All Forum Posts by: Joseph Montes

Sam J.

this is a situation i've never been in before. i'm not certain to what length i should go. we're still working out the details. most advice i've read online, and as @Eric Belgau suggested, says leave the professional work to the professionals.

@Joe G., the main sign was their credit wasn't exceptional, but they made enough money to afford the place. sadly, they've actually taken very good care of it up until now, but i think they don't know how to manage money.

i'll be honest and say my mistake was that i wasn't enough hands-on with the tenant selection process and jumped too quickly. i'd hoped to have the place rented out by the end of july before i left for a vacation to costa rica. i didn't market effectively enough and that didn't happen.

my property manager found them while i was on vacation. i was hungry to start making money on this home i'd just sunk a significant portion of my savings into and they "seemed like good people." my property manager is taking responsibility for the bad experience, but it was ultimately my ok.

the lesson here is to do your due diligence in screening and be patient while you look for the right tenant. i'm losing more money now with them not paying than i would have had i waited for someone better. even worse, i'm going to have to kick someone out in the middle of an extremely harsh midwest winter, which i've read is a terrible time for finding new tenants.

Sam J.

thanks, @Eric Belgau . that was very helpful. i'll check out the site you suggested.

Hi BP wise ones,

Things, unfortunately, have hit the skids with the tenants I rented my 3BR SFH to in Lansing, MI. On-time payments led to lay payments, to segmented payments, and now no rent paid in Dec. and Jan. The tenants are being non-responsive to calls and attempts to reach them at the property.

I live in Chicago and the independent property manager I've hired to watch over the place has made many attempts to get a hold of them. He called the court and served them seven days notice on 12/13/13. We'd hope this would bring them around, but I've yet to hear any report about it making a difference yet. A court date has been set for next Friday (1/17/14).

My question to you guys is whether you think it worth going to be there myself for the proceedings or hiring a lawyer? Lansing is 5.5 hours away and if it's cost prohibitive and I'd be better served by a lawyer, it'd make more sense to send one. How do those arrangements work in terms of cost/payment? Anyone have leads on a good lawyer in Lansing?

It's unfortunate given this is my first property, but I'm not discouraged. Thanks in advance for your help and advice.

Joseph

@Aaron Yates Thanks. I read and bookmarked both - very informative.

@Shaun Reilly Since making this post, several people from this site have reached out to me with this very same question. It makes me feel like I pulled a rabbit out of a hat! Although, in truth, it's not that remarkable.

I did have some difficulty finding lenders to start. Since I live in Chicago, I started with big banks like Chase and then credit unions. Like you found, all of their minimums were 50K. I figured since Michigan is more economically depressed, the loan scale had to be different, and that's where I ultimately found success. Not everyone was willing to go as low as 20k but I finally found a mid-sized bank in Lansing.

Regarding me personally, I'm gainfully employed, have a credit score near 800, no significant outstanding debt... I'm not a loan officer (also not trying to brag), but this probably played a factor? Just want to give a full picture.

@Aaron Yates that point you make about learning to find and evaluate properties yourself is something i think about a lot.

re: evaluating. i have no hard experience in a trade that might guide me. i read lots of articles/checklists online and gather what they offer seems very general. if you have a suggestion for a more comprehensive resource or learning method to further this knowledge, i'd appreciate hearing about it.

re: finding properties on my own. this is also befuddling. you listen to the podcast and many seem to have established a marketing company to seek out better properties gleaned from public records. i'm not quite at that level nor do i have the cash to make compelling offers. i'm just checking sites like zillow like everyone else and using that real estate agent i mentioned.

i wonder if there's some middle step? one idea: the property manager i independently contracted is a guy in a similar position as me, but with ties in my investing market and connections to make flips happens. he's done an amazing job as property manager so far and we talk about partnering on deals. i know there are perils to partnering...other suggestions?

@Joe Scott thanks for the encouragement and congrats on completing your program. Are you pursing it as a career or using it for your own investing ? If it's the latter, could you speak to how it's benefitted you? Given the issues laid out above and my particular situation, it seems like it might not grant me a much greater advantage. But I wouldn't mind hearing how it's helped someone else.

Steve Foth & Dawn Anastasi thanks for the encouragement. Sekelle O. & Joe Delia I see wisdom in what both of you are saying. On one hand, it's a significant fee. Still, she taught me a lot and helped me find a good deal. Perhaps, now that I've shown follow-through, I could bargain for a significantly lower fee on the next deal?

@Aaron Montague & @Patrick L. that was pretty much the situation. i live in chicago and invest in lansing, mi. i found the agent of zillow and she was very well reviewed. she said she'd need to charge me that in order to make it worth her while to work with me.

generally, i found her to be a great person to work with. she gave up a lot of personal time to slog through a ton of decrepit houses with an unknown commodity from out of town (me) on the chance we might find a deal. she taught me a lot about the process, answered questions, provided me contacts for electricians and inspectors, copies a lease and rental application she used for her own properties, local information, etc...

in general, as a newbie, I found her service invaluable and even if i was unaware that that fee isn't common, i don't feel cheated. i certainly gained something for my money. in the future deals, however, this is something i'll consider avoiding or minimizing. thanks for the advice!

@Patrick L. , thanks so much for the elaboration. The knowledge and insight people offer on this site never fails to impress me. Although I probably won't be able to cash-buy my next deal, I'll keep what I learned here in mind for the time when I'm generating enough income to make such a purchase.

@Aaron Montague , yes. That's the fee I paid to my real estate agent. I did agree to it when we started the process. I thought paying the agents on both sides of the deal was normal?