Rich Dad Education Blog

Rich Guide Answers

Question: How can I find out if there is a real estate investing club in my area?

Answer: This is a great question because networking is one of the keys to successful investing. Investors aren’t the only ones attending the Real Estate Investing Association (REIA) meetings. You will also find professionals in real estate related fields such as mortgage brokers, insurance brokers, appraisers, real estate attorneys, and contractors attending the meetings.

There are a couple of ways to locate a local REIA. You could simply type “real estate investing club” plus your city name or state in an internet search engine, or you could go to creonline.com and find a list there under “Resources.” Your local club may charge a small amount for yearly dues to help cover the costs associated with holding the meetings, such as room rent and mailings.

Once at the meeting, exchange business cards with everyone there. This is a great way to get some leads for building a Power Team.

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Rich Guide Answers

Question: The economy is tough and even previously reliable tenants are now having trouble paying the rent on time. How should a landlord deal with it?

Answer: These are difficult times. While you want to be compassionate, you still need to operate your real estate investments with good business practices. Continue to enforce all of the terms of your leases, including late fees and other collection policies.

If you have multiple properties or multi-unit buildings, one option that may work is to move a tenant who has hit hard times to a lower-cost unit. If the tenant is still able to pay every month but not on the same date, consider revising your rental agreement to change the due date. Have your attorney review the new agreement before you sign it.

A reality in this business is that sooner or later you will likely have to evict a tenant for nonpayment of rent. It's not pleasant, but it comes with the territory when you own rental properties.

Every landlord should have a copy of their state's landlord/tenant handbook. You can find it online; just search on "landlord/tenant handbook" and your state. You should also know how to file an eviction or have an attorney on your Power Team who can handle it for you.

Rich Guides answer questions from students about real estate investing and give them support and guidance as they develop their investing skills and knowledge. Rich Guides are available to take your calls at 800-978-8068, option 3, from 8:30 a.m. to 9:00 p.m. Monday through Thursday; 8:30 a.m. to 7:00 p.m. Friday; 10:00 a.m. to 1:00 p.m. Saturday (all times Eastern).

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Rich Guide Answers

Question: What is an appropriate assignment fee on a contract with $35,000 equity?

Answer: In general, without knowing any other details, $5,000 is probably fair; $3,000 to $7,000 is a typical assignment fee. You will be paid well for negotiating a deal but you still make it attractive for another investor to purchase the property. However, $35,000 equity doesn’t tell us everything we need to know to make a complete evaluation. What is the market value of the property? If the property is worth $75,000 and doesn’t need much work, this is a great deal and another investor should be happy to pay $5,000 for the contract; if it’s is worth $1 million, the equity won’t even cover the real estate commission when the property is sold. As you calculate the assignment fee, you should also consider the fix-up and holding costs for the investor and set your fee at a point where you can all win.

Rich Guides answer questions from students about real estate investing and give them support and guidance as they develop their investing skills and knowledge. Rich Guides are available to take your calls at 800-978-8068, option 3, from 8:30 a.m. to 9:00 p.m. Monday through Thursday; 8:30 a.m. to 7:00 p.m. Friday; 10:00 a.m. to 1:00 p.m. Saturday (all times Eastern).

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