All Forum Posts by: Craig C.

@Prashant P. Would appear to be a good bet if you could get ahold of him.

Elsewise I think your best option is to goto

https://www.biggerpockets.com/meet

@Mike Sattem

Perhaps I need a lawyers input, but the "Settle for tenants with red flags" would imply that there should be no issue in not renting to the 20 'Bad Tenants' who apply if there is no "Good Tenants'...

Is this correct?  Again, law isn't my strong-suit in the subject of real-estate. 

Thanks!

@Jassem A. Thanks! 

If you are comfortable with a co-signer as mentioned, and you have such an availability that could be a decent option.

In your situation, I would do one of two things:

1) Contact multiple lenders and ask "What will it take to make this happen?", and see what they tell you.

If there are 20 lenders, and 1 says no, they do not speak for all 20 lenders! 

2) Perhaps another option as well: Take a personal loan for $20,000 to get your 20% down. 

Probably not entirely ideal, but if it is your only option to make this happen, it is ultimately your responsibility to decide if whether or not the numbers make sense as to whether or not you can swing a payment on a $20,000 loan at high interest in combination with your new mortgage. 


My thoughts.

I have heard all the horror stories of 'Bad Tenants' who trash / destroy / gut the landlords properties, and read about the how-to's on hedging against it. 

The thing I don't know who would fit the criteria of a 'Good Tenant' if you are trying to gain a high-cashflow in a low income area.  The other conundrum I am trying to avoid, under the assumption that I get myself a Buy&Hold in a low income area, I may get 20 'Bad Tenants' apply, and no 'Good Tenants'. 

Law isn't my strong-suit in the subject of real-estate, but given the above scenario, I do not believe that you can deny all 20 'Bad Tenants' if you don't find even a prospective 'Good Tenant' either. 

It is true, you can be too wreckless, but it is also true that you can be too cautious!  So I need somebody with more experience than I here:

Am I being too cautious?  Or are my reservations a solid "Stop" sign??  

1. Thanks @Darren Eady I greatly appreciate this! 
   
   The frustration comes in when nearly all 2,000 hours are focused on achieving a goal that becomes a wild-goose-chase.  Even Thomas Edison found a way for things to work after finding "100 ways that don't work". 
   
   Most definitely you are correct, education comes whether sought or not - the fact that you are doing something you will learn something! 
   

@Mindy Jensen "You are absolutely right that a bank won't work with someone if they have bad credit and no money", 

 I don't mean to sound snide, but how is anything short of 875 a bad credit score?    And even if you have that score, it still takes a favorable underwriter is what I was trying to say.   And "No money", we're not talking about high-school kids quitting college, I really believe most folks here are mid-career, middle-class folks.  With that in mind: if somebody mid career managed to save $10k, it would be wreckless for them to put $10k down on a $50k investment property.  Maybe I am unique in this outlook, but for me, this simply an unacceptable proposition. 

My situation?   I have enough "disposable income" to swing the monthly on a completely vacant rental and still be fine. 
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Other posts I am reading seem to be suggesting that I am broke, and have poor credit, or that I haven't put in the 'planning, time, and persistence' involved.  A Textbook would tell you: I have done everything right, legally, and correctly. 

I want to clarify something: I do realize this is a public forum, and just any Joe can get on and post, but I am not an unintelligent individual, an irresponsible individual, or some highschool kid looking for options after dropping out.  I am somebody who hit absolute 0, and within 2 years time jumped 5 years ahead of his peers with no support, insider influences or handouts having been involved.

Further to that, I do not believe that those who are having the same experiences as I am are somehow unintelligent, or irresponsible either.  But I can tell you that the last thing we care to hear is "You have to want it bad enough", because I promise you very few have put in as much effort as us into this as somebody who vested hundreds or thousands of hours their first year into their investing experience. 
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Side note:
I want to apologize if I am coming off as being either snide or brash to anybody, but some of the responses I am seeing are equivalent to asking a hunter if he's certain he put the right end of the rifle to his shoulder.  

I also want to apologize for not taking recognition of the excellent responses that I have seen as well!  There are many excellent ones for sure! 

This post/subject, is to help the new guy, and keep him/her from wasting thousands of hours to achieve nothing!  

So to begin:  Is anybody else tired of the "You can start investing in real estate with 0 down" garbage yet? 

I know I am!  I know that at the conclusion of 2015, I calculated a loss of over 2,000 vested hours trying to make something happen!  Multiple banks, multiple loan applications, multiple offers, multiple approaches, and what did all of 2015 get me?  Behind on other things that require our time, and Beyond Significant Frustration!  

Who else has put serious time into this and managed to get no-where?   Am I missing the broad side of a barn, or am I hitting the nail?  Numbers are simple!    Yet if you try to talk to anybody who would consider lending you money, they get a deer in the headlights look, and say "no" because they are uncomfortable at best! 

As far as 0-down goes:

1)  Banks: Wont work with you!  Unless you have an 875+ credit score and a favorable underwriter, this is coming from my experience with 4 different major banks, and 2 local banks.

2)  Other Peoples Money (OPM): Unless you are already well established as a real estate investor, OPM does NOT exist!  Don't waste your time with your hopes and aspirations on this subject, it is trash, and you wont use it until you are already well established.  Unless of course, you spend $20,000 at some guru's seminar for them to "give you a reference" for something entirely worthless to begin with.

3) Crowd Funding: Unless you want to blindly throw in $5,000 of your own money, forget about it!  I didn't go any further than that with this, because my gut feeling was: this is a total scam!  And I was not going to waste anymore time on it.

4) "Creative deals":  Sounds great!  I will just use a public records search on a house I think will make everybody involved some pocket change!   Next, I will contact the seller directly - bypass the realtors, and hope the sellers don't mind that I essentially stalked them so I could speak with them about making a sort of an offer that I already know they won't understand (Because if you're new, you hardly understand it yourself!), and then somehow someway I just know they will handover the keys to the kingdom, and everything will be hunky-dory, everybody makes their money and goes-home happy, healthy and wealthy!   -  False.  Stalking is illegal, and at best it is shady and discourteous to by-pass an employed realtor! 
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The other part of all of this?  Somebody prove me wrong here!  I am sick and tired of wasting my time, energy, and money chasing this false promise of "0 down investing!", And I promise you, more than half of the registered users here, quit coming on to discuss great idea's and common issues, because most people can't even get in the door!    I can't count on 1 hand how many inactive users I find by just browsing the "search bigger pockets"!  

So please, somebody prove me wrong, or make a legitimate effort to be blunt up front with people who are "brand new" to the game, because odds are, if they have $25,000 in their hip-pocket to play with, they aren't wasting their time on here looking for advice.

I really want to thank all of you who have replied to my posting, it means a lot to me, and it is all terrific information! Thanks!

Hi, I've been doing a lot of research in my Area, and the surrounding area, and I have spoken with 3 different landlords who have given me a similar answer to the question above:

Q: "How do you protect against bad tenates?"

2 out of 3 said "You just can't", the third said "Run rent about 15% higher than you initially plan to rent your property for, nobody's going to want to destroy something they pay more for. Run a credit check, and if you want to rent at $650, rent between $725 and $750",

One of them went on to say "The quality of your property is the quality of your tenate",

I feel a little less than satisfied, as I know of one who had 6 rentals, and his horror story was people stripped everything out of the properties, and ultimately caused him to go bankrupt!

How do I, as a soon to be landlord, filter out the hooligans and protect myself from bad tenates? I am eagerly seeking as much advice as I can find! Thanks!

Hey Tim, thanks for you response. Yes I've looked at the demographics, but it appears they are moving down, median household income's median household income in 2011: $32,371 (it was $34,824 in 2000), the average household size was 2.45 and the average family size was 3.00, which tells me the average person makes less than $1400 a month, unless again I am looking at something wrong. Following the 3 to 1 rule, I wouldn't be able to rent more than $475 for a single renter and expect any real consistency in their payments...

Originally posted by @Elizabeth C.:

"local factor- if these tenants are non-transient why do they rent?"

I'm not certain. I mean there are 2 good size colleges here, but there is also a decent amount of industry.

With some of what your saying, I simply don't understand how to find out some of the information lol. Rent prices by area, yes. Looking to rent long term or short term, I don't know. Number of days on market, I know appx. how long but not how to tell if it's necessarily a good or bad deal.. there is no military except national guard/reserve.

Alot of the houses have been built between 1900 and 1950, and need alot of rehab, but again there are alot of houses for sale.

Thanks for your reply.