Uncharted territory for me: New Investor in Raleigh NC

General Landlording & Rental Properties
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Uncharted territory for me: New Investor in Raleigh NC

Dana Williams
Member since 2020 · 21 posts · 6 votes

Hello all, I must admit that this is very new to me so there are all kinds of things running through my head but now it's time to condense and put the pedal to the metal.

I have a fully refurbed house that I purchased in Wilson NC and looking to put it on the market for rent next month to possibly have a tenant by Jan. I've been looking at a lot of the posts here and they've been helpful with resolving a lot of things I've been thinking about. 

At the moment, the only thing that is stressing me is the amount of ways that things can be done in terms of managing my property but I'm looking for the best and safest way to do this. Things like "Where do I go to run background and credit checks in the most efficient manner..." and "Should I really use Cozy.co/Apartments to support my property...." has been running through my head. I'm a person who likes efficiency.

Just looking for some answers to help give me a stronger backbone in this time we're living in with things being tougher for some families. I would like to use this thread to bounce questions off of whoever would like to reply and all posts are appreciated and welcome. 

Thank you in advance.

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Joshua Howes
Holly Springs, NC · Member since 2017 · 10 posts · 6 votes
5y

Hi Dana! Congrats on getting started. I look at finding a new tenant the same way I look at hiring a new employee. In my success, I've learned to come to the table with a list of criteria. 

My most important piece of advice is to ensure the Candidates meet the criteria rather than making the criteria meet the Candidate. 

Also a note of importance, The Fair Housing Act requires landlords to give all walks of people an equal chance of obtaining housing. Just like with regular employment there are protected classes of people. Here is the HUD's breakdown of the FHA if you're interested https://www.hud.gov/program_of...  In short, the criteria below will ensure you're making an objective decision.

Here is a dirty and quick rundown of how I approach the criteria:

Minimum Credit Score: 660 (Might vary on your location where you set your standard)

Monthly income: No less than two and a half times the rental rate (3X is even better)

References: Professional, Personal and Previous Landlord. I call their previous landlord and basically ask if they were good tenants, if they were ever late, if they would rent to them again (that's a big one). I call the Professional reference to get a feel for their employment and their standing in the company. 

Background Check: I run this and the credit report through Cozy.co. 

Feel free to reach out to me personally if you have any questions and best of luck!

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  • Christopher Anderson
    Investor · Durham, NC · Member since 2020 · 23 posts · 19 votes
    5y

    Hi Dana, 

    Congrats on getting to this point! We've in contract on our first rental property and I'm nervous about beginning the rehab (even though we've been through many rehabs in our personal residences in the past) and getting the first tenants in place. 

    I'm following this thread to see what other, more experienced, folks have to share. But a couple of things that I've learned already in speaking with other experienced investors and landlords:

    • * There is no "best" tool for everyone. You will find the tools that best meet your needs through trial, error, and customization
    • * Find someone (preferrably a couple) who has a few rentals already in place in the area and ask if they would be willing to share their standard lease form with you, and ask why they like their form specifically. 
    • * Expect and embrace the fact you will make mistakes on this first one. That's the way it works. We all learn from the mistakes we make. The challenge isn't to be perfect, it's to minimize the damage mistakes will cause by having a safety net of resources (financial, material, and people) to fall back on. Even people with dozens of properties and decades of experience are still learning and making mistakes.

    Just the fact that you're asking the questions and looking for advice and support is a good indicator that you'll do great. Best of luck!

    Chris

    1Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Christopher Anderson:

    Hi Dana, 

    Congrats on getting to this point! We've in contract on our first rental property and I'm nervous about beginning the rehab (even though we've been through many rehabs in our personal residences in the past) and getting the first tenants in place. 

    I'm following this thread to see what other, more experienced, folks have to share. But a couple of things that I've learned already in speaking with other experienced investors and landlords:

    • * There is no "best" tool for everyone. You will find the tools that best meet your needs through trial, error, and customization
    • * Find someone (preferrably a couple) who has a few rentals already in place in the area and ask if they would be willing to share their standard lease form with you, and ask why they like their form specifically. 
    • * Expect and embrace the fact you will make mistakes on this first one. That's the way it works. We all learn from the mistakes we make. The challenge isn't to be perfect, it's to minimize the damage mistakes will cause by having a safety net of resources (financial, material, and people) to fall back on. Even people with dozens of properties and decades of experience are still learning and making mistakes.

    Just the fact that you're asking the questions and looking for advice and support is a good indicator that you'll do great. Best of luck!

    Chris

    Thanks for the response and good luck to you as well Chris. I actually have a coworker and his wife as mentors so they've helped me out a bunch. They own a couple properties in the area. 

    I've heard the horror stories of landlords not doing their due dilligence and picking the "right" people for their properties. I know it can be tough to make the right decisions on who will do the right thing in the end but I have a situation right now where my neighbor's daughter is looking to move into a new place in Jan. I have yet to interview the young lady and her boyfriend (she's a stay at home mom for the time being and he works, been at his job for 6 years from what I understand). The probably have sub standard credit and don't have enough standard income. They have a 2 year old and another on the way and I remember my parents being in the same boat when I was a kid. I personally experienced eviction while being raised with my parents. From my understanding, the young man works in Knightdale which is 20 minutes from Wilson. My neighbor is also a young guy with a new baby and wife. I think they would be good neighbors for each other. In the end, I need to interview both my neighbor's daughter and her mate to see what's going on and why they need to move. I just don't want to have a bad relationship with someone I've known since she was in middle school.

    My mentors told me that they have given people breaks and it's worked out for them thus far. 

    0Reply
  • Joshua Howes
    Holly Springs, NC · Member since 2017 · 10 posts · 6 votes
    5y

    Hi Dana! Congrats on getting started. I look at finding a new tenant the same way I look at hiring a new employee. In my success, I've learned to come to the table with a list of criteria. 

    My most important piece of advice is to ensure the Candidates meet the criteria rather than making the criteria meet the Candidate. 

    Also a note of importance, The Fair Housing Act requires landlords to give all walks of people an equal chance of obtaining housing. Just like with regular employment there are protected classes of people. Here is the HUD's breakdown of the FHA if you're interested https://www.hud.gov/program_of...  In short, the criteria below will ensure you're making an objective decision.

    Here is a dirty and quick rundown of how I approach the criteria:

    Minimum Credit Score: 660 (Might vary on your location where you set your standard)

    Monthly income: No less than two and a half times the rental rate (3X is even better)

    References: Professional, Personal and Previous Landlord. I call their previous landlord and basically ask if they were good tenants, if they were ever late, if they would rent to them again (that's a big one). I call the Professional reference to get a feel for their employment and their standing in the company. 

    Background Check: I run this and the credit report through Cozy.co. 

    Feel free to reach out to me personally if you have any questions and best of luck!

    3Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Joshua Howes:

    Hi Dana! Congrats on getting started. I look at finding a new tenant the same way I look at hiring a new employee. In my success, I've learned to come to the table with a list of criteria. 

    My most important piece of advice is to ensure the Candidates meet the criteria rather than making the criteria meet the Candidate. 

    Also a note of importance, The Fair Housing Act requires landlords to give all walks of people an equal chance of obtaining housing. Just like with regular employment there are protected classes of people. Here is the HUD's breakdown of the FHA if you're interested https://www.hud.gov/program_of...  In short, the criteria below will ensure you're making an objective decision.

    Here is a dirty and quick rundown of how I approach the criteria:

    Minimum Credit Score: 660 (Might vary on your location where you set your standard)

    Monthly income: No less than two and a half times the rental rate (3X is even better)

    References: Professional, Personal and Previous Landlord. I call their previous landlord and basically ask if they were good tenants, if they were ever late, if they would rent to them again (that's a big one). I call the Professional reference to get a feel for their employment and their standing in the company. 

    Background Check: I run this and the credit report through Cozy.co. 

    Feel free to reach out to me personally if you have any questions and best of luck!

     Thanks for the response Josh and thanks for your info. I have interviewed folks for positions at my current job so I do have the same questions I ask in general. I have also read through a lot of the things you've called out thus far. 

    Me being a noob at this, I will definiely want to put some time aside to bounce some questions off of you, primarily, how in the hell do I get set up on Cozy to do all of this? :)

    Thanks again!

    0Reply
  • Christian HansenPro Member
    Rental Property Investor · Cary, NC · Member since 2014 · 120 posts · 89 votes
    5y

    @Dana Williams  Hi, Joshua has a lot of good info in his post. For tenant screening yes you need al the details but start with the a more big-picture approach. Enough Income? Credit? Evictions? The main three.  

    Gather your data on the applicants and your impressions of them (do try and meet them) and the see if it passes the gut test. You want to find people who can AND want to pay the rent each month, and who seem like they would be able to take decent care of it. So, must have a have a job that pays(gross) at least 3X the rent. Verify that the job is real, I like to force them to prove it to me but also do your DD. One easy step is to call the company and ask for the tenant by name and see what happens. Credit score over 600 but that can be a misleading metric, people could have had medical issues that the bills were late and that might not make them bad tenants. So you want to ideally see the list of credit accounts they have and the payment histories. Last of the big 3 is evictions, NO evictions or eviction filings on record! It takes a while to get evicted so someone who went through that vs. moving out tells you something. 

    One thing some DIY landlords forget is to make sure they are who they say they are, everyone over 18 has to show a valid drivers lic (picture) and make sure it's them! Thats why it's critical to meet them or at least do a video call with them. Also all people over 18 have to sign lease as a Tenant, only children as "permitted occupants". You don't want to show up 3 months later and find that only the Permitted Occupants live there and that the Tenants are long gone. Theres no one to evict? Obviously you can, but it drags things out. Call landlord references! 

    Don't forget Pets are NOT a protected class, you can say yes to one persons dog but no to anothers cat/dog or whatever. Some of my best tenants have a dog(well behaved, loved, friendly) and there are no issues. Do collect a non-fundable pet fee though. Many people treat their pet(s) better than others treat their kids, and those tenants have a harder time finding rentals so often stay longer. I try to keep it to one or two animals, NO- Zoo's. No Fishtanks over 20gallons and I don't think its an issue since circa 1985 but no waterbeds.

    It's not a one step process but its not rocket science either, use common sense and seal up the soft spot in your heart, don't fall for the "give me a chance" hard luck stories, let someone else take that on. This last one is probably the hardest part of being a landlord! I tell people LTR prop mgt is not really a Property business its a People business.

    Good luck.

    3Reply
  • John Baker
    Rental Property Investor · Holly Springs, NC · Member since 2019 · 18 posts · 17 votes
    5y

    HI Dana,

    @Christian Hansen gave you some great pointers here and said most of what I had planned to say. :) 

    I'll add that I have a few rentals in the Wake Forest/Raleigh area and have utilized Cozy successfully for each without issue. The site you use to screen your tenants is important but the criteria (noted by Christian above) are even more important. Establish the foundation of what you are willing to accept in terms of credit score/payment history/pets/etc., and then work through the screening process. Using Cozy.co to screen your applicants and then eventually transitioning them to tenants is convenient. I've also used mysmartmove.com for screening. 

    If you need any other info on the area or process, feel free to reach out to me directly. Good luck! 

    1Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Christian Hansen:

    @Dana Williams  Hi, Joshua has a lot of good info in his post. For tenant screening yes you need al the details but start with the a more big-picture approach. Enough Income? Credit? Evictions? The main three.  

    Gather your data on the applicants and your impressions of them (do try and meet them) and the see if it passes the gut test. You want to find people who can AND want to pay the rent each month, and who seem like they would be able to take decent care of it. So, must have a have a job that pays(gross) at least 3X the rent. Verify that the job is real, I like to force them to prove it to me but also do your DD. One easy step is to call the company and ask for the tenant by name and see what happens. Credit score over 600 but that can be a misleading metric, people could have had medical issues that the bills were late and that might not make them bad tenants. So you want to ideally see the list of credit accounts they have and the payment histories. Last of the big 3 is evictions, NO evictions or eviction filings on record! It takes a while to get evicted so someone who went through that vs. moving out tells you something. 

    One thing some DIY landlords forget is to make sure they are who they say they are, everyone over 18 has to show a valid drivers lic (picture) and make sure it's them! Thats why it's critical to meet them or at least do a video call with them. Also all people over 18 have to sign lease as a Tenant, only children as "permitted occupants". You don't want to show up 3 months later and find that only the Permitted Occupants live there and that the Tenants are long gone. Theres no one to evict? Obviously you can, but it drags things out. Call landlord references! 

    Don't forget Pets are NOT a protected class, you can say yes to one persons dog but no to anothers cat/dog or whatever. Some of my best tenants have a dog(well behaved, loved, friendly) and there are no issues. Do collect a non-fundable pet fee though. Many people treat their pet(s) better than others treat their kids, and those tenants have a harder time finding rentals so often stay longer. I try to keep it to one or two animals, NO- Zoo's. No Fishtanks over 20gallons and I don't think its an issue since circa 1985 but no waterbeds.

    It's not a one step process but its not rocket science either, use common sense and seal up the soft spot in your heart, don't fall for the "give me a chance" hard luck stories, let someone else take that on. This last one is probably the hardest part of being a landlord! I tell people LTR prop mgt is not really a Property business its a People business.

    Good luck.

     Noted!!!!! Thanks for the reponse Chris.

    0Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @John Baker:

    HI Dana,

    @Christian Hansen gave you some great pointers here and said most of what I had planned to say. :) 

    I'll add that I have a few rentals in the Wake Forest/Raleigh area and have utilized Cozy successfully for each without issue. The site you use to screen your tenants is important but the criteria (noted by Christian above) are even more important. Establish the foundation of what you are willing to accept in terms of credit score/payment history/pets/etc., and then work through the screening process. Using Cozy.co to screen your applicants and then eventually transitioning them to tenants is convenient. I've also used mysmartmove.com for screening. 

    If you need any other info on the area or process, feel free to reach out to me directly. Good luck! 

     I appreciated the additional response. Thanks and also noted!!!

    0Reply
  • Chelsea Kline
    Member since 2020 · 38 posts · 68 votes
    5y

    Hi @Dana Williams!

    BiggerPockets has recommended tenant screening companies on the landlord resources tab. You can find the landlord resources tab by hovering over the "tools" bar and clicking "Landlord Resources". Some of these companies also offer free forms and other resources for landlords.

    I'd suggest checking out the list provided by BP and researching which company would best fit your needs as a landlord.

    Best of luck to you!

    1Reply
  • Dana Williams
    OP
    Member since 2020 · 21 posts · 6 votes
    5y
    Originally posted by @Chelsea Kline:

    Hi @Dana Williams!

    BiggerPockets has recommended tenant screening companies on the landlord resources tab. You can find the landlord resources tab by hovering over the "tools" bar and clicking "Landlord Resources". Some of these companies also offer free forms and other resources for landlords.

    I'd suggest checking out the list provided by BP and researching which company would best fit your needs as a landlord.

    Best of luck to you!

     Thanks Chelsea!!!!

    0Reply
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