All Forum Posts by: Sean McKee

Thanks everyone for your input! Luckily I am getting back in a few weeks. I am in the process of turning it over to a property manager, but I will still retain control of which leasing agents show the units.

@Russell Brazil,@Drew Sygit,You are correct that leasing is a low paid job and not very rewarding. There were other agents involved with showing the property and had my other broker rent a similar unit for the same rate. I honestly think it was not a good fit for both of us.

@John Warren- You make a very good point about people only wanting to outsource the hard and low paying aspects of the business. I never thought about it that way. You must have a solid system if you can get away with showing it once per week! However it wasn't working with the broker I tried out. I'm glad you were able to get around HUD!

Hello BP!

I'm actually not that stuck with my broker and have recently parted ways. However this experience has definitely got me thinking about how to avoid this situation in the future. I've been overseas for sometime now and have become "out of country homeowner". Happily this is temporary and I return back to the US in a few weeks. This experience has definitely shown me how "passive" my investments are and some serious gaps in my systems(definitely a post for a different day). Long story short, I had a tenant move out suddenly and left me with an unexpected vacancy. Normally I would just show this myself, but being on the other side of the world makes this a little bit harder. My normal broker was not available, so I scrambled to get a new one. Naturally I went with the first one I found and since I was preoccupied with other matters there was not an in-depth conversation. 

Fast forward a few weeks, I find out the broker is not really that motivated and is showing it maybe an hour a week at the worst times. I've located a new broker and moved past this, but I am still bothered by my lack of screening in the first place. I have some thoughts on what needs to be done going forward as I transition more of my business to outside managers.

I would however love to hear other people's thoughts and experiences with screening listing agents to ensure they have the fastest turn and get the best tenants? 

@Binyomin Vann- I also forgot to mention this should remain on their credit history for 7 years. I think that's the same for evictions as well.

@Binyomin Vann- I probably didn't explain it well.  It's an open tradeline, like an auto loan. If they constantly paid you late and left owing a balance, it will show that.  So if a new landlord checks their credit, they will see their rental payment history.  The biggest drawback is they only reporting to Equifax. Hopefully they change that soon. However this, combined with the fact you can put an eviction on their record should keep most people in line.

@Jeyo Punnakottil- Front Lobby is a user friendly and affordable option if you don't have a lot of units. If you do it annually, the base cost is around $17 a month + .60 cents a lease per month.  I like this service since you don't need tenants to opt into the service to report them. Tenants can opt in to immediately to start credit reporting, however it is not mandatory. If they don't opt in and pay late, then you can mark rent as late in the system. It will then open a trade line with Equifax and report them as late. This trade will then remain open until they move out.

The biggest downside to Front Lobby, is they only report to Equifax . As far as I know you don't need a tenant's permission to report to the credit bureaus in the US, but I add a clause to my lease so they are aware. 

Honestly, I'm not sure if it's worth unless you have 8+ units. You can still send people to collections if they owe back rent after they move out, and that also gets reported to the credit bureaus.

I'm all for tenants having reasonable protections against bad landlords. However a lot of the tenant unions have a very different interpretation of "reasonable" than most property owners. Because of this I don't think there will be much middle ground in the fight over housing.

In my opinion tenant unions often have misplaced objectives. Most of their efforts don't actually focus on the actual problem of a lack of affordable housing. Rather, many of their objectives are aimed at creating restrictive and punitive laws on current property owners. The sad thing is many of these new laws make it much harder for smaller landlords to do business. They are less inclined to give second chances. Since smaller landlords provide a lot of the affordable housing units, this makes even harder for the tenants the laws seek to protect to find housing.

@Pete Bhanshali- I'm sorry to hear this. It sucks that the system in Chicago doesn't recognize landlords are human and sometimes make innocent mistakes that don't harm the tenant. Chicago needs to move towards the Cook County RTLO ordinance that provides a right the cure. While I disagree with that ordinance as well, at least you have a right to remedy the situation or return the tenants security deposit to avoid the fine. It's a bad policy and ends up costing the tenants more money in the long run.

Until then most Chicago investors should charge nonrefundable move in fees. 

@Joe S.- I paint everything (walls, trim, ceiling) semi-gloss pixel white. I was against doing this for the first couple years because I didn't like the concept and how it would look. After a few turns, I decided to go for it. I'm glad I did, it is much easier to touch up and saves money. I haven't had any complaints from prospective tenants either. I agree with @Raju V. and @Linda S., the price of the market dictates what you provide.

I like the Henry Ford approach to Class C rentals. The tenant can have any color they like as long as it's pixel white.

@Michael Williams- Educating yourself should be the number one item. Looks like you are already there by being active on this site.

Start thinking about the types of rentals you would like and reading up on how to manage them. Class C rentals can have very different clientele than Class A. Even if you plan on self managing, I'd make sure the property works with a property management company so you have a way out if you grow tired of doing it.

Do market research so you understand the various trends going on in the area and what types of units you need to appeal to the widest tenant base. The last thing you want to be stuck with is a dud that is hard to rent.

Absolutely start networking now to find insurance agents, real estate agents, lawyers, contractors, and lenders. That way when you find a a deal you are ready to go.

Good luck!

@Bronson Simmons- There's a good book called Buy It, Rent It, Profit!: Make Money as a Landlord in Any Real Estate Market by  Bryan M. Chavis.  It does a pretty good job of giving you a frame work for organizing information. The author called it SEOTA or Strategic Evaluation Of Target Area. I credit this book for giving me a solid frame work and helping me pick the right property types and areas.

The US Census is actually one of my top sites for getting high level data. Follow this link. Type in either the city name or zip code. From there you search the tables and filter the data you actually want. I'm by no means an expert on searching the site, but I I'm able to find what I need without too much trouble.

You can also go to sites like City Data, world population review, city protect.

For more specific data try the city's home page site or googling for specific studies. Chicago for example has community data snapshots.

Lastly BP can be an excellent source for more neighborhood specific information.