All Forum Posts by: Andy Webb

@Rose White - oh sure, I get that. I was curious why the OP Matt was trying to avoid children.  In my experience, families with kids in a decent school district tend to stay for the long haul.

@Matt Sullivan - thanks for the update. If the unit is built before 1978 we just use the Lead-Based Paint addendum (HUD requirement actually), and either note that a) we have no knowledge of whether there is lead present; or b) that we do have knowledge and provide documentation. At that point the tenant is acknowledging the situation (normally we do not have knowledge one way or the other). It sounds like your state may have more stringent requirements as regards remediation in those situations where you do have knowledge that lead is present...

@Matt Sullivan - why no children?

Certainly don't blow them off - just a quick message that they do not meet the qualifications to lease the property will do.  No need to mention other applicants or anything else.  I would send an e-mail to have it documented in writing rather than calling.  

If you don't have it already, I would put together a written Applicant Screening Criteria document that outlines what you are reviewing and your criteria (e.g. 3x rent in gross monthly income, NO evictions, etc.).  We always have this signed before accepting application fees and running credit/background checks.  If background yields an eviction for example and we decline, that app money is now gone....and they signed agreeing to the process...no refunds.

@Joel Lopez - that is what a lot of investors do. Buy with hard money, either because a fast close is warranted or to address property condition, often both...do the rehab, then rent it out and do a rate-and-term refinance from hard-money into long-term conventional debt. Then wash-rinse-repeat. We are in and out of the hard-money in around 2-3 months, depending on the level of rehab needed. Depending on your buy/rehab to ARV spread you will have more or less money in the deal at the end of the process.

I have used any number of hard-money lenders over the years, but have been working with Investmark Mortgage, based here in DFW, since 2016.

Typically cash or hard-money.  If they post "all cash" and I am interested, I just float the question about HM as an alternative.  If speed is key, just be sure you are working with a good HM lender that can truly close fast.  Some out there take a few weeks, which can be too slow.  If there is clear title, most good one can close in just a few days.

I went straight to BRRRR and have used the hard-money route throughout. If you are working with a good hard-money lender, they will be part of your team and will be a great sounding board to make sure the deal is a good one...if anything, having that extra set of eyes on the deal is less risky in my view. Plus if you are buying right, with a good spread to where it makes sense to even use hard-money, you should have a decent equity cushion to absorb minor missteps.

Does the tenant not have renter's insurance?  If you do cover it, then your receipt from the purchase is sufficient to show as an expense.  Unless you fear some later reprisal from the tenant...then have her write up a receipt.

Talk to your plumber and instruct them to communicate only with you in the future.

@Jane S. - Sounds like it is time to move on.  

What are you ultimately trying to achieve? Cash-flow, equity capture, or a little of both? If equity, then definitely go the BRRRR route, whether SF or MF.

And perhaps another option: do a cash-out refi on your duplex and retain the asset.  You won't get quite as much cash in hand and your cash-flow will decline due to the higher note, but could be a good way to have your cake and eat it too.

Thanks for posting - this just underscores why we do what we do.