All Forum Posts by: Michael Masterson

@Jonathan Guerrero it depends on the quality of property you have and the tenants you are trying to attract in my opinion. 

For the "higher end"/rent units I do the entire process through RentRedi. It's $19.95 a month and worth trialing because it has no contract or implementation like other software. Aside from screening it also has a lot of other neat features that will differentiate your property to people searching. 

It gives the tenants a professional feel, and the screening is $35 once you approve an application. $35 is charged to them, and depending on how you are you can either credit off the first months rent or label that as your application fee. Your choice-I usually pass the charge them to make sure they are serious then credit it off the first months rent. 

In the lower quality units I've found the "app" approach is proving to me more difficult than its worth. I send a PDF (not word or you will see prospective residents change wording) version of the lease. In the lease they provide you with their SS# and full legal name. We will then put the info in RentPrep and they get an email to approve or deny the screening request. You also have the option to pass the cost to the tenant or absorb it yourself. 

I've gone cheaper in the past but the detail on both RentRedi and RentPrep is solid, and gives recommendations on other factors than just credit. 

To mimic the other responses: I would also collect 2 paystubs, 1 W2, and a reference. Often I don't call the reference if everything else is stellar-but it says a lot about the prospective resident if they provide one vs. "available upon request"

@Ezra Harris I think it helps out tremendously starting off. I spent about 5 years working with a local flipper on the side before I was able to pull the trigger on my first house hack, and it really came in handy (for lack of a better term) when doing things for cheap. Alternatively I knew all my strengths, and definitely my weaknesses. A lot of the work I sub out now, but if I'm tight on budget I know I can save big $$$ by knocking out a tile or flooring job on my own. Also I've found it really kicks your contractor in gear when they walk in the next morning and see you did a big project. 

I've just made it a point to clear it with them a few days in advance so they haven't ordered materials. Nobody likes the unloading materials, especially twice. 

@Mike Franco had the same issue. I can't find the picture but its one for the record books. Tenant asked if they could paint, and said no need to reimburse because they knew I just painted before they moved in. They did BLOOD red on the walls AND ceiling, and partially painted all the woodwork BLACK lol. Only took about 700 coats of primer to cover up. 

Good news though they did put down proper covering and somehow kept the floors immaculate. 

@John Bianco is highlighting that essentially you’re “buying your rate down”

@George Liu you’ll have that flexibility with any institution pending you’re dealing with a competent LO/broker. If the intent is to pay this debt down sooner than the actual terms you just need to figure out the cost benefit to securing the lower rate.

If you have a 5.5% but pay it off in half the term your effective rate is truly much lower.

Don’t focus as much on the rates but rather the origination since that can vary. For the most part the rest of those items will be very very close as you shop around, plus you’re allowed to tell a bank you’d like to use X Title company, etc.

A lot of the comment on here around brokers are true. Essentially you’re giving them the keys to shop for you. In return they do charge a % of the loan amount. Just like if you use an insurance broker vs an agent.

@Matt Pastier you may want to look into Key Bank. They're offering great rehab terms right now on free and clear with no seasoning requirements. Ok on investment as well-just did one myself. Not like a HELOC but still

Low cost.

Curious where this was in Youngstown area if you don’t mind sharing? Been thinking about looking out your way.

@Jases Brown I’m with most of the other people here. I’ve gone down the path of letting tenants do work on their unit (paint, planting, toilet fixes) and giving me receipts for the costs of the materials. It’s never been a good idea.

You likely won’t be satisfied with the work. They’ll probably do a pretty poor job, or won’t maintain anything they “improve” and you’ll have to change it when they leave anyways.

@Carol Fenimore in Cleveland you typically find the areas with higher tax rates being in more desirable school districts than their immediate neighboring cities. Albeit a higher number on the expense sheet, you typically fill vacancies fairly quick. Especially if you can find a 3br! Just a thought.

@Johnny Jones I personally have experience with rehabs going way back before I got into rentals so that helped, and I did a lot of the work myself FYI. Budget likely would’ve been much higher had I subbed everything out.

I would strongly suggest having a GC walking with you at inspection and building a budget off that and adding at minimum 15% to your estimate. If you don’t have a contact you should walk through a unit with your camera running and take your time. At home you can use a BP estimator to get a good idea as well. However as soon as you come across any “big ticket” items I’d bring a professional in. Miscalculation on counters by a few hundred is one thing, but a roof or HVAC can blow your budget.

@Ryan Keenan purchased in May 18’ fully occupied, completed renovation In 19’

@Ryan Keenan same lender and two appraisals were required when the value came in that much higher.