All Forum Posts by: Matthew Farmer

Thanks Scott & Tyler! Really solid feedback. We really do try to stick to our criteria as much as possible, and well put Tyler...not everything is black and white. 

We are considering this applicant because all of our other applicants have also missed our criteria in one fashion or another. We've had about 6 applicants at this point and the home has been available for a week. Property is in an "A" location, so our qualifications are reflective of that. 

From our conversation with the prospect, they went through a Job change during that time which didn't go so well. They left a job of 15 years to try something different and it didn't turn out well. I tend to agree, they made it work and the prior landlord said they communicated and were transparent throughout the whole period...so that goes a far way in my book. Clearly they are accountable if they are trying to do that. 

Hi - I have a couple for a property that has a slight blemish on their application. Based on the below, would you rent to them? 

1. Both Credit Scores above 600

2. Employment History Stable - Both have been at recent jobs + 2 years and before that at same job for 15 years. One individual is the primary bread winner and is in more of "commission" heavy position. If that were to go away, they'd really have to claw together rent.

3. Gross Income to Rent 4.2x 

4. Net Income [After taxes & other W-2 Deductions] to Rent: ~2.8x

5. No Evictions & Clean Background

6. Red Flag is Prior Rental Reference where they've been a tenant for 3 years. Throughout 1 year they were consistently late but always made payment that month. They have not had a late payment in the last 1.5 years.

@Brock Thomas 

I believe all of Roeland Park is in Shawnee Mission North School district from I map I just pulled up. Maybe it's highway access...closer to I-35 ramp, the home type Alex alluded to be a little more diverse, and lastly maybe attracts more Med Students at Ku Med??

@Thomas Wheeler @Alex Olson

Very helpful insights! Thank you. Yes, it's a classic rectangle home..nailed it. What do you think - 10% discount to Roeland park< I.e. if something rents for 1750 in Roeland, something in similar condition in Mission would rent for ~1600 in Mission? Crazy..this part of mission I'm talking about is just one block west of Nall...which you can hit a pitching wedge to roeland. 

Let's just hope Mission becomes the next Roeland Park 5 years from now!  

Hi - I'm evaluating a property in Mission, KS that is very attractively priced. As I look at rental comps, I'm trying to figure out if the 3/2 marketing in Mission is as hot as Roeland Park. For example, I see some 1,500SQFT 3/2's in Roeland Park renting for +1,750 but I haven't found a comp like that in Mission...yet they literally neighbor each other and are pretty much identical. 

Would anybody have any experience to share if you could expect a Mission Kansas 3/2 rental to price somewhere close to 1,700 to 1,750 like what's going on in Roeland Park? 

Hi - Recently had an application on a property with a really strong candidate and a less strong one. They are engaged, with the strong candidate having +700 credit and single handedly has a 5x gross income to rent just on her salary alone..she also just graduated college as an RN and could get the house on her own merit. However, the other tenant over the age of 18 (spouse), has a credit score in the 500's and appears he is in a debt resolution program (basically negotiating credit cards down)...don't see any evictions, or judgements filed on him. All prior references check out also, so only red flag right now is the credit score on this applicant.

I do have other quality applicants without this issue, but these 2 individuals are willing to sign a long term lease where I have an impression they could be in the home for +4 years if things go well, which would be great savings on vacancy costs. 

Should I take a gamble? 

As I forecast outer year NOI for a property evaluation, I'm forecasting rising property taxes, but is the ability to pass that increase cost along to rent easy? Or is it something like property capex where it comes due at point or another but you may just get burned alive one year?

I'd assume that NOI declines in years 2,3,4,5 until someone can really pass along rent hikes to the consumer? AND at some point, it's a wass (just like capex). Or are current property owners able to maintain their NOI margin fairly consistently year after year based on the 1st year analysis?

Maybe my biggest fear (1st time investor) is that I'm unable to pass along rising costs through rent and my 1st year cash on cash return isn't representative of my cash on cash return in year 5. For example. cash on cash return in year 1 of 10% but by year 5 it's 7% because I can't pass rising costs along to the renter?