All Forum Posts by: Corby Goade

Hi @Wendy Carbone, sure, I'd definitely start up a management LLC, doesn't hurt anything and it makes you look much more professional, in my opinion. Good luck!

@Account Closed, I don't lie to my tenants. I work for a property management company, if they asked if I owned it, I'd tell them. No one has ever asked, most tenants don't care. And yes, social media, it's one of the best tools out there- I am not digging through comments to see if their ex mother in law is mad that the applicant didn't like her cooking. If a tenant tells me that they like to keep to themselves and are quiet, but all of their photos have them partying and smoking weed, then I pass. And that happens fairly often. I've learned more from looking at a facebook profile for five minutes than their application can tell me, both good and bad.

Obviously, you'll want to visit with your lawyer to get advice on those questions, but here is how we do it:

We have an LLC that is a property management company. That management company has an operating agreement with our other LLC, which owns our property, we are simply employees of the management company and that is how we present ourselves to our tenants.

Beyond the legal protections that this structure offers, it makes interactions with tenants so much simpler. It's much easier to get rent increases, collect late payments, etc, when you are just representing the owner and not putting yourself in a position where a tenant thinks they can negotiate with you. You're just an employee doing your job.

As for a lease, I'd find a local real estate investors club and ask others to share theirs. Your lawyer might have a good one too- that is a good route to go, since your lawyer will likely be handling any issues, they will be familiar with the lease and comfortable enforcing it.

We also have an umbrella policy- they're cheap and offer a little more peace of mind.

As for tenant screening, depends on your neighborhood. We have a minimum credit score, no felons, 3X rent for income, etc. BUT- the most telling screening for us is checking people out on social media. That will tell you much more than any application will. And of course, we call every landlord they've listed on their application.

For rent collection, we use cozy.co, it's free for landlords (and tenants if they use a checking account) and is direct deposit. You don't have to wait for rent in the mail, and you know immediately if rent is late and can add that on to their required payment. You have to wait a few days for your deposit, but you're notified that it's on the way immediately, and it's well worth it to avoid fighting for on time payments, waiting for the mail and arguing about late payments. I'll never accept a personal check for rent again.

Finally, make sure your application includes banking info and SS#. If you ever have to find them and collect on a judgment, that info will be infinitely helpful.

Best of luck to you!

I'd never use a CC for a purchase. Cash advances from CC are expensive, and if that is your only option, you aren't ready to buy. Save up some cash and buy when you are ready. If you need a cash advance from a CC to make a deal work, you'll be dead in the water before you even start.

That said, unless you are doing private money or OWC, no bank is going to loan you money if you are using a CC cash advance for a down payment. Honestly, I doubt a private lender would lend you money if you have to use a cash advance to make a deal work either, it's very dangerous.

Since you asked- I have never understood why people paint brick. It's generally attractive, zero maintenance and typically an upgrade from siding. There are a few styles of brick that don't look great, but when you paint it, now you have to maintain the paint. You could have moisture issues, which will shorten the life of the paint, and even if you don't, it has to be repainted at some point indefinitely.

The only way I'd paint any brick is if I were trying to sell and the existing brick was ugly and beyond repair.

Wow- you are a brave investor! That sounds like a pretty aggressive first deal. Cheap property, eight risky tenants, probably will take quite a bit of your attention. Keep us in the loop on how it goes, best of luck!

Good advice above from @Mike Dymski. It's funny, I've never heard of anyone planning to buy and hold so that they can get to a place where they can flip full time, it's usually the other way around. Think of it this way- buy and hold is, or at least can be, passive. Flipping is a JOB. You don't make money unless you are working, buying, renovating, selling. You don't have equity when you flip, and you are paying taxes on whatever you make. With rentals, you people pay you rent when you are on vacation, when you are sleeping, etc, and taxes are at least deferred, if not eliminated. If you plan to flip full time, when do you retire? What income do you have when you retire? Lots of people do it, so it's not impossible, just some things to think about.

That said, you can't get a HELOC on a non-owner occupied property through conventional lending, you'd have to live there. You didn't mention if that was your plan above. You could get some cash on a non-owner occupied property from a private lender, but chances are it will be too expensive to make sense.

Keep in mind, there are always good deals out there if you are knowledgeable are ready to buy. You can find deals with equity already built in, which can accelerate your ability to leverage. Our market is very tight, but we just bought a place for a bargain and it appraised for more than 150% of purchase price after I put about 5% back in to it and got it rented- we only got that deal because we knew our market and were ready and agressive. When you buy right, it gives you lots of options. When you are too eager, you can paint yourself in to a corner. you said above that you'll be buying in April- what if you don't find a great deal in April? Be patient and find the right deal, make sure you have equity the day you sign. Good luck!

Hey @Justin Frye, there's already good advice above on interacting with your tenants and how to work on lease renewal. If you are new to this, the best advice I can give you is DO NOT tell the tenants that you own the house. Tell them you work for a property management company and will be their landlord, representing the owner. It makes everything so much simpler, raising rent, telling them to clean up garden, evictions, etc. You are simply enforcing the lease and following the orders of the owner.

We started doing this a few years back, and I have not since had an argument about collecting a late fee, service a landscape violation or 3 day notice. I'm just doing my job, and really feel for them- the guy who owns the place is a real jerk, not cool like me. Start an LLC, have some cards made and just "do your job." Good luck!

Borrow in your personal name- is there a reason that you are insisting that you borrow in your business name? Conventional money is cheap and plentiful. If you have decent credit and a job, a bank will practically throw cash at you.

If you are going to buy and hold, I'd avoid hard money like the plague. It's expensive and it could bury a beginner who doesn't have a plan.

I'd either look into house hacking or finding a rental that already has good tenants, a solid lease and meets your criteria. That scenario will make it easiest to get convetional financing.

If the lease expires next month, tell her you are not going to renew and she needs to vacate the property in 30 days (the day the lease expires). Read up on these forums on tenant screening and BE PICKY! Having a vacancy for a month is much less expensive than dealing with a terrible tenant for a year or five. The mental energy you have to spend on a tenant like this is expensive, I've been there. BTW, there are no "tenant's rights" in this regard. If they don't pay, anyone can be evicted regardless of their job, age, race, etc. Get up to speed on your state's landlord tenant regulations and know your lease inside and out and move forward with confidence. I amend my lease here and there with almost every tenant I have, because I keep learning and having new experiences that I'd like to avoid in the future. Good luck!