All Forum Posts by: Kristina Heimstaedt

@Adam M. I live here and know the market pretty thoroughly. We typically target millennials who are more than likely to be buyers some day. Because they fit this profile, more often than not, it is not their agenda to be professional tenants. I also like to respond to situations by presenting tenants with the following:

1. the law

2. how we operate

3. the bro deal that I'm willing to offer

Overall, we have a great product. Our tenants rent from us for that reason. However, they stay because we are great landlords. I had a tenant move out of state for about a year or two, but when she was looking to come back, she texted me first and I was able to place her in another unit when she came back. That's pretty typical for us or we hear from prior tenants who have boyfriends/girlfriends looking to move to the area. I think the combination of great products and excellent service make it pretty easy to operate in California. 

We've had a few challenges, but we've learned how to do a pretty solid job of screening them out. 

I ask that tenants pay about 125% of rent in the form of security deposit. I have had a tenant not pay last months rent and trash a property. In California, it is illegal to ask for first, last and security deposit, so the 125% typically protects against that and some slight rent increases. 

@Bob H. it's true that someone could totally be lying to me across the board. However, 95% of my tenants are under 35 and aren't professional tenants. I think I'm lucky because of the location and tenant pool filters out those possible pitfalls. We also often look at their social media pages. We typically see consistency and it's not a problem.

I have no record of how they are with bills. @Account Closed I want to know that if I'm going to allow someone to be in possession of my asset that they will pay their bills. Keep in mind too that I'm in California where most laws favor the tenants severely. If I can screen this out to protect myself, I will. I've also, turned people down because they told me that they haven't paid taxes in 2 years. I'm in an expensive market with a solid applicant pool. I can afford to be picky. 

I'd note that the area that you target can definitely have an impact on that profile. In Newport Beach, we're better off targeting millennials with good jobs because they typically are too busy working, still saving for a home and are thankful to have a nice place to live. We also have a high population of millennials with good jobs whereas most families own or rent for a year and then move on. Works for us, but maybe not for everyone.

I like @Michele Fischer's idea of talking to the tenant about the value adds that you plan on doing. 

Not sure what proportion of rent $400 equates to, but in California, you can legally increase rent by as much as 10% with just a 30 day notice. If I were in your shoes, I might opt for a 10% increase every 6 months pending it's legally an option. 10% typically is a nuisance, but not enough to move.

Most of my tenants keep track of their score in some format whether it's through their bank, credit karma, etc. I tell all of my tenants to just provide what they can from whatever agency they use to track it. 9 out of 10 times this is no problem and they're fully aware that this is part of the process. For the ones that do have a problem, I don't rent to them and typically it's because they had a hiccup with their credit and pay for everything in cash. I personally don't want to work with anyone who demonstrates that they aren't willing to do the work to make a problem better.

Hit them with a notice. Unfortunately as landlords, it's important to draw the line in the sand. Sometimes you need to hit them with a notice even if it's only to show them that you're serious about late fees. 

The other concern I have is that at least in California, it's important to do everything by the books that way a tenant doesn't have the opportunity to come back and say "but that's not what you did last month". 

Sometimes when things get too fuzzy, you gotta go with CYA and the law. It's not fun, but they put you in a tough spot. I would give them a pay or quit notice and say "you guys aren't paying your late fee nor rent at all. You give me no choice. Just because you two have decided to skirt your financial responsibilities, doesn't mean that I will follow suit. Pay rent and include the late fee from the last couple of months and this can all go away. Otherwise, I need to exercise what is in my right to protect my business." Obviously do what's most comfortable to you, but you gotta do what you gotta do.

Hi Cindy,

I use a source called Spokeo to get both numbers and emails. It's not perfect, but it's a numbers game.

Hi Everybody!!

Curious on everyone's thoughts here. I'm looking at potentially doing a flip with a partner. Partner is going to purchase the property all cash. I'm going to fund the remodel and manage the project and then we will split the profits when we sell. I'm looking at several different ways to fund the remodel and wanted to get input from everyone. I'm looking at the following options:

1. cash-I have the cash and could do so, but don't know that I want to tie up the money (50-100k remodel)

2. credit cards-I hear all the time that credit cards might be a great way to go. If so, curious as to which might have the best cash advance options or if I just pay for everything retroactively via cards.

3. personal loan- as far as I know, most personal loans have interest rates that are lower than general credit cards, which would be nice. However, if I do this flip efficiently, hopefully I only have the loan for 4 months.

4. construction loan-there is a developer in my area who I met who said he was getting rates at about 6% for construction loans and maybe that makes the most sense. 

I probably need some sort of equation to determine what exactly would be the right for me and this process. In an ideal world, I've got a very low interest rate for 3-6 months (below 5% would be grand), or 0% interest until a certain date when there is a balloon payment or an interest rate higher than 0%. Let me know what you all think. As always, thank you so much for your input!!!