All Forum Posts by: Account Closed

@Alba Alamillo ,

If the tenants in there are good tenants and meet your screening criteria, why would you get rid of them? I can see a reason, but the question was asked of me when I was doing the same thing and want to make sure you've thought through that.

You say the house is in excellent shape, so unless there is some foundation issue, which should be discovered during the inspection, you should have a great deal on your hands. I wouldn't be extremely concerned with any sort of rehab budget.

If you want them out, serve them a notice to end the lease agreement (not sure about your location, but in mine it's 30 days). You can give them 60 out of generosity. Then carry on with your business plan. 

For what it's worth, in my town, I bought a duplex across from the high school, and had no issue with the appraisal coming back lower as a result. If you're considering selling at some point, some folks like that and view it as a free field or an extra large yard to play in but not have to take care of.

I would definitely get it locked up under contract, and do an inspection. Good luck!

100% agree with Nathan's criteria.

If even after those criteria you have more than 1 qualified applicant, you have a few other options, as long as you apply the same requirements equally to everyone.

I verify employment, and call previous landlords for references.

If on the showing the tenant smells like smoke and you don't want smokers in your house, you could pass over somebody for that. 

If somebody's car is trashed and filled with garbage, that may be a representation of how they'll treat your unit. You may choose to take a pass on them for that reason.

Brandon Turner in some episodes even mentioned that you could reject an applicant because they have tattoos, if you so choose, as long as you apply that criteria evenly across all applicants. 

With that said, tenants should make 3x rent, a 'healthy' credit score, and nothing in collections, judgements, evictions, or criminal history. (I do make exceptions for collections issues in the event of short-term medical issues, where the tenant appears to be on the rebound, but would require a co-signer). 

@Fi Scope I don't have first hand experience in this space, but I've also been told that as long as it's encapsulated, then it's not a problem.

Do you know where the moisture is coming from? If there isn't any in the insulation, and moisture isn't coming in there, it's probably fine. 

@Steve W. Chapters 13-16 cover "Market Evaluation", and chapter 15 specifically covers 7 factors such as unemployment, population, job diversity, supply/demand, etc.

They more or less read the book, or at least excerpts on some of the show episodes. You can find those at syndicationschool.com. Here are the relevant ones.

https://joefairless.com/podcast/jf1527-how-to-perf...

https://joefairless.com/podcast/jf1528-how-to-perf...

First, Congrats on your first rental! Its a huge step and very exciting.

I completely understand, don't want to take your foot off the gas and wanting to get to the next level. 

House flipping is about buy low, sell high - and you do a bunch of work to push up the value of the property. Start by looking for deals and estimating rehab costs. BP has a book that gets you in the ballpark, but your local REIA might have a better pulse on local rehab costs. Once you look at enough deals, you'll have a better sense for what the average looks like, and you'll know what a "good deal" looks like.

Save, save, save, and jump on the right deal when it comes along. whether it's a BRRRR or Flip. You can BRRR with other people's money.

Not sure how sophisticated you want to get with your market analysis, but when getting started, I kept it relatively simple and created a spreadsheet of home sales and rents. For each sale and each rental, I'd document #beds, #baths, sqft, sale price / monthly rent, whether it was an apartment/house/duplex, and then take some notes on the condition/style. After a little while, I had a decent summary of how much, for example, a 2bed 1 bath Singe Family with an updated kitchen and bath would likely appraise for, and rent for. Gave me a good line in the sand, but of course, when I would actually analyze a potential deal, I would double check sold properties on ziillow/redfin, etc. 

This is all in addition to of course driving the city and seeing what you see.

On a more sophisticated level, the Best Ever Apartment Syndication Book by Joe Fairless (and his podcast) covers pretty well how to do a full market analysis.

@James Heacock I've heard from so many people that banks don't care and don't call it due. I think the logic is: if it's a performing note, why go through the process of calling it due and disrupt a good thing?

I initially made an offer to purchase from my LLC, but my local community bank told me that I should buy the house in my name (not buy under the LLC, as I originally made the offer), and they actually suggested that I transfer the ownership to an LLC after buying. So I think it varies, and I'm sure big banks are more difficult.

Great question @Donnell D Foster - there are two things you can start doing today.

1. Accumulate Cash! Some people would prefer to pay off debt first, some not. (Just make sure that if you don't pay it off, that you can get a mortgage and it doesn't throw off your Debt to Income Ratio). You can accumulate more cash by spending less and earning more. Perhaps easier said than done.

2) Learn! Consume as much information as possible. Start practicing assessing deals, talking to people, and the more you put the podcasts to work, the more it will stick, and the more useful it will be when you need to put that knowledge to action.

Congrats on the upcoming wedding!

I don't have any that I've used, but if you're a member of the Madison REIA, they have lists of contractors and handymen from different general sessions available online for you to call. Might be a good resource.