All Forum Posts by: Daniel A.

What you should take into consideration is the picture as a whole. Homeownership for 20 years along with a decent credit score are pretty solid indicators of responsibility and an ability to pay rent. Were you to take out of the picture the good credit score or the 3.5x verified monthly income, then you'd have cause for concern. Owning a home for 20+ years is an accomplishment, and it's a shame that her neighborhood got to the point that she didn't feel safe living there anymore.

At most, what I would ask her is why it is that, after 20 years of ownership, she's going toward rental rather than buying another house. But you definitely want to tread carefully. Maybe she just wants to have extra money in her pocket for very personal reasons. 

It's understandable that you don't want to make a mistake but personally, she sounds like a pretty solid tenant to me. I hasten to add that a great-on-paper tenant could turn out to be a nightmare, but I would let her rent one of my units, and I have decently high qualifying criteria.

I wish you the best of luck in your tenant hunt and hope that whatever choice you make works out in your best interest.

You definitely find yourself in a situation that no landlord wants to be in. What I can do is ask a few questions and provide my input. It is by no means exhaustive, and I am sure there are others who have better ideas, but here goes:

     With the notices, have you issued progressive notices? And by that I mean, was the second notice more stern than the first? Was the third written in such a way as to imply that the next notice will be one initiating the eviction process? 

     Do you have it structured so that your notices have ramifications? I.e., first notice is a courtesy; second notice is an X dollar fine; third notice is another X dollar fine and a final warning; fourth notice is the start of the eviction process.

Initiating the eviction process varies state by state, but maybe what they are doing does not rise to the level that the state deems eviction-worthy. In that case, the notices with attached fines would be the most you can do, but (and I don't know the applicable law off-hand here), you might not be able to start doling out fines if you didn't specify your notices would include them in the lease. You'd have to consult an attorney on that one. 

If your notices don't take a progression approach (each subsequent one becoming stricter), then you want to get on that. If your problem tenants continue to get notices, but the notices are essentially the same, then they're obviously not taking them seriously.

Another method I have heard of but have not had to implement myself yet is essentially paying them to move. You approach them, tell them that there are two options at this point. Option one is that you pay them, say, $400 for moving costs. You tell them that assuming they return the rental unit to rentable condition (top-to-bottom cleaning) that is to your satisfaction within a week, then they get their security deposit back along with $400 to help with moving costs. You agree to break the lease without court action, so long as you don't have to do any work yourself on the unit before renting it to someone else. Then you tell them that option two is that you take the numerous notices and neighbor complaints down the courthouse and file an eviction against them. You advise them that having an eviction on their record will severely inhibit their ability to get a decent apartment for years to come. Let them know that if you win, they will have to pay the court fees and will be liable to repay you the entirety of the lease. It will impact their credit. You can tell them that if they choose the eviction option that you will not provide a positive reference should a future landlord come calling.

Most people would likely choose the option where they make money to move. Some landlords scoff at this idea, but think about it: pay $400 to have them out in a week and have the unit in rentable condition and re-rented making money, or pay $1,200 +/- in court costs and have the tenant living there for a month or two, rent free. Then if you win the eviction, good luck having that tenant pay you anything back. Ever. If they go through an eviction, chances they care about their credit aren't big. And what do you think are the chances of an evicted tenant cleaning up the apartment you just kicked them out of?

I wish you the best of luck. Trouble tenants are a pain in the rear to deal with. There is that part of you that wants to work with them, that wants them to just be kind and respectful, but oftentimes, that is not going to happen. You must present yourself as an authority. 

These times definitely cause problems for a lot of people and it can be a pain to find a good tenant. But good tenants are out there and you must remain vigilant. The best way to find prospective tenants is of course by placing advertisements on as many platforms as possible. Let people know that you have rental units available, online and by word of mouth. I have a friend who keeps sending prospects my way because he had an ad online for one of his properties. Once he filled it, prospects would then ask him if he knew of anywhere else. 

Assuming you get a few prospective tenants, you'll then want to vet them to ensure you don't have a serial evictee on your hands. What I usually do when placing an ad is clearly outline my Tenant Qualifying Criteria (you know, things like: a decent credit score, no prior evictions, no criminal convictions, etc.). When a prospective tenant calls based off any ad, I'll again go over those criteria with them. And I'll go over it once more when they show up to sign and fill out the application. If someone knows they have an eviction on their record, they likely won't go through the whole process and pay the $25 application fee. 

Really, the key is to get the word out that you have an available property. Online platforms are where most everyone goes to find them. Google "apartments for rent in [your city]" and see what pops up at the top. Then do what you can to get your ad on those sites.

Hello,

It is always nice to have that kind of money, it just stinks when you don't know what to do with it. My question would be, What are you looking for in return? Are you looking to get into real estate yourself? As in, are you looking to use that as a down payment, whereupon you will then either be a landlord or hire a property management company? Or are you looking to find someone who is an experienced real estate investor with whom you can invest where they do all the work and you get an ROI on that $20,000?

I want to congratulate you on working to get your real estate license. That's quite impressive and I commend you. 

This app / website has a wealth of information, you just need to know what it is that you're looking for. Coming in with an open mind will cause this to seem … underwhelming, to a certain degree. But if you come in with a particular question or a particular problem on your mind, you'll find that there are hundreds of people who have already gone through what you're going through and who can lend you some guidance where necessary. You will find all kinds of calculators to run the numbers. You will find forums with tons of answers. You will find investors who want to give you money. You will find anything and everything real estate related here, so long as you know what you're looking for.

I personally don't think it's ever a bad time to get into real estate. But then again, it depends on what type of real estate you've got your eyes on. Commercial real estate is likely taking a blow during these virus times and this virus is likely altering the landscape of the traditional workspace atmosphere. Rental real estate, in my preference, is almost always a sure bet. (There are always exceptions, but there isn't nearly enough space here to outline them all.) There will always be people who either cannot afford a down payment or cannot meet loan requirements and they will always want/need to rent. There are people who don't want to be tied down with a 30 year mortgage.

Figure out what type of real estate you want to do. If you're working on getting your real estate license, does that mean you want to get a job as a real estate agent, simply selling other peoples' houses? If that's what you want to do, awesome. Then you can narrow your search here on BP, casting aside forum posts about wholesaling.

There are so many people who are wildly successful in real estate while they work normal jobs. Even in today's world, I would highly recommend that you pursue a college degree, even if you want to pursue real estate full time. Getting a degree not only looks good, but doing the required school work forces your mind to think, it forces it to create and reinforce neural pathways. While you may take a course or two that seem irrelevant, it's still causing your mind to work. When you work your mind (heck, even by doing crossword puzzles), you'll find that you are able to make connections easier. You'll start relating two completely random, seemingly irrelevant bits of knowledge together to come up with a viable response.

And while in college, you could take classes such as accounting or any business related class. Marketing, Accounting, Advertising, Business Basics. Any courses will give you knowledge to build a real estate business. As they reiterate in the BP Podcasts time and again, real estate is a business and the best ( … the only) way to excel is to treat it like a business.

Keep that mind working. Keep those neural pathways firing. You will see how it helps when you face a situation of which you've never encountered. 

I am continually impressed to see people so young displaying a passion for real estate. There is so much potential, and wanting to learn what steps to take is a great start.

What I recommend to everyone is to first figure out what it takes to get a loan. Learn the loan process, learn what banks require to approve you for a loan. Usually they desire something along the lines of 2 years of verifiable income. You'll need a down payment. They'll calculate your debt-to-income ratio. A lot of these numbers cause the rates to change drastically, which is why it is so important that you learn about them now that way you can hit the ground running when you get your things going. And while you're working on, say, getting your credit utilization low and making timely payments to jack up that credit score, you can then start studying up on the real estate business. (The whole credit business is a timely endeavor.)

Once you get a grasp on what constitutes a good credit score and you start implementing goals to make that score better, then you should take some time and figure out what it is that you want to do in the real estate world. Do you want to flip? Wholesale? BRRRR? Buy and hold? Do you want to get into commercial real estate? Apartments? Condos? You really want to narrow your focus on one particular arena that way you can spend more time learning the particulars and the nuances so you can achieve a higher level of mastery.

Other than learning what it takes to get the best loan rates and working toward reaching a supreme status there, education is the most important thing. You could also see about reaching out to other investors and offer to do all the leg work on a deal with them. Remember, you want to make them an offer they can't refuse. You want to bring something valuable to the table that will make them see you as an asset rather than dead weight. You can of course augment your chances of success there by exhibiting to them that you are well-read (but not pretentiously so). Last thing a seasoned investor wants to do is to have to spend time explaining what depreciation is. 

I'm not a seasoned investor, but I spend an inordinate amount of time listening to seasoned investors talk about why they take on a particular apprentice over another. I hope that I can convey some of that information over to you to enhance your chances of success. If you show that you have a drive for this, if you show that you are knowledgeable, that will attract others toward you. Read, listen, learn, take action and you will succeed.

Hello there and welcome to the world of real estate investing. You've made a wise choice and I want to congratulate you. While I can't advise you on what route might work best for you (there are entirely too many factors), I can toss out some ideas for you to ponder.

But first, I'd like to ask you some questions. You may answer them if you'd like, or you may consider them rhetorical. 

     How long ago did you decide to get into real estate? 

     What steps have you taken to reach your goal?

     Are you actively educating yourself?

I will say this: condos can be a bad idea because there is so much oversight. You have associations to deal with, blah blah blah. But then again, people make a lot of money in the condo business. I personally prefer multifamily dwellings. If you get yourself, say, a duplex, you get the privacy of your own residence while someone else pays either all of or most of the associated costs. If you go with a single family house and opt to rent out a room, for one, you can't really expect to charge someone the same amount to rent out a bedroom as you could to let them rent out a side on a duplex, and two, you have diminished privacy. Some people are okay with that. I mean, if you have a 4 bedroom house and you can rent out 3 rooms at $550 a piece, you're looking at $1,650 a month. Depending on the duplex, you might make that much, you might not. All depends.

Do what works for you. Sometimes it's not the best idea to overanalyze something to the point where you don't do anything. And the way I see it, if you're going to live in it, then it's not going to be a bad investment. I would suggest to make sure that you calculate the numbers to ensure that were you to move out that it would cash flow. But even if you end up getting a duplex and you have to spend $30  a month because the other tenant doesn't cover all the costs, you're still up because you're not paying to live in an apartment at $600 a month.  While it might not seem like it, you're still putting $570 per month in your pocket. And you're building equity.

If you are interested in living in the place that you own, then you have a lot of possibilities open to you. As a starting point, I would recommend that you head over to a bank and speak with a loan officer. Take a pen and paper with you and figure out what it takes for them to qualify you. You can also find a lot about this information online, but generally a loan officer can look at your particular situation, debt and all, and give you a good idea on what you'll need. For instance, when I went to my bank, they gave me a mortgage proposal based off what I told them. At that point, it being just a proposal, nothing was verified, but assuming all was true, I had a decent grasp on the numbers. Those numbers weren't precisely what I had had in mind, but it was a start.

It would be a good idea for you to go to the bank with a property in mind. Print it off the website on which you found it and present it to the loan officer. That way he or she can punch in those numbers and give you a better idea. They can also let you know whether they are even able to finance what you're looking at. It was only after twenty minutes of discussing numbers that the bank loan officer told me that they don't finance manufactured homes. 

I generally recommend that you figure out the money situation before you get too deep into finding deals. This is because you could find something absolutely perfect, then find out that you don't meet a particular requirement at the bank that will take substantial time to remedy. And as to your student loans, they usually calculate that into your debt-to-income ratio.

Once you take the leap from reading books to getting mortgage proposals, the feeling is almost intoxicating. It makes you feel like you're making progress, like you're actually doing something. Then you must keep going forward to keep the momentum. And the best thing about a mortgage proposal is that it's free. It just takes time. Go and see what a couple different banks offer in the way of loans. Many different lending institutions have varying degrees of criteria. Where one bank might deny you, another might give you a warm embrace and a cup of coffee. Learn what they look for and start working toward exceeding their expectations.

After that, work up a lease. Even if you don't have tenants, or a property, you're going to need one at some point. Embrace the Sunk Cost Fallacy and spend the time making one. Find a sample lease and then read other leases, incorporating into your lease what you think is good. Soon enough you'll have a solid lease and you will have had hours put into making it. You'll feel like that time was a complete waste if you don't keep pursuing your dream of getting some real estate under your belt. For me, having a large majority of the paperwork already done compelled me to work harder on finding that first deal. I wanted to see all that hard work fall into place. And I tell you what, sitting across from the first tenant, watching them intently read over the lease I made, watching them fill out the rental application and sign on the line, I was elated. They were taking my work seriously. 

Would it be unreasonable to assume that you currently have a tenant with such a history and are looking for something on which to grasp? Or maybe you're having troubles finding tenants and the best option you have is one with a previous history of not respecting a landlord's contract?

Whatever the case may be, you can look at it like this: There is always the chance that your previous offender will have "seen the light" and will be a model tenant. In fact, his previous eviction or court problems may have been initiated by a landlord who is … let's just say "unreasonable." There are plenty of those out there. Organizations have been erected to fight against such landlords, you know, the ones who take a full security deposit for a spotless rental and demand more. 

I myself wasn't an optimal tenant when I was in my younger years. Nothing to bring me near eviction, but yeah, I've paid my share of late fees and have had all of my security deposit deducted, and some. Nothing serious. But now, matured and understanding, I treat a rental as if it were my own property. I just spent two hours today going over nail holes with spackling paste in a rental my mom is about to vacate. What I'm getting at is that while a previous eviction is a red flag, sometimes there are psychological undertones that drove the tenant to such a position that are no longer present.

If you're looking to possibly rent to someone with such a past, there really is nothing wrong with that. It's your property, it's your risk. Really, you're risking it by bringing anyone into your investment. While many will voice their skepticism, what I would recommend, if you're considering it, is just to figure out why their past is flawed. There might be a good story in it. There might be some B.S. in it. Again, it's your property, it's your risk. Take a chance. Let the tenant be the one to decide for you whether you'll give other people chances down the road. Let that tenant know this in unequivocal terms.