All Forum Posts by: Nicholas Jose

Good afternoon, BP.

I'm currently doing research on how to screen applicants, particularly those who are self-employed. One way to verify an applicant's credit history would be to examine their tax returns and other relevant documents (i.e. bank statements). However, what exactly are you looking for when you see the form with your own eyes? Would there be something that jumps out at you that screams "WARNING! THIS IS A FAKE DOCUMENT"? 

For first-time landlords, wouldn't it just be easier to have your tax advisor/preparer look at the applicant's tax returns him/herself and report back to you about its legitimacy?

Thanks for the feedback, everyone. They've been really insightful. I should've mentioned how I went to eforms and typed up the letter based on which state you're from (NJ in my case). I think @Anna Sagatelovareally hit the nail on the head:

Here's what I currently have on my letter:

"Thank you for submitting your rental application to us. We regret to inform you that your application as been rejected due to one or more of the following reasons:

[REASONS LISTED ON THIS THREAD]

Your application may have been denied on the basis of a report given by a consumer reporting Agency and/or on the bases of the information obtained from other sources.

If your application has been denied on the bases of information obtained from other sources, then you have a right under the Fair Credit Reporting Act to make a written request within 60 days from the receipt of this notice regarding the nature of this information. As per deferral law, we are prohibited from disclosing the source of this information.

If your application has been denied on the bases of information obtained from a consumer reporting Agency/Agencies, then you have the right under the Fair Credit Reporting Act to make a written request within 60 days from the receipt of this notice to obtain a free report from any of the following Agencies:

[...]

You also have the right to dispute your credit report on the basis of its inaccuracy or incompleteness. You may have other rights under Consumer protection Law or credit reporting for which you may contact your state Attorney General’s office or your local Consumer Protection Agency.

Important Note: The Fair Housing Act is a federal statute that prohibits discrimination in the sale or rental of housing, as well as in residential real estate-related transactions, such as advertising, mortgage lending, homeowner’s insurance, and zoning. The law make it unlawful to discriminate on the bases of race, color, religion, sex, and national origin, disability, and familial status."

So the above letter may be used for disqualifications related to credit. Other than that, I should just stick to writing a simple "Thanks for your application, but we've found someone else" (or some other reason), as many of you have suggested. Thanks for the help, everyone.

Good evening, BP.

I'm writing my Tenant Rejection Letter and found some reasons online as to why a tenant is denied their application. So far, I have:

1. Application incomplete
2. Application contains false information
3. Delinquent rent
4. Delinquent credit obligations
5. Insufficient credit file
6. Insufficient credit references
7. Insufficient employment record
8. Insufficient landlord details
9. Insufficient references
10. Temporary or irregular employment
11. Insufficient rental history
12. Insufficient income for amount of credit requested
13. No credit file
14. No employment record
15. No rental history
16. Record of evictions
17. Record of bankruptcy, foreclosure, or repossession
18. Record of excessive or overdue debts and obligations
19. Temporary residence
20. Low credit score
21. Unable to verify credit references
22. Unable to verify employment
23. Unable to verify income
24. Unable to verify rental history
25. Negative report from previous landlord
26. Negative report from employer
27. Owner chose another applicant
28. Other: _____________________

I feel that the more reasons I have, the better off I'll be; however, I could significantly cut this list down by combining two items into one. For example, instead of having

1. Insufficient credit file
2. Insufficient credit references

I could just say

1. Insufficient credit file or references

But then again, I'd also like to be as specific as possible so as to leave no ambiguities. The tenant could question what "references" in the above statement means: credit references or people references?

Also, my tenant rejection letter is two pages long. Am I just thinking too much about this?

Good afternoon, BP.

I'm currently creating systems on what to do if a tenant wants to break his/her lease and stumbled upon this link during my research: https://www.lsnjlaw.org/Housing/Landlord-Tenant/Leases/Pages/Ending-Leases.aspx. There's an ominous little sentence within the page and it reads as follows:

I know for a fact that NJ is a tenant-friendly state. So what happens if the tenant changed his/her mind about moving but I've already found a new tenant to occupy the old would-be-moving tenant's unit? Would having the tenant give his notice to vacate in writing be enough?

Good morning, BP.

I'm at the point in my real estate investment career where I'm looking for a real estate lawyer who will review some documents I've made, which include:

• Fixed/month-to-month lease agreements
• Estoppel certificates
• Pet addendums
• Tenant application
• Notices to quit

What other forms should the lawyer inspect in order to close any existing loopholes, add clauses, and carry out other necessary revisions? Or would the lawyer provide these documents for a fee?

You're correct. My line of thinking when I stared this thread was whether or not there was insurance that covered lost rent *from vacancies. Now I understand that there isn't and I must have reserves ready to cover the months where I don't have a tenant in a unit. However, I still do need Landlord Insurance. Or homeowner's insurance. Still debating on which one to use as my first property.

Didn't know lost rental income didn't apply to vacancies or pandemics. Thanks for the clarification, guys.

So reserves are a must. Got it. But I still need insurance. I'm doing some digging here at BP and found some prospective companies: All-State and Liberty Mutual are some potential candidates. But I could probably hire an insurance broker to help me find the best deals and save hundreds of dollars in the future.

I'm also doing my research as well. Maybe there's no independent policy that solely covers lost rent, for it is bundled in a Landlord Insurance - I just learned about this - that also covers property damage, flood, liability, etc.

Good afternoon, BP.

When you start out and buy that first duplex (or other multi-family property), would you rather A) save enough in your reserves that you're covered for at least 6-months' worth of lost rent? or B) use an insurance company that covers for lost rent and let the tenant pay for it?