All Forum Posts by: Sergio Aguinaga

@Alan Pederson You're correct and I agree, it would be nice to get some experience with purchasing properties with an agent but usually there's tutorials about this kind of stuff so once you buy 1 or 2 properties on the MLS with an agent, the buyer should be relatively comfortable with purchasing houses. So I would want to take it to the next step and learn everything there is regarding purchasing properties without an agent.

@Alan Pederson I wouldn’t want to go through an agent if I can save lots of money and get a better ROI on a deal that’s not through an agent. Is this a bad idea?

@Lee Ripma is the for sale by owner contract the same as the P&S agreement? Also, is filling it out the only documentation required to complete the purchase successfully?

Hello everyone, I was just curious to see if there are any guides out there for buying a property that’s not on the mls with an agent. Let’s say I find a motivated seller, we want to get get the deal going and we are set on the price, what’s next? I do know that I can get an official purchase and sale agreement from my local title company. Should an attorney look at it? I’d assume not. But what else is there to it apart from the P&S agreement. Is there a process to follow for someone that has never purchased a house this way or some sort of checklist. Any advice helps. thank you.

@Thomas Ferreira Jr. Also, just an FYI: those properties on auction.com may have liens on the deed so you have to be careful because once you buy the property and it’s under your name, you’re responsible to pay all the liens on that property. To check if they have liens, you can take it to your local title company but what happens if there’s a lot of properties you want to invest in, since it can cost some money to check the liens on the property, is there a cheaper way to verify this information so that you don’t purchase a 20,000 home with a 60,000 lien on it? That, I am not sure so hopefully someone who regularly invests in those properties can lighten us up.

Step 1: buy a house Step 2: paint it white You successfully own the White House.

Hello Taylor, thanks for commenting. Rich dad Poor Dad is definitely a good book. It’s motivating and seems to be more like a blueprint of what to do to become successful in investing. I’ll take your word and read “the millionaire next door” sometime. I’m also just in the process of soaking in information but wanted to step right in and get a property and have that be a learning experience. I guess that can be good and bad. I’ll see how it goes first haha.

I think you should focus more on the cash flow for that property instead of worrying about buying it in a B class or C class. Get familiar with all the expenses and get to know what houses similar to the one you want rent out for.

Hello Everyone,

I am new to BiggerPockets and just got my first property and want to have it up on the market in about 2 weeks. It is actually my first rental property and have no prior experience with lease agreements. I've been reading up on a lot of the other posts but still have no conclusive answer related to where the lease agreements are obtained from and how to guarantee everything that should be on there is in fact on it.

The property I have obtained is a 3 bedroom 1.5 bath and I’m hoping to rent it out for $1,200 a month so what type of clauses are typically set for this type of property?

For example, what is the maximum number of occupants living in the property? I'd say a good number is 5 but again, the answer is so open and being my first property I'd like some insight on what's a good number and whether something should be allowed or not. I will break my post into 2 sections.

Part 1 contains questions that I answer myself but I’m not certain whether my answer is what’s conventional or what you guys do in your properties. So if our answers differ, I’d like to know where and how.

Part 2 focuses more on additional clauses that should be mentioned in the contract. I’d like the contract to be complete to protect myself. The goal of part 2 is to get more clauses that haven’t been mentioned.

Overall, I’d like to obtain a lease agreement (contract) where everything here has been included and even more clauses that I haven’t though of as well.

Part 1: Please provide feedback on answers I’ve given if not wise.

1. Maximum occupants living in household? 5. 2. Security deposit? Michigan rent is 1.5x as rent, so should I max it out? 3. Smoking allowed in household? No. 4.  Pets allowed? No. 5.  How much should late fees cost? 10% of rent for 1-5 days. 6. What happens if they get to the 6th day and still no rent? I'm thinking this is where I specify I have the power to evict but is 6 days too little or too much? 7. Guests allowed? Only if it doesn't surpass 5 people living within household and all other clauses within contract are followed (i.e no smoking, etc). 8. Fixed least contract time? 1 year. Is more years better though, assuming they're interested in having it leased for 2 years or more and they qualify all requirements of course. 9. Washer, Dryer, and Stove provided but what happens if they stop working? Tenant to take good care of provided appliances and have them working, even if replaced by the time the lease terminates. 10. Should tenants have renters insurance? If they want to but specify that even if they don't, landlord isn't responsible for lost possessions.  11. Should home business be allowed? I've read no, but why is not a good idea? 12. First rent and last rent? Same as monthly, $1,200 or what's the protocol for this?

Part 2: Other things that need to be mentioned in contract that seem more obvious (hopefully less debatable):

1. Tenants pay for water, gas and electricity 2. Tenants responsible for mowing front yard and plowing snow. 3. Renting the property in "As Is" condition meaning they have approved of the unit themselves and I will not do any "Upgrades" to the property. This doesn't mean I wont fix the A/C if it goes out, but it does mean they are not allowed to complain that there is not a garbage disposal or screen door. 4. No crime activity allowed and will result in eviction. 5. Monthly rent is $1,200 and due date. 5. Landlords are not responsible for any fines that the tenant receives. All fines will be taken care of by the tenant immediately. Landlord using Tenants Security deposit will pay any fines not paid by the tenants on move out. A processing fee to equal to the total fine (including fees, penalties and any other charges) will also be taken out to compensate the landlord for handling. 6. Security deposit can be used for damages on the property that are not ordinary. It can also be kept by landlord in case of eviction for tenant not paying for rent. Security deposit money cannot be used to cover monthly rent. If cleared and property appears in good conditions as expected, security deposit money should be returned within the first week after contract terminates. 7. Pest Control is the tenant’s responsibility with the exception of termites. 8. Landlord should have the right to visit the property if giving notice 48 hours in advanced. 9. Landlord has the right to be doing quarterly inspections to insure everything is in good working order. This is your opportunity to also insure the tenant has not violated any lease clauses 10. Tenants shall be responsible for: replacing their own light bulbs 11. Landlord responsible for maintenance of property. 12. Cannot paint walls without consent or it will result in a $5,000 fine. 13.  Rent payments to be done using Cozy only. 14. Communication only via email unless it’s an emergency.

So to conclude, what lease agreement contains all of these clauses and perhaps even more items that I have missed. There are Michigan specific laws and there is a large document I can read to learn more about them but I'm sure it is not efficient to write the contract myself. 

Please help with answering the suggested answers so I know where I went wrong in part 1 and any additional clauses that need to be included in part 2.

I am aware BiggerPockets does contain contracts specific to each state but how much in detail are they i.e do they cover everything I've mentioned and perhaps even more things I haven't thought about yet? Also, the lease has to contain a bunch of fill in the blanks to make sure it's filled in properly.

Thank you for the help everyone (:

Hey, thanks for posting. I thought there was an issue with my post because I hadn’t received any feedback on both my posts till yours just now. I guess people just aren’t finding my posts? Anyways, glad you found this and hope we both succeed on our goals.