All Forum Posts by: Charley F.

Thank you folks for all your comments, it has been of great help! :)

BTW, just took a look at your site. You got some pretty nice investments and got them for really low prices! First.. Congrats! Second, how did you do it? Not sure if the market in Florida is the same, but man, your formula is worth taking a look at!

Hello Stanley: This is why I ask questions, what sometimes seems obvious it does not necessarily compatible with a business model (to name it somehow).

I have not yet declined (well, I did informed my PM via email which I can cancel before they let the applicants know), so I still have time to study the reasons why will you consider it.

Do you mind explaining what do you see in these applicants (under your suggested conditions) an option to consider?

Hi all: This topic comes from a previous one. I want to learn as much as I can from this experience as it can provided insights for the future, and considering each experience is unique and that I am in for the long term, the more I know, the more I can minimize my risks.

I have declined a couple who wanted to rent one of my two properties. Here are what the report from trans-union and their testimony:

[b]THE HUSBAND

- Currently Unemployed

- Collecting Unemployment of $1,100 for the next 5 months

- Have 2 interviews in a big hospital in the area

- Works in the medical industry (hospital)

- Rental history checks ok

- Credit score of 631

- Installment loan of $34K, owes $24.8K and its past due for $104

- Have 4 collectionsin his records: $111 bank (2011), $59 medical (2006), $193 Verizon (2009) and $52 Electric Bill.

[/b]THE WIFE

- Currently employed. 4 months in a new job (bank)

- Credit Score of 527

- Rental checks ok (same as husband)

- Has a installment loan with a balance of $33.4K with a monthly payment of $395

- Has a loan balance $32.9K, shows as past due for $15.9K with monthly payment of $574.

- Has 11 collections: $943 Medical (2011), $284 Medical (2009), $722 Citibank (2009), $1,086 Sprint (2009), $491 Victoria Secret (2010) shows as paid, and another 6 other collections for medical that amounts for $900 (2010)

- In the trade section it also shows few other items that were "placed for collections": $45 Sprint (2011), $1,706 shows as closed by creditor grantor (2009), $4,775 Student Loan shows as unpaid balance charge off (2004), $22.1K Student Loan shows as unpaid balance charge off (2009), $1,189 Placed for collection (2010), $1,812 placed for collections (2010).

Now, I do not know if this is typical considering the state of the market and economy as I entered the business only a year back, but based on myself and people I know, this seems to be awful!. One thing is to be late, but 11 items sent to collections over the course of the past 5 years?

Is this typical?
Will anyone here enter on a rental agreement under such history?
What can I learn from this?

Please let me know your thoughts! I am honestly looking forward to learn from this experience.

Thank you everyone for chiming in. I hope I can return the knowledge you have provided as I grow in the business. Now that I have a full detail based on the report, I will be declining these tenants.

I will be posting the details on a new topic to try to see the thoughts of others on the specifics.

Thank you all!

Michael Lauther PM talked to what I assume is the representative of the landlord or a leasing office. Here are her comments:

"I asked if they would ever be considered for re rental – They said YES"

"The rental history seems good too – the rep at the rental did not have anything bad to say "

In that sense, seems to be ok. I wonder if you guys can see the report (names crossed of course to protect the privacy of the individuals) if you are able to see things that me, being a newbie, do not see....

@Michael Lauther

Prospect seems mixed. You get few people interested, they go and see it, express interest in the property but never get back. This particular neighborhood have about 4-6 vacant properties (as it shows on Zillow) but they are more or less around our price range. This week a few of them lowered their prices which lead me to believe they are also having issues renting.

I think I will continue to look. This property has been on the market only for 2 weeks and have been seen by 4 people now, which lead me to believe it has potential to wait a bit more and have someone who I feel a bit more comfortable.

@Dave Meyer

I believe so. The price range of the area goes around $1,050 for townhomes and $1,100-$1,300 for houses. This week however, few properties has been reduced to (i.e. from $1,150 to $1,050). I wonder why though, because townhomes in the area runs about $1,050 and a home is more comfortable in many aspects.

PM is a family member (cousin of wife) who is a real state agent. We have bought the properties with their help and she is managing about 6-7 properties for other family members who are also investing in RE.
They are also into the Buy-and-Flip. They do not own rental property.

My initial thoughts they were already in the know-how for PM, however, as I have learned from reading and interacting with people of your caliber, tells me they are also newbies (in the PM business). Which is fine with us as long as we feel the business is not affected. I think we have the luxury of being able to discontinue to work together, as we both understand that business is business, not personal.

As for your suggestion on CL, that is how we do it.

Steve Babiak

They were paying $1,230 before, so the difference will be a mere $40 reduction. Somehow this raise a red flag for me because the cost and hassle of moving does not equate to the $40 dollars they will save a month. That's $480 per year.

Does that makes sense or I am a bit "paranoid"? :)

Thank you Dave and Ed for for general rule of = 3X.

Rent x 3 equals $3,570. They numbers get close to a $3,279. And that is hoping that he gets the job within 5 months.

Now, after double reading the PM report I found that they had various collections few years back, but nothing related to rental or mortgage.

Hello Dave:

The rent is $1,190. It's a 3 bedroom 2 bathroom house. About 1,270 living space and 5,600 sqf including patio. PM did not provided me whether they have the money, but my assumption is that they do, otherwise PM wouldn't submit it.

Greetings everyone. I have found myself in one of those spots where I know what to do, but being a newbie makes me hesitant. I am one of those who always ask, no matter how obvious.

My PM has found a tenant that seems to have a average-to-good credit history as well as rental, etc. The only downside? His wife only makes $32K per year and he is currently unemployed. He is receiving unemployment $1,100 per month and will go as far as 6 months.

He is in the medical profession (PM has not advice which area) and has said that he has two potential interview.

PM submitted to my consideration on the premise of not-so-bad/good previous records, income from unemployment and potential to get a job.

My common sense does not agree, but then again, I am a newbie.

1- Would any of you consider it? Why?
2- Have any of you made the risk of something similar in the past? How did it played out?
3- Are there a few rule of thumbs that I can learn out of this?

Looking forward to hear your thoughts.

Regards!