All Forum Posts by: Joe P.

@Kevin Hill yep I see that rule. Isn't there a difference between security deposit and general deposit? I don't want to charge someone $2000 for my security deposit, but I do want to charge first/last and security.

@Natalie Schanne thanks so much for the quick reply! I thought that the 1.5x rule only applied to the security deposit, not the entire deposit. Wow.

So I think it would be in my best interest to charge $2,375 (950 and 1425 security). You are correct most people don't want that on their record, but most landlords don't even want to go through the hassle of the eviction for someone planning to leave and just not pay.

Hi all,

I just purchased a property in Gloucester City; its a duplex with one unit rented, and another vacant. I've been trying to get tenants in with not much luck so far, and I had one prospective tenant say that my deposit requirements may be illegal.

The rent is $950 per month, and the security deposit is $1,250. I was telling folks that the initial deposit is first month's rent, last month's rent, and security deposit - a total of $3,150. This particular prospect indicated that I could only charge first month's rent and security.

I scoured the web and forums to see if there is anything preventing me charging first and last, but I don't see it. I'm concerned about being burned on that last month, which is why I want to charge it.

Would love some input from our local investors, and if anyone has a lawyer they want to recommend, I'm all ears as well! Was going to use the Rocket Lawyer landlord document for NJ and add an addendum for rules.

@Account Closed you've got a few options, and I think folks have outlined some of them. I'll add my advice - which you should always take with a grain of salt.

1. Get and save as much money as possible, find the cheapest duplex/triplex/SFH with as many bedrooms, and househack. This requires a decent paying job, living under your means for as long as possible, but if you can save 600-1000 a month by NOT paying rent, and possibly having people put money in your pocket, than this is good.

2. Find a liquid family member or friend and see if they'll partner with you on a deal. This requires you to bring something to table, whether it be knowledge, know-how (e.g. rehabbing), or some other benefit.

3. A few folks said go wholesale...but wholesaling to me is a job that requires boots on the ground, and cash to start to make a dent. Again, unless you know someone who wants to unload real estate at a fraction of its worth, you're going to need to get money to get boots on the ground.

Frankly, I started as a landlord because I wanted to. I bought a house when I was 24 with a FHA loan, had enough money to buy another home with my wife when I was 28, and I rented out my first home. I could do all that because I saved every penny, didn't have student loans (thank you community college and all my credits transferring to my actual college), and didn't buy crap I didn't need.

So I think without time, money, know-how, or "much going for you" -- you need to figure out what your ultimate goal is and then start working towards it. My ultimate goal is to fund enough doors to either live off my R.E. and quit my job, or be able to do both and enjoy having the money necessary to walk away from a "real job" one day and do whatever I want. So I'm saving as much as I can, educating myself, and investing in properties where the numbers make sense.

You're 22 and far ahead already even thinking of those things. Educate yourself, get a job, keep a job, save as much money, and look to reduce your expenses so you can SAVE. A FHA loan on a duplex, triplex, or SFH with multiple bedrooms can make you a landlord. But you also need systems and knowledge in order to operate the property. Start learning now, and start saving now, and when the right deal comes along, you take it.

(Side note, I had the option of buying a duplex in what was a so-so neighborhood in Philly back in 2009. I didn't do it. Now that property, if I owned it and sold it today, would have netted me probably 100k in proceeds AND have someone else renting the larger unit, paying all of my living expenses. I kick myself every day for not taking that property, and tell all potential investors the same thing. When the opportunity knocks, you take it.)

Frankly, if I'm a mod, I'm just /closing thread. Terry has his opinion in the matter, which is bred in life experiences that I and none of us had. He came here looking for a discussion, or validation, or some combination I suspect, and found a minimal amount.

That zebra won't change it's stripes, and most of the other zebra's here won't change either. Lets acknowledge it, and move on.

I would never turn someone against a deal, so what I would say is do the due diligence and find out EVERY possible cost, and find out the best possible price to sell. Doing the homework will tell you if this makes sense for anyone.

I don't know much about wholesaling...in fact I know very little other than the basis -- you buy the property at a discount, and assign the sale to someone else, and the difference is the "fee" you get.

With that in mind, the numbers need to make sense for an investor, and for you.

For an investor, is this property UNDER-market rate rent? It hits the 1% mark, but is it truly a good deal for an investor? What is their return for buying from you, at say, 120,000? After this person pays their debt service, taxes, insurance, sets money aside for CAPEX, vacancy, maintenance...will they make money?

And for you, what are the comps in this area? If 100k is the high price, then why would an investor pay 120k to you?

 ¯\_(ツ)_/¯

You are saying that every person who doesn't win, loses. That's simply not true. It's not about silver lining, or anything like that. And it is a binary view because you've taken zero consideration to other factors other than "winning" or "losing", which you've also poorly defined.

If you're going to put a philosophical post like this up, expect to be educated and for folks to disagree with you.

"90% of people never take action." While I'd love to know if that statistic is made up (I could actually see it be higher than 90%, frankly), does that mean those 90% have lost? Heck no. Maybe to you they lost, but ask them if they lost because they didn't get involved with real estate...I bet most don't see that as a loss.

You mention the fierce competition in certain markets, like a Vegas or Bay Area, and use that to justify that for every one person who closes on a deal, the other nine who missed out have lost. I'm simply telling you, that isn't true. Much to your original point -- information, networking, experience -- all are gained in that situation. Perhaps a savvy investor sees the idiots who get involved at the prime market all gain zero appreciation in the long run, and end up under-water, and then invest in emerging markets out-of-state to some degree of success. Who's the real winner in 5 years?

"You seem to choose a narrative the best fits your opinion, or look for the best in people. Perhaps, it is the silver lining you choose to see rather than the reality. I don't have to go too far into history that tells me this is not true." I could say the exact same about you, no? You are assigning winners and losers to life scenarios that don't necessarily produce that result, to prove a point about people winning and losing. :)

Good luck, @Melanie Hartmann. I've yet to hear anything (yet) as to what you've done to prepare for this new job. Despite having income covered, nothing is guaranteed, and a dip into the savings for something unexpected could easily put you on your heels, for example.

Based on your first post, it says you are "planning to get into wholesaling ASAP" -- well allright, but what's needed in that planning stage? I would have been planning six months ago to "execute" upon receiving the first deal.

Of course everyone here wishes you the best, but more importantly, we wish that you're withholding key details that give you a chance at success. Haven't seen anything that says you're ready to go, other than the fact that you've said you're ready to go.

Just curious if anyone else has come across this.

You meet some nice folks who want to rent from you. They seem normal, all other requirements are OK.

Like any good landlord, you scan their social media. You find out that this individual, or perhaps both, used to be drug users. They are now clean, according to their Instagram, or Twitter, or whatever.

What goes through your mind, and how does it play into your overall evaluation? Does making this part of your evaluation potentially tie to discrimination laws?