Unable to prove that one of his tenants was selling drugs, Guido Nunez had to get creative. picture alliance / photo library | Sebastian Rau
Guido Nunez almost stopped investing in real estate after encountering several problems in one of his buildings.
But he stuck with it and now has a portfolio of 150 units.
Nunez says having cash reserves and a collection of contacts can help landlords overcome problems.
This is a machine translation of an article by our US colleagues at Insider. It was automatically translated and checked by a real editor. We welcome feedback at the end of the article.
As a landlord of several apartment buildings guido nuñez faced with a whole range of problems.
One building in particular was a nightmare, Nunez says, and almost caused him to give up real estate altogether.
He had burst pipes that caused flooding in the building. He found termites inside and even discovered that a tenant was selling drugs out of the building.
“One thing led to another,” he said. “I said, ‘I’m done with the building. I’m done with it.’”
read too
Foreclosure auction in Berlin: “ruined” apartment was sold over its value despite water damage and a debt of 40,000 euros
So he put the building on the market, found a buyer and was ready to sell it. But the deal fell through while it was still in escrow, which turned out to be a blessing for Nunez. He decided to keep it and try to restore the building to add value.
Several years later, Nunez has built a portfolio of 150 units, according to tax records that Insiders were able to see.
Despite the issues he faced, Nunez said investing in real estate was “100 percent” worth it because it’s a hard asset that holds its value over time. It was a way for him to gain financial independence after being fired from a company in 2011.
In an interview with Business Insider, Nunez shared four tips for new investors to help them overcome the roadblocks they face.
Four tips for landlords
The first tip Nunez gave is to have a cash reserve to fall back on if problems arise. Saving some of the excess cash flow is a good way to build that reserve, he said.
read too
Is the recession coming after all? Some Americans could soon lose their jobs, says a top economist
“What you don’t want is to live off your cash flow and not think you’re going to have any problems or capital expenditures,” he said.
Second, Nunez advises taking a calm approach and learning to solve the problem. The attitude “the sky is falling” or “the world is ending” is not helpful, he said.
For example, when Nunez found out that one of his tenants was selling drugs in his building, he had to get creative to find ways to get him out of the building. Because he couldn’t prove what happened behind closed doors, and the district where the building was located had many laws that made eviction difficult.
His first step was to install cameras on the property to monitor inbound and outbound traffic. Then he began casually mentioning to the tenant how many people he saw coming and going. He then began sending emails to the building advising of visitors and quiet times, and the tenant eventually understood the cues and left the building.
“We did it our way,” he said. “They knew we were going down this path. We knew what was going on.”
read too
Investors are ignoring a lot of risk in the stock market right now, says one hedge fund manager
Nunez’s third tip is to make lots of contacts with artisans. That way, you can take care of problems faster, he said.
“I always approach people at the hardware store or on the street, or when their truck is promoting something that’s not in my digital business card system,” he said. “I approach her, introduce myself, get her contact details, her card. Depending on how much time I have, I then talk about the costs. So if I need something, it’s always just a click away on my phone.”
Finally, Nunez advises educating yourself about certain problems, even if you can’t solve them yourself. According to him, this gives you better information when you decide which service provider you want to hire and what price you want to negotiate.
“You become a better negotiator on contracts because you know the process,” he says. “You also reduce your risk because you know what it means. No one will try to cheat you.”
Read the original article on Business Insider here.