Newbie with few important questions! Please help!

[Eric DeVito]

Hello all! So I am going to meet with a realtor for the first time this weekend to go check out some homes. He just sent me a bunch in my price range via MLS. Some homes he sent me have current tenants paying rent. I have the following questions:

1) Is it better to buy a property with a tenant who is already in the home and paying the rent instead of a vacant property?

2) If I do come across a vacant property, what is the best/quickest way to get a tenant inside of the property? This part worries me that I will not find a tenant.

3) Should I trust the agent with his listings that saying current tenants in property are great tenants, owner is just trying to move property? Seems fishy, but not sure.

4) Basically how do I determine which is the best deal for me to pursue?

[Nina Davenport]

Eric,

I second everything that Ruth and Tim said.  As one wise person once told me, "Real estate has two directions, fast forward and fast reverse"  Take your time, learn, and trust but verify everything. Do NOT take what the current owner who is trying to sell, tells you about his tenants - that they always pay on time, they never complain about anything, that they hate to sell but they just have to, etc.. An agent who is also an investor is essential.

Here's what I do when I purchase a rental.  I only look at properties that are vacant.  I make sure to get the systems all up and running, replaced if older, whatever, to make sure it will be as maintenance free as possible when I do get tenants in.  I especially thoroughly check out the plumbing.  Fill all the tubs and sinks and let them go at the same time to check out the waste lines, have someone scope out the sewer line to the street, especially if it's been vacant for a long period of time.  "Stuff" hardens when no one is flushing water regularly and this can cause a back up.  You do not want these issues when the tenants are all moved in.  Invest in a good quality toilet like Toto Entrada.  No $99 HD cheapies.  Make sure there are the appropriate GFCI's in bathrooms and kitchens, all these things that are better done before a tenant is moved in. You don't want to be called over repeatedly to take care of things.  That is frustrating to you and the tenant.  Be pro-active, not re-active.

Here's how I screen for tenants.  I advertise on Craigs List.  I allow texting, love it, in fact.  Pay attention to the very first communication you receive from a potential tenant.  If it goes somehthing like this, "When can i move in?"  Don't even reply.  On the other hand, if the first inquiry is well-written, contains an introduction of who the person is, first and last name preferred, what job they have, when they want to move, etc, then that is worthy of a reply.  Throughout your communications the person should be prompt and courteous.  

After all seems to be good, tell them you are going to have them fill out an application (get help from an experienced landlord in creating your application.  You don't even know what questions to ask, most likely). You must apply the same criteria to ALL tenants, to avoid discrimination.

After you review the application, (submitted when the person said they would, not 5 days later), have them go to a tenant screening service like NTN or Tenant Reports.com and have them pay for the criminal and background check, the credit check, and eviction history. Should cost them $25-$30. You don't pay for it. The company then sends you their info so you can make an informed decision. I had to do this for a property in PGH, and I live in Lynchburg, VA and it worked out great. If you are local, you will meet your tenants in person, as an added benefit to your screening process.

I urge you to get involved with a local REIA and learn from other's mistakes. It will save you much stress and financial ruin, and help you get off to a great start. Keep reading BP forums and you will learn what to do and not do. It's a fantastic resource.