All Forum Posts by: Jimmy Martz

Based on everybody's responses, I have decided that I am going to keep the 3 month inspection clause in my lease paperwork and inspect all properties at the 3 month mark.  At that point, I will make a decision whether or not it is a tenant that will need an inspection every 3 months or if 6 months will be fine.  I figure it's best to keep the clause in the paperwork and back off for my good tenants while keeping the expectation of 3 month inspections for tenants who might need that motivation to do the property upkeep.  With the tenants who only need inspections every 6 months, I will email them when the 2nd inspection at the 6 month mark arrives(because they are expecting inspections every 3 months) to make sure everything is okay with the house and use the email communication to build rapport by telling them that:  "I don't think an inspection is necessary for you every 3 months because of your (fill in the blank with the good stuff they do that I want to reinforce)" 

Thanks for everybody's responses & helping me develop this system for my business!

Thanks everybody for your responses!  @Katie Stone what I have been doing is emailing the tenants and giving them a window of time that I am available over the next week.  I try to give them the opportunity to clean up if they know that there are issues(like your oven) that they can fix before I come by.  If I let them pick a time 4 or 5 days out within my availability, it gives them the opportunity to fix these issues before I show up.  I would much rather see a clean house even if they did it for the inspection than have to have a sensitive conversation about my standards of cleanliness vs. their standards of cleanliness.  Even if they are just cleaning it for the inspection, who cares.  They did it.  

As for how to handle issues when dealing with difficult issues during the inspection, use this line:  "(tenant name), when I have to make difficult decisions regarding (Fill in the issue), I want to be fair to you but still maintain my business so I am just going to fall back to what already agreed on in the lease paperwork."

I've used this to add rent for extra animals brought into the house, charge tenants for damage, talking tenants down when they want me to pay for a plumbing bill that they called in & didn't tell me about until they presented the bill to me, tenants asking for upgrades or unnecessary items, etc, etc.

@Dean H.  Thanks.  My tenants are middle class folks who generally do not cause too many issues.  I try to hit the sweet spot in the middle of the market where you're not getting the low income or high income tenants & their needs/wants. 

Hello BP!

I want to know how landlords or property managers structure routine inspections of their properties.  I want to be a good landlord for my tenants and I want to protect my investments but I feel like my current systems might be a little overbearing for the tenants I have. 

-Currently doing an inspection every 3 months for the first year with new tenants and then every 6 months beyond that as long as I haven't had any issues regarding the tenants not taking care of the property. 

Thoughts?

I used Red Dirt Lending a few months back and they served my needs well enough.

PM me if you are interested in the specifics regarding my rates, terms, etc. 

HEY BP!

I am closing on a SFR in Yukon next month and the garage is converted into a 4th bedroom. It is not permitted but it was done well (walls have been textured nicely, no holes in the walls, floorboards installed, decent light fixture). My question is: Will it rent faster & for more money as a 3 bed with a 2 car garage or as a 4 bed without a garage?

Other pertinent info:

-Both garage doors are still there and I think the railings are probably still there by the way the sheetrock was placed. 

-There is a door leading to the backyard but no window in the room. 

-The hot water tank is in this room in a closet but they put a nice door on that frame as opposed to the crappy particle board doors you usually see.

-I don't know about how the duct work is currently set up for ac/heating of this room.  There is no window unit.   Is this potentially an issue that would make the decision sway definitively in 1 direction or the other?

-There is no closet so it's not an official 4th bedroom.  It could be added easily without screwing up the floor layout. 

-There is parking for 2 cars in the driveway but no carport

Let me know what your thoughts are.  Thanks in advance. 

(other keywords- Oklahoma city, Mustang)

@Vanessa Castillo  there is no time frame to how long you can own a home before you can open a line of credit against the equity other than possibly a seasoning period that some banks may require if it is a recent purchase.  As long as the equity is there, you should be good. 

@Ryan Kennedy  One other thought.  You mentioned getting financing for the cost of the rehab.  Here's a tip- When you go to your local reia meetings, you will likely be looking to meet private money lenders.  My experience has been that you find many more investors than lenders at those events.  Instead of seeking out private lenders, get to know the investors and get references for who they use for their private money.  Seems simple but I think a bunch of people overlook the obvious sometimes. 

@Ryan Kennedy 

1. I financed the rehab from my HELOC. This allowed me to get the job done without having to deal with draws.

However, I did have to use private money to finance 2 deals.  They financed 80% of the purchase price.  I paid 20% plus the rehab cost.  2 points and 10% interest were my terms. 

2. I didn't have to wait for the 6 months of seasoning.  I found a local community bank that does portfolio loans that they keep in house so they didn't require this for me. 

@Justin Ratzlaff Formulas are easy but getting from the formula to the real-life expenses that you didn't know you had until you're knee-deep into the project is the real trick. Only experience and some good advice along the way can really teach this. I simply look for properties that I will be all in at 75% of ARV minus rehab/holding costs, etc.

ex. 100k ARV house with 20k in rahab, holding costs, etc.

Offer 55k (75k is the 75% of ARV and subtract 20k for the rehab, etc)