All Forum Posts by: Tom Goans

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I have Texas roots and really miss the Tex/Mex and BBQ. Colorado has terrible Tex/Mex and BBQ.

Bring me some and I will buy you a glass of iced tea.

Yes, through email. I have sold a large number of properties since 2000 via the Internet. I have not personally spoken to or met one of my buyers since 2004, until yesterday. I spoke to a borrower of 4 years for the first time yesterday.

Most pay with money orders. This is a sign to me that they have had issues with banks in the past.

In the lending industry, one thing they request is 2+ months of bank statements. One key thing they are looking for are NSF charges and negative balances. Good idea.

By the way, in many states, it is against the law to talk negatively about a tenant. You may state you would not rent to them again, but not give details. I never call previous landlords. The may be holding a gruge or had a personality conflict with the tenant. If they pass my conversation test, I give them a new chance to build a good relationship. It has worked well for me.

One question I failed to mention that is extremely critical and revealing: When do you need to move in? If they say right away, today, this week, something like that, they are probably having landlord or lease issues where they are. I generally pass if they are in a hurry. What I tell them is I need more time to prepare the property. Be careful what you say, you don't want a government agency investigating a discrimination charge. They are like flies around your sandwich, they won't go away.

The person/company that hired the real estate agent generally pays the real estate commission. This can be negotiable. In some contracts, it is mentioned who pays.

Be the Best Prepared and Informed Person in the Room

File Stacking Form - information in file and order within file.

I worked very closely with a mortgage broker to finance the new sales at my development. Nearly all lenders use a File Stacking Form.

This is your cheat-sheet. Use the form to build your files on every investment you make. A complete copy of the information can then be provided to the lender to expedite the loan process. They will love you for it.

If a real estate agent presents an opportunity, give them the File Stacking Form and request they present you with a file of the information prior to your consideration. You will be saving time and making better decisions.

As for this lender, meet with the owner and express your disappointment and thoughts of taking your future business elsewhere where you are appreciated. Be friendly and help this business owner realize this is business and not personal. The business owner is probably not making any money until closing either.

Everyone is going to find this crazy, but my experience has been excellent using this screening method.

I never have a potential tenant or borrower fill out an application. I never obtain a credit report. I never do a background check.

I don’t need to. I have a causal conversation with the prospect. This can be done by email, telephone, but seldom in person.

A great question is to inquire about hobbies. This is very revealing and effective. I never ask direct personal questions. I never ask how much they make. (I have had very prominent professionals, such as doctors and lawyers, default). Listen closely to what the prospect tells you. I cannot tell you how many times a prospect all of a sudden told me they have a terrible credit history and then asked if that was a problem. My rule; if you are that forthcoming, you are a terrific risk ... it is the ones that hide the truth that are the problems.

If I do meet with a prospect face to face, I pay close attention to how new the automobile is, the jewelry, the toys, i.e. cell phone, and the clothes - are they designer clothes.

NOTE: I once read more than 50 percent of people making less than poverty level wages own a smart phone. How much is this costing each month?

I guess I have been doing this too long. But this type of screening is far more revealing than an application, credit report, or background check. It will give you a clue as to what might happen in the future - is the teenager becoming a problem child.

There are more investment opportunites out there than you have money or time.

Instead of trying to make this one work, walk away and find a better investment with no risk from the taxman.

By the way, check the county clerk and recorder filings. Sometimes, if someone cannot afford to pay local property taxes, they also cannot pay the federal income tax. In this case, the IRS will record a lien. This comes in front of all other liens or debts.

If you have not rented the property within 7 days, something is wrong.

To determine the rental rate, analyze the neighborhood demographics. Determine your target market. What does your target market usually spend in rent or mortgage payments. What is the rent amount asked by the competitors in the neighborhood. Be competitive. Be the best value in the neighborhood and the property will rent in a very short time. Plus, the tenants will be more motivated not to lose the property because it is the best value.

Everyone wins.

When a property sits vacant, the holding costs, tangible and non-tangible are alarming. Create a spreadsheet of the holding costs. This may help motivate you to find ways to rent the property faster.

I have owned income property since the 1960s. I also believe that a positive cash flow is critical. I would rather make a deposit than place an advertisement or show a property. The trip to the bank is fun.

Some of the very best mentors are old pros operating a small office. The ultimate is to go to work for one. No matter the job, you will be around and exposed to all kinds of tricks and insights. In fact, it is best starting at the bottom and working your way up.

Then, one day ask the mentor if you can be a partner on one of his new investments or if the mentor will partner with an opportunity you bring to him. In the latter, he will probably help you analyze the investment, thus you learn even more from a person of experience.

Think small. Many small investments are better than one or several large ones. You get hurt less should a small investment fail or become challenging.

It may be wise to invest in having an attorney draw up one for you. Mistakes can be much more costly.