All Forum Posts by: James H.

We just finished a rehab on our first property. I put the for rent sign up before the rehab was done but after we removed all the nasty. some tenants may not be able to see the space for what it could/will be, but others can. You might find someone who is cool with it having less renovation done than you plan to do.

Plus, I found that I got some needed screening practice during the time when it was partially complete and there were more tire kickers than after it was complete. Even though it is pretty simple, it did take me a few prospects to really know what is appropriate screening criteria that won't exclude every one form my tenant pool. I was surprised at how many people asked about the house, but apparently didn't have any real interest for whatever reason. Its been a great experience so far and we still have yet to approve anybody after taking 4 applications. This is out of about 10 people who looked at the property and out of about 30 who have called about it and didn't schedule an appointment or did schedule and never showed up. Keep in mind that it is completely normal to get a lot of folks who will not follow through and who sill stand you up so you might consider booking everyone for the same time on the same day. Let them wait on you if they actually show up on time, which is unlikely.

You can also offer a discounted rent and sign them up for a lease period that expiers during a better time of the year and increast the rent at that time.

Thanks for your relevant "opinion" regarding tenant screening Ed.
I am sure other readers will find your comment helpful and informative.

Mitch,

Nothing personal inferred. Only presenting the rational behind my willingness to get involved with low income properties so that others(reading this thread after your comment) that may not have the capital that possibly you had to start with, or don't feel comfortable with too much leverage can have food for thought from the other side of the coin. But my guess is that someone searching criteria that would pull this thread would more likely be looking for useful information from people with experience with low income properties. Not every "low income" thread needs to be turned into a low income vs quality neighborhood consideration. There are specific threads for that comparison and it is my understanding that if you want to start a new topic you should start a new thread so people looking for what you have to say can find it.

George,

Thanks for the heads up. The property is not currently registered as Section 8. I wanted to try the free market first and see if I can make that work. But the property is in excellent shape after the rehab and I would think it would pass a Section 8 inspection.

Mitch,

Although I appreciate you inpute, it does not address my question. Regarding 50% and 2% rules, they are great rules of thumb that I did use and considering I have the property and complete rehab with new mechanicals systems for less than 24K (cash), I can say I fit comfortably within the "rules" criteria. I understand higher income properties usually generate a better tenant pool and have a better potential to appreciate, but guess what? We invest in the properties we can afford at the time and build from there. And my vacancy expeneses are a lot smaller than if I had a huge mortgage (or even a small mortgage). But there are countless angles to consider. If I wanted to sit around and save money for two more years to get a better unit at the terms I feel comfortable with other investors would say I'm not making good use of my money, which I would tend to agree. Having said all that, my goal is to upgrade to better propeties in the future. In the mean time, I have a tight little cash paid unit that should generate good cash flow if managed correctly. Now, since my property IS a low income property, and I can't change that, I would appreciate advice concerning my screeing question from landlords with low income rental experience and succuess. I will worry about invesment theories and philosophies when I am ready to act on my next property.

Hey guys,

I have just completed the rehab to my first ever investment property low income sfh rental.

Most prospective applicants don't bother to show up at the set meeting time (or at all). Not a big deal as I like to check on the properties.

The first applicant that we received was a married couple with three boys and two pit bulls and out of state driver license numbers - no thank you! their credit was terrible (not that I expect any different for my 550 month 2 br house) and I won't rent to pet owners with unapproachable animals. So I declined them. They were the very first app so I didn't charge just because I already knew the answer based on the dogs, but I still wanted to go through the process for practice.

The next applicant had golden 5 year rental history, although only 6 months (verified) at current employer. We didn't charge app fee for them because my wife handled them (Spanish speakers) and messed up. This won't happen again. Anyways, they have no skin in the game and have not followed up to execute even though we approved them.

Now I am looking at my third app. We charged for this one. They even gave us the 300 deposit (refundable if we say no) to hold the place for them. They showed up when they said they would to see the place and then a second time to give me the app and money. Present employment of the husband is 6 months and previous employment was 2 years. The wife doesn't work. Last 6 months at their apartment checks out and personal references check out. They have insufficient credit to generate a score which is good considering they haven't run up a bunch of charge cards and not paid them.

Here is the problem. They claim to have lived with the husbands dad for the last 5 years prior to the apartment they have lived in (verified) for the last 6 months. However, his references give conflicting stories and there is an apartment collection for about 900 bucks or so from 2008.

I don't like that there is likely false info on the application. I don't like that there is a collection from an apartment within 5 years.

Even so, they seam better than all but one of any of the people who have expressed sincere interest in the house and the ONLY ones to back it up with money.

I'd like to get a tenant in place and the last 6 months for them check out good.

I guess my biggest concern is the dishonesty on the app, but considering the collections from 2008, I can see why they would lie. But even though it was less than 5 years ago, it was still 3.5 years ago and this is an early 20's couple, so a long time for them compared to a mid 30's or older.

Considering it makes me nervous to show half of the people the house because I'm afraid they could just be scoping it out to come and steel my copper and a/c compressor later, what is your opinion. This is my first rental and my judgement just isn't that developed yet. I'm putting myself out here-I want to take the chance, but if you all tell me I am heading for disaster, I need to hear that to re-assess my judgement.

Turned out to be no shows. Luckily I was going there to oversee the installation of the HVAC system anyways. We had another no show tonight, too. All together I've had about 4 no shows out of 5 appointments and the ones that did show up was a couple with 3 kids, 2 pit bulls and out of state DL #'s (despite having lived in this state for 3 years [supposedly]). Only one of them was during a time when I wasn't going to be there anyways, but I can see it getting annoying as I don't have much to finish on the house and not much reason to go there except to check on it. Not sure if this is typical...

Shanequa, I think that is a great system! I think I will try that out.

Thanks for the feed back. I just got a couple calls since your post and I will be meeting them there, and havimg them fill out the application there along with paying the application fee. No problem. This is the first time I have been in charge. It takes some getting used-to.

Yeah Kathy,

I'm only using a sign. Due to the nature of the neighborhood, I don't want to be jacking around with internet savvy people. I had placed an add on Craigslist, but only one response. And when I told the girl to drive by to see if the neighborhood was suitable to her needs before we met there, she was said, "I'll just street view it on Google." I didn't think to tell her it looked totally different than Google street view until after the call ended. Besides, there is a fairly high traffic street that my street T's into, so I will put an arrow pointer there (probably today or tomorrow) to get more than just the folks that live right in the couple nearby blocks. I may post CL add again now with fresh pics though, just to be thorough. There is a lot of competition what with all the hourly apartment spammers, though.

My main issue right now actually is coordinating the application. The rental unit is about 20 minutes form my house and about an hour from my office. So I have to meet someone to give them an app, and then meet them again to pick up the app and app fee once they have filled it out? Some BPer's have said that they have the tenant fill the app out in front of them and pay the fee right there so applicants don't have time to formulate their lies. But I would not have my OWN info memorized to fill out an application with phone numbers and addresses and all, so how can I expect less sophisticated people to?

I guess if they leave blank spots on an application I can decline them for incomplete application if I didn't like them.