All Forum Posts by: Scott Groves

Thanks Chris. Do you know if I can use the same Title company that I am using to close the sale in Michigan to hold my money?

I will be closing on a rental property that I have in Michigan in a couple days. The closing was rescheduled due to a change that the buyer wanted to make regarding the loan. The new closing date has not been scheduled other than it is likely to happen in the next 10 days. I would like to take the profits from the sale and purchase another property. This property is jointly held. My partner does not want to reinvest their portion of the proceeds. I would like a recommended Qualified intermediary in the Austin TX area who can help me with a 1031 exchange.

Carlos, who or what company are you specifically using as a qualified intermediary? I am looking for a qualified intermediary in the Austin, TX area. Any suggestions?

I am a landlord with a few houses. The thing is I have never rented a room in my house before. Should I have a rental agreement? Should there be a security deposit? How formal should this be? I plan on having a cost for rent and split the utilities. What else should I consider?

Don't forget to listen and/or watch podcasts that focus on wholesaling.  Episodes 71, 77, and 81 come to mind.

When I rent out a house (that I do not live in), I tell the tenants that there are three things that I want. I want them to pay me on time. I want them to take care of the place. I don't want them to do anything illegal. You may want to start with that. I would have them pay the utilities separate from the rent. That way they have skin in the game and will me more mindful of the cost of using gas, water, and electricity.

You will be living with the interest rate for the entire loan. That will be the most important figure. Then there are closing cost. Closing costs have many meanings to many people. Ask what they are and what their cost is. Costs will vary from bank to bank. The cost of any given item for one mortgage company will be different for another. You have to look at the overall costs. Taxes and insurance should be the same. You get to choose the insurance company that you will use so shop around. Get involved in this process. It's your house and you will have to live with it. If you plan on buying another house, you will need to be familiar with the process. If you have someone else do it for you, then you will never be wiser.

I have a house that I have been renting to a very good tenant for 4 years. They have talked wanting to buy the house. They said they missed an opportunity to take money out of a mutual fund to use for a down payment and will need to wait until the beginning of the next year to get it. Their lease agreement will expire at the end of July. I was planning on putting the house up for sale in June with a closing when the agreement expired. They called to me out of the blue to restate their interest in the house. The reason for the sale is to get my money out of the house that is out-of-state and make a nice profit. We talked about a lease-to-own and land contract arrangements. I want to set up the deal so they may be successful at applying and securing a loan so I can cut ties. What are the pros and cons of each deal? What is a reasonable interest rate for a land contract? I have also thought about offering a new one year lease to give them time to get their money together as a simpler solution for the moment.

Choosing a good tenant begins and ends with screening. The interview about their past becomes meaningful only after 20-30 minutes. I takes that long for people to open up and tell you about the stupid stuff that they have done. The question is whether they are continuing to do the stupid stuff. Look to the credit report, not the credit score. How long ago did they have credit issues and to what extent were they. If there are one or two small credit issues such as being thirty days late and it occurred three or more years ago, that is fine. The report indicates that for the last three years they have changed their behavior. I have found that people who have small issues are not good savers. That means they will never save enough money to move onto something more expensive including buying a house. They stick around for a long time.

My philosophy regardless of whether you want to sell or rent is to make the house look brand new. That does not necessarily mean high end features. You will attract better buyers and renters. It sets an expectation for renters. If you rent with chipped counter tops, you say you don't care about the property and they shouldn't either.