All Forum Posts by: Victor N.

I also work with tenants on section 8. I developed a very good relationship with the case managers and the inspectors. This makes my life a little easier when it comes to dealing with the tenants. @Marcia Maynard provided some excellent info so I will pitch in with a few things to watch out for:

Knowing the section 8 rules! This will also help you manage your tenants better. For example, the housing authority does all the affordability calculations for the amount of rent the tenant can afford. Every time there is a change is the tenant's income up or down, their portion of the rent is adjusted accordingly. So basically, the tenant should always afford their portion of the rent.

Regarding repairs for example, if there are damages caused by the tenant, you should point those out to the inspector when he/she does the annual re-inspection. If the inspector agrees with you, the tenant will be required to take care of/pay for the repairs, which hopefully will motivate them to take better care of your property. But on the other hand, do you want them to make repairs themselves if that's what they decide to do? In other words, you might end up doing the repairs but in that case you should be able to bill the tenant.

Also, if the tenant does not pay their portion of the rent and you successfully evict them, they automatically lose their section 8 voucher. This is a big motivation factor to encourage them to pay. The case manager can be an amazing ally because they will send a letter to the tenant who is not following the rules. In addition, if a tenant does not repair damages that they caused as noted by the inspector, they can lose their section 8 voucher within weeks after the usual 30 days to perform repairs has passed.

Another issue to watch out for is unauthorized residents in the housing unit. The housing authority will give you an official list of the household members allowed to live in the apt/house. All of my section 8 tenants are women and sometimes they try to make their boyfriend part of the household ( boyfriend moves in).

Section 8 tenants are sometimes not easy to deal with. But knowing the rules can help you protect your investment and make it profitable. Good luck!

in CT you are required to pay interest on the security deposit ( in MA too). Most banks have accounts specifically made for tenants deposits. I have used TD Bank and BoA with no problem. You can open multiple tenant accounts at the same bank but the money is kept in separate accounts so it is very simple in term of tracking interest.

@Jennifer H. , I would rent to this person.

To me income and debt level is more important than credit score. You can have a lot of debt such as student loans, car loans etc but still have a high credit score. In other words, I want to make sure that the tenant can pay all his bills including rent.

So maybe you can pull his credit report and see the total payments he needs to make every month including the new rent. Then you can decide if his income is sufficient.

He has a great paying job and he has been there for a long time. he might be a long term tenant since his goal is to save money and put his girls in college.

A while back one of my co-workers was in a similar bind. He had a very low credit score due to prior credit card misuse but had a great job. His wife was also working but just like him had a low credit score. They were so stressed out because someone broke into their apt and the wife no longer felt safe and absolutely wanted to move. They got turned down everywhere because of their credit. When he approached me, i suggested he looks for a private/small landlord/property owner. He did and found a small place but was happy that his wife felt safe again. They stayed there for 5 years.

he told me his landlord was very sad that they were living because they were the longest lasting tenants he had and the rent was always paid on the 1st. The only reason why they moved is because, they took the time to repair their credit and then bought a house.

off course we all have to be wary of people with bad credit but with the additional info you provided, I would rent to him...

@Chris K. ,

The portable heaters are not a viable solution. Call an HVAC person and fix the furnace asap! By the way, did the fire dept red tag the furnace?

Regarding the CO leak, the furnace heat exchanger might be cracked or the CO is leaking from the chimney into the house. If the furnace is in the basement, do a quick check to see if there are any gaps around the vent pipe going into the chimney or any other holes in the chimney where the CO can escape from.

Be glad you installed a CO detector but definitely have the furnace and or chimney repaired asap! Since we're in winter, the portable heaters could be used as a temporary solution until the furnace is repaired.

@Tom V. ,

Im in CT too. Glad to see the situation was resolved.The wife saved the day, like they always do! lol I dont think there will be any problem with the check since the tenant had a promotion and all.

Evictions are fairly easy and inexpensive in CT if you do them yourself. But they are expensive when you hire an attorney or if your property is in an LLC ( in CT when a property is in an LLC, you must use an attorney for the eviction).

Regarding the lights in the hallway, the tenant is correct. I had a similar issue with my first multi and had never realized that the hallway lights where on one apartment meter ( which used to be the previous owner's apt so it didnt matter for him but I didnt know). So get your electrician to fix the problem asap.

If the tenant calls the electric company and complains, they will automatically switch her entire meter to your name within days if problem not fixed.

Dont worry about what some said about your experience level. You have to start at some point and as long as you learn from your mistakes you will be ok.

I didnt hear you mention that the other 2 apts had been rented again. Where are you with those? Clean them asap, maybe a fresh coat of paint and rent them to better tenants. You already know the current tenant will be moving out soon because of job relocation so you need qualified tenants asap.

If real estate investing was easy, everybody will be doing it! Good luck!

A million dollar listing and a $50k listing might require different outfits but I think its safer to check out your competition. When in doubt, I will overdress instead of underdress but I dont think wearing jeans is a good thing. Khakis or slacks will work if you are not comfortable in suits.

Make sure you are well prepared and organized with all the necessary forms you might need. I've dealt with realtors who were ill prepared, brought forms that were so old and outdated, etc.. It is basically a job interview! With so many agents out there why should the seller hire you? If you look at it this way, you will be ok.

Also make sure that you car looks clean. Sellers with other potential candidates will judge you just like we landlords will judge a potential tenant with a filthy car full of junk...

@Brian Mathews is correct. To rebuild your credit, you need to pay off your debt and you also need time to see your score climb upwards.

The only problem I see here is that once the debt is paid off and your cash is gone, yes you will have decent credit but you will have a hard time purchasing real estate. Off course a lot of people can invest with minimum cash but not all of us have mastered that yet.

$150k is a lot of money. So I would personally follow a different path. Among other things, your credit score is affected by how much you owe, how many delinquent accounts and how many accounts in good standing you have ( Im not even looking at debt to income ratio or percentage of credit used, etc...)

What I would do is get a copy of my credit report, then:

1) Pay off all the "small" balances due regardless of the interest rate. Yes, Im aware that the rule of thumb is to start paying off the largest balance with the highest interest rate. But doing so might take all your available cash. So pay off all the small loan balances if you have any. This will reduce the number of delinquent accounts and slightly improve your score without sucking up all your cash.

2) bring current any account that is not closed and you currently use such as utilities. That will also slightly help your credit because these accounts will now be in good standing

3) Open an account at a credit union. They have programs for people who are trying to rebuild their credit and they can put you in that program. Try borrowing say $1,000 for 12 months ( even if it is a secured loan -you put down $1,000 in an account with them as a collateral). If you deposit some of your cash at the credit union, a $1,000 loan will be easy to get. The new loan, with its on time payments and good standing will help with your credit. You will probably pay a high interest rate but for just $1,000 it will not be too bad.

4) open up a secured credit card for $500 or $1000. Most secured cards do not report to the credit agencies for a year or so after the account is opened. But after the 12 months, they will start reporting and your credit will benefit. This will not have an immediate positive impact on your credit but it will help in the long run.

5) purchase rental properties with 30%-50% down if you can ( maybe a hard money lender, a partner or the credit union) or 100% if you must do it on your own. You investment MUST generate a good positive cash flow. Use that extra cash to continue paying down your debt and improving your credit.

Doing it this way, will take you much longer to pay off your debts and reach your goal of great credit but your score will still improve, you will have some cash left for a rainy day and you will have started investing in real estate...

@Rob K.

Great tip about showing the tenant how to turn off the water in case of an emergency!

I also replace all shut off valves with quarter turn valves in any new acquisition as well as replace all electrical outlets specially in older homes where the outlets only have 2 prongs instead of 3 which is required by most electric space heaters

I have extra electric space heaters in case of an emergency. but I keep asking myself, what would happen when there's no electricity due to a bad storm? Off course that would mean that the entire neighborhood has no electricity in which case you are covered but it would be nice to have one of those propane heaters ( which do not need electricity to function) to help out the tenant.

For HVAC i have a service contract with the gas company. It can be expensive but they will come the same day if there is a no heat situation and repair the furnace.

@Matt Whiteside

Good job Matt,

organization skills, negotiation skills, detailed oriented, fearless... I guess you are a pro now. Congrats!!!

@Christina R. ,

your questions and observations show that you've learned a lot in a short period of time. you needed a lower purchase price and a cheaper quote for the rehab to make the numbers more attractive to your financing source. be on the look out for the next deal and be happy that you didnt lose any money in this one!