All Forum Posts by: Anna Sagatelova

@Cyndie Rogers Section 8 is not one uniform program, each market will have it's own PHA(s) that administer that program locally and each has their own rules and protocols. In each market, your success will depend on how well that particular PHA is faring - for example, has the virus caused crazy delays in initial inspections and rent determinations? It will also depend on your property - how in demand is it, how many vouchers are there for a property of your size, etc.

Since you're a broker, I would recommend reaching out to a handful of PMs in your area who are experienced in Section 8 and ask them about their insights about current trends. A lunch meeting can go a long way in gaining valuable local insights.

A property manager should absolutely share what their screening criteria is with an owner.

Information from specific screening tools, including credit information, should not be shared. You the owner gave the PM the right to lease your property - read the agreement, I'm sure it says something to the effect of the PM will abide by all Fair Housing laws and will qualify all applicants the same way, etc. The applicant also gave the PM permission to run their credit/background check, for the sole purpose of qualifying them for the property. They (ordinarily, per the standard disclosure language) did not give the PM permission to share that information. The owner's preference/opinion does not factor in.

Before you sign the management agreement, be clear on what the screening criteria is, how they verify the information needed to pass that criteria, and in what situations they might go to the owner. If you agree to what their process is, let them perform it. Screen your PM company, let them screen the tenants.

Great advice from @Michael Henry. I only want to add that you won't really be able to "screen" the existing tenants like you would a new applicant. The information that is typically used in screening (access to credit and background check, paystubs, etc.) was provided to the landlord who did the screening, for a limited time and purpose, and cannot and should not be shared with buyers. The tenants have already been approved and placed.

What you will be able to check is that the amount listed in the property advertisement matches the lease and that the amount in the lease matches what they pay in the ledger. Some investors ask for an estoppel letter where the tenants verify things like how much rent they pay, how much was their security deposit - this protects the buyer in case there is a discrepancy between what the seller and tenants disclose.

Will you be managing this property yourself, or will you have a PM take over management once you close? If you will be managing yourself, and you are not ready to place a tenant yourself from Day 1 as @Calvin Ozanick said, I would argue that you are not ready to pull the trigger on an investment property. If you have your procedures and tools for advertising, screening, and leasing in place, go for it and I think it does usually work out better if you place your own tenants.

If you will be working with a PM, I encourage you to reach out to them and ask what their process will be for onboarding this existing tenant. Be aware of any fees that will apply and also ask them what red flags they'd look for.

Good luck!

If your applicant makes 3.7 times the monthly rent, they should have no problem budgeting their gross monthly pay to make a single lump sum rent payment. This is the norm and the standard nationwide, and it is the underlying reason why landlords typically use the 3x monthly rent as a minimum criteria for income. It is a big red flag to me that someone makes above that minimum criteria and is already asking up front for you to accommodate a paycheck to paycheck lifestyle that's incongruent with the whole point of meeting that very criteria point.

When verifying income, did you check paystubs, or did you just take what the applicant reported? This will answer whether they really do get paid on 1st and 15th, but either way, the above point still stands.

I like the idea to offer a higher priced biweekly option, check if that is legal in your state/municipality.

Your new PM needs to follow up with them to request exactly what they need (leases, tenant ledgers and contact information, keys, etc) and more.

Did your old PM confirm receipt of your 30 day notice to terminate? Or total radio silence?

Many companies do charge an early termination fee, though it's usually not the "remainder of fees that would have been earned".

Many PMs simply don't want to work with someone who won't commit to a minimum of a year. Hopefully that PM is very good at answering your questions before any paperwork is signed and is also vetting you. You should be on the same page to proceed, but I don't think it's inherently bad that many PMs don't want to onboard a client just to have them leave in 2 months or even 7 months.

You would need to get the relevant rules from the PHA you are dealing with. Each metro area has multiple PHAs; for example here in the Greater Cleveland area we have CMHA, EDEN, LMHA, PPHA... 

Generally you can't just raise rents. You have to submit a request to the PHA and they will review it. Each PHA has their own rules and procedures for this. Also generally you can't add a fee for water/sewer/trash - the HAP contract will state who is responsible for each and every utility, if it your HAP says landlord is responsible, you can't get around that by charging a fee for the same.

This is info based on my experience with various PHAs, mostly CMHA, in Cleveland.

I agree to let your PM handle it. Do you know for sure that they won't be able to pay rent? They could have sick leave, savings, etc.

If you want to express your sympathies, that's appropriate. A list of financial resources in the same letter might not be. Your PM should communicate to them that if they are unable to pay rent, to please reach out. In fact, given that PMs have been doing this since March, it's likely your tenant has already received protocol and a list of financial resources from the PM.

House hacking sounds like an attractive strategy financially, but it does require a lot of tolerance and patience for having neighbors or even housemates.

If you have all of these concerns, you would be much better off trying a multi-unit house hack situation than an SFR. You're right that it's impossible to screen for some of these things, and frankly many potential roommates will be turned off by the intensity of the questions. I consider myself a quiet person but I'm not sure I can answer "what time do you go to bed" and then be expected to stick to my answer as long as I live with that person.

I would sincerely hope your PM already tried challenging the chargeback with all the necessary documentation at the bank level, before approaching you to pay the distributions back.

With that said, that's your rent money, not the PM's, so there is probably a clause in their management agreement protecting the PM from losing that money.