Howdy Partners

Because I am financially obligated to my partners, last week, we immediately disclosed Marty’s job situation to Mr. Partner and Jack. Our personal goal is to make sure our financial crisis doesn't become our partners' financial crisis. So far neither seem too concerned. They understand the risks and rewards we all take. They are true investors.

Marty Sunshine and I have grown as investors and have honed our skills and our expectations. Just like my tolerance for crummy tenants has plummeted, so has my tolerance for so-called investors who have read half of the first a chapter of the latest make-money in real estate book. I will never again invest with someone who just approaches me just for my expertise. It isn’t that I mind sharing what I know. I just don’t want to be involved with someone who can’t stomach a broken hot water heater.

A major reaction from people who hear about what we do is simply to tell me about all the bad stuff they think I experience. They never say, “Wow! That’s great. You must like what you do.” Instead, I get well-meaning cliche's like, “I would not want to deal with an overflowing toilet at 2 a.m.”

Neither would I. I have never gotten a call at 2 a.m. from a tenant. In fact, at 2 a.m. a tenant would get my voice mail.

Overflowing toilets are a minor an issue. Broken air conditioners don’t scare me. Frustrated tenants don’t bother me. Hell, deadbeats don’t phase me any more. It isn’t that I enjoy these dramas, it is just that the great majority of the time I don’t encounter these issues. For the most part, I have excellent tenants. My homes are in good condition. I don’t like junky homes and expect my properties to be in good working order. I expect this of my own home too.

Marty and I are looking at expanding what we are doing. I don’t know exactly what this will look like just yet. But, my expectation is anyone who comes with me better have the right stuff.

My ideal partners must be able to read and understand financial statements. I don’t want to explain for the twelfth time why net income is different than revenue.

My ideal partners must understand things break. It isn't the end of the world when something doesn't work right. A home is a tangible asset, not a stock certificate. Homes aren't perfect. Pipes leak, rats happen. Having someone (a tenant) guard your property also causes unknowns. I have had great tenants leave. They didn't have an obligation to me. Their lease was up. They moved on. It wasn't personal. That doesn't change anything. Properties are sometimes vacant.

My ideal partners must be willing to give input but step back when necessary. You can have the vision. If you share it with me, we will both win. However, you cannot have a say in the plumber or the lawyer. I have developed a relationship with good quality vendors. They stay.

My ideal partners must look at a house like a piece of meat. They are not treasured homes to be decorated. That is your own property.

My ideal partners will understand the ups and downs of real estate investing. They will keep their drama in check. I have plenty without them.

My ideal partners will have patience for their money. Real estate is a long-term investment vehicle. These folks will understand this is a means to an end, because they too are true investors.