All Forum Posts by: Brandon Mattingly

Investment Info:

Single-family residence buy & hold investment.

Purchase price: $150,000
Cash invested: $39,000

This is my first real estate investment!

I caught the real estate bug 6 months prior to closing on this deal. I was blessed enough to have the funds to put into practice all I learned from BiggerPockets and other REI resources.

What made you interested in investing in this type of deal?

At first, I was looking to buy a Multi-Family in the area, but my buying power wouldn't let me even get a duplex. So I began looking at SFR close to the downtown of our city which has more affordable houses and could cash flow decently.

How did you find this deal and how did you negotiate it?

NMLS / Realtor.com

I think there was some sort of listing glitch when it went live. I caught the post 2 days after it said it went live and was the first to see and make an offer. Normally, things get viewed and offered on immediately in the area, so it felt odd to not have much interest. But the property checked almost all my primary boxes and I got the property at the asking price!

How did you finance this deal?

Personal money. We sold our condo in Chicago and had leftover cash after buying our primary in the area.

How did you add value to the deal?

Added a dishwasher (took WAY more work than I planned for), and spruced up some basic cosmetics. Brought it from a C property to a B property in a B Neighborhood.

Lessons learned? Challenges?

My father and I did all the rehab and it took longer than expected. I wanted to get my hands dirty on this first one so I'd be more informed to hire out rehabs in the future. I LEARNED A LOT. Especially that I'll definitely hire out this type of renovation again.

Also, I got a great tenant in the rental as of mid-Jan. I spent a lot of time finessing my tenant screening process so it can be repeatable in the future.

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

My go-to agent was Brandon Long from Boulder Bay Realty. He was a FANTASTIC partner to have around. Not only did he help me promptly view places, but has experience with rehabs himself. So he was able to help me visualize and get ballpark ideas of rehab costs, time, and local going rental rates. Use Brandon Long!

Thanks, everyone for your input! I'm so thankful for this community offering wisdom so quickly and willingly.

I'll be going forward with arranging the mother and daughter in the lease from the start.

Cheers!

I have a good applicant for a 3/1 SFR I rent out who told me she would be expecting her mother to move in with her during the summer months but then leaving back "home" to her home out of state. My rental is in Indiana and the mother is based in Flordia.

I'm not completely opposed to the idea since the daughter seems like a great potential tenant and they both agreed to be screened as tenants separately.

My question is: How would I structure this lease and/or addendums?
Should they both be on the lease from the get-go? Should the mother be added in through a roommate addendum later on?

Just is an out-of-the-ordinary scenario, so just wondering if anyone has worked with good tenants who have temporary roommates.

Thanks in advance!

@Colleen F. Great catch on those! I'll change that wording to be more nuanced to catch that about adults and more direct about smoking.

Appreciate your time!

@Joe Splitrock you, sir, are a big-time help! Thank you so much for this needed advice.

Those are all great suggestions and I'll be implementing many of those into my screening process.

Here are a few follow-ups:

Credit Score
I realize this is a pretty high credit score when I look at the lay of the land. The reason behind this is I'm a big fan of Dion Mcneely (Dion Talk YouTube Channel) whose only main requirements are a 700 credit score and no past evictions. I felt insecure about asking for 700 so I peeled it back to 680.

I have one lead who has above 680 credit, meets income requirements, but listed a "Boxer mix" as a pet. Around here that's often code for a mix that might have pit bull mixed in as well. I'll have to look into that further though.

If I really run into a squeeze on this one, then I may lower that requirement. Very open to experimenting and changing on this one.

Pets
This one is tricky for me. I'm open to having pets, but I'm mainly wary of getting a tenant with a "vicious dog breed " for insurance purposes. Or any dog, no matter breed or size, that jumps at me when I meet them. I just left it more open-ended because if I don't get a good feeling about the pet, then I'll say no - big or small. I probably should just make it more solid. The loose wording stems from my loose and changing feelings about it.

The rest of the advice I'm really digging.

Thanks again for taking the time to evaluate and offer improvements on my approach!

@Joe Splitrock
<<Here is my Potential Tenant Questionnaire>> which has all the questions

It's based on BP's Landlording book's documents.

I posted those requirements on the Ad and are also peppered in the Questionnaire.
--
All applicants pay for Credit and Background Check
No Past Evictions
Credit Score 680+
Income >3x Rent ($4500 gross monthly)
Pets are allowed on a case-by-case basis
Pets $250 Non-Refundable Fee and $20/month per pet (Limit 2)
No Dangerous Dog Breeds or Mixes with Dangerous Dog Breeds
No Smoking on property

This is my first investment property and I'm working on getting my first tenant!

I'm trying to develop a fair and efficient tenant screening process, but I'm a little worried if I'm dancing around any discrimination issues with unqualified leads.

⚙️Here is my process in the works:

1. Gather Leads from Listing Sites - FB Marketplace and Apartments.com currently
2. Reply to inquires with a Potential Tenant Questionnaire Google Form (Based on a BP Resource)
3. Follow up Call with leads that meet qualifications (Income, Credit, Eviction History etc) to schedule a showing.
4. Offer Application
5. Approve or Deny Application with documented reason

My main fear is keeping things fair and avoiding any unintentional violations of Fair Housing laws or partial practices.

❓My question is: Do I need to reach out to people who fill out the questionnaire who would not qualify? 

For example, if someone answers with a credit score of 500 (under my required 680), do I need to tell them that they would not qualify? It states clearly in lots of places (ad + questionnaire) that you must meet those requirements. It seems as if these people are self-disqualifying themselves or just not reading the requirements.

Is it wrong or illegal for me to tell them that IF they wanted to apply that they won't qualify? I know I can't stop them from applying, but can I say, "Based on what you've shared with me you won't qualify if you apply. So it'd be best to save your $40 (application fee) and not apply?" Seems like common sense, but I wasn't sure if that could be seen as me denying an application to someone.

Obviously, I'm not trying to be a jerk in all this. But I don't what to waste my time showing the property and sifting through applications that I know won't cut it.

Thanks in advance BP community!

🔥**Bonus Question: Someone asked me if I accept Section 8 today. I'm in Indiana and currently do not want to participate in the program (someday though!). Can I say "Sorry I don't accept Section 8 vouchers?" Seem like I could since Indiana does not protect "sources of income."

@Grant R. Thank you for taking the time to spell that out! I'll be utilizing that going forward.

@Grant R. Thank you sir!

Appreciate the input on the vacancy rate. My thinking behind that is the fact that rental inventory is low right now and have heard (and seen) people have no issues getting high-quality tenants lined up. That may be thinking a bit short-sighted and starry-eyed though. So I'll likely adjust.

Follow-up question: Is figuring 8% essentially account pay for 1 month PITI for turnover each year? If so, it feels a bit odd to assume I'll only have tenants who stay for a year a time. Does this vacancy percentage traditionally try to build up to cover the PITI and the turnover costs (paint, flooring, etc)? I haven't really wrapped my head around what I'd be setting aside the money for yet.

TIA!

@Jake Rhodes Thanks for weighing in! So, my final quote from my insurance broker is actually $444. Attached is a screenshot of the basic policy coverages. I'm definitely not an insurance guru, so I'm totally open to feedback. I went throught the same broker who supplied us with our primary homeowner insurance.

Do you see anything that's off?

As far as rent – I'm thinking I'll list for $1400 and see if I get leads, and lower accordingly. It is a pretty tiny home, so I'm being a little conservative on the estimate.