All Forum Posts by: Curt Smith

Hi all  IMHO you are thinking right, about the businesses details but are do in the weeds.   Higher bottom line is via working on learning better screening and requirements uip front!!  IMHO and experience. 

The goal is zero turn over (forever). IE a family with young children and a dog move in and literally never moves out untill every kid has gone thorugh the local college. IE 12+4 yrs. :) I'm on this path in a few doors. First tenants and never moved out (yet). Also when you screen for families with young children (I'll get to how to be FAIR housing HUD compliant while screening) you also get "doers" who rarely call re maintenance needs. Several doors I only get asked in to fix something every 2-4 yrs. Years not months. IE a kitchen faucet has worn out or a dishwasher.

Focusing on how to attract longer term (permanent) tenants will net 200% more (incrementally) vs any other tactic IMHO.

tips:   buy the book  Landlording on autopilot.  Best screening chapter found.

- add to your requiremetns at the bottom of your zillow rental add;   Must be long term renter, multi years.  Preference given to longer term stays.

- Take 1 or 2 dogs.  Put in a fence for the back yard.  Charge $300 per pet fee, $25/mo per pet rent.  Apartments are up to $50/mo pet rent.  Use petscreening.com to help filter fake emotional animals.

- I get 3 mo bank statements during formal screening.  During initial sms screening I ask send bank screen shot showing bank balance to continue.  I look for 2.5x rent as min.  This is practical; takes 2x min to move in.  Many (many)  apps have $500 to 1k in the bank.  These are undesirable tenants!!! Not savers.   

- If I see >>$10k in the bank I ask are you planning on buying a house?   "Oh thats great thats good idea.  I'm sorrry though we don't take tenants who are planning on buyin a house."  FAIR housing allows you to deny based on financial situations.  I literrally say we won't take you.  You shouldnt either if your goal is "they will never move out", permanent renters do not have the FICO or savings to buy.  We filter for those with savers mentality (via conversations, and bank balance) who are permanent renters.  IE camee from a house and wanting to rent my bigger nicer house.  NOT from selling a home and wanting to rent a year to buy another house.

- I ask; how many people will be rentiing?   Why are you moving?  How long do you plan on staying?

Piece together a complete picture of this family.  Why moving, why your place vs another etc.  It must add up to "makes sense" no holes in their story and sounds to YOU they will be permanent renters and take good care of your home.

Good luck to all, curt

Hi All, I hate to have a good sub to deal go south by not understanding all the details and MANY complications post closing.  Like canceling the occupant ins policy and putting y9our own renters policy on listing the BORROWER as also insured AND the lender as the mortgagee (escrowed) and also listing you as also insured (or in my doc case, the land trust name;  123 Main Family Trust).

Connect with me then PM and I'll send you my free but extensive sub to training complete with doc examples.  Much missunderstanding.

Best to all.  curt

I hold several rentals I bought sub to and just closed on one last week.  Sub to docs are the most complicated of all deal types and hate to think a new investor might screw the docs up trying to close sub to, I have a free training doc I give away that gives all doc examples and how to close.  Connect then PM me I'll send you the training.

You own the deed, thus you have rights to the appreciation and ALL tax advantages of depreciation, deducting interest paid etc.  No dif from buying with new mortgage in y9ur name.  Just someone else qualified and got the debt, which today is low interest vs the high interest new debt!!

Even if the at the time of closing you are even with AS-IS value, as my recent closing was, I will get all of the future appreciation (paper gain) as the neighborhood and future sales (comps) go up.  Its a nice house I just bought from a devorcee wanting to bail and move on.  I have it on zillow rentals.  Look up 7 edwards terr chattanooga tn for pictures.   

Debt balance $262k,  He wanted $50k to walk, my wife and i met walked the house (a practiced good cop-bad cop tag team) she blurts out this really isn't worth $50k?!?! I then figured numbers on a pad and showed that $40k at closing was generous.  He agreed.  So I'm all in for $302k plus closing costs $2k, plus fix up costs $5k for approx $310k the as-is value today (at high interest rates).  I'm certain the area will appreciate a bunch going forward.  

Now, the appreciation is all paper.  Available only when you sell.  I would NEVER (EVER) replace someone elses debt with my own even to cash out refi.  I would knaw off my arm before I would REFI out someone elses debt.  When you have a lot of doors and debt you'll realize the value of debt NOT in your name.  

Focus on cash flow day one on any deal. No exceptions for sub to. This deal the PITI today is $1600, rent $2300 (low) and the FHA PMI insurance payment part is $400. I just need to wait and pay for an appraisal so the LTV is better then 80% and poof I can get the PMI removed and have more cash flow. Yes yes there/s problems for the seller wnen you buy sub tos that are FHA or VA. Won't get into that here.

Best to all, curt

FWIW they released an update to focus on creative deal marketing.  Leads are included in the system packaging.  They have videos on the home page:  creativereireply.com .  I just started using this upgrade for a month now, had been using the basic reireply for 2 yrs.   The creative version is a vast improvement, business in a box.   Its pricey but does a lot.  Best you watch the videos.  

I'm focusing on subject to offers so this system is perfectly tuned for me.  If you are wholesaling etc this is not for you.  If you do creative deals, lease option, sandwitch, subjet to, this is the tool.  Got one under contract so far, closing to keep next Wed.

I suggest that the current hot area is: FSBO and expireds. Thanks to >7% purchase money. Will stay hot while interest rates stay high. you can DIY this area sure, and you should try. I'm short of time and don't like fooling with glueing tools together. I'm willing to pay for everything packaged up.

Best of luck all, curt

Ive been a longer time user of reireply.com, they've in the last 2 mo updated to a new add on called creativereireply.com that provides leads for you based on a 50mi radius of a chosen zip. Can have multiple zips, each at extra per mo. The leads are FSBO and optionally expireds. The system is tuned for making creative offers. My focus is buying subject to for my own rentals. Most users are making lease option, rent to own and some subject to offers. I'm seeing a crazy ramp up in FSBO / expired leads now that interest rates have topped 7%trapping sellers. I see leads with vacant houses on FSBO sites. No way in heck will they sell. Just waiting for investors to buy at a discount or make creative offers.

This creative system is pricy, not sure what you'd get signing up now. I can't talk price, I don';t even know I just signed up, added a VA account, a 2nd zip and am working leads. For me its worth it since its business in a box. I dont have to lead gen (propstream), skip etc, up load to some SMS tool. I don;t have that much time to fool with tools!! So I appreciate its all wired up for me. SMS goes out on a canned DRIP system over next months. I just deal with the usual replies.

It was early luck I know, But got a nice sub to deal signed and will close next Wed so far. From the leads and SMSing sellers, I know there's alot more deals in the FSBO/expired area as stress, recession, job loss (hope not), and interest rates stay this high. Through next Spring will be tough for sellers so they will expire and really desparate will try FSBO. When you see leeds on FSBO, they are ready for offers.

Best to all, curt

Hi Folks, I'm just a user/subscriber.  I'm not pitching this tool.  I've been around the block for 10yrs own 40 doors of rentals.  Yet to keep busy I still market for deals, 1-3 a year that I keep is ok for me.  I agree with the question!!!

I have good beginners luck and have gotten a deal from every channel attempt except for post cards. LOL Have spent at least $10k over the years to GOOD lead lists. No response. But I was mailing in a hot up market in Atlanta area. And have not recently mailed now that sellers are stuck, long days on market, ramping up expired listings that end up on FSBO. Due to buyers disappearing, traping sellers (like the old days again). So cards may work today if yoiu know how to build a good list. I use propstream.com for details on a house and for pulling lists and mailing cards within propstream.

But recently I've discovered a new SMS marketing system that pulls the leads for you, they push out SMS  series of messagese they built for you.  Your job is to reply to positive interest.  Turn off the out bound SMS on negative responses.

I'm using creativereireply.com a brand new system they built just for creative deals.   I focus on subject to, because that what I'm interested in.  If you had cash or financing you could find tons of deals.  this system specializes in marketing to stuck sellers, who want offers.  IE expireds,  and FSBOs.  Both are seeing zero buyers due to nearly 7% mortgages.

And like my other marketing channel efforts, FB ads, then google ads, I got a deal under contract quickly in 6 days.  Will close on the subject to in 2 weeks.   A very nice house, I'll take over the mortgage payments, give the seller $40k,  small fix / clean up and it will be a great rental.

Folks;   learn subject to and all forms of creative financing.  This is the best period in our lifetimes NOW through next year.  As loong as mortgage rates make buyers pull back, sellers will listen to creative offers.

As a help for sub to I give a way my sub to training/helps pdf.  BP connect then PM me I'll send you the file.   Buy BPs crreative book; Zero down and all other creative training.  Watch on youtube subto etc etc.   

Best of luck. curt

I agree with Jason. Just closed a HELOC on a 2nd residence. Very difficult to get through underwriting since 99.9% of HELOC lenders only lend on primary residence. I hear PenFed credit uniion may lend HELOCs on rentals like yours with no debt. But rare.

Re DSCR lenders I've done 6 in last 2 yrs. Financeofamerica is the worst, so bad I reco no one ever use FofA!! Lendinghome now kiavi is good. Slightly a head of Kiavi is lendingone in FL. When I compare and rank its re the PIA and stupidness in the underwrigting PIA process. All lenders in all catagoriies may have similar terms with small +/-, what differents lenders in a space are their underwriting teams and processes. A bunch of lenders lend on purchase money for rentals, or cash out REFI but every lender will be very different re the pain in the but, length of time, hoops to jump to get closed. Some will even baiil on the loan and not fund leaving you high and dry especially if purchase money. Go with ok terms but BEST underwriters IMHO. You only find this out from 1st person referrals.

Best to all, curt

Hi All,  zero worry about due on sale, espeically because of the way I close, in a trust, get POAs etc.  Zero worry!   Search here, and my network, heard of zero instances of this theoretical problem.  Banks learned they are really bad at managing real estate.  

 You pay interest, you can deduct it.   You have every tax advantage of owning a rental.

Dodd Frank has a provision that if the sold house but debt is still in the sellers name is current for 12+ mo that debt does not count against the borrower (for a new mortgage).  BUT as any dusty corner of statute and regs its up to the lending banks underwriters to know this.  Its best to shop for a lender who's competent at hair ball closings.  I like swbc.com for rental and hairball borrowers.

I have NEVER had a seller contact me later to ask for help or complain that the debt is still in their name.

Sub to is my only focus right now. From now till who knows, several years, will be one of the best times ever to market to stressed owners to buy sub to. IE FSBO, Expireds (just failed an MLS listing), divorce, when these sceenarios are combined with low years of ownership (low equity) the sellers can't sell any other way but via an investor taking over their payments so they can move on. Every sub to I buy has some hair ball issues that prevent selling on MLS;

- low equity such that offers did not cover the debt + costs of selling (figure 10%).  = stuck

- they just hate agents due to bad experiences so they refuse to list and try FSBO. There are folks who just hate agents.

- Divorse and need to sell fast.  

- Probate sometimes has debt.  I only go after deals where the debt is over 70% of the value.  IE I don't want to put mjuch cash out to close.

- Pre forclosure.   FWIW this is a VERY VERY hard deal scenario.  I reco new folks stay away from pre forclosure.  So many leads above you don't need to approach these folks.

I have a sub to training doc complete with doc examples of how to close.   Connect then PM me.

Hi Helen, I don't know the training you refer to but i focus on just sub to re buying rentals for myself.  I've written a sub to and all the docs I use training pdf I give away mainly to help folks not screw up a very complicated doc and process deal structure.

Connect and PM me and I'll send this training PDF.   Also I wrote a doc on how to focus on buying rentals;  this one I linked off my BP profile 1st paragraph;  how to buy a bullet proof rental portfolio.  Down loand it off my BP profile. 

Good luck, curt