All Forum Posts by: Michael McDevitt

@Account Closed, is there a better site to use?  I would like to know if there is a competing service.

I hear ya, @Brendon Woirhaye!  I will never understand why someone would want to sign a lease, for a place they can't afford.  Scratch my head every time, but I should be used to it by now.

I know this comes with the territory, but it is frustrating! 

I had a very nice couple with a young daughter come look at my nicest rental home (4,300sq ft with $2,800 rent).  They were a little young, but both were college-educated, well-spoken and very confident they would pass the background and income verification check.  I told them while chatting with them, that I made no exceptions for my rule that income must be AT LEAST 3x monthly rent.  They said that wouldn't be a problem.

I signed them up on mysmartmove.com and then the games started.  First, she completed the application, when I told them I needed him to do so (she is a stay at home Mom) because he was the sole employed in the family.  Then he completes the application and his income is way low and it says he is self-employed.  

I questioned them about the whole mess and they say the information is wrong and somehow get the report changed to show more income as an employee.  Then they email me a letter from his employer, stating he is their employee since February, 2016.  I day, "great" and tell them to send me a bank statement showing the payroll deposits.  They say, "well he doesn't get paid by his employer,  Instead clients pay him directly, so you will not see payroll deposits."  What the heck?!?

I have had possible tenants lie to me about all kinds of background stuff, but I really had these people pegged as coming back with flying colors.  You never can tell.

Rant over - on to the next applicant tomorrow!

My advice is to read this website. There is tons of great information and real experts who can answer any questions you have. It is a very friendly place to share information and learn. Reach out to people, connect with them and be willing to share information you know as a realtor. Do that, and success in this business will follow. Good luck!

@Patrick Liska, I am a CPA.  It seems like you have a pretty good handle on the options.  How long have you held the property?  If you hold it longer than 1 year, you get long term capital gains rates, which is pretty attractive.  The installment sale is just a means to hold of paying the tax until you collect the money.  A 1031 is possible, assuming you held the property for investment, but the IRS would assert you didn't hold it with the intention of investment, if it was a flip.

I would be happy to answer any other questions you have, if you drop me a note.  If it were me, I would hold it for a year and take the long term capital gain.

Referrals are probably the best - ask your friends or other REIs.  Find out if the contractor: (1) showed up when he said he would (which is rare!), (2) completes the job on time and on budget, and (3) does a good job.

Of course I would never allow a grow operation in one of my properties.  I doubt someone would ask a landlord if they could grow.  They would rent and do it without the landlord knowing.  My guess is they honestly just wanted to know if I minded them smoking marijuana in my home, if they had a card for it.

I don't have any interest in renting to someone who wants to smoke.  I was more asking because I was curious if someone could claim they were discriminated against by me.

I am the second CPA to post a response here.  Like @Brian Adams, I believe QBs is a good solution.  However, there is a decent learning curve.  Or you can hire a qualified bookkeeper.  

I am unfamiliar with the QBs for landlords, but that might be worth a look.

I have a prospective tenant who wants to rent one of my units.  He retired about a year ago and is closing on the sale of his home at the end of September.  

I have never rented a unit to a retired tenant, so I don't know how to qualify one.  I am normally looking for wages high enough for the monthly rent not to exceed 30%.  What do I look for with a retired tenant?  I am assuming I am looking for plenty of liquidity and money in the bank.  what do you look for?

@John Burtle - take a look in the books section of the website.  There is a book on flipping houses in there by J. Scott.  If you buy that book, you get a bonus book on how to estimate rehab costs.  I haven't read it, so I can't speak to how good it is, but it is on Amazon with very good reviews.

Other than that, the best education on how to estimate rehab costs will happen, over time and with more experience.  That is how I learned (and am still learning).  You will get a "feel" over time, and when you aren't sure about something, call an expert for help.