All Forum Posts by: Robert Smith

Need more info on this for the community to help. If the bills are in your name and they pay them that is one thing, but if it is their bill then that is another story. When renting out my homes I make them roll the bills in their name and prove it to me with a copy of their receipt. Another option, maybe for next time, add a certain amount to the rent each month to cover and if they go over an allotted amount they are responsible for the overages. See your state laws on grounds for eviction as each state is different. If one of my tenants paid habitually late I would look at 2 things, they pay, even though eventually and that means you arent fixing back up the entire home to rent out and losing that money. On the other hand the longer you let them stay the more painful it becomes. Once they know you will give they will push more and more. Property managers earn their pay and this would be a good question for them. Don't go to court unless you know you are going to win and get possession. Anything less will create hate and discontent then you would really have a time with them. Good luck, look up the state laws and go from there. 

The kind of team you would want to build would mostly rely on what your end game and purchase strategy will be for the homes. If looking to buy and hold you would need many of the same members as a rehab and resale, however the mind set of those team members would need to be set up to see either way. I have done many deals in many states and have worked with others in and out of the US to purchase homes and resale or hold long term. Research the areas and call multiple agents. Get on craigslist and look up the investor deals as well as call a few investors looking to buy homes in the area. They are more then likely wholesaling homes so be cautious with the information you get unless you hear the same from 5 or 6 different people. Bird dogs are invaluable whether in your own back yard or in another state. As for screening your team, how did you do it when building your team for your local market? The hardest part is getting someone to call you back. Pitch you are looking to begin looking in the area but don't mention as an investor. If they will put the time and work into you in the beginning they should be rewarded. Look for hungry agents and members who know the market and area without voodoo math and fudged inspections. Straight up and honest is the only way to be in this business. Seeing that you are in LA, I actually have some investors from your area here with me now looking to buy and hold a few more and looking to find and close on a few here in the area before they head back home. Send me a request if you want to talk more. Good luck, this is the best place to start looking for more info.

Welcome, if you decide to move some business toward east TN to Knoxville let me know. Deals are going quick but I can not only work with you on the buy and sale but also the buy and hold. 8% right now is a little low for most but you have to start somewhere.  Good luck

Post some numbers for the property so we can see where you are at (ARV, purchase price, amount for rehab) are you planning to buy and hold or rehab and resale? Any time I put a property under contract I have at least 2 exit strategies for this exact reason. If there is enough equity just wholesale the home, or come back due to the inspections and renegotiate for more time or restructure the deal. If it is a deal now, you can make it an even better deal with some creativity. Need more info then we might be able to help.

Rich,

Great reply. I am in the Knoxville area and have been doing many deals for a number of years in several states and you said it great. Overall it is a normal transaction once you get the bank and seller worked out. I like to have multiple purchase and exit strategies when looking to buy. My first thought on a property even if it is underwater is a sub2 and do a lease option to a cash rich / credit poor buyer. We are a title state and many don't want to take on anything like this so finding and building the right team is key to getting things closed quickly and easily. Memphis is a hot bed for investors and many there are doing deals and having no issues. Disclose, disclose, disclose like always. Here in TN what I have found is they usually go to sale pretty quickly after they hit the public notices so the key is to get them prior to the NOD and begin when 90 days late. Banks do take forever and 9 times out of 10 they don't talk with the other departments and will end up going to auction even while you are working a deal. Auction.com has been taking over 80% of the sales here in the area, I am not a fan of them personally but it does bring a crowd I can source for more deals and to sale to.

A good place to start would be consulting your attorney and CPA. There are several tax issues that could arise with a transfer as well as getting your insurance switched over. Switching over may possibly raise the taxes due to a reassessment due to the transfer, and depending on if the home has a mortgage you may need to consult the lender. It can be done and there are many reasons to do so. Without further information it is hard to say what may be involved for you. A cheaper alternative then an attorney would be do a property search and find homes in the area owned by an LLC and see if they bought as LLC or if it was transferred. You get what you pay for, save yourself the time and possibly more money later on by consulting someone qualified to speak to you. Good luck.

The fastest and best way to learn is partner with someone in your area doing deals and making money. Everyone is a real estate investor until you look at their portfolio. Someone who has been around a while may take some convincing, but tell them you will do the deal for them and work as their "acquisitions manager" until you have done a few deals for them. Call the we buy houses numbers on the bandit signs and search local craigslist. Let them know you expect to get paid but understand their time is extremely valuable and you are bringing something to the table other then questions and a hand out. All the guru's forms are "good in all states" but as you mentioned you took the course a few years back. From last year this time to now things have changed, possibly even from 3 or 4 months ago. Someone doing deals today is the place to go for the forms, in my opinion.   

Lease options can be a gold mine, I have done many in the past and still do them successfully. On a side note, don't just look at one way to buy homes. Lease options can be a good jumping off point however there are many other ways to buy built off of the same strategy. Brian had it right by saying get your terms deals together. Also have your exit strategy in place prior to doing a deal. I like at least 2 options to exit the property when analyzing a deal. If you are buying to hold that is one strategy, but finding others in the area needing funding that you can assign or sandwich the lease option could be another exit. Many of my rehab and resales have come from lease options. 

Good luck.

Congrats on the acquisition of the building. From experience I know how hard it can be to take over management or ownership of a building with previous tenants. The first thing you need to let them know is that there is a new owner and that things will not be handled the same way. Everyone has their own style and ideas. With the PM being the previous owner and having issues my suggestion would be to get a new PM and get all new leases. Sometimes tenants see what they can get away with and if everyone else did it before that will not break the cycle. If you are adding your time and money in the unit the first place I would start is with a fresh vision and perspective. What was done before is unacceptable. If they move out then you now get to decide who moves in. One of the easiest ways to keep tenant turn over low is to make them happy. Ask them what needs to be done to each unit when you personally go and speak with each tenant or have a list of questions drawn up for your new PM to ask each tenant I.E. what can we change that would make things better, if you had a nicer unit would you be willing to pay more, if I do these upgrades will you resign a new lease or pay more, things of that nature. If they don't want to cooperate don't touch their unit. Reward good behavior and on time rents and wash their minds and activities of how things used to be. I don't know your market or know what the units look like, but I always strive to buy the worst house on the street and make it the best house on the street. Watch what larger, seasoned owners in the B units are doing and match or top them. Flat paint and commercial vinyl tile goes a long way instead of carpets or wood. Start outside and work in, and when they sign new leases make sure you CYA (cover your assets) with addendum and check lists and hold them financially responsible. You may have to make an example out of one, but that is the business. 

Good luck. 

Being a licensed broker/property manager as well as an investor here in Knoxville and Maryville I would have to say go with your criteria instead of your feelings. It is nice to rent out your home before you get it on the market however knowing the market here I don't think renting it out would be an issue if you had to wait until you are done. 

The perks of not showing it and such can be good, a bankruptcy 5 years ago would not be a huge concern for me since that was about the time everyone had issues, the no missed payments really hold a lot of weight since then. If her score checks out, and depending on how much you screened her (both on phone and in person) you can get a better feel of how she is. The income over and above rent price is nice, as well as no pets. 

A red flag for me would be moving to the area for a job. Not an instant deal killer but new location and new income also brings about the chance she could hate the job and quit or move back home. Everyone says they will stay there forever, every one promises the moon. Not to sound cynical but hope for the best and expect the worst. 

Check references and google them, don't just take the number or info they put on the paper, it could be a friend or buddy "vouching" for them. That has saved me a lot of trouble in the past. Every one has good intentions but things can change in an instant, even someone with no bankruptcy and perfect credit could have issues. Make sure you get copies of her ID and if you don't have something in your lease waiving the notice of termination of tenancy due to nonpayment I would get that in there. You don't want to have to wait 30 days after giving her notice that you are taking her to court if something goes bad and she can't pay. 

In the end take emotions completely out of it, that is the only way to stay successful when investing, especially when renting out. 

Good luck.