Originally posted by @David To:
I have a question on this concerning the 3X income vs rent. What happens if the income is low but it is a high net worth individual? Like someone recently divorced or someone recently retired or working part time? But they have a lot of money in their checking / savings / retirement account? So let's say someone is working part time but have $100K + in their checking and savings account? This person has an income only 1.2-1.5X vs rent though but willing to draw money from savings / checking, etc. Would you take a chance on this type of individual?
Is it illegal to ask for their last 12 months of bank statements (how much they have in their checking, savings, and retirement accounts)? Because when you refinance or apply for a loan, the banks will also require of this from you. This would determine if they are a high-net worth individual and can pay the rent without satisfying the income requirements. Let me know your thoughts on this matter.
So i have a buddy who had a similar situation where he had a women who was getting out of a divorce and her credit was terrible (something about the husband maxing out credit cards and taking out tons of loans in her name prior to divorce) but she had enough to pay for the entire year in cash. He ended up changing his screening criteria (so this does carry forward for that property from now on) and it would have a clause that if you had a lower credit, it would mean X amount of months in advance, with an increased security deposit of X times. The woman has been amazing so far, and that year had past and she is still there, but that's what he did.
Whatever you do, just keep in mind that you might have to carry that new standard you have moving forward on that property. Idk how you would be able to put a clause in there about net worth, but if they have funds available like you're discribbing, then it could be something of the same? Again, this is just what my buddy did not guidance.
