I use competitor pricing as guide posts but since I've been operating for several years, I look at historical, year over year data for my own place and raise it a bit.

If the cosigner/guarantor owns real estate for example, any unpaid judgement will become a lien on that property and raise the odds significantly for eventually getting paid.If the cosigner/guarantor doesn't have assets like real estate to go after all they are offering you is a promise and last I checked you can't cash a promise!

If you do find a deal and maybe it doesn’t cash flow for the first year or 2 but you can make improvements, raise rents on under market leases, manage property effectively and cover your expenses at least you will have started and can look for better cashflow over time.

If some applicants fall below your requirements, then everyone would be considered "conditional," you can raise the security deposit to mitigate your risk of someone breaking up or defaulting. 

We have been long term owners for many years and have recently decided to make the move to medium term on 1/2 of our duplex to test the market.

@Ashley RuddCongrats on passing the test and getting licensed!

How do you determine the property should have an NOI of $400K without raising the rents?

Unfortunately, those that do not allow a ppp will often raise the rate or charge origination to offset their risk of having no PPP on the loan product.If anyone is interested in the Ohio statutes, you can read the summary with links to specific statutes here:https://com.ohio.gov/divisions-and-programs/financial-instit...Interestingly enough, the PPP statues only apply to 1 or 2 unit residential homes with a few other "ands" in order to meet the criteria. 

Hey Justin, You sound like a prime candidate to take advantage of section 121121 qualifiers Must live in the home in the past 2 of the 5 years 24 months non consecutive required Must have owned the home for at least 2 years Only one spouse needs to meet the ownership testBoth spouses need to meet the use test Neither spouse has excluded a gain / used section 121 in the past two years Must file jointly for the 500k exclusion

Most real estate investors who raise LLC questions on BP forums cannot articulate the risks they are protecting against or how an LLC will provide the appropriate levels of protection.