All Forum Posts by: Jeff G.

I second @Michael Noto get a copy of the bill. There are a few possibilities here:

• Bad insulation as @Sergio Garcia says. Also, I might suggest getting the furnace inspected. Why? Because certain failures can cause the furnace to burn more fuel than required. I personally had this happen to me once (partial furnace failure) where my unit wouldn't reach 60 degrees but I got a $300 dollar bill in the mail. Yeah, I was upset.
• If someone has moved into the home (e.g., a room mate) with a delinquent utility bill it's possible that their bill has been tacked on to the primary occupant's bill. It's an especially nasty way for some utilities to attempt to collect on utility debt. I imagine some states don't permit this kind of behavior.
• Check the back yard, the basement, and the attic as appropriate. It's always possible that you have a tenant that's into "indoor gardening" and I don't mean petunias. This could also explain the elevated utility bill.

Welcome to BP @Patrick Bellard 

It's nice to meet a fellow Michigander on this site. I sympathize with your predicament. Getting public records from public databases in MI can be painful and expensive in a nickle and dime sort of way. I seem to recall the record search in Genesee county to be especially hideously if I'm not mistaken.

Your best bet would be to go get a Real Quest Gold account. It can be had here: http://www.realquest.com/ for about $80/month as I recall. That may sound like a bit much (because it kind of is) but realize that that it pays for itself if you do more than about 40 property searches per month.

It works well for pulling up property records and simple owner and mailing address look-up. It's well trusted and can give you fairly good comps too, a lot of Appraisers swear by it.

Good luck.

Pass

@Jeorgia B. most rehabbers won't touch a deal unless they can profit an absolute minimum of $20,000. Further, you should be making $10,000 on the deal (more or less) yourself as well.

As a rule of thumb, even if the house just needs "lipstick" (negligible repairs and updates) that's a presumed $10,000 in rehab. Under the most ideal of conditions minimum amount of "meat" on a wholesale deal therefore is $40,000. I just don't see that reflected in your numbers.

A cash buyer is much better off waiting for the house to be sold off at a tax auction and potentially picking it up for much less than what the current owner owes. 

I used to get calls all the time from extremely motivated sellers with insufficient equity for me to do anything. Sure, theoretically I could have done a Subject-To deal or the like. But, I'm just not interested in a deal structure of that nature just yet. I quickly learned to scrub my leads for 50%-100% equity.

I hope this helps!

@Andrew Challenger 

I agree with @Victoria Winters it sounds like you need to get a clearer picture of how wholesaling works.

That Tom Krol guy I mentioned earlier (sorry Tom, I misspelled your last name in my previous post) has a "Bird Dog" academy online here: http://www.floridabirddogs.com/index.html

The site is intended for "bird dogs" (property scouts) but gives a nice 14,000 ft. view of what it is to be a wholesaler. More than one wholesaler in your area has gotten their start from this material. Learn the material and reach out to him. I'm not one of his students but I was inspired to take action because of a podcast series that he was in. He has a lot of bird dogs and has partnered on deals in the past per his comments in podcast interviews.

@Jeff McCaskey you're welcome sir!

That depends. I have never personally had to get a judgement on a tenant. (I'm a wholesaler, I don't own any units of my own just yet.) But, I have several friends who are landlords and we "talk shop."

One friend (lets call him Steve) has four triplexes and lives in one of the units himself. Because he's on site and does all of his own management and repair work he also just handles evictions and collections himself. He just gets a judgement and waits. Sometimes he collects and sometimes not. I do think he's tired of going to housing court so, last we spoke he's looking at getting himself a flat rate eviction attorney for his own sanity.

Larger institutions (think several large apartment complexes) tend to farm out their evictions via flat rate service and then pass them off to a collection agency. Or, so I've been told at meet-ups by those who would know.

But, it seems most people around here just wait for tenants to care enough about their credit to want the judgement removed. Because, judgments show up on credit reports for 10 years and are renewable for another 10 years (in many states) this might seem like a bad idea. Don't forget, these debts can collect enough interest (I forget how much) to generally offset the steady decline in purchasing power of the dollar (inflation) over time.

My gut says, I'd sell the debt to a reputable collection agency and be done with it. I'll see when I get there.

@Jeff McCaskey is right, some people just don't give a rip about their credit and simply won't pay you--ever. Collecting on half the judgments you're forced to get is doing pretty good. Jeff, are you farming those out to a third party collection agency? Or, are you pulling that percentage all by yourself.

Just remember @Stacy Eisenberg , judgments are returnable. So, keep track of your old judgments as they get ready to expire and file the appropriate paperwork for their renewal. 

I have no experience with lease options as of yet. @William Allen you may want to have a look at this post: http://www.biggerpockets.com/forums/83/topics/167048-lease-options-safe-act-and-dodd-frank

Bottom line, don't just find someone who has done this before (pre Dodd Frank) and might be operating under obsolete understandings. Rather, seek out a qualified investor friendly attorney in addition to whomever you consult with to shepherd you through the process.

I agree with @Michael Noto run your numbers assuming the worst possible scenario. 

@Coy Barnes I think you mean ask them to sign once escrow is complete and you're the legal owner. You might be able to work out some leasing concessions with the current owner during the sales process but don't hold your breath.

Some Tips

• Check https://www.rentometer.com/ to see what market rents are in your area.
• If they're paying substantially below market rent you might have a fight on your hands. Be professional and courteous. 
• You might want to also send out a survey to each of your tenants to make sure you know the names and contact information of everyone occupying each unit, the total number of minor children, etc. 
• Most landlords I know require their tenants to get Renter's Insurance. You might consider requiring this in your lease in addition to the security deposit. Why? Because it gives you one more avenue to collect if the tenant destroys the property.
• "Cash for Keys" might be your most effective option. But, in that case you may be putting out $500 to $1,000 (or more) per tenant to get them out. Factor that into your numbers!
• Going forward, do yourself a favor and find a flat rate eviction attorney. You send them the paperwork, they take care of the process for you for a fixed dollar amount. Everybody wins.

@Colleen F. is right. I forgot to mention that there may be local laws or ordinances which limit the number of unrelated people who can live in a single residence.

Check with a lawyer. There are a lot of persistent myths about this sort of thing.

Do yourself a favor and reach out to @Tom Kroll he's a major wholesaler about an hour north of you. He'll be able to get you started on the right path. He's been wholesaling for about two years now. He went from a nobody to a major player in that time.