All Forum Posts by: Bradley Hager

@Sean Tippens 

We just painted a rental in Midland. Did all interior (walls, ceiling, doors, trim and baseboards). Paint and labor included was $4800.  Obviously pricing in Midland is higher then most markets due to the lack of availability of good providers and high demand but your quote still seems extremely high even for the midland market. One of the keys here though is to ensure you get someone who knows what they are doing and has a good track record as opposed to someone new to the business and just trying to take advantage of the high price point. We had a previous painter for another property that nickel and dimed  us to death and took way too long to complete the job. Needless to say they are not around anymore. We learned our lesson On that one. 

@Dan Moore

This is great advice and exactly the information I was looking for. Thank you!

@Nathan G.

Thanks for the reply! Our initial approach was to screen one of the partners of the company. He’s not the one going to live at the house but he would be the one physically signing the lease as a representative of the company. We also wanted to understand the history of the company paying as well. Sometimes you get these open today, closed tomorrow type business in the oil and gas industry so we just want to make sure it’s a good choice on our part.

My question is what is the proper way to screen/credit check a business who will be paying for a residential lease?  

I have a potential renter for a single family property where the company they work for will be paying for their rent.  In West Texas, this is very common because many of the workforce travel from Houston or Dallas on a regular basis and renting a house is cheaper than staying in hotel rooms.  We have this same situation in another rental, however, we had a service do all the screening and listing of the property and they did the background checks.  We are attempting to do it ourselves this time.

I've been told to verify credit by contacting at least 3 of their creditors and seeing their payment history.  Also if they have lines of credit with a bank, get info on how much and their payment history.  Is there anything else to check?  Are there any specific forms/applications for them to fill out to take to their creditors so they provide the information freely?  Am I able to credit check/background check each tenant that will be living there even if they are not the ones paying the lease?

In the end, how do I do this the right way? 

@Scott Smith thanks for the information!! I’ll look into the article your sent. What’s a little bit frustrating to me is that I’ve never heard this process before. Maybe cause I haven’t been paying attention or maybe because it could be construed as legal advice and people shy away from going into these details. I appreciate the response and will do some more digging on this.

I've heard so many times to always put your rental properties into an LLC however I'm running into road blocks doing this and I'm curious if I'm the only one.

1) I bought my first property in my own name with conventional financing. After realizing it made sense to transfer title into an LLC, I started investigating and talking to my lender and I was told that since it's a Freddie Mac loan it would trigger a due on sale clause. Obviously not what I want.

2) I'm about to buy my second property and want to put it in an LLC from the beginning. However now I'm being told by the lender that I can't do conventional financing and title the house into an LLC at the same time. The only way is to either ensure I get a Fannie Mae loan and move title to the LLC after closing (but he said something about a "continuation of obligation" clause which I still need to look into) or go with a non-conventional investor loan with an 8%+ interest rate.

Just wondering if I'm missing something here or doing something wrong because it doesn't seem to be so cut and dry on putting a rental property into an LLC. Any help or insight would be greatly appreciated!