out .

And so we built a team right and we just added on that team little by little , and now we've managed 26 properties right and I'm really doing it . I'm just doing some vital meetings and things of that nature which I enjoy , and so and I'm working to like continue growing that . And so , long story short , right .

I would say just outsource little by little as much as you can If your goal is to continue to grow . If you just want to keep a small portfolio , you're happy where you are and you can manage it . Keep all the profits . But if you want to grow bigger , outsourcing is huge , Got you .

And so , very quickly , I signed up for something called Billium , which I use today for long-term rentals , and it's just good having a software that's online , where tenants are able to pay their rent and you can keep track of that .

It's not just you trying , know , you trying to do this where you can keep the lease agreements , you can keep all the conversations . That was a major piece too .

When you talk about doing like evictions and things of that nature , or you know potential lawsuits coming up at some point and things of that nature , you want to have a repository of all the communication that you've had so that you're on the same page , you can refer back to it .

And or if a tenant's like , hey , you didn't say that , you want to be able to look back through it and not try to find , okay , was it a text , was it an email ? You want to know . It's all in one system , if at all possible .

And so digitizing all your items makes a lot of sense and it allows you to be able to pass that on or teach somebody else how to use the system down the road .

Another example I can give is when it comes to the shoulder rental management , which is a little bit different , but we've put all of our systems into the software hospitable right and we've added in all these different metrics and kind of how we message and all these different templates and things of that nature so that we can teach it to some of the VAs that

we hire now to kind of give that around the clock coverage .

And so if we didn't have that system , if it was still all manual like hey , there's no real rhyme or reason why we do something you would still have to step in every other day to try to help that , whereas if you put it down on paper , if you build out the system , if you record some loom videos to show people how you work , now you can leverage that

off in the future Understood .

how you got to separate yourself and not become emotionally involved in a lot of this .

And one of the things I can give you Right , I have and we'll talk about the short term rental stuff . So we got like a bunch of cleaners and things of that nature that are awesome and very important to the business and we've gone through a couple to find the ones that were locked in solid too .

And some of those individuals we still connect with like we're still on calls and like , hey , how's it going ?

And working alongside them , but we don't use them in the business anymore because , hey , you had three strikes within you know a two month period where we got had reviews and we needed to move on , right , and that's separating business from from the , the friendship piece , and you've got to settle that stuff up front .

So , for example , with contractors , one of the things that we do is we make sure that we have it either in an email or in a document exactly what the payout is and exactly what we're looking for , and try to put pictures and examples and things of that nature .

So , if it's not this , then we make the agreement that the bad guy hey , this is what we agreed to . Listen , I understand you got to pay all these guys and I'm with you . This is a grind . You need to pay these guys , like yesterday , and I want to get you that payment .

If you can knock this out , as we agreed to , like the pearly agreement , right here , you finish all these punch list items and things of that nature , I will personally be there to hand you that check Same day . I just need you to knock these out right Now .

You're making the agreement with the bad guy , as opposed to if it's just deferable , like oh yeah , he's going to take care of me , and things of that nature . It can go bad quickly .

Another example I'll give you and this is something that we put into a couple of contracts not all of them , but overwhelming majority is we put timelines right and what I'll typically do is I'll ask the contractor like , hey , how long would it take you to complete this ? And at the front everybody was optimistic hey , six weeks , it'll be done .

Okay , perfect , I'm going to give you eight weeks , right , and there's a penalty if we go past the eight weeks , and you put this in the agreement . So past the eight weeks is starting to hurt our business , and so it's $100 per day off that final payment , right .

And so what that helps to do is to focus everybody in , and it allows them to make an easy decision , right . Hey , I've got all these other jobs that I need to do , but this one has a penalty in it If I go past X amount of time . And I told him I can do it in six weeks .

Let me go focus over here in these last two weeks before the company kicks in and get his job done and start to get paid , right . It's not , you know , it's not that I don't like you as a friend , but we do have an agreement and I make sure that we put all that stuff up front .

That way , everything is out in the open in terms of expectations .

Yeah , worst case scenarios , hey , this is , you know how it would work .

I think it was pretty comprehensive agreed , agreed .

Literally you've got to call these references . So I've called a couple of references and they had no idea , like they didn't coach the reference up and I'm like no , who's that ? I'm like what ? So ? So like , yeah , you got to call , don't just think because they filled it out , that's real .

But hey , I'll give you $500 , right To . I see your property's available right now , but I'm not moving here until May 1st . Right , so I'm going to give you a $500 holding deposit . It's non-refundable . To hold it for me to May 1st , for me to execute all the documents , things of that nature .

So it's kind of like reserving your slot on that property if it's one that you really liked , so that's one piece . And then security deposit is again what is helping make sure that they don't damage the property and that they don't just cut the lease and leave because they want to get their security deposit back . Okay , Lee Bond , anything else top of mind ?