I'm thinking of writing a book.

After 12 years as an investor, with some lessons learned from my parents experiences, I'm thinking of writing a book. I am trying to motivate myself. I have plenty of stories--especially about mistakes I have made--and I've made enough that I could weave a cautionary tale out of shredded income. Perhaps, something on "How to lose a million dollars in real estate" or "Handbook for throwing away money" and, yet landlording has done well for me, I just made plenty of mistakes along the way.

Cleaning Ovens for the ADHD

On this fine Labor Day, I was out at a rental, doing some last minute cleaning and organizing, and praying for a good renter. During the prepping, I opened the oven and realized we hadn't cleaned it, or finished cleaning it.
This blog is a little about cleaning and a little about time management. I'm also going to go out on a limb and say that, "if you don't have a cleaning service, they stronger partner should usually clean the oven," and this is usually going to be the man. I cleaned the oven fairly easily just using soap and water and bit of elbow grease.
I had oven cleaner at the unit, but didn't want to breathe the fumes, so I decided to experiment. I started by filling a sink with soapy water to soak the stove grates. I took a sponge with soapy water and squeezed it onto the oven door and surfaces and let the solution soak in for a bit while the sink was filling.During this time it's good to remove the oven door if you know how--it'll be easier to reach inside the oven.
I soaked a sponge in the soapy water and squeezed it onto the interior oven surfaces. I spread it out and let it soak for a bit. While it was soaking I went and cleaned some other surfaces and swept and vacuumed. Then I would return to the oven and use a green scrubby (Scotchbrite ) to break up the grease and crud. I'd soak up the nastiness, rinse under the kitchen faucet, then repeat my soak, clean something else for a while, come back and scrub routine. I did this about 5 times over an hour and got the oven usable.
I don't think I had to scrub that hard. I also didn't have to use any harsh chemicals. I just used a soap with a degreaser. If you want to use a harsher degreaser that's natural, white vinegar is good, but pungent. You can also use lemon juice. I was left with a nice lemony oven, and I got most of the rest of the house clean.

Getting (Human) Customer Service

Tired of automated call centers? Here's a link that gives the codes to get a human.
http://www.get2human.com/get2human_list.asp

Reply! Real Estate dot com Update

Finally, after a bunch lot more emails. I guess the lawyers letter helped.
Dear Client:
Thank you for your business. We enjoyed having you as a member. While we are sorry to lose you, we do hope you will consider us again should your business require lead generation in the future.

I also got a personal email from my customer service manager, but it was full of it, and I don't want to raise my blood pressure looking at it and rebutting it on a paragraph by paragraph basis. Most of it stems from the 'value' of their service and how it was presented by their sales staff.

One more reason to use me when buying REO's

I spent the last couple years as a building inspector. I know a lot of the contractors who are local. I know which ones tend to get things right the first time. I am also familiar with a lot of the pricing structures.
I just arranged for the septic, home, and termite inspections for my client. I got some of the lowest prices, and because I tend to repeat with the same people I got small discounts for my client. Many of the REO's are going to need work, and Fannie Mae and the FHA 203K loans require licensed contractors to do the work.
Contact me if you're in the market for an REO.

More Reply!

I've gotten another half dozen or so 'leads' with contact info that is either incorrect or belonging to people who are not interested in buying or selling property, or who don't meet the criteria I mentioned to the company when I signed up. So much for the one or two a week that I was told when they were usual--maybe this is just an anomaly.
From the attitude of the "customer service rep" (insert extreme sarcasm) I should probably be happy that I might, someday, be able to be of service to these "leads". It is not the fault of the people, they have to provide information to browse Reply!'s site. Then, if they have not been prudent and faked their input, they get contacted by professional subscribers who got duped into joining the site.
Reply! did not credit me for two of the other 'leads'. I've sent it on to my lawyer, and contacted the fraud department at my credit card company, so perhaps they'll sue me and I'll counter-sue them. We shall see.

Parts is Parts

Sometimes the upgrades on a house make it worthwhile. This is especially true when the housing market is down.
When the price per square foot is down, you're going to get more bang for your buck on a repo. I just saw a house with a $60K upgraded kitchen and a $5K in flooring, and another couple thousand in crown molding, sell for $50K more than a similar house down the street that had been a rental. I'm a handy guy, but kitchen remodels are notoriously laborious. They take a lot of time and usually a lot of money.  The house was basically on sale with a $17,000 discount. The other house also had rental grade lighting and bathroom fixtures. The difference in the houses had everything to do with how much the house was cared for and loved by the owners.
The difference in price, works out to about $300/month with today's interest rates. Sure, not everyone can afford the difference, and some people don't want the extra debt. When the market recovers, the house will be worth that much more, and be that much more attractive to a buyer.
There is money to be made when the parts are worth more than the whole. This is similar in concept to the corporate pirates of the 1980's did, and what salvage yards do on a regular basis. Find something where the pieces are worth more than the whole. Obviously, you're not going to split up the house. But, if you have similar house, with dissimilar prices, it might be worthwhile to estimate how much the upgrades would cost if you plan to make them in the future.

Good news for the High Desert

Evidently there's another project coming to the desert. It's a solar electricity generating station. You can read about it here.

Subsidized housing.

Over the last week, the subject of where prices for housing is going came up a lot. It was coupled with the increase in vacancies that I've seen in the rental market, both residential, and commercial.
Along with the conversations, I mentioned that the rental market is really competitive at the moment, and someone asked if I ever looked into subsidized housing, sometimes known as Section 8. I have looked into it, and decided not to get involved for several reasons. I'm going to tell you why.
Over the years, I had an opportunity to pick up some older duplexes in a low-income neighborhood. The units had few tenants, and some of the vacant units were emptied of the easily removable contents--doors, toilets, cabinet knobs, faucets, and compression plumbing under the sinks.
I started by renovating and renting the empty units. During this time, money was short, and I was working part-time and temp jobs during the day, and the units at night, and doing a variety of paperwork early in the morning. It wasn't unusual for me to be up at 5am and not in bed until somewhere between midnight and 2am. I would often get a nap at lunchtime, but I was doing a lot of 16 hour work days, 6 days a week, with a 'short' 8 to 12 hours on Sunday.
During this time I got a lot of people wandering by to ask when the unit would be ready. I had several ask me if I took Section 8. I was fairly new to the business, and told them I hadn't looked into it. When asked, I told them the rents were about $650 and nearly all of them told me that Section 8 would pay me $850 and that we could "split the difference" or something to that effect. That sort of dishonesty helped put me off. Well, I guess they were honest with me, but not with Section 8. I have an abiding antipathy to liars. However, I would give them an application if they wanted.
I  also was questioned as to why I was making the places 'so nice' by applicants. I replied, "If it looks like a sty, only pigs will want to live here." Those people never brought back the application I gave them. In the words of Dave Ramsey, broke is a condition, poor is an attitude.
Emotionally (I know I shouldn't get emotional about property--that's fodder for another article) I am a bit attached to these properties that I've spent so much time renovating. I've spent a lot of time and money, and literally blood, sweat and tears on these units. All of the landlords who do their own work that I've talked to, feel pretty much the same. All of them that have had Section 8 renters have had problems with damage to the units. The overall conclusion is that the extra money is eaten up in the repairs.
As it happens, the local paper had a trio of staff writers cover the subject. In my opinion, the comments section will give you better insight than the article itself.
Though Section 8 pays higher than average rates, there is a flipside with subsidized housing (brought up by one of the above commentators) in that it devalues real estate in the area. The people building subsidized housing  are able to charge rents that are lower than market rates (affordable). This brings down the rents of neighboring units, especially, or maybe because of, the added units cause a surplus of housing. This drives the rental housing prices down. So the government causes taxpayers to  subsidize a few large construction companies that are in competition with them.
The purpose of the subsidized low-income housing is to deflate housing prices. This unfortunately for investors, also deflates the value of their property. So it's likely, that in the near future, as bailout money gets used for subsidized housing, it will accelerate the decrease in your investment's value. Your property will become worth less faster. This is going to be especially true in larger cities.
If you drive around neighborhoods or down the freeway, you're likely to see a lot of commercial property vacancies. There are more coming. As rents go down, commercial properties are worth less. Unfortunately for small business owners, there is a lot of uncertainty as to what new taxes are in store for them and what existing taxes are going to be raised. That economic uncertainty is going to contribute to unemployment. So there are going to be less Americans compteting for housing in California.
All this makes me think housing hasn't bottomed out yet. This is especially true in outlying areas and suburbs. Though, prices are still at lows that I haven't seen since the 90's, and you can pick up housing for less than it costs to build, and less than it would cost to rent. It still might be good to buy, knowing that your purchase will lose value over the next few years, then increase after positive changes in the economy.