All Forum Posts by: Bill Pate

Make sure you register with the section 8 office as soon as the property transfers or you will lose the rent they pay for that month.

HUD (Section 8) has a negotiated amount and is based off the lease. You could try raising the rent when the lease comes due, but that might trigger the tenant to move also. Personally I wouldn't raise it unless necessary. I don't see anything in your calculations for maintenance and vacancy? In my experience you need to calculate at least 10% for maintenance and vacancy. If I can't make at least 18% per year ROI after that then it's not worth buying. Remember multiple homes come with multiple problems. They are definitely a money maker though. I own one duplex and have had to put over $7000 into it since January just to fix the roof. Now that was a planned expense...

Basically it comes down to whether you can rent it for the amount of the mortgage plus at least $100 a month in profit. Don't forget to calculate vacancy and maintenance. I turned my SFH into my first rental, but I did it out of necessity because the house wouldn't sell back in 2007. Back then I was losing about $75 a month, now I make $75 a month. Have owned that house for 16 years and once it's paid off it will be a good money maker.

If they don't have a bank account I won't rent to them.  I always tell people as an adult if you are not responsible enough to maintain a bank account I don't want to rent to you.

I use erentpayment.com for all properties.  I don't make it mandatory, but I give a considerable discount on the rent if they use it.

@Joe Splitrock that's a good point.  In my opinion it's always best to gather multiple points of view because there is always something my narrow field of vision will miss.

@Joe Splitrock I am not saying it's probable, but the opportunity does exist.  Personally I don't have hundreds of units and I like to keep my operation small.  Showing tenants the property to me is entirely too valuable of a tool to give up.  Looking at how clean the inside of their car is when they pull up, how they introduce themselves, and the little nuggets of information they slip and say during the showings tell me a lot.  In my opinion this comes down to risk vs reward.  Not having enough time to show the property tells me you can't handle the work load and are looking to cut corners.  If you can't be bothered to show me the property as a prospective tenant I would wonder what else won't be done after I get the keys?

What if the prospective tenant takes the key and then drags some lady into the property and sexually assaults them?  The lawsuit could cause you to have to close the doors all because you don't want to spend a few minutes showing properties?  The gamble is too large.

 Personally I own 6 rentals in the Cleveland market that have 7 units total.  Three condos and three houses with one of the houses a duplex.  Of the rentals I have 5 of them have been purchased as rentals from the start.  All 5 of those were purchased for under $35000 and not one of them are in a war zone.  The three condos are in Broadview Heights, North Olmsted, and Avon Lake.  The two homes are in Elyria.  One of the homes is in Elyria township over by the coke plant.  The duplex is just west of downtown Elyria.  Now all of these properties were distressed and either purchased as a foreclosure, bankruptcy, or medicaid sales.

I own six properties with seven units in the Cleveland area and surrounding suburbs. From the time of listing the property for lease until finding a qualified tenant I usually average two to three weeks of vacancy time. Personally I use Smartmove by Transunion for the initial screening, and then follow-up with a check on income and cleanliness. Buy properties that allow you to keep the rents on the lower side of the market while still making a good COC return. Especially in the Cleveland market demand continues to remain strong in my opinion. In the 10 years I have been renting properties there has never been a vacancy longer than one month. Like people said keep a well maintained clean property, a simple easy to understand lease, and manage the property well. My returns are 12.5% COC at the lowest and 40% at the highest.