All Forum Posts by: Brad T.

What areas do you see these in Bob? 

@Crystal L.

Thanks Crystal.  This is a B property in a good area with good schools.  The maintenance seems to be good.  I will find out for sure if my offer gets accepted and we perform the inspection.

Hi Bob,

  Thanks for the comment.  You are able to find 12 cap properties like this?

Brad

Hello Everyone,

  I have just placed an offer on a 12 unit (3 fourplexes).  Can you please give me your thoughts on the deal.  The numbers seem to be good to me.  Any advice would be appreciated.

Offer price $800K

Owner financed, with $100K down, 30 year amortization, 5% interest, 10 year term

Fully Rented at $800/mo each $9,600 gross monthly rent

$8,300 monthly cost including vacancy, maint, taxes, insurance, property management

I am calculating a 8.7 cap and $69,850 NOI

Thanks for your input!

Brad

Thanks for the feedback, everyone!  I will continue to take the application fees to cover the background and credit checks.  If I didn't, I would have been out $60 so far for the current vacancy that I am trying to fill.  The first person didn't pass the criteria, and the next couple decided to rent another house.  I do think it helps reduce the amount of tire kicking tenants that apply.

How does everyone run their background and credit checks?  I have been using e-renter.com and icheckcredit.com

What are everyone's thoughts on whether to charge an application fee for rental houses?  Do you collect a bunch of applications and only run the background and credit check on your top candidate with you paying the bill or do you have the tenants pay and check every applicant?  Charging application fees has been a bit awkward for me.  If I get 3 applications during one open house, I don't like to take money from all parties.

I didn't see the property details anywhere other than the rent and taxes.  Post that and you will get lots of help!  What is the purchase price, type of house, nice area?

It depends on your goals.  Do you need/want the cash flow?  Is your goal to have the house paid off?

30 year

If you want the cash flow and plan to add many more properties.

15 year

If you want to have the house paid off in 15 years to reduce leverage and have a higher cash flow. Downside is your ROI is lower than a leveraged/mortgaged house.

My rental is about $300 per month more than their current rental.  I have had a ton of calls for the house, so I am definitely moving on. Thanks for confirming my decision everyone!!

Thanks for the feedback everyone.  I am definitely leaning towards not renting to this tenant.  I was going back and forth in my mind about what to do, thinking that most tenants don't have great credit.  With that said, most people should prioritize housing as their top payment to make.  I do have a good amount of people calling to see the house, so I will keep showing the house to find a better tenant.  Thanks again for your comments!

Hello Again Everyone,

  I am processing a rental application right now and I would like everyone's opinion.  The background check came back clean with no criminal history.  Good start.  No evictions on record either.  Good again.  I called the previous landlord and they said that the tenant keeps the house in good shape, but is late 1 to 2 months rent fairly frequently.  This was the landlord's only rental and it doesn't sound like they were very good at pushing the tenant to pay.  What would you do?  Some options I have thought of are below.

1. Don't rent to this tenant

2. Get an extra security deposit (1.5 months instead of 1, this is the most that is allowed in Michigan)

3.  Make them get automatic payments from their bank account

4.  Maybe both of 2 and 3?