All Forum Posts by: Walt Payne

@Matt Smith  I think the most important thing you need to do here is evaluate what your criteria are, and why. Knowing why helps when making decisions so you understand how to evaluate borderline cases.  Some of the criteria used by people matter more in Class A and less in Class B,C or D. Some always matter.  As others have said, look at the property type, the best tenants you are likely to get, and go from there. But it is also important for many reasons to set firm, unyielding criteria. Why? Well two very good reasons. Bending the rules usually means "settling" for something less out of desperation. Bad move, it also means problems more times than not. The other important reason has to do with discrimination laws. You need to be able to show that you accepted/rejected tenants based on consistent factors. Otherwise you are opening yourself up to criticism and possibly losing a lawsuit. A few important things to consider: 

Does credit score really matter? Personally I think it only does when you get into the really low numbers. If they have no evictions and a few years of rentals they probably are typical in considering shelter the priority, even if they stretch their income a bit thin. 

Do evictions matter? If so do you allow an exception after x years? 

Do convictions matter? What kind get no exceptions? What kind get exceptions after x years? Personally violent crimes and sex offenders are generally lifetime no for me. Exceptions that I would make - sex offenders who were 18-19 and got charged with statutory rape with an over 16 yr. old ... after 5-6 yrs. without incidence.

Income ratio: Evaluate and set it and make zero exceptions, or expect to regret it. Unless of course you accept Section 8.

I suggest you require payment of deposit upon signing, first month rent before they get keys.  Again, no exceptions. Depending on state and local laws, find out if you might be able word the lease so that deposit is not refundable if they bail, but you do not need to do an eviction. Not all states allow that kind of thing but if they do, get it in your contract.

Always include all adults living at the property on the lease. Always require that all of them meet the requirements. Always make sure your lease says that they are all responsible, together and separately, for compliance with all terms of the lease. Otherwise if the "responsible one" moves, you are left with someone less than acceptable as a tenant. 

And that is where it becomes easy to see how slumlords happen. Not necessarily intentional, just lots of deferred maintenance and "more important things" to spend the money on. 

Not to mention the fact that Trenton is not far behind Detroit and Camden for national honors as most dangerous war zone.  If you fix it up and die in battle do your heirs get title?

@Sam Leon  But only if the ground is to the left :)

Sideways doesn't seem to matter much, as far as I have seen but definitely not a negative either.

It is also becoming more common to put additional outlets on the end cabinets, where it makes sense the same as you would on islands. And, if you have a higher end place with lots of counter-top space, even a quad outlet or two comes in handy for chargers, etc.

@Jim Viens I agree totally, and in a later post he stated that, but the impression was set. I understand the reaction totally. Valid post, wrong place.

Sometimes the answers given are not what we want to hear, even when they are what we need to hear.  Sometimes they are a little more straightforward and blunt than they need to be. Sometimes they are harsher than would seem to be appropriate. I will say that the posts you are referring to were totally on target IN GENERAL and that there is a perception that wholesaling can be done easily, with no knowledge, no experience and no money. And that is so far from the truth.

As always  @Bill Gulley has some excellent points.

My philosophy is very much like @John Thedford. Florida doesn't have the job growth that places like Texas are seeing, but people are likely to continue moving to Florida as a retirement destination forever. That will keep appreciation going. Though it is not a steady curve, the climb is likely to continue indefinitely due to the steady influx of population. 

I look for solid cash flow for today, with a good location and desirability for appreciation. I don't count on profit from it when I buy, but I consider the likelihood of it happening. And when investing long term where appreciation is going to happen one just needs to be patient and sell at a good time.

@Brandon Turner  

Good solution. As others pointed out after my initial post, it is actually helpful to expose others to such tactics. You are not going to teach the unethical anything they couldn't conceive on their own, but the sincere and naive might get taken in by such tactics unwittingly.

@Craig Shute 

Your post is useful in that it provides a process that might help other understand. 

The specific modifications that one needs to make are very area specific. For example property taxes where I invest are quite reasonable. Insurance can be a deal killer, especially if the property needs flood insurance. Other areas probably have other specific adjustments needed. 

@Lance Stull  Welcome to BiggerPockets. As the others said, it depends on timing. It is also a matter of condition. If your house is in nice condition you would get the best price by seeing a realtor. If it needs repairs, you might still get a better price through a realtor, or you might not. But if it is in serious disrepair, then an investor may offer you a quicker sale at a reasonable price for the value.

To be honest I would consider investors a last resort unless you have an urgent need to sell. I would exhaust all other avenues first and know that the investors are one group of buyers that will be there later if you need them.