All Forum Posts by: Barb F.

Circling back around here with an update! Have completely self-managed for the month I've been in Charleston so far, including lawn care, final maintenance issues, showings, and screenings. My tenants signed their lease this week and will move in on the 15th!

1. I'm planning to go with a HYSA for the security deposit. The funds just cleared this morning.

2. When I was changing my Geico autoinsurance to SC while registering my car, I kept them on the phone and they helped me out with a quote for a landlord policy. I'll be calling them this weekend or early next week to ask them to execute/implement it. 

3. I've heard my insurance company should be handling any changes to my mortgage escrow, so I'm going to ask for more details about that when I call them next week.

4. I used RentPrep's TransUnion SmartMove with income verification and judgments/lien add-ons. Very glad I went for the more thorough report - I felt comfortable that I had a decent picture of who was applying.

5. Not opening a separate business checking account at this time.

6. No LLC for now! Going to ask Geico for an umbrella policy quote when I talk with them about the landlord policy.

7. I should be cash flowing about $750-800/month on this property. I'm going to put $500 of that each month toward rebuilding my EF.

8. Need to do more research on possible retirement account options, but for now I'm not pursuing this. I recall a conversation with friends about passive income like real estate not being eligible for typical types of retirement plans.

9. I take most of my questions about depreciation off my plate while the dust has settled. In my new job as a financial planner, my mentor is an enrolled agent and knows a lot about this stuff. I lucked out! Can't wait to ask her about these things.

10. The larger strategy for the big income change has sort of been set to the side while I've been in transition. That's something I'll start to suss out over the next couple months.

11 (bonus). I decided to go with Innago property management software as it's basically free for both tenants and landlords ($2/payment to process ACH payments, which either tenant or landlord can pay.)  I used it for signing lease documents as well. Pretty happy with it so far!

Thanks for sharing your thoughts, folks!

When I've sold items on Facebook marketplace before or given things away using my Buy Nothing group, I've always checked the age of someone's profile and any public info on their profile along with evaluating the conversation to see if they pass a "vibe check". My personal rule of thumb for profile age is that if the profile was created before 2015-2016 (when the internet started to get a bit crazy with misinformation ahead of a certain presidential election), I'll generally proceed as long as they're interacting like a normal person (not a bot) and their profile looks otherwise legit. If it was created between 2015/2016 and 2019, I don't love it, and I'll generally opt to not respond if I'm having a favorable interaction with someone who has an older profile. And if the profile was created in 2020 or later, I generally assume it's fake and refuse to engage unless there's some really convincing evidence otherwise. Throughout several years of operating like this, I have not been harmed, scammed, or stolen from. This is probably resulting bias, but I feel that this general rule of thumb has served me pretty well.

How is this related to rental properties and tenant screening? I'm curious if anybody does anything similar when screening tenants. If you do, why do you think it's helpful? If you tried it and no longer do it, what made you decide to stop? If you don't do this, do you have a particular reason (such as you'd find out through a different part of your process that someone is scammy) or is it something you just never thought of incorporating into your screening?

I've just posted my first property (my former primary residence) on Facebook marketplace (thanks, Zillow, for being a jerk and locking my account for no reason). This is my first and only property, and suspect it will be my only property for at least the next few years. I'm operating from a distance and in person meetings with prospective tenants won't be possible.

I'm not sure that "age of social media profile" would indirectly fall under a protected class (such as age)? But getting a social media profile is a completely voluntary activity and there's no true age verification I'm aware of, so I think there's an argument that age of profile is not a good proxy for a person's age. I know I'm not bound by Fair Housing Laws with only 1 property, but it's something I want to be conscious of as I develop my process both for this go around and in the future.

Just running into this now... delighted to see it's been a multi-year issue. I'm a first time landlord renting out my former primary residence. @Filipe Gonçalves, how did you initiate contact with them? Was it the csteam at zillow.com (thanks BP for not letting me copy an email address in here...) email address or a different one? I'm a little nervous about just handing over my mortgage and insurance statements over unsecure email before I'm even asked to do so. @Brian Arcangeli you also recently dealt with this it looks like. What was your outcome?

What did folks do to ensure tenants reach out to you directly rather than through Zillow? Include your phone and/or email in the text description of the listing?

Thanks in advance! I'm finding this all very nerve-wracking a newbie.

Hi all! Back in here after meeting Mindy Jensen on a recent cruise ☺️

My situation: bought my first home in Fredericksburg, VA in December 2019. Cash-out refinanced in November 2021 at 3.75%. I've lived in it solo the whole time. Bought it because the location, price, and other qualities made it stand out as a great property to have a long-term rental when I leave the area.

That day is coming soon. In April I am moving to Charleston for a new job (incidentally: know anybody looking for a great tenant in Charleston who wants to stay in one place for a 3 year term appointment?). After a lot of thorough conversations, I have decided that I will be renting the house to my tattoo artist. We’re on the same page about wanting everything well-documented and on paper to protect both of us and maintain a business relationship. Regardless of if I were renting to him or not, I have SO many questions. Important: I am much more on the leftist / progressive / social justice side of the spectrum and not super interested in screwing others over - mutual benefit while doing good is my preference.

1. Virginia doesn’t have many requirements around a security deposit: doesn’t require an interest bearing account or for me to return interest if it earns any. Does it need to go in a BUSINESS savings account or can it go into a PERSONAL savings account? If I do an online HYSA, are those generally personal accounts? I’m also interested in banking with a community oriented bank or credit union, black owned bank/CU, or similar, but interest rates there are often lower than online HYSAs. Most importantly: I want to not have to pay fees on the security deposit account because that would be ridiculous.

2. HOW do I approach my homeowners insurance about changing my policy, and  WHEN? I’m spooked because a house hacking friend called to ask his HOI company this same question before he started renting out rooms, and they just flat out dropped him. I have my auto and homeowners bundled with Geico / Liberty Mutual. Do I just call LM? How should I expect the premium to change? It’s about $900 or $1200/year right now.

3. I have a conventional loan held by Mr. Cooper. Will I need to refinance? Terrified that if I do I’ll get railed with interest rates that have more than doubled.

4. How do I run a background and credit check? I’m comfortable with my tenant selection but want to do this both for due diligence and for practice.

5. Do I need a *business* checking account to accept rent payments and pay for maintenance/repair costs as they arise? Even though I believe this will be pass-through income, it seems like it’s a better choice for accounting and keeping income/expenses more easily separated.

6. Should I create an LLC to accept rent and pay maintenance/repair expenses? It only costs $100 to do this in Virginia and I've done it before… but would I need to do this in my soon-to-be home state of SC? How could I even do it in SC before I move there??

7. The house is old and I’ve done a ton of reno in the last 4 years. I want to use the rent to help me build up a larger emergency fund, to the tune of $20k more than I have right now. I don’t want to draw a salary right away and instead build the EF… but is that smart? I’ve heard I should “always pay myself first” but I’d REALLY feel better with a larger EF.

8. Should I create a retirement account that I can contribute to with income from this property? What type? I don’t anticipate buying in SC so this will be my only property for at least 3 years (the length of my new position there).

9. How the hell does depreciation work? Do I need to worry about that NOW or is that a “next year at tax time” thing I can take off my plate and revisit in a few months.

10. I’m taking a big (but temporary) pay cut in my move to SC (please withhold your judgment - it was a very carefully made decision). Roughly $115k to $60k. So 2023 will be my highest AGI year for a couple years to come. 2024 will be lower, and 2025 will probably be lower still, before coming back up in 2026. (And yes, I know the phrase “man plans and god laughs” but this is just some rough approximation for a place to start thinking about this.) Having this bird’s eye view of my income for the next few years, how can/should I be optimizing this situation?

I do have MORE questions… but they’ll come after I get started with tackling these first 10. Sending good karma and warm, fuzzy vibes for anybody interested in sharing recommendations on my questions!

@Jenise Araujo sure thing! I also recommend the books "Long Distance Real Estate Investing" by David Greene and "Landlording on Autopilot" by Mike Butler. They should be two good additions to your out-of-state education :) 

Hey @Nick Ancil! If you're not from the area (and with a Phoenix location it looks like maybe you aren't), you'll soon find "NOVA" covers a wide geographic area made seemingly far, far larger by our incessant traffic (pandemic notwithstanding). I did have about three meetups for people in eastern Prince William County in Montclair at a local library. There wasn't much going on in the area so we had a decent turnout for the first meeting but fewer after that. And as with many things, I tend to get excited about an idea, put a lot of energy into it, and then lose steam and turn my attention to other pursuits. So while I did have some folks meeting a couple of times, it is not some ongoing, successfully sustained thing

How are you looking to get started? House hack? Buying locally? Buying elsewhere?

@Danna Mead Glad you found it helpful! Feel free to ask more questions or provide your own feedback if you decide to do it too :)

Totally understand about the HCOL. I'm in expensive Northern VA and ended up deciding it made more sense to buy a suitable house further away from the city than closer to work. (Suitable = adequate for my style and lifestyle needs while it's my primary residence, appropriate construction / privacy / space for it to work as a house hack for as long as I want, and appropriate as a stand-alone SFH rental. I searched for months and this place really does seem to fit the bill for all three of those needs, which is amazing to me.) My other option was waiting several more years for my investments to grow to afford the necessary larger down payment on a house two counties away (where I'd been renting) that was much more convenient for work and my social life. It's a sacrifice to be farther away from literally everything, but I wanted to get going with real estate goals and I know this was the right move based on my budget at the time. It should bear out in the long run as well.

How's the house in Philly going? What are your challenges with it, and what's gone right?

:)

Hi Danna! Someone else recently reached out with the same question :) Here's what I told them:

I did end up deciding to take the course in Spring 2019. I was really diligent with the first couple modules - I benefited from having her outline of the math so I could design a spreadsheet. The Bigger Pockets calculators are good, but you get limited uses unless you're a paid member. Because life gets in the way, I haven't finished the course. But learning how to handle the numbers was my biggest challenge to getting started.

I made a trip down to Alabama at that point (I was already in the NC for work and was able to stay with friends), looking over how much money would buy how much house. After gaining some more confidence in figuring out how to analyze properties and neighborhoods, I decided it would likely be better to start out with a house hack in my area of Northern VA. Accordingly, last summer I threw myself into looking locally. Four offers later, I finally closed at the end of December on a place in Fredericksburg where 1) the monthly mortgage and utilities are equal to or slightly less than my rent - thus I can afford it with no strain to my budget - 2) with two spare bedrooms I'll be able to rent them out - gross rent on either one would cover about 45% of the monthly costs, and 3) it's in a good location that it will stand well on its own as a rental whenever I'm ready to leave.

So that was stuff I managed to pull off without finishing Paul'a course or taking advantage of much of the BP Pro benefits. I've done (or will be doing) almost all of the renovation work with my dad so I haven't needed to rely so heavily on the renovation modules from YFRP. But I think in the future, if/when I'm ready to buy a house solely as an investment rather than a residence, I think those middle modules will be more helpful.

I also like how Paula describes handling her tenants in her podcast, so I do plan to revisit the last part of the course before getting a housemate.

All in all, I paid for both YFRP and BP Pro. I canceled my Pro membership when it was up for renewal - I just don't relate as well to many in the leverage-happy BP community. I like the AA more conservative approach. So I'm glad I did YFRP, even though I haven't finished it, because I'm going to be able to refer back to it.

Last thought- I am very much a "student" in personality. I was the straight A kid who missed valedictorian by -this- much. That is to say, formalized learning with organized lessons and a syllabus is how I learn best. YFRP really fit that bill. And if you like the encouragement from other students, they have message boards and accountability groups too - I tried and they're just not my jam (but not disparaging them at all.) I listened to BP a lot for encouragement when I needed to get over some of my initial fear and doubts, but I'm not active here much and don't listen to the podcast now. I'm sure I will again at some point.

I was asked a follow up question about the accountability groups and discussion boards, so here's what I added to say about that: 

No, they were more not my cup of tea because that type of "positive peer pressure" has never worked as a motivational strategy for me. It felt like one more e-mail I needed to type rather than working on a more tangible point of progress. I think the 3-4 people in my accountability group were actually reasonably similar in overall philosophy. Regardless of what anyone's individual goal was, everyone was a bit more on the "I want to start learning, I'm curious and motivated, but the risk and leverage involved with traditional REI seems a bit too much for me. I want a way to do this a bit smarter and more conservatively." That DID resonate with me - it's just the weekly e-mail thing was another chore that fell by the wayside. But I imagine if you kept it up with other enthusiastic folks, you'd derive the intended benefit of a positive cycle of encouragement. You also always have the option to e-mail Erin (Paula's assistant Chief Sanity Officer / administrative saint) and let her know if your group isn't as active as you'd like and you can request to be placed with other folks.

Hope that helps you think through your decisions!

@Jason Cosner Welcome and thanks for your message! We haven't had any more meetings... I was the driving force behind setting up the monthly meetings at the Montclair Community Library study rooms. The first was very well attended, the second smaller, and then I was by myself for the third! With my other projects, I don't have the bandwidth to organize, publicize, and host. However, if you're up for taking on that mantle, I know I would be interested in attending :)

@Cameron Tope Thank you!