All Forum Posts by: Sean H.

@ Nathan, I was thinking the same thing as a potential flaw in my strategy. Going forward I would require one to be put on file. I wondered about the legality of doing that, but most hotels and car rental places demand a credit card for incidentals, so I think I would be good as far as tenant screening.

@ Anthony, after a bit of digging, I found the square app can have manually entered credit card numbers, but they charge a higher rate. This will be taken into account upon invoicing so it won't affect me so much.

I had not thought of using the card to invoice for incidentals, but that is a great idea as well! I have only gotten burned once with a terrible move out, but it certainly was painful enough. A credit card will be very useful in this situation, if worded correctly in the lease.

To capture everything suggested thus far, I am thinking something like this to be added to the lease, "On the 6th day of the month, if the rent has not been paid, the tenant agrees to have their credit card charged for the total rent amount, plus a $50 late fee, as well as any credit card processing charges. If at any point, the tenant has canceled their above listed credit card, this will be interpreted as voluntarily ending the lease, effective the date of cancellation. Upon move-out, should any damages exceed the amount of the security deposit, the tenant agrees to have their credit card charged for the balance owed on the damages."

What do you guys think?

@Chris - No merchant account would be needed if I am understanding the app correctly. Just the payment of the fees, which would be billed to the tenant. From some basic research, the fee's for using square are a bit higher than you would get if you had a merchant account, so that must be the rub.

Good thought about them canceling their car. Maybe a lease stipulation will be that by canceling their credit card, they effectively cancel their lease, voluntarily? That could be another good out to prevent having to go through eviction hearings.

@Brian - I agree, sometimes the law does not follow logic. That's why I am a bit hesitant to proceed and looking to others for some guidance on the issue.

If using the app worked out well, I would consider offering regular payment as an option, but I doubt people would want to pay the convenience fee, as most of these tenants live paycheck to paycheck. $15 per mo can be a huge deal for them. Plus I kind of like the idea of only doing it when they are late, charging all of the extra fees so it stings quite their wallet quite a bit. This way they will remember what happens when they pay late and correct their actions.

I own some rentals in blue collar areas. Some houses are notorious for being occupied for 3 months no issues, then late payments, then partial payments, then no payments, and eviction. They cash flow excellently when rented, so I do not want to get rid of them and I have trouble finding Section 8 tenants for these units.

What I am thinking is, have my property manager get their credit card number when they sign their lease. Have her download an app such as squareup (https://squareup.com/). Have a clause in their lease that states something like "On the 6th day of the month, if the rent has not been paid, the tenant agrees to have their credit card charged for the total rent amount, plus a $50 late fee, as well as any credit card processing charges." This will guarantee payment.

Payments charged would be something like this..

Rent - $450
Late Fee - $50
Credit card fee (2.75%) - $13.75
Total charged - $513.75

Has anyone tried anything like this? Is it entirely legal? Pros/Cons?

I have a commercial property lined up that is a good deal.

List Price: $500,000

Tenant 1: Doctor, been there for 4 years, very happy in current location will renew lease in spring, paying $33280/yr.

Tenant 2: Doctor, been there for 1.5 years, very happy in current location, plans to renew lease in 3.5 years. Paying $47840 / yr.

Taxes: $14396 / yr
Ins quote: $1485 / yr
Landlord responsible for water/sewer, past 12 months average $400/mo for both. $4800 per year.
Property was built in 2006. No maintenance issues.

NOI: $60439.

Even with 100% financing, 500k 20 yrs at 6%, it will cash flow about $17500 per year.

Here is where I break down. The owner will hold 25% paper. My lender will lend up to 75% of purchase price. 75+25=100% wooo!!! I'm done right?? I do not think it is that simple, but I feel like I have a flexible seller and a good deal on my hands. Would like to try to make it work creatively. Are more details needed?

Congratulations Mark!

I would be interested to hear the process on how you found a tenant prior to construction. I am assuming you bought the land first, then shopped it around? Or did someone approach you, needing a garage, then you found the property, etc?

What tasks do real estate investors typically assign to VA's?

Rich,

Would love to hear more about new construction. Regular progress reports and numbers analysis would be awesome!

Scott,

That is what I am trying to do, albeit unsuccessfully. How are the people that you know able to do it successfully on a consistent basis?

Brendan,

Why would you recommend those folks?

It seems like the biggest factors will be your team and your processes to get to 100 deals.

For investors who are currently flipping a decent amount of homes per year (10+), what would you say is your limiting factor to expanding to 100 or even more than that? Some folks earlier were talking about lack of deals, is this true for everyone or are there other factors (say financing, lack of crew, etc)?

Suppose that the answer to the previous question had been solved. What would be the biggest change to your business as you know it today, besides the addition of more bodies? I am thinking more in line with additional / different processes.