All Forum Posts by: Elise Bickel Tauber

Hey Justin! This is one of the most asked questions I get from my newer investors who are holding rentals. This is a tough one. So i've been an investor and real estate agent for a while and here is what I've seen work.

1. When screening, you need to have the same process across the board. I don't look at credit scores that much because they are easily changeable (like can be made to look a lot better then they should be lol). I do make sure we have 3xs the rent income or 1 years rent in savings. Also we heavily look at residential and employment history. If you have a lot of job hoping then there will be disruptions in their pay which means disruptions in their rent payments to you (more times then not). You are looking for more character references then anything. Never and I mean NEVER trust a landlord reference. Some of my best landlord referenced tenants have been my biggest nightmares. Either they lie about the contact info and have a friend talk them up or the landlord is just so desperate to get rid of the tenant they say whatever they need to do get them out. Really look at their employment and rental history and the rest should fall into place

2. You need to prequalify them a little before showing. We have 4 full time agents on staff and even with that we are often booked. The worst thing you want to do is show a place, they love it, and then you find out they can't move in for 4 months or they want to move in immediately and you have a tenant in there until the middle of summer. Make sure you check move in date, pets, and give a general overview of requirements for your application to make sure they meet it. They could lie but more often then not tenants will let you know upfront about any potential issue for the app.

3. Co-signers can be included in the eviction but they need to live in the same state. At least where I am in Pittsburgh, if the co-signer lives out of state i either cannot do anything or do very little to hold them to the eviction and repayment. A very well qualified co-signer will not want the hit on their credit or the potential garnishment of wages if something goes wrong

4. This has been the biggest thing we have been struggling with. You do not want to loose momentum in the market but you also don't want to waste your or anyone else's time. We give the approved applicant 48 hours to sign the lease and pay deposit or we put it back on the market until they do. During that 48 hour window we tell all other applicants we are scheduling for 48 hours or more past to allow time for the applicant to sign and if they do, we will call you back to cancel. This also lets them know if they end up being the applicant that has the time limit put on them, you aren't joking around. You will keep scheduling.

5. Zillow and facebook market place are still the best.

Hope that helps a little. If you ever need anything feel free to reach out!

Anything with the exterior in my opinion. Mainly because of all the extra work you have to do to keep an eye on weather and tarp etc. As long as you have utilities on, you can do a bathroom/kitchen remodel any time of year but the exterior...not my favorite lol

To start, was this a good tenant that is now exhibiting out of character behavior or is this a habitual late/non payer? That is a huge difference on how to handle in my opinion. If this is a good tenant that just isn't responding and not paying then maybe something is wrong. Maybe do an occupancy check to make sure the tenant is still there (and alive. Sorry if thats gruesome). You could also check with an emergency contact if it's completely out of character. Last year I had a tenant who always paid on time and was super friendly not pay and not respond and turns out they had a stroke and were in the hospital. I would have felt horrible if I had filed eviction on her. 

If this is a habitual late payer or bad tenant, or if your search above doesn't turn up anything, then I default to this...

What does your lease say? In PA the landlord tenant law states that unless you have it in writing, like a lease that states otherwise, you need to give 10 day notice to quit prior to filing eviction. Our lease waives that 10 day notice to quit so I would immediately file eviction. The tenant will either show up and then you can at least get some communication as to what is happening or they wont show up and you can file possession.

Hope everything turns out ok!

Are you over in Philly area or Pittsburgh? I'm over in Pittsburgh and there are a lot of great deals here both for rentals and flips.

Are you doing a DSCR loan on this?

I agree with everyone that seems really high.

I usually see this around $300-$600.

We see this constantly in the profession. The more units you manage the more this will happen. We have a ton of great tenants but then you usually end up with 1 or 2 in a batch of a few hundred that just makes you wonder why you do this (or maybe just me). I will say that sometimes you can talk a tenant into a good relationship. Unless you have a blatant lease violation and you are able to evict, you need to build the best relationship you can with her. The tenant could do a lot of things, not the least of which is destroy your property. Something that goes a big way is to "yes...and" the tenants when they reach out about problems. I train my staff with that. Yes, I acknowledge your question/comment/concern AND here is what we are going to do about. Sometimes they just want to feel heard. 

And if this is a tenant who is still horrible and doesn't care, make sure you document everything, conversations, what happens and when, etc. I would honestly offer the tenant to break the lease. If they think you are a slum lord and you are miserable, I would let them/get them out. It isn't worth it!

Hope that helps at all!

I've managed my own properties and I have a property management company that manages over 500 units for other owners. I can tell you, no one will manage your properties like you do. I know this first hand. On the other side, the point of having a good pm is to not have to deal with the bs that comes up. I do think interviewing is good but also, ask them when interviewing how they would handle certain situations. What is their policy on turn overs? How would you handle a non-paying tenant? What do you do when a repair comes in? Even the best property manager may not mesh well with what you want/need. And the two of you should be a partnership. Join local investor groups (to where your properties are ) via social media if you cant do it in person. Look for recommendations and then interview thoroughly. 

The only reason, in my opinion, to purchase an investment with such low cash flow on paper is if you are purchasing for long term appreciation. If you are just hoping to purchase something with minimal out of pocket costs to re-sell in 10-20-30 years for your profit, then yes. It isn't bad. But if you are looking at cash flow, I think thats way too low.

I agree with the overall consensus. $500 in the big picture is a very very small loss. I had a client whose contractor had 1/3 deposits on 3 different jobs for over $50k and he made excuses and excuses and all the guy ended up doing before flaking was demo (and cause damage) to all 3 properties. They are going to sue because of the situation but with only $500 it just isn't worth it.