Real Estate Investing: The 4 Laws of Tenant Screening |
- The 4 Laws of Tenant Screening
- Duplex with non-paying tenant in FL
- Do you charge wholesalers a fee to proceed with offers?
- NYC Tenant Disappears two weeks before 30 day Notice end. Has yet to return after move out date. Abandonment?
- Want to invest in 3-4 unit multi-family units. But considering moving to another area in 5-7 years. Should I invest now anyways or wait until I fully decide on where to go?
- Is adding solar panels worth it for multi-family?
- Buy or wait? Need unbiased advice from those not profiting off me.
- Hard Money
- How accurate have you found rent estimate tools?
- Tenant offering to buy my Rental .. What should I do?
- Questions to ask before buying a house
- I have the option to buy 300 acres of forest land. How can I make it profitable?
- Friends & family asking to invest with me. How to best structure for win/win?
- How to go about writing a contract for wholesaling?
- Tenant won't move their stuff off my porch
- Comps came in way lower than expected
- Washer/dryer and value for NYC condo
- 3% Down Options? Or fake news?
- Low ball offer on small multi family
- Guidance for a complete beginner?
- Closing Costs/Points Question
- Thoughts on current market? (Specifically on SoCal)
- What renovations result in the highest return on invested capital?
- Looking for Local Ohio Lenders
- Wholesalers — how did you find addresses to knock on when you first started?
| The 4 Laws of Tenant Screening Posted: 11 Aug 2020 07:52 AM PDT I'll put the best info up front. If you want to avoid late payments, minimize damage, and overall cultivate quality tenants, your screening process needs to account for the following 4 things.
This is the criteria that my company uses to screen tenants for the 620 properties that we manage. Using this method we have over 95% of tenants pay on time with a $0 balance on their ledger (even during Covid). Our average vacancy is under 2 weeks per year. Our average property turn is under $300, and over 95% of turns cost less than the Security Deposit. It's not a fool-proof method, nothing is, but it's consistent and it protects us and our homes in most scenarios. Those 4 are pretty obvious. Here are 4 common mistakes to avoid that I see private owners make all the time.
Cosigners With the possible exception of college towns with young students just starting out, you should never accept co signers. If a tenant is in need of a cosigner to begin with, this shows they can't handle their own finances. They are an accident looking for a place to happen. Point them to a life coach or financial specialist who can help them get back on track, but do not make their problems your problems. Not to mention, the vast majority of Co-signers think it's a 'letter of recommendation' type situation, and have no intention of paying for their delinquent friend/family. Don't fall for Sob Stories Hurricane Katrina displaced me from my home, and I couldn't find a job in the 2008 recession, when I finally got my feet underneath me in 2014, my kid got leukemia & I got diabetes. I had to go to part time, then my wife left me and I lost the house.... Look, I don't mean to be cynical here, but don't let someone else make their problems your problems. If anything seems fishy... run When people let their financial situation go south, they get desperate. Some use this desperation to get the help they need and get their life in order. Some turn to fraud. I've had women say they were living alone, only to sneak their SO with 5 counts of felony assault into the home. I've had people use their family's SSN to apply for the home. I've had suspicious gaps in employment/housing history, etc. Never Compromise In almost every situation where I give someone the benefit of the doubt, something shady comes up, and I end up regretting my decision. It's almost always better to refund their application fee, and let the property sit a week or two, than to take the gamble. Remember if it takes 2-3 weeks of lost rent to find a better tenant, that's still a better deal than a month of lost rent. [link] [comments] |
| Duplex with non-paying tenant in FL Posted: 11 Aug 2020 10:30 PM PDT I am considering making an all cash offer on a decently priced duplex however, we learned that one tenant is not current on their rent. Both units are 3/2's and are located in Tampa in a C to B- neighborhood. Taking the moratorium on evictions into consideration would buying a 'problem' property make sense to you? The coc at what I'm prepared to offer sits around 6%. The future upside with a new tenant in place looks pretty good with a 15% cash on cash return but its difficult to say how far that horizon will stretch and that makes us apprehensive. [link] [comments] |
| Do you charge wholesalers a fee to proceed with offers? Posted: 12 Aug 2020 05:09 AM PDT So, I've been getting so many unsolicited "reaching out" offers on my properties. So many don't even proceed after I say sure send me an offer. All they do is waste my time asking questions. So I started charging a $300 fee once they contact me before I'll proceed. I have them cashapp it before I'll even respond. Sold 1 house this way. Was wondering if anyone else does this and what you charge [link] [comments] |
| Posted: 12 Aug 2020 05:01 AM PDT Renting out one floor in a 2 Family House, Month to Month lease. Floor has 3 Tenants(all has their own lease). One tenant has been using drugs, late rent, eating other roommates meals out of the fridge, lying and stole $400 from one of his roommates wallet. So enough was enough. 30 days notice was given to the tenant to move out. The 6 of August was suppose to be his move out date. He is nowhere to be found. After looking at my Nest camera, tenant left 2 weeks ago with a backpack and has not returned. My question would be how do i move forward? Should i contact him? Is there a law about apartment abandonment? Yes i can prove drug use. I can prove everything but the stolen money. Recently the relator called the tenant and says he's been in the hospital(Lies). He does this every time he has to pay rent(That's why we are letting him go). He Would Constantly Disappear and make excuses. The month before he did the same thing, showed up with a doctors note. With no enter date just a release date. everything Has been documented. My issue is I want to remove his things and store it in the living room on the same floor as his room. Change the lock to his room only. Because obviously he BSing and i don't want him to be comfortable. I will not change the front door lock. [link] [comments] |
| Posted: 11 Aug 2020 05:24 AM PDT I'm in my early 20's, so I'm on the fence on if I want to stay where I am or go somewhere new. Wondering if it's worth investing soon or wait until I'm fully decided. Thank you. [link] [comments] |
| Is adding solar panels worth it for multi-family? Posted: 11 Aug 2020 07:59 PM PDT Are solar panels worth the effort for a 3 family? The house is old (is 70+ years), but the roof is only ~5 years old. If I included electric in all 3 apartments, I'm almost positive I could charge ~$500 total more in rent. Anyone have any experience with this sort of thing? [link] [comments] |
| Buy or wait? Need unbiased advice from those not profiting off me. Posted: 12 Aug 2020 02:02 AM PDT I am 21 with a consistent income looking to buy a modest single family home or duplex in order to live in and fix up to either sell or rent later down the line so i can continue to buy more properties. My end goal like most people on this sub is to have passive income from multiple properties. I'll jump straight to the point, I have about 10k saved for downpayment right now and I am looking at the 170k range in south Jersey. I hear rumors that the housing market will crash in the next 8 months and anybody I know in real estate I talk to tell me this is a lie, these people also are the ones who are pestering me to use their services since they are aware I'm buying a home so I am not as quick to trust that advice fully since they have incentive in pushing me to buy sooner instead of waiting. I'm currently waiting for October so I have 2 years of commission history with the company I'm currently a manager at so that I can get approved for my mortgage. I am in execute mode so I would love to jump at the first opportunity I find that makes sense but at the same time if I have a chance of riding it out for a better deal when we have a market downturn and also have more time to save for a larger downpayment that seems preferable. TLDR: What is the consensus on another possible housing crisis [link] [comments] |
| Posted: 11 Aug 2020 07:13 PM PDT Anyone know any good reputable hard money lenders in the northwest? [link] [comments] |
| How accurate have you found rent estimate tools? Posted: 11 Aug 2020 06:59 PM PDT Can anyone share their opinion on the accuracy of the rent estimate tools? Like the one from Zillow or Onerent? [link] [comments] |
| Tenant offering to buy my Rental .. What should I do? Posted: 11 Aug 2020 12:08 PM PDT Hi All, So one of my tenants just came into like a 10 million dollar inheritance and made a really generous offer on one of my rentals. I see no problem selling it to him but I'm not sure how to go about it because he just signed a new lease in June and he said that'll give him time to collect his inheritance, gets his ducks in a row, and we can move forward toward the end of the lease. With that said, I'm not sure how to move forward ... Do I have a lawyer write up some kind of binding contract? Would it be too premature to have him sign so far in advance? I thought about having him put down a deposit but he doesn't know when he'll be able to collect any of the inheritance in the short-term. I'm not in any rush, but I know a lot can happen in 10 months especially in an Election year so I'd like to try and lock him into something [link] [comments] |
| Questions to ask before buying a house Posted: 11 Aug 2020 04:30 PM PDT I am 24 and it took me two years of working minimum wage to save up for a house. I am pre-qualified and I have been looking for an investment property for a while. I finally found one that I am in love with and I am seeing it tomorrow. If you were me, what kind of questions would you ask? I will be using your answers to help assist me in gathering new information about the place I am viewing. Thank you all for any advice or questions you put down below as this is my first time buying an investment property! Thanks! [link] [comments] |
| I have the option to buy 300 acres of forest land. How can I make it profitable? Posted: 11 Aug 2020 09:47 PM PDT There's 300 acres of forest mountain land available for about $600,000 on the Washington/Oregon border and I need some help thinking how I could make it profitable? Info: - 20 minutes away from small local town (community college, and airport) - State prison is nearby - Mostly heavily forested mountain (not flat) land - lots of wildlife - nearby the local river The land is about 6 hours away from where I live right now, so I'd like to make money as passively as possible, however, I'd be willing to move if the motivation ($) is enough. My costs for the property would be about $45,000/year. Business ideas I've already considered: - Shooting range - Retreat resort / vacation rental - Hunting resort - Selling timber (I don't like this idea) Edit: There is already a 3 bedroom luxury lodge on the property [link] [comments] |
| Friends & family asking to invest with me. How to best structure for win/win? Posted: 11 Aug 2020 06:02 AM PDT So I've been investing in minimal fix up, buy and hold small multi-family and single family. I manage them myself after my 10 hour per day job. Looking mainly to hold for the long term and build up cashflow in afford Midwest suburbs. Mildly successful over the past 3 years with 6 cashflowing doors to my name. The confusion now comes when close friends and family now want to partner and "invest" with me. I think I could make something make sense easily treating those folks as private lenders but more I talk to them, most want to have an equity split in properties with me and share. There's anywhere from 5-10 "investors" that are asking me to do something with their money. I'll admit that it's flattering that people trust me and I want to do what's good for everyone, but I'm a bit confused on the best way to utilize their investment and also, how to scale an operation like this. If capital is no longer the biggest constraint, it would be nice to focus on networking, deal finding & analysis I would assume. Also, management becomes a huge concern as I feel like I'm pretty close to my limit on what I can do from a management capacity standpoint. Any advice on how I can (in this order of importance):
Thanks! [link] [comments] |
| How to go about writing a contract for wholesaling? Posted: 11 Aug 2020 09:20 PM PDT Hey! So I'm starting to get into wholesaling with a friend and as a beginner, I want to make sure I dot all my i's and cross all my t's. How do I go about writing a contract when I offer to buy someone's house in cash? Obviously I want an inspection period where I can back out (incase I don't find a buyer). Similarly, how do I go about writing a contract to transfer the ownership of the first contract to the investor who's a cash buyer? My assumption is that I need a real estate lawyer to draft up some sample templates for me, but is there an easier way where I can find a template online? What is the proper way to go about this? [link] [comments] |
| Tenant won't move their stuff off my porch Posted: 11 Aug 2020 08:58 PM PDT TL;DR Tenant of 5 years who is likely a hoarder, won't remove their stuff from the deck. What can I do? My parents and I own a multifamily home that we live in and rent out the first floor to tenants. They've been there for a few years now. No issues for the most part, occasionally they have to be reminded to pay the rent as they seem forgetful of it every once in a while. Besides that, they're clearly hoarders as the inside of the apartment is FULL of stuff (which honestly worries me as a fire hazard as well). My current concern is that we have a front patio/porch that has both doors for the first and second floor in the front of the house. My family doesn't put anything on the porch. About a year and a half ago, the tenant asked if they can do some gardening in the small patch of lawn we have. My father allowed them since he wasn't using it. That translated to the tenants slowly putting stuff on the garden and then putting stuff on the patio. My parents didn't think much of it at the time and relations with the tenants were good. The tenants kept putting more and more stuff out on the porch to the point that it's full of clutter, a small table, chairs, A LOT of smaller things, plants, plants hanging off the ceiling (never told them they could drill in the wood), plants hanging off the ledges. Long story short, it's gotten WAY out of hand. On top of it, the paint has started to chip from the close contact of the plants exposing the raw wood. My father wants them to remove their stuff so he can repaint it all and he feels like the tenants are taking advantage of his good nature and quite frankly, that's not part of the rental agreement. I've notified the tenants once in November, then again in January to remove the clutter by the end of February, asking very politely and giving them plenty of time. I messaged them again on Sunday asking to please clear the deck because my parents are planning on scraping the ceiling and floor and repainting it. No response from them. I am writing to them tomorrow again in a more stern tone and my father is planning to just move their stuff off the porch if they don't take it off. So far it's been 2 days since I sent the message (the THIRD MESSAGE about this) and they haven't moved ANYTHING. Which leads me to believe they have no intention of moving it. Obviously this is annoying because it's our house and they're dictating how they treat areas of it that they are not paying for. My father is planning to move the things off and tell them he doesn't want it back on the porch. If they put it back he's just going to throw it on the sidewalk whether it breaks none of his concern. Obviously it's a pandemic outside and there's a moratorium for evictions but my father doesn't even care about them stiffing us for rent for the next two months if that's what it takes. He wants to stand his ground and I see his point, he worked his ass off for 10 years saving up pennies to put a down payment on a home and this is how these tenants are treating it. Do you agree with the recourse of action or would you do anything different? [link] [comments] |
| Comps came in way lower than expected Posted: 11 Aug 2020 02:09 PM PDT Long story short i purchased a property with major needs. My all in costs were about 65k (midwest houses are cheap). When i went to refi the value came in at 70k which was was lower than expected 6 months ago when i bought it (pre-COVID). Im now out about 13k total unfortunately, good thing im not trying to retire tomrrow. Theres my rant [link] [comments] |
| Washer/dryer and value for NYC condo Posted: 11 Aug 2020 08:04 PM PDT New to investing and renovating and would love some advice here! We have a 1 bedroom condo in NYC and we're considering adding a stackable ventless washer/dryer combo in the bathroom. There is no laundry in the building, but tenants typically don't have a problem paying for wash and fold laundry service, like many New Yorkers. The rent is around $3700-$4000 (pre-covid). Tenants are mostly singles or couples without kids. The bathroom isn't that big, and currently has a full size shower (no bath) that takes up half of the bathroom, with the toilet and vanity taking up the other half. We would make the shower a single shower, and put the 24" wide washer/dryer next to it. The previous owner did major renovations and the design of the condo is a huge selling point and what made it stand out from all the cookie cutter condos. The bathroom looks like it's out of a magazine, and it feels very open and luxurious. Adding a washer dryer would definitely ruin the open feel of the bathroom. We're also considering putting the washing machine in the kitchen instead, and removing the dishwasher, but not sure if this will be possible. Is reducing the bathroom size and adding a washer/dryer a good move, in terms of eventually selling the condo and an increase in the rent price? Thank you! [link] [comments] |
| 3% Down Options? Or fake news? Posted: 11 Aug 2020 07:46 PM PDT I have a family of 5 and own my home. I don't want to swap homes to qualify for 3% down investments. What are my options? Is there any legal way of qualifying for 3% down and not moving? I seem to hear about investors using 3-5% down for their rental properties. Are they really moving into all of these or are they floating in some gray area where they don't really move in? [link] [comments] |
| Low ball offer on small multi family Posted: 12 Aug 2020 03:12 AM PDT Hi I am wondering if anyone had luck placing a low ball offer on a small multi family. If so why did the seller accept? [link] [comments] |
| Guidance for a complete beginner? Posted: 11 Aug 2020 06:34 PM PDT The past 6 months I've recently become increasingly interested in real estate investing. I started by reading books and attending various free online seminars. I want to continue my education but im having difficulty finding the information I desire. I guess my question is, are there blogs, reputable online courses, or any place I can pick someone's brain? A mentor sign up? Just kidding. [link] [comments] |
| Posted: 11 Aug 2020 05:59 PM PDT Hi! We are borrowing 20k from my sister for our down payment on our house (VA). We currently own our first house, but selling it soon since HOA restricts rentals. In 7 months, we will be able to cash-out refi the 20k down payment if we want. Additionally, we have about 6k of closing costs. We really want to cash-out refi in 7 months to get that 20k back out and maybe do a 20% conventional down payment on another property. However, we are scared interest rates are gonna go up. Additionally, we are thinking that if we want to refi, we might as well buy some points off the lender and have the lender pay closing costs for us, since in 7 months we will have a new interest rate
Thanks for any help! I think this is mostly a personal decision... But wondering if I'm missing anything [link] [comments] |
| Thoughts on current market? (Specifically on SoCal) Posted: 11 Aug 2020 09:09 AM PDT We thought it might be a good time to purchase a rental property due to demand being lower due to COVID 19, unemployment, and other gloom news that media put out there but to my surprise, it is the other way around. The properties we are looking at is between 650k-700k and so far 0 success from the 6 offers we put in. All 6 offers we put are at asking price or higher and all of them closed higher than asking. My question to you experts are why? What triggers this crazy market? I understand the mortgage rate is historically low but unemployment remains high, international (china) investment should be much lower than previous years and with Covid 19, I would think people are more reserved. [link] [comments] |
| What renovations result in the highest return on invested capital? Posted: 11 Aug 2020 05:02 PM PDT Thanks for your time in reading the post! I'm a 25yr old newbie here looking to make a move in the near term and want to cultivate a solid understanding of what my drivers of profitability will be before doing so. I'm going to quickly go through these for my own edification so please confirm and comment if you have anything to add! Based on my understanding the two core drivers of growth are: (1) cash flow and (2) appreciation. If we look at (1) cash flow on the revenue side we can either (1b) increase rents or unlock additional revenue by charging for ancillary things like parking, laundry, etc. On the Expenses side, we could increase cash flow by (1b) looking for opportunities to shift expenses to the tenants (e.g. utilities, lawn care, etc.). The crux of my question comes as I think about number 2: appreciation. My understanding is that appreciation is one of the strongest drivers of returns. And asset appreciation can either come as a result of (2a) the market organically increasing or (2b) forcing appreciation through renovation. All in all these are what I've identified as my four levers of profitability. What did I miss? Like any investor, I want to be able to control as much of my return as possible—I want to mitigate how much I'm beholden to market rents and organic market appreciation. So looking at (2b), forced appreciation, what are some of the renovations I could do to most effectively force returns on the asset? Thanks for thinking through this and keeping me from veering off course! [link] [comments] |
| Looking for Local Ohio Lenders Posted: 11 Aug 2020 01:09 PM PDT Working on a refinance with my Triplex. Was quoted 4.125% which I didnt like but was ok with but it then got bumped to 4.6% which i feel is too high given the rates everyone else seems to be getting. Anyone have any lenders they recommend working with to get something lower? Been using Mid America so far but the experience has been less than great. [link] [comments] |
| Wholesalers — how did you find addresses to knock on when you first started? Posted: 11 Aug 2020 04:49 PM PDT I'm an aspiring investor who will probably start with wholesaling. I'm kind of curious how to find addresses to go knock on besides driving for dollars. I have the public records of who's behind on taxes but what else can I do? I have time, energy, and a lot of motivation — all I need are some addresses! [link] [comments] |
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