All Forum Posts by: Robin Grimes

Applicant: "Your Pet Policy says you accept pets with a deposit and pet interview. We don't have real pets, just birds, turtles and a ferret. Do you still need a pet deposit? "

While prospective tenant was filling out application she made a point of telling me twice that she had "Never paid a late fee". Which was supposed to mean she always paid on time. My warning flag went up and was confirmed when I spoke with her previous and only landlord. Prior landlord: "She always paid a few days late and never with the late fee. I didn't renew the contract and I'll be taking them out of her deposit".

My mortgage broker also mentioned that reserves becomes and issue. You have to hold x months of reserves, in cash, for each mortgage to qualify for the loan. For property #5 the reserves for each property goes up substantially.

There are many threads on BiggerPockets about what to ask a seller. But what about the questions that sellers ask you? What are some of the questions, and your answers, that Sellers ask when negotiating with them to buy their property.

Questions I've gotten from Sellers:
Q: Why can't I stay in the house and just pay you?
A: Our policy is never to rent a property back to the seller. It's been our experience that people have a difficult time being tenants in what was once their own home.

Q: Would you pay more if I make some of the repairs myself?
A: We only use our licensed contractors for repairs.

Q: Can I store my stuff in the garage/shed until I find a new place?
A: We would be happy to pay for a storage unit for X months. (as part of the negotiation)

So what are the common questions you get asked by a seller?

Well I just paid $1000 for a brief lesson at the university of HUD. I contracted on a HUD home with cracks in the foundation. AFTER sending in the EM and contract I had a foundation company come out to quote repairs. They said that the foundation could not be repaired, it would need to be torn down and the foundation re-poured, because it was to thin to add piers. I cancelled the contract with HUD and of course HUD is keeping my EM.

I tried to argue that HUD had misrepresented the house and that the HUD inspection never mentions the foundation. No luck, so HUD has stolen another investors EM by not allowing inspection after contract. I do understand the term "AS-IS" but HUD represented that they were selling a house, not a lot with a tear down structure.

I will buy again from HUD but I will do ALL my inspections in the 48 window after I win the bid and before I submit the EM. $1000 lesson learned....

After filling out Application and paying application fee.
Tenant Applicant says: "We won't be ready to move in until the kids are out of school June 1st. You will hold it for us if we pay deposit right?"
Me: Sorry, June is 3 months away. You would have to rent it now.

Stupid things Tenant Applicant’s say.

I had renovated a nice 4/3/2 and put it on the market for lease. Here are some of the comments from people who toured the property during the open house or called me from signage.

#1
Young single mother with 3yr old in tow. “My boyfriend will be paying the rent, he said to just go find a place, but I want to rent it in my name, so it will be mine alone.”
I’m thinking: I’m not renting to someone without the verified income to pay the rent. Sorry but a promise from a boyfriend just won’t do.
I’m saying: Here’s a rental application. The application fee is $25 but you should know that I will need to verify income and whoever is paying will need to be on the application and lease.

#2
Middle aged couple with no kids. Wife says “I don’t like the wood floors. If you can put down carpet and repaint to something brighter, we’d be interested. Also you will need to replace the stove.”
I’m thinking: The wood floors are new laminate that I just spent $1400 and two days installing. The paint is all new also. If you want to remodel a house, go buy one yourself.
I’m saying: Here’s a rental application. The application fee is $25. The property is being rented in its newly remodeled condition.

#3
Family. Made appointment and met me at house. Husband says “I need a 3 car garage.”
I’m thinking: The 2 in 4/3/2 stands for TWO car garage. Plus the photos show it’s a two car garage, so why are you here wasting my time and yours? Did you think I was hiding a third garage bay in the back yard?
I’m saying: Here’s a rental application. The application fee is $25. This house only has a two car garage.

#4
Very young guy, young 20’s maybe, called me from sign in yard. He’s parked at house. Says: “ I need a big place for my girlfriend and our 3 month old since we want to have more kids. Could you help me out and rent it to me for $xxx” (about ½ the rental rate).
I’m thinking: So you’re requesting that I contribute half your rent so you can have more kids that you can’t house and support.
I’m saying: I’m happy to provide an application. The application fee is $25. Sorry the rental rate is firm.
.

WOOHOO It's been a decade since I've seen a refund from the IRS. I'm finally seeing the tax benefits of owning rental property. So welcome TaxMan, it's good not to hate you any longer.

Hi Steven,

Hire a CPA who has a very good understanding of rentals. Let them file your taxes. A good CPA is well worth the $ you will pay, to have them find ALL the deductions. A big part of making money as a landlord is the ability to keep the money you make. the Bookkeeping and filing taxes with rentals is not somewhere you want to pinch pennies.

Robin

My last SFR had an old hot tub in the backyard. I posted the cover and hot tub separately on Craigslist. The hot tub for "FREE, you move" and the worn cover for $50. Cover sold same day and hot tub was gone a few days later.