All Forum Posts by: Bart H.

 I would always ask for proof of income.  You will find a LOT of people either dont know their income or they will flat out lie about it.

Had someone years ago tell me they had a 8K/m income, but were self employed and got paid in cash, they owed me their bank statement and they had something like 20 separate overdrafts.  We didn't walk away we ran from that one.

 As others have mentioned, stick with your criteria.  She sounds like she has problems.  I wouldnt necessarily say no because of a DWI, if it was a while ago, but a DWI and bad credit, no thank you.  And lets be honest, that isnt just bad credit, that is terrible credit, and she likely still owes someone money.

What we find is its much better to have vacancies than to deal with tenant drama.  in the long run, vacancies are a lot cheaper.

And if I look back, EVERY single time we have not stuck to our guns on our criteria, or been willing to take a double deposit, or whatever, its been a really bad mistake.

You might want to check with a CPA, I would be a little worried about making sure any transaction that is done doesn't create a gift tax liability.  

Plus if she has lived their for more than two years (which it sounds like she has), then she also would have 100% tax exemption on gains. It would be a terrible scenario for her to "sell the house" to an LLC/partnership whatever. Rehab it, and then all of a sudden open her up to $50K or $100K in short term capital gains taxes.

 I believe we are closer to a near term top, and I think the easy money has been made.  But as others have pointed out, you have a plan to buy and hold, it doesn't really matter if you buy and the value goes down by 50% the next year the values will come back.

If the property cash flows and you bought in a good solid growing market, then 20 years from now, the rents should be higher and the property values should be higher.

If property values continue to go up from here, then you have missed out. 

You wont be able to time the top or the bottom, I wouldn't try.  No one can.

We are personally just taking our time to find deals.  If the numbers work, we would buy today.  The biggest difference is two  years ago, we might have chased a bit.  Now we are sticking closer to our numbers..

I don't think a major drop in property prices will happen again.

But really its all about the numbers, if they work, do the deal regardless of the market, otherwise wait.

 We are willing to work with someone up to a point, but once we file for an eviction, I want those tenants gone.  There is no going back.  There is the risk of damage, and you almost certainly have a tenant who is without money, and you will just have issues in the future with non payment or late payment.

Our strategy has been to maintain the nicest house in the area, fix things immediately and get the best tenants.  Costs us some money in the short term, but we dont screw around with tenants who are unable to pay/take care of the house.  

I would much rather have a two or three month vacancy than a bad tenant.

 We have had a LOT of success finding deals right around Thanksgiving and Christmas.  The house we live in right now fell out of escrow the Tues before Thanksgiving, we almost did a showing on Thanksgiving but got in on the Friday after thanksgiving, we had an offer in over the weekend and had the house under contract within the week.

What we find is during the holidays, sellers are motivated, and buyers are usually less active.  So its a buyers market.  Take 3-4 weeks to close on a loan, 1-3 weeks to rehab and have it ready to lease or rent puts you right in that Feb-May or June sweet spot.  We find that time frame to be the best for leasing and selling.

Technically if you own stocks, the companies that you own carry leverage in their own right. 

NM....

 I am not so much talking about being spiteful.  But at the same time, you feel like they were dishonest with you.  I would be more inclined to be strict and by the book.

Let me give you an example, we had a group of tenants who paid on time for a full years lease.  They gave proper notification per terms of the lease that they were moving out .  They also were helpful in letting us show the property and we got it leased with 0 days of vacancy.

AND they let us get in a couple of days early to do some painting and other make ready things while the lease was still in effect.

You bet your bottom dollar when I did their walk thru and found a few things, nicks in the drywall, damage from a piece of furniture on a wall etc.  a couple of blinds were slightly damaged and kind of mangy.  We ate the cost.  

Yes there is wear and tear, but there is also a fine line between wear and tear and damage.  Someone who is deceitful about a washer and dryer wont get the benefit of the doubt from us.

 I would just flat out tell the tenants it wasnt theirs, and you expect it to be there.  I'd say it a little nicer, ie that you found out it came with the house etc.

If they take it, probably not a ton you can do.  I dont think I would take them to court or file a police report or anything, because end of the day, the tenant does have a record of you modifying the lease.

If they do take the washer and dryer....I would pull out a fine tooth comb with pictures of every little thing that was damaged.  Paint chips floor scuffs, dirt.  Everything.  I'd find every bit of damage and withhold as much of the deposit as legally possible.