All Forum Posts by: Chris B.

Based on my experiences, I find the credit score to be an extremely accurate indicator of whether or not a tenant is likely to pay rent on time and cause other issues like smoking / damage to the property. My minimum score is in the low 600s.  I'd consider each no credit situation individually, but no longer accept poor credit. Time after time, it was the tenants with poor credit that were headaches. The statement that poor credit is good due to leveraging credit for investments is something I’ve never seen in a tenant as a landlord. I’ll consider it if I ever come across it but I’m not expecting to encounter this. I rent in B+ neighborhoods. I have never encountered anything even close to 10 applicants where half have no credit and half have bad credit. If I did, it would mean I'm asking way too much for rent and I need to lower my rate.

If you have a nice place, consider adjusting your asking price. If I owed property in C / D or worse neighborhoods, I would expect worse credit, but I don't have experience with these locations.

I have a different view.  I would not suggest collecting a deposit on either the 1st of the month or upon occupancy.  Always collect a full deposit at the signing of the contract.  You can also collect rent at the signing of the contract or before you hand over the keys.  Regarding the rent for the portion of the 1st month, I would offer to pro-rate it to half a month's rent.  If I was feeling especially generous, I'd pro rate it to 14/31 of the monthly rent to if you wanted to be exact.  As they look to be potentially excellent tenants, I wouldn't want to loose them or start off bad over over  trying to squeeze out that extra half a month's rent (Aug 1 - 17).

Thanks for the additional information.  So say you get a 20% down payment, you might get something like almost $50K down and you would be charging the new buyer a higher interest rate and the difference would be profit.  I assume that means you have connections that would let you complete this deal which is the final piece.  You can profit and you can help a buyer would normally wouldn't qualify get a home.  Nice.

The tenant has become unreasonable.  The landlord has provided what I feel and I think a court would feel is more than satisfactory level of response here.  I would turn the phone to silent mode now and ignore the tenant tonight, try to get some sleep, and get the AC guy out Monday to fix it.  Then deal with the tenant who won't be living there any more once the current contract expires.  Serious about that last part.  People think being a landlord is easy :)  

If the AC isn't fixed by Monday when the tech comes, I as a landlord, would rescind my cash offer in this case and purchase a window mount unit and get at least one room cold for the tenant until the issue is resolved.

I actually had the AC die on a tenant last year.  It was a Friday also.  I arranged to have a AC tech come and fix it on the following Monday, offered the tenant $100, and everyone was happy.

I'm curious why someone would pay $15K more than the property is worth when you can buy the next property down the street for actual market value?  Is the subject to / sell with owner financing option that makes this the more attractive deal somehow?  How hard would it be for you to flip it and find a buyer to purchase it from you with this type of financing?

Your sister's ask doesn't directly align with the RE investing that you likely would be able to participate in. Syndication might be what she is looking for? If she wants to know when she will reach a certain monetary goal, that type of thinking applies to different investing such as bonds and annuities and not to something as dynamic as hands on RE investing or stocks. Here's an example. One person can invest $300k cash in a SFH bought outright and receive say $1500 rent per month It would take 55 years to earn 1 million before expenses. Another person can start with $100K, fix and flip 10 houses and end up with 1 million in 5 years or less. The rate of return is based on active decisions and can not be guesstimated. She may be asking you to provide a specific offer on a specific property were you can work out all of the numbers and therefore estimate a profit on that one project. It probably won't provide a million dollars in the first transaction and you can't predict how many deals exactly it will take to get there.

$1M in the bank isn't going to be nearly enough to provide your sister's family with the lifestyle they have gotten used to.  However, if they are making $500k a year, they can easily have their 1 million savings after 3 years with a financial advisor directing them and some discipline.  That is going to be hard for you to turn around that kind of profit share for them in 3 years through RE starting from zero.

You certainly need to build your connections which you are doing right now.  To win over any partners, you have to have a real, quantifiable deal on the table for your partners to look over and see if the numbers work for them.  Get a list of possible partners.  Determine what your partners need out of a deal.  Then find that deal that meets the requirements and present it to them.  I believe you feel you have amazing tenants, but an investor is going to be looking at the profit potential.  

If you are handy, you can purchase and install your own mini-split.  I installed a high SEER Mitsubishi 18,000 BTU heat pump / AC and then had an AC technician come out at the end to vacuum the lines and do the final electrical hookups and verify everything was good all for under $3k.

I think you will need to be much more specific. Too many factors at play here. Size, condition, rooms, location, nearby factors that affect price. If you provide a sample property address, those who know the market may be able to provide guidance. Price of the house has minimal correlation to rental income. Some people get great deals and others overpay. Some purchases return excellent ROI and others do not.

As you can see a lot of people on this forum including myself don't have a direct goal of any particular number in our bank account.  We see the goal of continuously building wealth with your profits.  We can cash in at any time, but that isn't the goal.  How quickly you accumulate wealth I think is what you are asking.  The answer is it varies wildly and can not be predicted.  It depends on environmental conditions and your decisions.  Some people can start with nothing and wisely manage their RE business and have a million in a few years.  Others can start with $100K, make poor decisions, and loose everything.  Some people have high risk tolerance and others do not.  I have been slowly acquiring RE ad do not have $1M in equity.  I'm guessing that if you take all RE investors in the US, more than half do not have $1M in equity in their lifetime.  Many do as its not too hard to get if you make wise decisions and are active.  Only your decisions can predict your outcome.