MIG Invests

New Landlord? Avoid These 3 Costly Mistakes Before It's Too Late

info@mig.properties (Anthony Marin) — Thu, 20 Feb 2025 18:33:27 GMT

Don't be afraid to make mistakes - But it's best to learn from Others

No matter how many books you read, YouTube videos you watch, or experienced investors you speak to, mistakes are inevitable when managing rental properties. The key is to avoid the big mistakes that can set you back financially and instead make small, recoverable ones that help you learn and improve. This advice is relevant whether you own a 3 unit or a 300 unit building.

Here are three mistakes we see new investors make all the time—and how to avoid them.

1. Not Screening Tenants Properly

Let’s be clear: tenant screening is non-negotiable. Every applicant should go through a credit check, background check, and eviction history review—no exceptions. In today’s world, these screenings can be done easily online, and the cost is typically covered by the applicant. If a prospective tenant refuses to pay an application fee, that’s a major red flag you shouldn’t ignore.

Quick tip: Never accept cash payments at a showing. If a prospect offers to pay upfront, it’s often a tactic to bypass the screening process. Instead, ask them to fill out an application and let them know you’ll get back to them soon.

Why this matters: A bad tenant can cost you thousands in unpaid rent, property damage, and legal fees. A few minutes of screening can save you months of headaches.

2. Taking Shortcuts on Maintenance & Repairs

We understand—every new investor watches every penny. We’ve been there, too. But cutting corners on maintenance will cost you more in the long run. Many first-time landlords make the mistake of:

Choosing the cheapest contractor instead of the most qualified one
Using low-quality materials to save money
Ignoring small leaks, boiler issues, or electrical problems, thinking they can be fixed later

Before we take on a new property management client, we have an honest discussion about how they plan to handle maintenance issues. At MIG, we only work with trusted professionals and use quality materials to ensure that small problems don’t turn into expensive disasters.

Why this matters: A small leak can turn into major water damage. A cheap contractor can cost you double when their work needs to be redone. Investing in quality repairs upfront saves you money over time.

3. Poor Record-Keeping & Organization

This is one of the biggest struggles for new landlords—and one of the most important things to fix early. Managing a rental property means tracking:

Income & expenses
Lease renewals
Receipts for maintenance & repairs
Tenant information (IDs, leases, applications, etc.)
Tenant leads & inquiries

If you’re not organized, tax season will be a nightmare, and small problems will turn into big ones when leases expire, payments get missed, or repairs aren’t documented.

We use a combination of Appfolio property management software and QuickBooks to keep everything streamlined for us and our clients. Whether you choose software or spreadsheets, the key is to have a system in place and use it consistently.

Why this matters: Good records save time, reduce stress, and help you avoid costly mistakes like missing rent payments, forgetting lease expirations, or failing to deduct expenses at tax time.

Final Thoughts

Mistakes are part of the learning process in real estate investing, but avoiding these three big ones can save you time, money, and unnecessary stress.

At MIG Real Estate, we specialize in helping investors start, build and grow their portfolios the right way.

If you need help with tenant screening, maintenance, or property management, reach out—we’re happy to help! Contact Us

Why You Should Build Your Real Estate Team Like A Football Team ?

Thu, 10 Nov 2022 15:37:29 GMT

Real Estate is a team sport - Who do you need to be successful ?

Real Estate is a lot like Football, it doesn't matter how great you are individually you need a good team around you to be consistently successful for a long period of time. Tom Brady was a great example of that, he may be the GOAT (still kills me to say that as a 49er fan) but he realized he didn't have the team around him on the Patriots to compete for a championship so he made a tough decision to leave what he knows to go to a better team. Real Estate investors have to do that same evaluation of their team. The team that got you to 10 units may not be the team that gets you to 100 units. Let's see who you need as you progress on your real estate journey.

In the beginning your team will be small for a little while and you'll be wearing a lot of hats. Here is your starter real estate team and they will get you through your first few deals.

Real Estate Attorney - Do not get a jack of all trades attorney. At this stage you don't need an attorney that only does real estate but at least 80% of their time should be spent on real estate.

Investor friendly RE Agent - DO NOT get your brother in law 's best friend that sells houses on the weekend. Find an agent that works with other investors. They are hard to find but they are out there. This is very important in the beginning because they will guide you during the transaction and get you to the closing table.

Real Estate Accountant - Same idea as the attorney, doesn't have to only focus on real estate but a majority of their business should be servicing real estate investors.

After you've done a few deals it's time to step up your game and bring on a couple more players on your team.

Property Manager - As you add doors to your portfolio you will realize quickly how important a property manager is and finding a good one can help you scale your business very quickly. In keeping with the football theme, you are the coach of this real estate team and the property manager is your quarterback. They run the play you call and when you build a great relationship they can call an audible to score a touchdown.

Contractor/Handymen - This is another very important part of your team and ideally you'll have a few of them to keep them in check.

Mortgage Broker - Acquiring and refinancing your deals at competitive rates and points is paramount to your success. Find a broker with contacts with banks, credit unions, hard money lenders and private lenders.

Hard Money Lender - Your mortgage broker may have a few hard money contacts but I like to have personal relationships with my HML. When you need to close fast on a great deal this is who you call.

Wholesalers - Now that you have a nice portfolio and have proven you can close. Reach out to the best wholesalers and ask to be on their preferred list (these are the investors they call first before they send the deal out to their blast email list).

Insurance Agent - Insurance always gets overlooked until a wind storm rips off half your roof or you get a really bad sewer back up. Educate yourself and make sure you are properly insured.

Can You Use Your FHA Loan Multiple Times?

info@mig.properties (Anthony Marin) — Tue, 05 Apr 2022 15:10:13 GMT

We will also explain how you can build a rental portfolio using your FHA loan

The quick answer is YES! You can use your FHA loan multiple times BUT you CAN NOT have two FHA loans out at the same time.

How can you use your FHA loan to build a rental portfolio?

Buy your first property (preferably a multi-unit) with an FHA 3.5% loan. Reside in that property for 1-3 years. FHA will allow to buy a property up to 4 units.
Within that 1-3 year period, refinance the property into a conventional mortgage.
Once you refinance your property into a conventional mortgage, it allows you to use your FHA loan again.
Buy your second property (preferably another multi-unit) with an FHA 3.5% loan and do the exact same thing you did with your 1st property and in 5-7 years you can have 4 or 5 properties.

PROS

Borrow up to 96.5% of the value of the home at very low interest rates.
You can buy up to a 4-unit property
Credit score should be at least 580, If your credit score falls between 500 and 579, you can still get an FHA loan as long as you can put a 10% down payment.

CONS

You must pay PMI (Private Mortgage Insurance) for the life of the loan.
Requirements on the property and buyer are more stringent than conventional loans.

$10k for your first real estate investment.

Sat, 21 Nov 2020 02:01:59 GMT

How to live for free -

I only have $10K, but I want to get started in real estate investing. What can I do?

First and foremost congratulations on saving $10K. Most people don't have the discipline or aren't willing to make the sacrifices it takes to save $10K. Knowing what I know now, I would buy a multifamily property (2-4 units) with an FHA loan. I would live in that property for a couple years (rent free) then refinance so I can buy another property using the FHA loan again. This strategy is called house hacking and many successful investors have done it to begin their careers. Here are a few of the immediate questions I get when I tell someone to do this.

How much house can I get with $10K?

You can buy a house up to $300K. An FHA loan allows you to put a down payment of 3.5% of the purchase price. 3.5% of $300K is $10,500 (borrow the last $500 if you need to).

What about closing costs?

FHA allows you to put most of the closing costs into the loan. We have a "Quick Tip" at the end of this article that helps with closing costs.

What does my credit score have to be?

Your credit score must be above 580 to get the 3.5% down loan. If your credit is between 500-579 they will ask you put down 10%. If your credit is less than 500, use some of that $10K to fix your credit and get your score above 580.

Why not buy a property larger than 4 units?

FHA loan guidelines will not allow you to buy a property more than 4 units.

Should I buy a property that needs to be renovated?

This depends on you and the resources you have. If you have the ability, patience and contacts to do a renovation I would suggest to do it but not to bite off more than you can chew. Doing a renovation is advantageous for a few reasons but here are the 2 most important. Once you're done with the renovation and fully occupied you will have definitely added equity to the property. You can use an FHA 203K loan which allows you to put the same 3.5% down of the purchase price and FHA will give you the funds to purchase and renovate the property. If you're not comfortable or you don't have the time or resources to manage the renovation then buy a turn-key property (needs no work and has tenants).

What if I don't want to manage tenants?

You can hire a property manager even if you live in the property, we manage properties where the owner lives in one of the units. BUT, I suggest you manage your first property for at least 3 to 6 months to get an understanding of all the moving parts to managing property. I suggest this for 2 reasons, 1-there are a lot of bad property managers out there and will take advantage of newbies. 2-You will appreciate your property manager when they are doing a good job because you will understand how much they are doing and how much time you've given back to yourself.

QUICK TIP - Always close on your property within the first 5 days of the month. You will receive the security deposits and the pro-rated rent for that month. This will help with closing costs and in some cases we've even received money back at the closing table.

When you get tired of house hacking then you can move on to the BRRRR Strategy using hard money to close quickly. That post is on its way.

5 Inexpensive upgrades to get your apartment rent ready + 1 Quick Tip.

info@mig.properties (Anthony Marin) — Tue, 17 Nov 2020 04:11:07 GMT

What to refresh between residents. —

As buy and hold investors and property managers we’ve turned over hundreds of apartments over the past 10 years. Our goal is to get the apartment rent ready in a manner that is going to attract a quality renter as soon as possible, and of course as inexpensive as possible. We’ve compiled a list of 5 things that can be done on every apartment you turn over and these items will give you the best bang for your buck. One thing that is not on this list is painting, painting the apartment after EVERY tenant vacates must be done if you want to attract quality tenants. Here is the list in no particular order.

New range vent hood - $40-$100
New toilet seat - $20-$40
Reglaze tub - $300
New outlet and switch covers - $.99 each
New baseboard heater covers - $25-$40

QUICK TIP: Leave the stickers or plastic on the items you are replacing (such as the range hood and toilet seat). Potential residents love seeing new things and once the apartment is rented, tenants enjoy ripping off the tape and taking off the plastic on new items.

How are you treating your tenants right now?

Thu, 15 Oct 2020 18:34:32 GMT

Pandemic or not. Good tenant relations is good for business. —

Being a rental property owner comes with its challenges. Filing an eviction on a tenant that is behind on their rent is the only way to be successful as a landlord/manager, BUT....this time it’s different. This is a once in a lifetime occurrence that will make or break landlords, managers and companies. How are you treating your tenants at this moment?

Attorneys advise that you have to treat every tenant the same. You must have policies and procedures and stick to them no matter what. I agree with that most of the time. Still, if you expect me to treat a tenant that has paid rent on time and taken care of our property for 5 years the same way as a tenant that is habitually late and not communicating with us, I will tell you that is a bad long-term business strategy. More importantly, it’s not how you build lasting relationships with good tenants. Prior to this pandemic we have always worked with our good tenants during tough times and this extreme situation is no different.

My conversations with our property management clients have been consistent during this tough time and it comes down to a few basic questions. Were they a great tenant before this happened? Are they communicating with us? Are they trying to get on a payment plan? Are they maintaining the property? If the answer is yes to all these questions, then I firmly believe we as landlords and managers have an OBLIGATION to ride this out with them. If the answer is no to all these questions, then you file for eviction immediately. If the answers are mixed, then we have to use empathy and do our best to work with them. Especially if questions 1 and 3 are yes and the reason they are not communicating is because they are embarrassed.

As I’m writing this, I can hear some of my fellow landlords saying, “If they are living in my property they should have money saved for a rainy day.” My response to them is, we as landlords should have capital saved for a rainy day as well. But this isn’t a rainy day, this is a Hurricane and if we stop pointing fingers and work together then we will all get to see the sunshine after the storm.