All Forum Posts by: Jeff Bridges

 No pools. period. Tell tenant your insurance company does not allow pools on the property. Insurance could cancel your coverage or raise your premium if they found out about the pool or trampoline being on the property. deny both of those each and every time. Way too much liability exposure to you; no upside to your bottom line by granting their request.

 Landlord references/ interviews are tricky. You can weed out fake landlords by doing prior research before calling. Tax records to verify the person you are calling matches the online owner records, verifying the exact rent they paid, asking them to verify the address of the rental, move out times matches the info on the application. Fake landlords wouldnt know the other details or amount of rent most of the time. See article below on other tips.

here is an article to weed out fake landlords:

https://www.rentecdirect.com/blog/tell-rental-appl...

 Read up on fair housing laws and local state laws before you get yourself into a pickle. Fair housing laws prohibit charging a higher deductible for families or discriminating against families. See below detailed answer from a law firm on your question.

https://fairhousing.foxrothschild.com/2011/07/arti...

You got alot of people with both scenarios, which seems like alot of wear regardless of who you choose. I place more weight in the landlord references. What did the landlord say about each and every one of these adults? If you havent called each persons prior landlord, I recommend you do so and find out about their late history and how they kept their unit. in each application, are they all related or unrelated?

here is another good resource for screening. read it over to review your process and make sure you are consistent in the future:

https://www.biggerpockets.com/renewsblog/2013/01/2...

At first glance it seems like there are too many unrelated people applying to live there as roommates. Just remember the screening is more than income plus credit score (which is bad for both and already a caution flag). Landlord references are important. Remember sometimes choosing none of the above and waiting for other applicants is better than making a bad decision and selecting one of them.

 Using the free version of cozy: if you're tenant paid sunday, payment would likely hit your account on friday, since it takes 5 business days to clear using their service. They allow you to pay $3 fee to have it deposit sooner. If the tenant paid mon/tues, it might not hit your account until the following monday since the weekend days dont count against the waiting period. It's the cost you'll have to be willing to deal with to leverage the completely free service they offer. They usually are pretty transparent on when funds will be deposited in the email notifications based on when tenant pays up.  They can setup accounts over the weekend no problem from what I understand. The funds just dont go anywhere until monday however... Since the 1st of the month falls on all different days, all landlords deal with the length of time it takes to deposit into your account to be changed...

 ....With experience. Lacking that, you use the BP calculator. Below is an example of just one good resource to research your neighborhood. You can check out the best and worst school districts, demographics, livability of the neighborhood. You could check out the livability scores of each neighborhood to find out which are the most desireable and which are the least. Could give you some insight on why your 40k house is located in a non sought after neighborhood of your target city for example... You could also use the rental sites to check out your rental comps and see what the housing stock looks like... It's like detective work, only your on your own to do your research and figure out your own criteria after lots of research. talk to someone local besides your family member. They might know of neighborhoods, but not really know about them. 

http://www.areavibes.com/

 there are money laundering laws and policies required of banks that make what he's trying to accomplish more difficult. Sounds like he needs to be talking to a law firm who may be able to suggest some legal strategies that they could facilitate for him. power of attorney to cash the check might be one option they suggest.

Follow up once you know the situation with PMI on your current loan. also provide a timeframe where you think the loan will be paid down enough to get to 25% of appraisal or that you can challenge PMI to be removed. I would stick to your current loan at first glance. PMI is temporary, fixed interest rate is for the life off the loan.... You can calculate the total loan cost at life of loan at each rate and see the difference.

https://www.bankrate.com/calculators/managing-debt...

Looks like it might take a bit over 2 years to breakeven (ballpark, maybe longer) on the loan/closing costs of a refi to benefit from the lower monthly expense. When do you expect to have your balance get to 20% of a new appraisal? Have you checked if you are allowed to remove PMI on your current loan if you get the property re-appraised and it meets criteria to allow you to drop it? That might be worth checking out if possible with your lender and what steps would be needed to drop PMI and how soon your equity might allow that to happen...

 I see lots of talk of what NOT to do, but not much in the way of recommendations on suitable alternatives. I feel like there is not much to take away from your guidance if we dont know what is actually useful to RE investors. I'll add a plug for quicken Premier (includes rental bookkeeping and related expense categories) as its very easy to learn and much less expensive than QB, yardi or buildium for small time investors with less than 10 properties. Also auto downloads transactions from the operating account and any other rental accounts. Been using it for 5 years and CPA has no problem using the schedule-E output report I share from quicken with them each year.

sidenote for your 15 unit company:  They pay $3000/ year for their bookkeeping with yardi ($250/month minimum). Do you really suggest $3000/year for software is a cost-effective approach to running their bookkeeping their operation for a 15 door business or any small-time landlord operation less than 15 units?

 Earlier you said you were just going to mail the schedule E and made no mention of using tax preparation software to prepare your entire tax return to include the 1040 (thats the main tax return form that you submit to the IRS as part of your filing). I wasn't wrong and you didnt use enough details to describe your situation. Next time consider using the e-file function of the tax prep software so you dont have to print out a million sheets of paper and rush to the post office last minute. That is so 1990. It should have been included with your software purchase. If you e-file, you dont have to mail in a copy.

Also next year look into freefile by IRS (the official link to use the software is below), which provides free online software (all web-based) at no cost to you and will e-file for free as long as your household income is 66k or lower. I recommend taxACT or taxslayer as they are very easy to use. You won't find reference to this option on any of the vendor sites because they prefer you pay full price.

https://apps.irs.gov/app/freeFile/jsp/index.jsp