All Forum Posts by: Josh Green

I have multiple wealthy clients that cannot qualify for loans or credit because of a lack of a credit score or lack of w-2 income. 

Looking at assets is definitely important. Say a client made $3000 a month from 1 job and rent is $1000 and they had zero in the bank but a 780 credit score. That client would be far more high risk imo than one with 60k in the bank and an explanation of the hard time they’ve hit. Again, maybe I’m just sensitive to the situation having recently gone through it. 

Originally posted by @Thomas S.:

The one item that can not be taken into consideration is the fact that she has 60K in the bank. She has the ability to give away, gamble away or shoot the 60K directly into her arm any time. The only money you can count is the employment income she presently receives.. i

 She could just as easily lose her part time job.... 

Originally posted by @Peter Sinclair:

Originally posted by @Josh Green:

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Stick with the minimum requirements you set when screening tenants. Its good to be empathetic but don’t get caught up in their situations. 

If you require a minimum credit score of 650 and the tenant has a 635.. stick to your minimum. If you have minimum household income requirements such as double or triple the rent.. stick with it! Her alimony isn’t set in stone... what if the husband doesn’t pay?

There were times I felt bad turning down a renter, especially after they’ve paid a $40 application fee but I have to remind myself these are the rules of the game.

If you decide to turn her down, you can always pass the buck of blame to someone else. For example, I tell my renters that I just manage the place and the “owner” makes the ultimate decision.  In your situation I would say “ I pleaded on your behalf and explained everything to the owner but they decided not to waive the minimum requirements, If I could rent it to yah.. I definitely would.. I’m sure you’ll find a place better than this one anyhow.” 

Since you are giving that advice what is the difference between a 650 and a 635 credit score.

 The difference could be attributed to many factors, such as maxing out a credit card, being late on a payment, having your credit run multiple times. A 650 credit score ranks higher than 40% of US consumers, whereas a 635 credit score ranks higher than 36% of US consumers. 

Not that I consider it relevant for a rental applicant  - I don't -  but the difference could simply be down to putting a large item that you can perfectly afford on  interest free credit at Loews.

Even with your example, I can argue that if you can perfectly afford something, why not just pay it off? What if after this large purchase you get laid off from work and you cant afford these interests free payments anymore.

Since differing credit scores have a myriad of affecting factors, i chose to screen my tenants against minimum credit score as it provides an objective reference point for me to make decisions rather than leave them up to questionable, subjective interpretations of ones credit score.

It’s called strategic debt. I can pay off my car but the loan is 1.9% and my portfolio is up 22.90% ytd. 

I’ll play the devil’s advocate :) 

What happens to your stragtegic debt if the economy crashes again and the renters you relied on loses their jobs. Whose gonna pay for that mortgage then? 

My argument isn’t about taking on debt.. it’s analysizing ones ability to make their debt payments. 

In the situation of true strategic debt, the debt can be paid off at anytime. I’m not suggesting having 20k in an illiquid investment and getting 20k in unsecured or “bad” debt. 

The ability to pay debt is certainly important. In the situation with the tenant, she has 60k in the bank. If rent is 1k a month, she has 5 years worth in the bank. In my situation, if I were to lose my job I could either pay it all off or I could (And would) likely just make payments from my investments. The whole purpose of strategic debt is to put the money to work in a way to outperform the debt load. 

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Originally posted by @Ihe O.:

Originally posted by @Peter Sinclair:

Stick with the minimum requirements you set when screening tenants. Its good to be empathetic but don’t get caught up in their situations. 

If you require a minimum credit score of 650 and the tenant has a 635.. stick to your minimum. If you have minimum household income requirements such as double or triple the rent.. stick with it! Her alimony isn’t set in stone... what if the husband doesn’t pay?

There were times I felt bad turning down a renter, especially after they’ve paid a $40 application fee but I have to remind myself these are the rules of the game.

If you decide to turn her down, you can always pass the buck of blame to someone else. For example, I tell my renters that I just manage the place and the “owner” makes the ultimate decision.  In your situation I would say “ I pleaded on your behalf and explained everything to the owner but they decided not to waive the minimum requirements, If I could rent it to yah.. I definitely would.. I’m sure you’ll find a place better than this one anyhow.” 

Since you are giving that advice what is the difference between a 650 and a 635 credit score.

 The difference could be attributed to many factors, such as maxing out a credit card, being late on a payment, having your credit run multiple times. A 650 credit score ranks higher than 40% of US consumers, whereas a 635 credit score ranks higher than 36% of US consumers. 

Not that I consider it relevant for a rental applicant  - I don't -  but the difference could simply be down to putting a large item that you can perfectly afford on  interest free credit at Loews.

Even with your example, I can argue that if you can perfectly afford something, why not just pay it off? What if after this large purchase you get laid off from work and you can afford these interests free payments anymore.

Since differing credit scores have a myriad of affecting factors, i chose to screen my tenants against minimum credit score as it provides an objective reference point for me to make decisions rather than leave them up to questionable, subjective interpretations of ones credit score.

It’s called strategic debt. I can pay off my car but the loan is 1.9% and my portfolio is up 22.90% ytd. 

You mentioned you have some vacancies, I would try to accommodate them in those offices until you get their units fixed

Suggest they bake or use edibles instead of lighting it up

Definite liability. I’m glad we don’t have that problem in Florida.

You said she’s willing to pay a years of rent in advance? Isn’t that precaution? Having recently gone through a divorce I can understand her explanation. Bad things sometimes happen to good people. Maybe I’m missing something but, I don’t see this applicant as borderline. Interested to hear how you go.... good luck man

Originally posted by @Drake Espenlaub:

Once I leave said company, is it then possible to take those funds and put them in a self directed IRA, or once in a 401k must stay in 401k? Also the 401k I have is a roth IRA.

Once you leave the company you can certainly roll it over into an ira which opens up the options considerably in what you invest it in. But keep in mind, if you have an outstanding loan when you leave it will be called. And if you can’t pay it then it is taxed and penalized as a distribution. (Though if it’s a Roth it’s a little differently but the penalties would be on the earnings)

OP Account is closed :)