All Forum Posts by: Mike Moreken

Originally posted by @Aaron Montague:

Originally posted by @Mike Moreken:

3 Bedroom, 1.5 Bath single family row home. 1120 sq ft. New roof, carpeting, painting, sinks, lighting fixtures. New refrigerator; old range/oven, clothes dryer, washing machine, garage, plus ADT security service provided. West Trenton 1.5 month security deposit and application review of rental history, employment/income verification,eviction and credit checks, etc. Tenant pays for gas heat/hot water/electric and water/sewer service. 3rd party/Section 8 payments accepted. Each adult must pay a $50 credit check non refundable fee before application. Applicants who submit this fee will determine the order of received applicants.

Any comments?

 I'd drop "OLD" before range/oven.

Can you legally take 1.5 months in a security deposit in NJ?  I can only take 1 month in VT.  What I do is take First/Last/Security all equal to one month's rent.

 Good point to take out 'old'  Yes in NJ (1.5*monthly rent) that is our maximum security deposit.

Originally posted by @J Scott:

Originally posted by @Mike Moreken:

I suppose 50% would be a great figure for net for rent, but this seems unlikely.

 What does that mean?  What seems unlikely?

net income 50% of gross income.  

Some succeed, some don't.  Yes costs come down usually with longer rental periods.  You can be done with rainy day funding, vacancy fee funding.  Maybe I will set up 2 bank accounts for that! ;)

Thank you, yes will modify if I use it.  Not same laws + terms used in socialist state of NJ.

I am going to push hard to get automatic debits setup with the tenant.  No looking a letter date, etc.

Originally posted by @Johnny Nuchols:

When you are purchasing a property for a rental you should always request to see their previous tax forms. Landlords should be filing the Depreciation and Amortization on form 4562. When it comes to taxes people want to get the most of there money back at the end of the year and if there expenses are inflated or not accurate from what they are telling you this form will show, review part III on the form. As an example when a landlord replaces the roof it will depreciate at a different rate than the original rate at 27.5 years, this will have to be recorded on Form 4562. This should help you find any red flags on information the seller is providing.

 (From instructions form 4562) Section 179 property does not include the following.Property held for investment

My CPA says the roof is basis, 27.5 years

50%  I have heard for wholesaling, buying for rehab, etc.  That is what you want to pay for the property based on project worth at end of project.

I suppose 50% would be a great figure for net for rent, but this seems unlikely.

Many paths in real estate, a few ideas here: From notes of Liz Faircloth's talk Feb 17, 2015 Figure out what path you want. 1) Four main categories of RE (real estate) investing. Figure out and focus on one! a) Landlord b) Passive investor c) Wholesale d) Rehabilitation 2) Main RE goals: What are the percentages today? and your goal in 5 years for these three categories? Today Five years a) Cash Generation % % b) Passive Income % % c) Wealth Building % % 3) Create a 'Why' statement. Why are you investing is RE? 4) Determine your: * Assets, * Time availability (7.6 hours available for average person), * Skill & Knowledge, * Personality traits. 5) Determine: Are you financially a risk taker or conservative? Are you 'Big Ideas' or 'Details' person Are you Persistent? Introvert or Extrovert? What is your Communication style? 6) Create a Team & a mastermind group. We are not strong in everything plus we all have blind sides. Decide what you can offer from step 4 for any partners. Examine mutual and non-mutual goals. As mentioned by Liz, you may want the group have each member work on these ideas. Discuss similar and dissimilar goals.

I have found many cannot simply put down #'s on a spreadsheet and start working on PITI, landlord fees, legals fees, etc. Every time you think of a new expenses BUDGET it, and put in expenses. At least half population can not seem to do this. You must get a income/expense projection budget before renting!

Many cannot 'PLAN'.  See step 5 above by H. Painter.

Not directly mentioned.  If the LL gets to collecting checks gleefully.  Newbies may not think or plan for a reserve fee (on expense ledger until filled, plus might contemplate a separate business bank account so can be observed easily).   Basically any positive income must fill a reserve rainy day fund ASAP.  Once that is achieved you can think of doing something else with positive income.

Yes leniency, that catches my eye.  Must be on top of the business situation.  Responsive.

An mentioned, NEVER start emotionally connecting, this is a business.  Be respectful.

I know one LL that says 'hold on', walks 50 feet away.  Acts like he is talking on phone.  Then comes back and says my investor says "NO".  He has no investors :)

I have in my lease, LL plans to inspect monthly.  It can be amazing what you can find from stories I have heard.  I also am checking for safety/maintenance too.  In NJ we must give a days notice of visit.  I suppose will do this by email (documented trail).

Originally posted by @George Paiva:

I am a landlord in CT, typically we have to wait 10 days to file a "Notice to Quit" to have the tenant volunteerly move out in non payments of rent.  I've been through 5 evictions already and won each time so I understand the process.  Today I was studying all the literature found on various CT websites helping out tenants.  Mind you I do this to understand Landlord/Tenant law.  There unfortunately aren't any sites to help landlords ;)...  Anyway I was on one site that mentioned a KAPA NOTICE which is an informal letter sent to the tenant before you would submit a Notice to Quit. 

My question is do any other landlords write these up? Pros/Cons?

Here is the website I read this - http://ctlawhelp.org/self-help-guides/housing/evic...

AKapa Notice is an informal warning letter that:

• Explains what you did wrong, and
• Tells you to stop or to pay for damages caused within 15 days. If the problem is not solved within 15 days, your landlord may send you a Notice to Quit.

 It appears KAPA is a legal idea in CT.   Rather than look at lawyer sites I would try to pull data from a CT government site, or as last result consult an eviction lawyer.  I plan to follow roughly Marcia's steps.  

Originally posted by @Marcia Maynard:

Never heard of a KAPA notice. We use a "Rent Past Due" letter quite effectively. Rent is due on the first, late on the second. We charge a late fee of $50 on the sixth. So on the sixth we stop by to talk to the tenant and also hand them the Rent Past Due letter, which clarifies expectations and also bills the late fee. This usually does the trick. If they haven't paid by the 8th, we serve the Pay Rent or Quit notice. However, for repeat offenders, we serve the Pay Rent or Quit notice on the 6th. If they don't pay within three days, we contact our attorney to file for eviction and unlawful detainer with the court. From legal notice to sheriff lockout takes less than 30 days in our jurisdiction.

 Nice local government turn around!  Clock ticks, late, 5 days later boom.  Nice policy.

Originally posted by @Ariel O.:

The money needs to come WITH the application. They hand you an application or fill it out online, and pay then. There is no reason for you to shoulder the cost of an eviction and background search without having the $$ upfront. That's standard practice everywhere and Trenton should be no different.

 I got pretty convinced that you meet the prospect in a public place and fill out application.  Most applicant's skip info on application from what I have read.  They must fill out credit check with fee so these two items can be wrapped together?

Beautiful idea on fill it out online.  I did put my docs up on the web.  (Frugal LL ;) inkjet costs)  yes charge my business 10 cents a page.  As my first shot at LL can ponder doing this...  I figure if they are serious I'll give them internet link and tell them to printout 1 + 2 documents.  (Credit + Application).