All Forum Posts by: Jonathan Taylor Smith

A legitimate Private Lender cares first and foremost about the deal / property, more so than they do about YOU - although you do matter in the equation as well. So, if they are asking for all your personal details (DOB, SSN, etc...) and/or they want some form of upfront payment before they've even evaluated the deal... SCAM ALERT!

The NON-Professional Private Lenders I've worked with over the years have never even asked for my DOB, SSN or any money. But then they were also not folks I found online. They were people I encountered locally, as I went about my daily routine - and telling people what I do. So they had other means to vet me.

But Professional Lenders are far more likely to ask for those private details going in. However, even in that case, I've not been asked for upfront money other than to obtain a credit report. I also check their license, reviews, etc...

With a lease-option, you are not "on the deed", as ownership remains completely with the owner / seller. However, the purchase option should be recorded against the title of the property, so that the property cannot be sold to anyone BUT YOU while the option exists (it has a time limit). And during that time, you control the property through the lease. And that lease is normally worded to give you more control than a regular tenant would have - such as the right to modify / upgrade the property to an extent, sub-lease, etc...

@Jason Reider - Much of this will depend on the laws of your location and rules of the housing agency you'll be dealing with. You should get the current lease and HAP contract to review. And find out when the tenant is due for "recertification". In most cases it runs with the lease term, so it may be November. But it could be out of sync with the lease term. This may matter, because the Section 8 housing agencies that I've worked with require notice to increase rent be sent to the tenant and HA at least 60 days in advance. And it could be 60 days in advance of the lease renewal, or it might be in advance of the recertification - which becomes important if re-cert is not in-sync with the lease term. But you'd certainly want to submit a rent increase (likely 90 to 120 days out), as then you have time to issue a notice of lease NON-renewal if the increase is denied. And you should not really worry about increasing the rent causing you to lose the tenant, as in most cases the increased amount is paid by the HA - not the tenant (although it could end up being due from the tenant). It is certainly cheaper to go the rent increase route than suffering a tenant turn and getting a non-subsidized tenant replacement after an expensive rehab - who is not likely to remain as long as someone on Section 8.

@Armando Carrera - When I was starting out, I ran out of 20% down payments after my 4th property. But I was able to continue buying, and took down numbers 5, 6 and 7 as LEASE-OPTIONS - with only $100, $1000 and $3000 down respectively. In each case, it was someone getting married, their spouse already had a house, and they were either upside down on their property and/or it needed a massive amount of work (for which they did not have the money) to make rental ready - so they could not rent it out. Then I got several more (well into double digits) using funds from Private Lenders. In some cases, I've been able to buy properties with ZERO cash out of pockets, and sometimes even walk away from the closing table with CASH - because the Private Lender funds more than my purchase price. That works well when the property needs rehab and I'm getting it for a price below its value. And of course, there is also subject-to and seller financing.

I am on a similar journey... Right now, I'm in the early days of my 2-week free trial of OwnerRez for my first 2 STR units. But for my LTR units I'm using Buildium. I like that OwnerRez has a property management component should I decide to offer management for STR units of others at some point in the future.

Not sure about CO, but we make tenants sign a NON-Refundable Holding Fee (not Deposit) Agreement for any monies received prior to move-in to HOLD the home for them. If they fail to sign a lease, pay all remaining funds as due and move-in as scheduled, we keep the Holding Fee for our trouble. Otherwise, it converts to fund their Security Deposit upon move-in and they pay the remaining funds.

Hello @Evan Thomas Andriola - I only have one property that does not have separately metered water for each unit (a Triplex with 2BR units). And I've considered sub-metering it. But to date, I've just set my rents at a rate that accounts for me having to pay the water bill - and informed the residents that each year I'll increase the rent based upon my expenses (including water), so keeping the bill down helps me to help them.

But one problem this could cause is if increasing the rent to cover the water bill then places your rent above the market rate. In that case, having it accounted for as a separate fee might attract more initial interest in renting the property - with the total cost being revealed later. If so, just make sure the fee does not exceed what a given unit might consume if they are good on their water usage.

Well, the latest "clarification" of the vague memo is that "rental assistance programs" are exempt from the pause - so I am expecting payments to arrive as usual.

YES, I've also had that occur with some tenants. But I think it has more to do with how different individuals handle what is technically an invasion of their space and privacy. Some people are more disturbed by that than others (even if they have nothing to hide) - and following you around may give them a greater sense of control and therefore comfort. This can also be triggered if they have kids or what they perceive to be valuables in the home that have not been secured.

It can also relate to how you conduct the inspection. For example, at the start, do you confirm if all persons in the house are aware of your presence, and do you ask if it is OK for you to open bedroom, bathroom and closet doors? Showing them that you are aware that this is their space and that you are an intruder (landlord or not), can set them at ease by showing such signs of respect.

Congrats @Emily Pena - I'm also an agent (working mostly with investors), property manager and an investor myself (currently owning 26 rental units). "Houseboat community"... Hmmm, such a thing has never even occurred to me. Until now I've focused on distressed single-family and small multi-family properties for rehab into rentals (BRRRR). But @Garrett White and I are shifting our focus to larger unit count properties. We're also seeking to buy a local (Raleigh / Durham) property management company to expand that business more rapidly.