All Forum Posts by: Steve Osowicz

@Stephanie Barcia I am not an attorney nor should you use anything following as legal advice.

The way this was explained to me by an attorney is that the lease and the option can be treated as two separate contracts. Why is this important? Well, if you sign a 1 year lease, with the right to exercise the option at the end of the year, and you have to evict the tenant, you still have to be able to honor the option. 

Though it is unlikely that a tenant would be evicted, then be able to purchase, who knows. Six months after purchase, then an eviction, then having to figure out what to do with the property for the next 6 months until the option expires is something to consider. I would be careful about how you craft the agreement and would run it by an attorney before using it. What if the potential tenants are unable to sell their house?

If you are still sold on the idea, I would say a down payment of $5,000 - NONE of the monthly rent applied, the $5,000 would apply towards purchase, however if the tenants are unable to exercise the option, then you would be entitled to keep the down payment. I would not use the term "deposit", I am not even sure I would use "down payment", I would ask an attorney about proper verbiage for that sum.  

@Michael Germinario you can go to google type - property management policy and procedures manual - this will provide links to different existing property management firm's policy and procedure manuals. Typically you will go to their pdf link of the manual that is provided online. This way you can review and use what you think is most beneficial and disregard items that do not apply to you. 

Good Luck!

Yes, Hillview is good, Highview, obviously the Highlands, St. Matthews, Germantown, Fern Creek, Jeffersontown, all good rental areas. There are pockets to avoid in some of those areas. 

@Christina Shearer Welcome to KY, you are actually in a great place for rentals with Western Kentucky University being there, no need to go to Nashville there is more than enough opportunity right where you are. In addition, if this is your first rental, you might want to be pretty close by just to get your feet wet. Bowling Green has changed a lot since I lived there, but I know an agent if you want his info you can send me a message. 

Good Luck!

Mail in check - if they have a bounced check, no more personal checks only cashier's checks or money orders to a P.O. Box. 

Paylease.com - you can set up so that the tenant pays the transaction fee to pay rent online. 

I don't like giving a tenant the account number, in Kentucky if you are in the process of filing an eviction, and you accept any amount of payment from the tenant, this resets the eviction process. So, a tenant could get their pay or quit notice, let's say they owe $900, they just go to the bank and make a $100 deposit, you have accepted a payment and would need to start eviction process over. 

Ah, I could tell so many tales. 

- One time were leasing out a house in a neighboring county (Oldham) great schools, nice area, very desirable. I am sitting at my office and a guy comes storming in with purpose, decked in full suit, sunglasses still on, very assertive. Just walks in past office manager, right into my office and slaps down a stack of cash. 

Me - only my eyes look up, no expression on my face, very unimpressed by his display. 

He says loudly and confidently, "I am a general manager and owner of a new roofing company (unfortunately we get a lot of fly by night roofing companies in Kentucky/Sou Indiana due to storm damage) and I want such and such house in Oldham County, I am ready to pay deposit and first months rent right now".

Me - "Sir, you will need to set up an appointment to view the house, we need proof of income, we do a credit/criminal background check first."

Him -"Look, I know I want the house, I have cash ready, I saw the pictures online and it is great area, income is no problem, my credit has been damaged due to a divorce but no other issues, we can get the lease started today".

I have never had someone rush to get in a property that worked out well, so I need to dig a little bit deeper, something is off. 

Me - "Sir, it sounds like everything is okay, but we still need to run a credit/criminal check". I can see he is getting frustrated, and I pull out my closer, "Do you have any tax liens or levies that are not in repayment?".

Bingo! - Shoulders slump, eyes drop, he starts to stammer a little at this point, "Uh, well, there might be something I in the process of taking care of".

Me - "Great, you get that taken care of and then we will get started on the application, also we don't take cash you will need to convert that to a cashier's check or money order".

Never heard back from him.  

@Anson Young Nice job on the property, by the way that burning smell in your nostrils was just the smell of money.

@Jeff Rabinowitz People involved in real estate are party animals, illustrated by spending Friday night on Bigger Pockets. In Kentucky we have 2 notices, one is a 7 Day Pay or Quit, which is typically for non-payment of rent. The second is a 14 Day Notice, for most everything else, including not allowing access for maintenance, although if there is a potentially damaging issue or danger issue to the tenant or property, then you can get access immediately. If it is not an emergency, then it is 2 days notice - the statute is KRS.383.615. The reason I tell you all of this is certainly there are similar types of laws in Michigan.

Also, again this is for Kentucky, we would give 30 day notice prior to the end of the lease via certified mail that we would not be renewing the lease. No reason need be given, just that the lease is ending and would not be renewed, after that if the tenant stayed, we would not accept rent, and file a 14 Day Notice for failure to vacate then go through the eviction process. 

@Michael Seeker I have had minimal dealings with him, never done a deal, but I have spoken with him do know he is aggressive about payments. Hate to hear that about your experience with River City, that is normally who I refer to. 

A lender would be better suited to answer that but, my understanding is that  credit being pulled by related companies i.e. mortgage companies would make less of an impact as it is due to you "shopping" for a loan. I believe also the time frame is a consideration, so if you apply at several mortgage companies within a 30 day time period would be less of an impact. The problem would be if you applied for a mortgage, a credit card and a loan for a boat all around the same time.