- Guido Nunez almost quit real-estate investing after facing several problems in one of his buildings.
- But he stuck with it, and now has a portfolio of 150 units.
- Nunez said having cash reserves and a Rolodex of contacts can help landlords overcome problems.
Being a landlord for multiple multifamily properties, Guido Nunez has had to deal with his fair share of problems.
One building in particular was a nightmare, Nunez says, and almost caused him to quit real-estate investing altogether.
He had pipes burst, causing flooding in the building. He found termites in it. He even discovered that a tenant was selling drugs out of the building.
“It was one thing after another,” he said. “I said, ‘I’m done with the building. I’m done with this.'”
So he put the building on the market, found a buyer, and was ready to sell it. But the deal fell through while it was in escrow, which ended up being a blessing in disguise for Nunez. He decided he would hold onto it and try to make repairs to the building to force appreciation.
Several years later, Nunez has built up a portfolio of 150 units, according to tax documents viewed by Insider.
Despite the problems he’s faced, Nunez said investing in real estate has been “100%” worth it because it’s a hard asset that holds it’s value well over time, and has been a way for him to gain financial independence after getting laid off from a corporate job in 2011.
In an interview with Insider, Nunez shared four tips for new investors to navigate the roadblocks they’ll face.
4 tips for navigating roadblocks as a landlord
The first tip Nunez shared is to have a reserve of cash to deploy for when problems come up. Saving some of your excess cash flow is a good way to build up this reserve, he said.
“What you don’t want to do is live off your cash flow and not think you’re going to have any problems or any capex expense,” he said.
Second, Nunez said to take a calm approach, and learn to solve the problem. Having a “sky is falling” or “world is ending” mindset doesn’t help you, he said.
For example, when Nunez found out one of his tenants was selling drugs out of his building, he had to get creative in finding ways to get them to leave because he couldn’t prove what was happening behind closed doors, and the county where the building was located had lots of laws that made eviction difficult.
His first step was to install cameras on the property to monitor traffic coming in and out. Then, he started casually mentioning to the tenant how many people he saw coming and going. He then started sending emails to the building about visitors and quiet times, and the tenant eventually picked up on the hints and left the building.
“We handled it our way quietly,” he said. “They knew that we were headed on that path. We knew what was happening.”
Nunez’s third tip is to make a lot of contacts with handy work professionals. Doing so will expedite your ability to take care of problems, he said.
“I’m always walking up to people at the Home Depot, or in the streets, or if their truck is advertising something that is not in my digital Rolodex,” he said. “I’ll walk up to them, introduce myself, get their contact, their card. Depending on how much time, I’ll chat about costs. So anytime that I need something it’s always a click on my phone away.”
Finally, Nunez said to try to learn more about particular problems you face, even if you can’t fix it yourself. This will allow you to be more informed when deciding on which contractor to use and what price to negotiate.
“You become a better negotiator with contracts because you know the process,” he said. “You reduce your risk as well, because you know what it entails. No one’s going to try to pull a fast one on you.”