Hi, it’s Lou Brown. Welcome back to another of my 101 cash flow generators. You know, I love this business. I’ve been buying, holding and selling property for over 40 years. I’ve learned some amazing things during this time and one of them is how we deal with collecting our money. You know, when someone doesn’t pay as agreed, what happens is that you have to take them to court and you have to create an eviction and unfortunately sometimes you have to actually set people out of your properties and when you get to court, sometimes the judges want to take your money and give it to the resident. And they do that in a form of late charges. Even though late charges may be a part of your contract, and in fact they are, what the judges will often do is strike through the late charges and not give them to you in the judgment.
Well, that’s not too nice. Since after all, you’re the one who didn’t get paid. You’re the one who had to resource other money to pay the pavement on your property. You had to pay your property taxes. You had to pay your insurance and obviously the use of the funds coming from the resident is one of the things that we use to make that happen. So, it was kind of a flash of brilliance one day that I said, well, let’s just not have any late charges and instead let’s convert any amount of money on a daily basis that would be due because they hadn’t paid us to additional rent. And so now in the agreement that we have, and this is our standard rental agreements loaded with profit centers and protection, this is in my volume two Settling and Holding System. And you can find that at StreetSmartInvestor.com in there is my amazing Standard Rental Agreements. And what I’ve discovered is there’s so many different things that you absolutely, positively must have in your rental agreement. We actually review it annually to discover anything that we need to update. And years ago we started putting in the additional rent instead of late charges and what happens is each day that they do not pay on time, then that’s additional rent for that day. And if we ever have to evict, we add everything together. We put it on the rent due line and on the line that says late charges we put zero, add that up. And then the amounts that we’re applying work a judgement. Yeah, baby! Alright. Like it. Love it. Share it. And I will see you soon. Take care.
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