Just an Idea

General Real Estate Investing
1

I’ve browsed some of the posts in the forum and I often see posts for what I call the “usual” 3-2-2 (three bedrooms, 2 baths) single family homes, and some posts with duplex deals with a few numbers asking “Is this a good deal”?

I was introduced to a strategy some time ago (actually about 25 years ago) by a man many of you may have heard of, but most probably not. His name was Charles J. Givens and in my opinion, he was a walking encyclopedia of “thinking outside the box”.

Lets face it. We all (well, most of us) want to live in nice prestigious houses in nice prestigious neighborhoods and communities, who doesn’t? Well, this also includes renters. The problem is, some of these homes are $500,000 and up. The area where I live (Ocean Isle Beach, NC) an ocean front LOT is over 1.2 million, and that is without a house on it, just the dirt.

So how do you buy a 5 bedroom 5 bath home with about 4500 to 6000 square feet living area or more that costs over half a million dollars? His answer was simple. Think outside the box. Buy the home, rent the rooms, not the house. If you bought a $500,000 house with 5 bedrooms and 5 baths in an upscale neighborhood, you could reasonably expect to rent the rooms out at least $1000 each per month, which is 5k per month, which is 60k per year. He said, “Think of it as your not buying just a house…but a mini motel”.

This is just an idea for those looking to step up to buying more expensive homes. :beer

2

I loved Charles Givens, too. Before he went to jail and committed suicide. j/k

KidRob, I remember him talking about a version of the concept you mentioned.

He rented a large house, and sub-leased a room to someone who worked nights. He wouldn’t see much of him, because neither were home at the same time. I believe that was after a divorce, where he had his son living him, too. I’m not sure.

Back in 1982, or so, I rented a 4/2/2 to a nice Vietnamese couple that pulled this stunt on me. They sub-leased beds to what turned out to be 13 people, including probably eight kids, after they moved out of the house themselves. These people served as the attractive, “credit worthy” front couple in this scheme, I discovered.

The reason I know they rented to 13 people, is because that’s how many toothbrushes I counted in a cup in the bathroom.

Otherwise, they were piling up mattresses in the bedrooms to cover the number of occupants. I didn’t recognize what they were doing, since most of them disappeared on my arrival. However, the walls and doors were just covered with marks, smudges, and writing, which told me there were kids everywhere, and I hadn’t rented to any kids. Hmmm. And the couple I originally rented to ‘couldn’t show up’ to meet me. Hmmm, twice.

Of course, I discovered all this after I was (finally) called about their clogged toilet. Normally, I would have just called the plumber, but I needed to do an inspection anyway, after I had learned from a neighbor, that one of the tenants had tried, unsuccessfully, to hang herself with an electrical cord, from a 3’ bush in the front yard, naked.

Meantime, the tenants had flushed the toilet over and over, trying to get it to work, but not before flooding the bathrooms and bedrooms with feces and urine.

I figured it was gonna cost me about $3000 in damages, and they couldn’t get worse, since there were “fine” living all ‘ghetto’ like. So, I just raised the rent $100/mo. and did nothing. I figured if they stayed 36 more months, they would pay for their own damages. Well, I got another $600, before I had to kick them out for disturbing the peace, and dealing with the police multiple times after more ‘naked suicide’ attempts. That poor bush.

So, yes I had tenants using the Charles Givens’ method of “Buying/Renting More Than You Can Afford” …all while turning me into a Vietnamese slumlord.

Meantime, better than trying to live with your renters, like Givens suggests is an alternative, why not just buy the house you can afford?

Of course, anything’s possible. I mean my dog can lick it’s genitals. However, that’s not something I plan to indulge in.

3

Sounds like a nightmare. In our rentals and lease contracts, we get the names and ID’s of everyone who will be living in the apt, room, etc., and their names must appear on the contract, and if they’re not there, then they cannot live there without breaching the agreement.

“If I could lick my balls, I’d never leave my apartment.” ~ George Carlin

4

Ha!

Yes, I had the same requirements then as now. However, in 1982, I had never rented to any of the slew of Vietnamese con artists that were doing this to all the “mi changs” back in the day.

Frankly, I’ve never had this happen before, or since. I’ve had tenants move in their boyfriends and girlfriends, and subsequently attempt to morph them into de facto tenants without a lease, but that’s about it.

Not to mention that I’ve since developed a qualifying method that pretty much eliminates 99% of my headaches.

My new qualifying method was the result of a black tenant having me investigated by the federal government for discrimination, after asking her and her boyfriend, both of whom I inherited when I bought the building, to move out for disturbing the peace.

Of course, I wasn’t discriminating, but I quickly learned how to completely insulate myself from that issue going forward.

I’ve outlined it elsewhere, if you search my posts.

Great post.