All Forum Posts by: David S.

Originally posted by @Sylvia B.:

I would suggest you add to your standards. Make a written evaluation of each applicant:

• Keeps appointment - On time/Late but called/Late, no call
• Cleanliness - Neatly dressed/Messy/Trashy  -  Vehicle clean/Messy/Trashy
• Social Media - Posts clean & polite/Crude/Promoting illegal activity/Partier/No posts found
• Disposition - Agreeable/Polite/Pleasant/Rude/Offensive

Type up a simple form and add the above to your current credit, income, criminal, and reference standards. Mark what you need to on the form. You can give whatever weight you choose to each item when making your decision, just use the same standard for each applicant.

***DISCLAIMER***
Some localities have very specific laws limiting the landlord's ability to screen tenants. Know your local laws!

[Edited to add: I would choose applicant B.]

This is perhaps the best advice here to stay out of trouble with Fair Housing Laws. If you have WRITTEN criteria made up BEFORE you show these prospects the unit and you are consistent, you should avoid losing a lawsuit.  Being late with no call is huge in my book and would result in a lot of points deducted.  That means that person does not respect your time.  Disrespectful FB posts is not great either.

Also, who applied first?  What does your written policy say about holding out until you get the best applicant?  Some municipalities don't allow that.

I would remove race from any equation as you have pointed out is a protected class.  You do not see white/black/other. You see a prospective tenant. Period. Actually, the only color you should be seeing in this business is green.

I would take Tenant B.  You can even reverse the races in the scenario and it wouldn't make a difference.  

Overall, the finishes look nice.

Unfortunately, there are several issues that are hard to overcome:

Bad layout of living room/kitchen, backs up to the road, most expensive in the neighborhood, largest in the neighborhood, funky addition, and weakening market conditions.  Concerning the layout, wall reassignment/removal would have been addressed on the reno. As far as houses with horrible additions, I typically offer less for those to account for the costs of removal of the addition and the loss of square footage on the final price.

I would recommend:

1. Staging- you said this was done. Photos need to be updated.

2. Drop in price to 199.9k.  You will pull in the under 200k crowd.  Your market is similar to mine and you will pull in much more hits with this as agents/buyers are probably pulling in searches under 200k.

3. Consider changing agents to someone more experienced in this type of situation.  Aggressive social media push should be used.

4. List it as a 4BR. In many markets, a 5BR is a negative. It will also be eliminated searches of 4BR houses. Maybe you can list the extra room as a mancave, she cave, bonus room, etc.  I see you already have an office.

5. Pull off market and relist. This will send it to people with a new on market MLS feed.

6. Feedback from every person that sees it. The agent should be able to get this.  In my market, a 4 question survey is encouraged.

@Shane H.  and @Michelle B.   

I agree that QB is a powerful program for accounting. However, there is a big learning curve. For example, the terminology is completely different. You don't have tenants or expenses, it is called something else. Also, QBO is different from the desktop version, so any step by steps for desktop useless when using QBO.

Shane and Michelle, do you have any sources or information that is available on Landords using QBO properly?

@Brian Beadle In my area, it is difficult to find a good PM. As a result of this, most investors with more than 75 units go this route just for the sake of having competent management of their properties. They tend to to just manage their own ONLY. I will probably do the same as well. However, why would you want to enter in such a low margin business? I guess that is a personal preference. Many RE companies do PM as a loss leader because they work with investors. Therefore, if I were to do a PM company for hire, I would have my own brokerage. I would estimate that 30 percent of investors would like to expand by buying more. Then maybe 10 percent are willing to sell. Therefore, you would have 40 percent of potential sales/buy clients with potential of double ending commissions by representing both in a deal.

@Colby Mulry Yes, I have experienced this. What are the chances that a replacement tenant WILL NOT be late? I would say that this depends on your local market and class of rental. Why spend 10k in lost rent, eviction costs, and turnover costs if you will be getting something similar? If it bothers you that bad, issue a rent increase in the amount of the costs of a PM and hire a PM. Or a rent increase to compensate you for the extra work. It is easy for someone to say evict or don't renew when you are the one who will feel the sting of the loss of revenue. More than likely, this tenant cannot budget the bills in accordance with paycheck dates and your rent payments are getting paid on his 2nd paycheck of the month. Also, is the place well kept, taken care of? That is another factor in your decision. If he takes care of your place and does not get social visits from the police, then just keep getting the late fee or any extra "inconvenience fee" you deem fit on the lease renewal in the form of a rent increase.

@Jim Chesmore I completely understand where you are coming from. I use QBO and it is a PITA as you just saw how you need to translate accountingspeak to rental properties. I am currently researching Buildium, Appfolio, PropertyWare, Rentec, Rental Manager for use. They all have an accounting feature for rental properties. Now I am not sure how good they are personally but they all seem to suggest that their accounting features are better and more custom than QB. Perhaps some users of these software packages can tell us.

Many local, community banks and credit unions don't care about seasoning.  You would get a non-Fannie Mae type loan in the form of a commercial or portfolio loan.  The interest rate would be a little higher and a shorter term, but it would be a good move to start a banking relationship with that community bank.  IMO going to a private lender for a few months will cost you thousands in closing costs and not worth it.

3 red flags:

1.  "persistent"

2.  "fee upfront"

3.  Big promises

Find someone good in your market and offer help. Connect with as many local REI investors as you can. Not sure what you are trying to do, but a lot of experts on BP give back by offering advice.

@Rick C. Better to spend $1100 now than thousands later. Sometimes several treatments fail to do it. It is also much easier to do it while vacant. Once a tenant has all of their junk in there, well, that is more hiding spots for them and a more expensive treatment. And then liability....a model just won a multimillion dollar lawsuit over bedbugs. Definitely need a Pro with a guarantee. As far as heat or chemical, talk to several companies. Some companies have stopped the heat process. I suspect due to liability of fire risk. I have had good luck with chemical treatments.

PROS:  Less competition therefore better price and terms.  It is kind of hard to get a good deal when there are 100 offers on it and they are bidding up the price.

CONS: None that I can think of.  Maybe making other investors jealous that you got a great deal!