"Pimp My Sub2..!"

Only in San Bernardino, CA will you find the "Pimp my Tattoo" mobile tattoo clinic and bus conversion! [well, i guess this bus actually goes 'anywhere']

Yes, friends step aboard and take a trip directly to the psychedelic express to "tat" nirvana! Or not.

I barely got this photo snapped before the bus turned left at the next light. If you notice the graffiti all over the back of the bus in white spray paint. I had to laugh at the graffiti on graffiti situation. I could barely tell which was supposed to be there, and which was not. [It's supposed to be there! Who knew?]

Meanwhile, the bumper read: "pimpmytattoo.com" so I gleefully refer you to them, because I'm so impressed with their marketing gimmick! At their site, you'll see better pictures of the actual bus I saw (being driven in Ohio).

The real reason I post this, is because it draws attention to the cash flow opportunities that exist in these areas. These are management intensive locales, but at the same time opportunities to create an income stream that doesn't require an arm and a leg to get into.

Anytime I hear someone say that there's no opportunities in real estate anymore, I now just direct them to San Bernardino County. Owners change hands often in these places. Often the owners that knew there was cash flow, also didn't know how to manage a business, or how to market correctly. They're the same ones that become, "don't wanters," as Robert Allen describes them; those who want out of their properties. These same owners will accept very creative terms just to save their butts.

I bought an apartment building in an economically depressed area very similar to this. I got in free. All I had to do was apply my professional management skills to turn the place around. It didn't need rehabbing as such. It was just in need of some a consistent, professional, management application to create both cash flow and a substantial amount of equity on paper.

It's simple, but not always easy, however. Tenants that were used to a loosey-goosey management style from the previous owner, which created the mess for the owner in the first place, underwent a severe case of "management overhaul shock" after I pulled in.

Many tenants bailed on the situation, because they had no intention of following any "new" rules, or actually paying their rent on schedule. Did I mention my gigantic late fees?

Anyway, Sub2 financing came in so very handy for this situation, because nobody in their right mind would have tried to get financing on this failed management hell hole, otherwise. The seller knew it. I knew it.

Find a seller with a problem, not a property with a problem, and get rich solving the seller's problem with the property. Yay Sub2!

If you would like to know how I bought that property without new financing click here: "Screw The Bank!"

Popularity Contests!

Rental demand in San Diego is crazy right now. Who knew?!

A few years back, we accidentally started a rent payment bidding war on a 3/2/2 rental house. We had already been scheduling cattle calls for our units, but this once, we had prospective renters actually offering to pay more rent than we had advertised.

Obviously we didn't know our market. Obviously we had advertised too low a price. Obviously we got a hint when our phone rang off the hook.

It's fun knowing what we offer is in high demand.

However, it's a hidden sin to lease out a house for less than it's worth. Sure, we get all giggly listening to all those voice mails.

But it's smarter asking for more money and being OK with fewer calls. This seems self-evident, huh? Well, there's lot of landlords that are too ignorant, insecure, if not impatient to negotiate top dollar rents.

Today we can spot an amateur in a nano-second that doesn't know his market, when he brags about how fast he leases up his units, and the numbers of call he got. Uh, huh. After he finishes indirectly bragging about how ignorant he is about his market, we ask facetiously, "Wow, you got ninety calls for your unit and rented it in less than a day!? That's just fantastic. So how many more dollars do you plan to continue to drop in the toilet each month so you can remain popular?"

That's our polite way of asking a braggart how much money he plans to lose by negotiating stupidly, if at all. Maybe that's not more polite... Oh well.

Meanwhile, several years ago now, we advertised a 3/2/2 in Orange County for a $1,300 bucks which we reasoned was probably market value. At the time, this was actually $300 under market. We're guerilla market testers, and just needed some feedback. Our phone r.a.n.g. o.f.f. t.h.e. h.o.o.k from prospects!!! We scheduled our routine cattle call, not realizing the full impact of our offering price on demand. We had a stampede of "Lookee Lous".

After all was said and done we had negotiated the rent up to $1,600 a month, received a gigantic (probably illegally large) deposit, and had the unit re-rented within seven days of the last tenant moving out. We probably could have reduced the down time by three days, if we had scheduled our cattle call the day we had the house ready for re-renting. However, a week is acceptable in our book. A month used to be acceptable until we learned better.

"Are auctions always good?", one might ask. Yes, we believe they are. However, at the auction, we don't want prospects feeling like they are being treated like suckers, or they bail in disgust and contempt for us.

The secret we think in having a successful auction, especially if the prospects are not expecting an auction, is first to create scarcity through the cattle call itself, and then "let the cat out of the bag" to the prospects privately, that there is an outstanding bid from "x" dollars for the house. Then we give the prospects the chance to mull it over, while asking which of them would be willing to pay this much, or say Twenty-five dollars, more. Frankly some prospects that were only curioius, but not really prospects will leave immediately. We want them gone!

Meanwhile, as experienced negotiators, we can deftly go round robin with the prospects until we get the rent we sense we can command under the circumstances. We've had tenants pull out wads of cash trying to get to the head of the line. It's important to remember that the most likely prospects to win the bid, will have terrible credit. For us that's great. It just gives us that much more leverage on deposit sizes, co-signer requirements, and higher rents --- and longer leases.

It's OK to say, "We'll rent to you, but we want a 24 month lease, so we can cover ourselves in the event you get 'flakey'". Or to be a tad more professional, we couch the demand as a benefit to the lessee (who is paying over retail rent) by saying, "...to give you time to improve your credit and establish a positive rental history, we need to commit to a 24-month rental agreement."

Notice what we said here. "time to improve your credit", "establish a positive rental history", "we need to commit". We're saying.... The tenant "needs" time... The tenant "needs a proof positive history of on-time rent payments... and we've included ourselves, as the Landlord, in the tenant's problem with the use of "we need to commit" [to a long term lease].

The only thing we're committing to is gobs of extra cash for two years from this guy! Yay!

I love auctioning off gargantuan rent payments, collecting confisicatorily huge deposits from desperate, anxious, credit challenged people!

Anyway this might be an alternative way for some to positively get retail (or more) rents, from people happy to pay --- and not throw money down the drain trying just to be popular. You can be "popular" and get all the money due you! Who knew?!