The Friday Fab Five is a series where I share five articles, books, or resources that I’m currently using and enjoying. There are many wonderful resources about real estate, personal finance, entrepreneurship, and life out there, so I’ve narrowed them to some of my favorites that I think you´ll enjoy.
Here are this week’s Friday Fab Five. Enjoy!
1. The Freedom Formula from the Investing Architect
I’m a strategy guy. I grew up loving board games like Risk and Monopoly.
It turns out that success in real estate is a strategy game too. It’s not enough to just take action or even to buy good deals. You need a big picture plan or a blueprint. If your actions do fit within the right overall strategy, you’ll find yourself accomplishing your goals with much more ease. If you don’t use a strategy or use the wrong one, you’ll either experience frustration or worst case completely fail to reach your financial goals.
A fellow BiggerPockets.com author named Erion Shehaj (InvestingArchitect.com) does a great job teaching strategy. We both advocate for the strategy of getting free and clear properties using the Snowball Plan or as he calls it the “Domino” method.
His article below provides a good case study and formula for his overall strategy of obtaining financial independence with rental real estate.
2. Easy Tenant Credit & Background Checks
You do check credit, eviction reports, and criminal background on all of your tenants, right? If not, why not?
These days it’s easy. You don’t have to become a member of the credit bureau, have your office inspected, or pay monthly membership fees. You can even require the applicant to pay for the $35/report fee directly to the bureau instead of having to collect application fees yourself.
My wife and I manage one rental property on our own outside of our regular rental business, and we use the service TransUnion Smart Move. Inside of our rental business we use a management software called Buildium that has the same service built-in.
The biggest rental mistakes we made in the past were not sufficiently screening tenants. I know the temptation to get in a hurry and just get someone paying you. But don’t rush it! Screen your tenants, check their background and credit, call their references, and verify employment and income.
If you do, you will avoid the biggest problems of being a landlord.
3. The Beauty of Online Rent Payments
Once our tenant moves in, another tool that has made our lives MUCH easier is an online payment service. Currently well over half of our tenants pay online. Another large percentage deposit their rent to a bank account we have at Wood Forest Bank (conveniently open 7 days per week inside our local Wal-Mart). The remaining tenants mail their checks to our PO Box.
If you still pick up rent in person, don’t do it! Systems and processes are your friend if you want a life.
If you want to accept online payments, there are a variety of tools out there. Here are a few I’m familiar with and like:
- Dwolla – easy, safe, free way to transfer money from tenant to you. I use this for the personal rental outside of our company, and our rental company used it successfully in the past.
- Paypal – If you transfer money from person to person it’s free. I’ve used this in the past too, and I currently use it for my CoachCarson.com classes.
- Buildium Property Management Software – online payment is built-in to the software and costs $.50/transaction. But the entire management package (which is very powerful) costs $45/month or more, so this service may not make sense yet if you only have a couple of properties.
4. Historical Biographies – The News of 2016 is Nothing New
I love reading biographies. In the last year I’ve been on a streak of reading about historical leaders and public figures in the U.S.
I’ve enjoyed biographies of Albert Einstein (Public Library), Teddy Roosevelt (public library), and Abraham Lincoln (public library). To get a better understanding of the history of my own state of South Carolina, I also read a biography of Strom Thurmond (public library), who was a complicated and controversial long-time U.S. Senator and former Dixiecrat presidential candidate. And just this week I finished the fascinating biography of John Adams (public library), a founding father and the second president of the United States. You can also see the HBO mini-series of the book on Amazon Prime or Netflix.
A good biographer will leave you feeling conflicted about their subject. Human beings are complicated, paradoxical creatures, and this rings true even (or especially) with the most accomplished among us.
But more than the individuals, I think you should read historical biographies about your own country and region in order to understand your social and cultural origins, your laws, and the political patterns (good and bad) that have repeated themselves since the very beginning.
In the case of the United States, you’ll learn that the tumultuous presidential primary season we’re seeing in 2016 is actually not so new. As an example, the second Republican National Convention in 1860 was deeply contested and split, and an underdog named Abraham Lincoln was the surprise winner on the third ballot of voting.
The next biographies on my reading list are:
- Martin Luther King, The Autobiography of Martin Luther King, Jr. (Public Library)
- George Washington, Washington: A Life (Public Library)
- Thomas Jefferson, American Sphinx: The Character of Thomas Jefferson (Public Library)
- Frederick Douglass, Narrative of the Life of Frederick Douglass (Public Library)
- Richard Feynman, Surely You’re Joking, Mr. Feynman!: Adventures of a Curious Character (Public Library)
- Maya Angelou, I Know Why the Caged Bird Sings (Public Library)
If you have a particular biography you recommend, please let me know.
5. Start With Why
I recently watched a great TED Talk with Simon Sinek (18-minute video) for the 3rd or 4th time. I think it captures an essential concept for personal growth, communication, and for leadership: Starting With Why.
As you’ll see in the video, Sinek believes you can’t persuade people (or yourself) with the what or the how of a product, service, or idea. People first want to know your why.
Getting clear on the why of a business, a project, or your life is extremely hard mental work. It’s powerful because it’s not easy. But the video gives some great illustrations to help you work on it.
That’s all for this edition of the Friday Fab Five! I hope you enjoyed it.
I would appreciate your feedback. Please comment below to let me know what you like (or don’t like) and any suggestions for improvement or future resources to include.
Enthusiastically your Coach,