All Forum Posts by: Rick Barker

-You can use an incentive program, I'm just stating that it probobly won't hold up in court if questioned. That is a long waiting period in Connecticut.
-We didn't have to provide a lease to the mortgage company when purchasing so I don't know if I can help with that.

-The 1.5% is the minimum in the statute. The current lease should state the amount of interest being paid.

-On the Incentive, If you do this it won't hold up in court as it will appear to a judge that you are charging a late fee prior to the required 9 day waiting period.

If you are financing this property ask the bank to set your mortgage payment for the 15th of the month. This will allow you to meet the statutes and have time to get your rent and then pay the mortgage.

-Set up a process for your rent and let your tenant know.
My (Ohio) rent is due on the 1st, late ($50) if not received by the 5th, If not paid by the 10th the 3 day pay or quit notice goes on the door, and then I evict. If you have a process it will be easier to follow and your tenant will know you will not be a pushover (as long as you always follow it).

Congratulations!

Is the property in Connecticut? If so:

-Make sure the seller includes the interest (rate not less than 1.5%) on the SD as it is required to be paid to the tenant annually and/or at termination of tenancy in Connecticut.

-In Connecticut you cannot charge a late fee until 9 days after the rent is due. Con Stat $$ 47a-4(a)(8), 47a-15a

The book Every Landlord's Legal Guide from NOLO is a very good reference or you can look up the statutes online.

Good luck!

You will benefit greatly even with just one rental. Business expenses and Depreciation of assets/rental will almost always show as a loss on your return. I would hesitate to use software on your first tax reporting with a rental. It is better to go through a CPA who will ask the right questions and limit your risks.

Like others have said you may want a GC until you learn the process.

My wife and I GC the projects.

We sub Carpet, Electrical, Plumbing, and HVAC. We do all the drywall repair, painting (with sprayer), lay wood/tile floors, and install trim/doors. Our sons do most of the demo. They're good at damage.

Both our fathers were home builders so we grew up with the scheduling and systems to make it flow.

I rely on the county records. Most of the time if an eviction is canceled because the tenant paid the amount due it will not show up in the nationwide eviction data. If I have to file for eviction to get you to pay I don't want you as a renter.

Do whatever makes you comfortable to verify your applicants. Just make sure you are consistent and don't go against fair housing laws. Most tenants will have bad credit. It usually come down to who is honest when they complete the application and where their payment priorities are (They pay their rent).

My last property I acquired took almost 3 months of counters.

ARV = 115K
Rehab = 7K
Cost = 20K
Profit = 17250 (15% Min)

MPP= 115K-7K-20K-17250=70750

Listing Price = 92K, 240 DOM
Oct 1st Offer 52K cash, rejected 92K counter
Oct 7th Offer 55K cash, rejected 88K counter
Nov 1st Listing Price Reduction to 82K
Nov 1st Offer 55K cash, rejected 79K counter
Nov 14th Offer 57K cash, rejected 75K counter
Dec 1st Listing Price Reduction to 72K
(I smell BLOOD)
Dec 14th Offer 59K cash, close by 12/21.
Accepted

I was able to go far below my MPP based on the DOM, pattern of price drops, and the end of the year that was approaching (plus stubbornness).

As you go through more of these you'll learn the banks pattern for reductions. Missing out on the first 10 or so houses I made offers on was the best learning experience I had. Always stick to your price. If it doesn't work out there will always be another one.

Agreed Mitch. It depends a lot on the age of the house your looking at, type of drains pipes that are used, and their accessibility (in a slab vs. a crawl space). Once I acquired the house I was speaking of I had to clean out the traps in every plumbing fixture to get them to drain. A low cost solution compared to bad supply lines.

I had a plumber perform a pressure test on the plumbing of a REO I purchased in December that was winterized. The plumber hooks up a compressor to the plumbing line and fills it with air. Once it is filled you wait to see if the pressure holds. If it holds no leaks.

We collect the nonrefundable holding deposit that will convert to the security deposit once the lease is signed and the full first month's rent is paid. I have a tenant moving in the 20th of March and here is the holding deposit receipt they signed:

This will acknowledge receipt of the sum of $950.00 by BRARON PROPERTIES LLC ("Owner") from XXXXXX ("Applicant") as a holding deposit to hold vacant the rental property at XXXXXX, until MARCH 20, 2011.
The property will be rented to Applicant on a ONE YEAR LEASE basis at a rent of $995.00 per month, if Applicant signs Owner's written One Year Lease and pays Owner the first month's rent ($995.00) on or before MARCH 20, 2011, in which event the holding deposit will be applied to the Security Deposit.
Owner and Applicant agree that if Applicant fails to sign the Lease Agreement and pay the first month’s rent ($995.00) on or before MARCH 20, 2011, Owner will retain this holding deposit to compensate Owner for the inconvenience.

A PRORATED AMOUNT OF $385.20 FOR MARCH 20-31, 2011 WILL BE DUE APRIL 1, 2011 AND STAND AS APRIL’S RENT.