All Forum Posts by: Jesse T.

In general a family is going to be more stable than a situation with 4 roommates.  

If you do end up going with roommates I would want to maximize security deposits and hold all roommates liable for the whole lease.

Even with a good group of roommates the chances of a stable group for more than a couple years is pretty low.  There are bound to be changes with at least one of the roommates in terms or relationships, job status or even buying a home by at least of the 4 roommates in that time period.

 But in this case you got the deposit in a month, correct?  Breaking the deposit into paychecks matches a lot of people's real world situation.  I think it where the tenant screening process is a little different than accept/reject.  The good prospect gets it split up, the weaker one can check back in 2 weeks when they have the full deposit.

IMO 2 is a pretty easy rejection.

1. How old are the mom's collections?  I would want to get a couple good landlord references to offset the credit issue.  Does the son have other work history?  If he has typically made $1500+ with good work history - the job is very useful in approving him.  If he has lower previous income and/or spotty work history - there is a good chance you are relying on the Mom for rent getting paid.

 I would propose 2% to 2.5% and giving her the rental listing.  Although with the rental listing - I would make sure that she wants it and will take it seriously.

 With an agent, it is likely even less between 10 and 20K by the time you pay commission and depending on if it is the OPs reduced offer.  And that is before considering the costs of a bankruptcy attorney etc.  Just a foreclosure credit-wise is a lot easier to recover from than a bankruptcy and a near-foreclosure.

I think you may be comparing the P&I on a 15 with the full payment on a 30.  Even with the interest rate difference - the 30 should be significantly cheaper on a monthly basis.

That being said, I would probably go with the 15 with PMI(not lender paid). The advantage is the higher principal payments will get you to a point where you can cancel PMI sooner.

Does the deal work with a 3% commission?

What type of investment is it - buy and hold or flip?

If it is a flip is she the right agent to sell it?  If she is - I would give her something informal and then list with her at 7%.  If she isn't the right agent - at least give her a shot at the referral.

For buy and hold - the rental listing and management might be an opportunity for her, but you probably should give her at least a partial commission at this point.

I would not go the finder fee route(a payment directly to her) - I would either give her a commission through her brokerage or do it informally.

Happy Birthday!

One thought is if you are targeting college students as your potential tenants - you don't necessarily need a multi-family property.  A 4 bedroom/2 Ba house would house 4 tenants.  If your location and property is desirable enough - your vacancies should be similar to other properties.

What work do you need done?