All Forum Posts by: Charles Long

@Joshua D. My 2 cents... Potential tenants should be evaluated on 6 factors 1. Job time/stability 2. Rental History 3. Income 4. Credit 5. Criminal History 6. Pets

If any one of these factors is less than ideal (in this case credit) but everything else looks good then that should be ok.

If 2 or more of these criteria are less than ideal...RUN

Also, someone willing to pay $7500 deposit is a red flag for me. Sounds like a desperate tenant. Of course I dont know what the monthly rent amount is but in these types of cases we typically go with 2 months rent for deposit and possibly first and last.

I dont recommend accepting the $7500 as advanced rent... They have to pay rent anyway. Keep it as a safety net for yourself to make up for the added risk you are taking on with a less than stellar credit score.

Good Luck!!

@Sarah Vance Personally, I dont think renting and being a semi-long distance landlord is that big of a deal. Offer a good price and ask for a 24 month lease. Make sure to choose great tenants, screen, screen, screen.

Secondly.... For future reference, I dont ever recommend purchasing a 1 bath home for a rental, unless you are planning to renovate and add a second bath. 1 baths are hard to rent.

Third.... Consider selling and owner financing. You can charge a premium on asking price and interest rate and take the maintenance and upkeep responsibility off your plate. I just did a deal for one of my clients like this....$5000 down, 15% above market value on the asking price, 1.5 points above prime on the interest rate (which is generous).

My client has supplemented his retirement income, the buyers have good income but some credit issues that prevented them from traditional financing. Everyone was happy.

Just a thought. Use an attorney for the contracts. Good Luck!!

@Mark Sewell sorry for the delayed response. I'm still learning the ins and outs of the system. No rmlo, the owner is carrying the note. He had a real estate attorney in place that he had used on a couple previous deals to handle the paperwork, title, etc...

Yes, tired landlords are a good market. There are a lot of them out there. My theory is that they really don't have a solid grasp on the proper way to do it, i.e. handshake deals, improper tenant screening, etc. So they get fed up with bad results and problem tenants.

@Alvaro Rodriguez I just moved fro Houston and have some insights into your questions.

1. It is not likely that a new construction home will appreciate enough in 2 years for you to make a profit once you take into account fees, commissions, taxes, the monthly payments that you have been making, down payment closing costs, etc... The vast majority of your monthly payments go towards interest in the beginning plus new constructuon is priced at the top of the market.

2. Over the past several years Houston has seen really high appreciation numbers but mortgages are currently outpacing rents and the market is cooling. My opinion is that values will slow down for a couple years and rents will start to rise. This is due to the recent rise in interest rates. If rates are reduced again appreciation will resume (just my opinion)

3. I think living in it for a couple years and then using it as a rental is an excellent idea. New homes are very easy to rent and very few maintenance issues. The longer you hold on to the house, the better your profits will be. Assuming there is no catastrophic market failure such as 2008. But remember, TX home values and appreciation remained steady through the crash. Appreciation slowed to a crawl but did not dip into negative numbers so you should be safe.

I know a great Realtor in Houston that can help you with your search. if youre interested. I'll send you a connection request. Good Luck.

@Teho Kim ok, I have some opinions here but Im not gonna touch this argument. I see everyones point I just think each person is looking at it from their own perspective. I tend to share Sam Hopkins outlook on it. Without arguing over specific numbers.... $35k down is not money spent, its money invested in an appreciating asset.... although it is now less liquid and could be tied up for a while.

2 concerns come to mind for me....

1) The age of the property can almost guarantee that you will have "surprise" repairs. I think low cash flow is ok but the property should be much newer to guard against "hiccups"

2) I see that you are stationed at Laughlin AFB in Del Rio, TX. Why not invest there or in San Antonio/Austin? (I have lived in all 3 places) there are some great deals. I haven't been to Del Rio in a while but I know there are some homes begging to be flipped/renovated...

Maybe I missed something in your post but I would much rather have a "local" property. Just my opinion. Good Luck!!

@Johan Yang Everyone here seems so pessimistic. I wouldn't necessarily jump to the conclusion that it's a scam but I wouldnt give any information until I was able to verify that this guy, his company is 100% legit. That should be easy enough. Here in Texas it is quite common to see regular Yahoo and gmail accounts in the real estate business.

Dont jump to conclusions but be careful!! Good luck!!

@Christian Villanueva Austin makes a few good points definitely but there are some other factors that need to be considered. I am familiar with the Houston market. Lived in Clear Lake for the last 3 years. I have "house-hacked" successfully several times.

#1 the more bathrooms the better so shoot for a 4 bed 3 bath home if possible you can charge a premium for a private bath

#2 you live in one of the rooms with the shared bath and rent out the master you can charge even more for the master suite

#3 if the house is clean and in good shape vacancies will not be much of an issue, there are many, many, many people looking for flexible living situations due to work transfers, divorces, transition periods, new jobs, etc...

#4 People will pay a premium for a month-to-month lease (you can't really hold someone to a lease in this situation because of potential personality conflicts)

#5 Make it "all bills paid" including cable and internet, people will pay a premium

#6 $700/Room is not that bad, you could probably charge more if the home is nice

#7 The apartments available in that area for $700/mo are NOT NICE plus there is a 12month lease typically, plus utilities, plus they have to move their furniture in, etc....

#8 Remember, you are marketing the convenience, people will pay a premium for convenience

#9 In my experience I have never had more than a couple weeks vacancy between tenants but both my properties were nearly new, very clean and fully furnished

#10 Some clients of mine just bought a 5 bed 3.5 bath home in Clear Lake City Super Nice, upscale neighborhood, for $325k, huge house that would be perfect for a house hack.

Just some things to consider. I'm not in the area anymore but I know a great Realtor that could help you. I'll send a connection request if you're interested. Good Luck!!

#3 there are many, many, many people

@Salvador Santolucito Honestly, you shouldn't have to follow up too much with prospective tenants. Following up is not going to sway their decision if they aren't interested. If they expressed interest it is good to let them know that you've had several showings and ask them if they intend to put in an application, beyond that there is not much else to do.

If your house is a good value, meaning that the price is right for the neighborhood and level of renovation/finishes/amenities then you should receive several applications and take your pick of qualified tenants.

In my experience, (I have executed somewhere close to 400 leases as a Realtor) landlords tend to make a few mistakes 1. overvalue their renovations/flip quality 2. Use a high-price strategy to "test" the market 3. For Rent by Owner 4. Get impatient in waiting for the right tenant

Price at the low-end to middle of the market to attract a lot of applicants then take your pick of the highest quality tenants. Ask for a 24 month lease but be willing to accept 18.

Hire a Realtor to get maximum exposure for your listing if you haven't already. It will rent faster and attract better qualified applicants. It is worth it to pay the commission!!

Be patient in selecting the right tenant. Don't make a snap decision. It is better to lower the rent a little and get a great tenant than to have a total nightmare on your hands.

I can forward you an article I wrote on tenant selection and pricing strategies if you would like. I will also be happy to run some rental numbers for you if you need. I'm a Realtor in the Austin area by the way.

I'll send you a connection request. Thanks, good luck!!

@Almaz Hayet I'll keep an eye out for possible listings for you. I've sent a connection request. Let me know your email address and I'll send over some potential properties for you. I'm always here to help. Thanks.

@Kyle Jey For turn-key properties the bank will give you a pre-qual letter with a maximum approval amount. They will adjust the amount when you are ready to make an offer...for example if you are approved for up to $300k but you want to make an offer of $200k, your loan officer will send you an amended letter. Ive even seen some,that you can log in and change tje amount yourself.

For a rehab, renovation, flip property, etc... (Assuming it doesn't qualify for traditional financing) Be sure of your numbers, put the property under contract for 30, 45, 60 day closing date....then present the deal to your lender for approval.