Hi, it’s Lou Brown and I am back with some more information. Having been a landlord now for over 40 years, I know what it’s like to buy and hold property and I know what it’s like to do everything you can do to be able to collect your money and to be able to use your money. You know, one of the challenges I learned early on is that most States have security deposits and most landlords collect the security deposit. Well, one of the things you got know about a security deposit is it’s not your money. It is the resident’s money and that money in many States, you have to put that into a separate bank account and you have to hold it there. And in some States you have to tell them what bank it’s in, what the account number is. And in some States you even have to pay interest on the money.
You have to manage the account. But do you have to pay the resident interest on money while it’s there? So I’ve, I’ve finally got a clue and I said, this is just insane and it makes absolutely no sense because worst of all we can’t use the money. Secondly, at a later date when the resident moves out, that’s when we have to account for the money and addition to accounting for it on a monthly basis. It could be there five years, you still have to keep up with that money. And I realized that we could do things differently. So what we created is what we call a move and C and this move in C is actually equivalent to a little bit more than one month’s rent. And when we collected the hat, it’s just me and we can spend the money right away. And that was an was a game changer for us.
I do a lot of research online. I did a lot of research in various state laws and I discovered that it was perfectly acceptable to do that instead of a security deposit. And in fact you can do both. So I created a standard rental agreement loaded with profit centers and protection and ours allows for the move in fee. And it also allows for security possible. You can put zero and the security deposit for you and you can put the amount of money in the moving fee. Now it’s fully explained as to what a moving C is and he’s used for and explains that it is a nonrefundable fee. It also explains that we will pay our residents upon proper notice, wouldn’t our worldly, we get a 60 day notice and what happens is when we get proper notice then we notify them of what they have to do in order to keep the clean slate with us when they move out.
So we give them a 20 item checklist. Now this is all available. My volume eight property management system volume mate, property management. It’s got my standard rental agreement and it’s also got my move out inspection report and it’s got a move out checklist of about 20 items that we send the letter to the residents. The letters already written, it’s um, forms. Yes, you can easily send it out. Now what happens is that we are willing to pay the resident or some of these various things. For example, we’ll pay for a claim stove, we’ll pay for a clean refrigerator, we’ll pay for clean carpets, we’ll pay for painted walls, provided that you approve of the work that’s done and you’re going to walk through when they tell you that they’re ready to have it inspected and you’re going to put together a checklist of items, which by the way is in my volume eight property management.
You can secure that by going to street smart investor.com and what happens is that we actually have a schedule of payments that we will make to that resident when they move out. So here’s what just happened. You got to use the old ways. It’s security for positive money. Now you get to use that money for your business. When they move out, you get to pay them for work that’s done, they have an incentive to get paid and you get your property back quicker, cleaner and you don’t have a downtime to get it ready for the next resident. I hope that has been a value to you. I love teaching and sharing what we’ve learned being in this business with them. Over 40 years and I will see you again soon.