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CONTACT WALTER

559 S. Washington Ave., Kankakee,IL 60901

P.815.929.9258 P.815.929.9200

walter@waltersanford.com

Walter, thanks for speaking in front of Exit Realty Florida last month. It was great stuff and my agents really appreciated you, your presentation, and your books and tapes. Thanks for an enlightening day! Steve Marabel, EXIT Realty All Stars

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WHAT TYPE OF REAL ESTATE DO YOU HOLD FOR RETIREMENT? December 20th, 2017 | Posted in General Real Estate, Other Interests, Real Estate

In this continuing series of what retirement looks like for a top real estate agent, I have had many questions.  One of the most prevalent is what does retirement real estate look like?  Simple answer is different for everyone but my peers and myself who are successful in their retirement holdings stuck to some major themes:

  1. Buy something that will be fairly easy to have the tenant pay off while you are still working.  Obviously, the piece of real estate will have to throw off more net the closer the purchase is to your retirement date.  If you have 20-30 years to retirement it is fairly easy to have something cash flow and thus get paid off before the big date.  I made enough mistakes in my life where I had to have some of my holdings pay off in the last 7 years.  Sure I had some negative but I had a large income from real estate brokerage, coaching and selling books and software on how to make more money at a real estate agent.  Goal:  get it paid off close to your retirement date.
  2. Buy something that motivates you to improve.  When a tenant kicks in a door in a drunken rage (sure, it happens), be in an area that demands a new door frame rather in an area where you would try to fix the frame and the locks. (never looks right).  Buying in an area where most of the property is better than yours or where there are people who could be purchasers that will appreciate it or where your spouse does not chastise you for “making it nice.” Don’t be stupid in improving a property more than the area demands but always strive to bring it up to area standards which should be better than average because I can only stand above average tenants.
  3. Have in your mind that you will be known for above average properties, in above average areas at a little below average rents.  The reason for this is that I make my money in other ways.  I cut down on turnover by offering 2 to 3 year leases.  Tenants that agree to longer term leases are different animals.  They have stability.  I have in essence cut down the turnover cost by 50% over one year leases.  I ask for larger security deposits with tougher rules about carpet cleaning and damage.  I file quickly on tenants if they break the rules or become late with lease payments.  I experience less problems because I have nice properties that nice people want.  Nice people have jobs with Fico scores over 625.  There are exceptions but not too many.
  4. Improve for the long term.  In making improvement decisions I try to make improvements for the next generation.  The reason for that is the next generation will probably be my family still collecting rents and living and tithing off the net income from the rental properties.
  5. I seldom sell.  If I have made a mistake and the property can never meet the above parameters, I would consider selling.  This almost never happens.
  6. I impound or escrow property taxes and insurance.  No huge expenses to worry about and I have a monthly cost that I can use to let tenants know why their rent will be increased the next time around.  I don’t increase existing tenants rent if they are a joy, but I do increase if my costs have gone up.
  7. Pets are allowed only in the most extenuating of circumstances.  I have never seen a pet improve a property but have seen them hurt many.  I have a couple of dogs in homes where the tenants do a terrible job of keeping the place up and the damage has already been done and they have been there for more than 5 years. I have a dog in a home where the tenant has been there so long that he paid off the mortgage.  He waited a decade before he even asked me.  I have never had a pet accompany a new tenant.  If they are smokers they will say that they only smoke outside.  That is not true.  They will smoke inside sometimes.  A good paint job inside on a 2000 sq. ft. home is about $2000 for nice grey walls, white ceilings and trim.  Much less if they did not smoke.  Candles are the same as smoking.
  8. You will not see satellite dishes on any of my properties.  Animals install them and wreck your siding and roof.  Get an agreement up front with your tenant that a dish will never appear.
  9. Landscaping is kept to neighborhood standards.  If not, I have my guy do it and bill at 125% of cost.  Usually only takes one incident for them to be out there cleaning up on Saturday.
  10. I like brick properties with vinyl windows.  Upkeep in Illinois is tough on anything else.

There are a million other “rules” and I will let you discover them in my products.  I have recorded everything that has ever made my net worth grow in real estate brokerage and ownership.  Many of you have my books and software, but did you know that I am no longer speaking and therefore have all this product that will not be sold “on the road”.  The package of products used to cost $1500.00.  The best real estate manuals in the world.  Now, I am selling them while they last for $90.00 which is my production cost.  You can see everything you will get in a 40 pound box here.

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