All Forum Posts by: Trevor Western

Keep in mind you cannot charge an application fee in Massachusetts.  It's been discussed here in biggerpockets already.  

"An important ruling has been issued by the Massachusetts Federal Court that has big waves in the residential management community - many of the commonplace "fees" charged to Tenants and Prospects are now unlawful. This includes: move-ins fees, application fees, and up-front pet fees. The decision on August 26th, 2014 against Equity Residential, which manages approximately 6,680 units in Massachusetts, affects not only the bottom line, but the way many communities conduct their leasing."

@Kimberly

I recommend you write out your qualification criteria for the apartment and stick to it.  I print out a few copies and hand them to the potential applicants.  I can then point them to the specific issue that prevented them from being qualified.  ie. 3x income not there, or credit score below 600, or evictions in the past. 

This protects you from any accusations you treated someone differently for arbitrary reasons.  The reasons are all spelled out and everyone is treated the same.

I've only had one tenant offer me a credit report and I declined to take it.  I pay for full background checks which include the credit report.

I have seen forged paychecks and other records, so a forged credit report would not be surprising.  It's just simpler to pay for it from a reliable source.

-- Trevor

Hi Khalid,

     Congratulations on closing the deal.  Can you tell us a little bit about the deal?

      Thanks,

           Trevor

Vernon Hill is not a great neighborhood.  It has the usual shootings  (see 

http://www.telegram.com/article/20150719/NEWS/1507...  for example). 

It's always fun to plug in the address into Google at look at the number of (previous?) tenants who have been taken away in handcuffs.

The real question is can you attract the kind of quality tenants at the prices you need to charge?

I'm another investor in 4-unit family homes in Worcester.  Prices seem a little on the high side right now so haven't picked up anything recently, but always looking.

Longer answer: Not only can they not be trusted, but they can be manipulated too. 

I have two rental houses in Worcester, MA, I listed under the "Make Me Move" option.  Zillow originally couldn't find the houses, and the Zillow people said I could force Zillow to find them with a "Make Me Move" listing.  So I did.

The houses are realistically worth between $200K to $240K each, but I listed both at a "Make Me Move" price of $475,000 each.  Yahoo!  If I got those prices I would "move" and buy 4 houses with the proceeds.  

I listed them about 6-9 months ago. Zillow started out at reasonable estimates around $200K each. Since then Zillow has steadily increased the "Zestimate".  As of a few hours ago the Zestimate was $305,144 and $446,994.   I think it's aiming for my Make-Me-Move price.

My goal this year is to get the Zestimate up to $1 million each.  I just need to set the "Make Me Move" price to between $1-2 million each.  Wish me luck.

 I couldn't agree more.  If a family member is renting from you it affects the business deductions permitted by the IRS.  Don't get emotionally tied to this deal.  A better one will come along.

I exclusively use RentOMeter.com    It's shows an average and median price for apartments in the immediate vicinity.

Alex

I think Peter Cohan (who teaches business strategy at Babson) had a good reply in his follow up article to that same CoreLogic report.  See link below. 

http://www.telegram.com/article/20140611/COLUMN70/...

He goes on to conclude:

"But Worcester educates and then exports to much of that talent. And its housing market is among the nation's worst. Getting that talent to stay in Worcester and start fast-growing startups is an obvious solution that remains firmly outside the city's grasp."

 But if you're a buy-and-hold investor you are looking at a lot of reasonably priced houses that can cash-flow.  Just plan on staying in the Worcester properties for 5-10 years or however long until it makes sense to sell.   Just don't get yourself in a position where you're forced to sell a Worcester property.  

I'm continuing to invest in Worcester.  It looks like great long-term opportunities to me.