All Forum Posts by: Alan Grobmeier

@Matt Mayotte  Attorneys are kind of like muffler guys, 'you can pay me now or pay me later'.  Get a real estate attorney.  It will cost you much less to do it now vs ending up in some dispute.  

@Coricka White.  Seller financed deals, on properties I want, are difficult to come by.  I have 1 seller financed property I bought on 11/15.  20% down and 5% interest, 8 year balloon.  I overpaid by about 10k on it.  

Despite these facts, I am still happy with my purchase.  It is in a GREAT area with GREAT schools.  I will probably be able to hand it down to my children without any issue.

My recommendation is get with a GOOD realtor that will send you owner financed listings.  I have one in my area.  Great guy.  I had to go thru a few for them to understand what I wanted.  Most real estate agents do NOT deal in owner financing.  It is too much trouble for the 'easy money' types.  

My rents are due on the 1st and LATE on the 3rd.  But I run a tight ship.  LOL. 

@Jonathan A.  CA is one of the MOST tenant friendly states.  Lawyer up and good luck.  

@Kevin Ferris.  There ARE good renters out there.  But I think I have most of them.  LOL.  Out of the properties I have, MANY of my renters have credit scores in the 700-750 range.  They just don't have the money/down payment to buy a property on their own or they are new to the area.  

A couple of them went thru the downturn and lost their places.  They are completely soured on owning.  At least for now.    

I have had ONE of my renters for over 5 years.  They don't want to buy in PHX and are leaving for So. Cal next year.  This was always their plan as their daughter will be graduating for High School in Gilbert next summer.  

@Kevin Ferris  Are you overpriced for the area?  It sounds like a nice house.  But having the 'best' house in a neighborhood is a monster mistake.  ALL of my places are 3/2s in good school districts.  During 'weird' times of the year I can have problems with vacancy due to the fact people don't want to move in November (for example).  

I look at EVERYTHING when I get an application.  Credit score is almost meaningless to me because if someone JUST filed Bankruptcy a year ago, they could be my best tenant.  Their credit score, because of the BK, could be 500.  After all, they can't file for BK again for 7 years.

My criteria is as follows;

1)  No evictions.  I've never done one, and don't want to.  If my prospective tenant has an eviction, they have been thru one more than me.  In addition, we know that they do not prioritize rent/where they live.  

2)  3X rent or more = Salary.  Pretty simple there.  The problem is that people are WANTING to spend more than that for rentals these days.  

3)  Dont lie on the application.  My applications ask EVERYTHING.  If you lie, you're out.

I HAVE rented to people with 'shaky' credit/incomes.  The key is to mitigate YOUR risks.  I explain, up front, that they do NOT meet the normal criteria.  As a result, I will do a month to month lease AND increase their security deposit to the state maximum.  If I have no issues after a year, AND I mean ZERO issues, I will consider looking at their overall situation again.

I usually don't have too much trouble renting my places.  80% of them are gone in a weekend.  Most of the time I get at least 5 good applications and I can then look at things like debt/income ratios, amount of money left over, etc.  After all, I do NOT want anyone renting from me to be 'house poor'.

My $.02

AG

@Account Closed.  The reason I am interested is to see if I had previously analyzed any of their offerings.  More of a curiosity.  Like I said, I've probably looked at 100 of these in different markets and compared them to what you can buy on you own in the same area.  It sounds, based on the problems, that the properties are not in 8-10 school district areas.    

@Account Closed  That is insanity.  If I was a 'corporation' I would have a responsibility to get the BEST tenant, not just the first that qualifies.  After all, the choice for tenant will make a direct impact on the bottom line.  

@John Woodrich  AZ is one of the most landlord friendly states.  Evictions can be done in about 21 days.

I just find it odd that if my 5th applicant (for example) makes a ton more money than 1-4 and has no debt, that I couldn't pick them vs the first applicant I saw.  That's crazy.  It's similar to the 1st person I interview that hits all the checkboxes getting hired.  Businesses would go out of business using that type of 'logic'.

@John Woodrich  Interesting thoughts.  I didn't think that bad income/debt ratios could be considered 'discrimination'.  I have the obvious 3x rent = income requirements and cash/deposits.  So there are a few cut out in seconds.

I hold open houses, not individual meets.  When I meet someone I tell them I am collecting applications and will move forward with applicants later in the week.  It is the same as competing for a job, at least in my mind.  I tell everyone who is not in my top 3 that they are out within a day or two.  Then I run credit/background on applicant #1.  If good, I'm done when I get the deposit, signed lease and 1st months rent.  If not, move on to #2.

I don't think my state doesn't requires me to take the first 'worthy' applicant that shows up on my doorstep.  Does MN?  I've gone thru AZ real estate agent training (decided not to sit for the test) and don't recall lack of income being equated to discrimination.  Since I take most of my applications within a two hour period, I think it would be interesting to see how a court would view my actions.