All Forum Posts by: Brian Garlington

Congrats!   

You bought a rental property in the most landlord friendly state in the country.  Check

You have a Section 8 tenant in there so 70-100% of your income is guaranteed. Check

You let your wife do the negotiating. Smart man. Check

That is phenomenal my man. Some neighbors of mine did the same thing. They bought a fixer upper here in the Bay Area a while back. Husband-Wife. They set their ego aside and house hacked in it, a 3/2.

In the last 18 months and with the ARV their fixer upper is now worth 44% MORE than what they paid for it.

I gave them the number to a lender that I have used that will do financing on properties as low as $50K. They did a refi-cash out on their place here. Bought 2 houses in Helena and 2 in Hope, Arkansas. All are occupied by Section 8 tenants, and meet the 1% rule. A couple of them are 2% rule. 

The cashflow from those makes it so they no longer needed to house hack here and now they are starting a family.

This business can be so simple with a little bit of sacrifice. 

There are those that say; 

"I don't want to buy out of state."

"My spouse doesn't want to house-hack for a little while"

"I don't want to rent to Section 8."

"I want my first place to be Move-In ready, in a B neighborhood that's a 5 minute walk from work and I want to get it under the asking price."   

The list can go on forever.

If you argue for your limitations, you get to keep them.

Again, Congratulations sir! Well done. 

Do you already own the flip?

Can't emphasize enough what Julian said. When I build rapport with other Realtors here in the Bay Area they are more transparent about what it will take to get the deal for my clients. 

What I would add is that now that things are turning a little I will ask about terms.....I.E. terms, quicker closing,...longer closing (sometimes they want a rent back, we just closed on a deal and we were only the 4th highest bid but the sellers wanted a rent back and we gave them rent for free as well as a couple of other things).

As an FYI, when it comes to Section 8 I generally don't care as much about their credit score because 70-100% of their rent will be paid by Section 8,,,,,,,,,,,,,here's what I DO ask.

How many people will potentially live at the place with you? Whatever number they say and 1.5 to that to account for the other unnamed adult that willalso move in as well as the uncle/niece/cousin that will also spend a lot of time over there but not necessarily live there.

Do you smoke. Anything.  I don't care if you have a medical precription, you are not smoking that "green stuff" at my rental.

Do you have any animals or pets?  

If they have any evictions or felonies in the last 7 years I will not rent to them, neither will my PM. 

Do you already own the properties in Cleveland? If so, what type of work needs to be done and what type of properties are they?

Am I missing something? If you already have an SFR in the City why not keep it simple and start renting out a room or two in your house? That's what a lot of folks do.

First thing is to show people that you re pre-approved with a lender. Even if you are going to "pay cash", you need to show a pre-approval letter, it shows you are more serious and most of the people I have dealt with out there want to see this before they will even call you back.

I could be wrong,.....but I usually do not hear about these types of questions unless it's from a FSBO. Now if you did use a Realtor to represent you, then I would most certainly be asking them and their broker about this.

Your Realtor should have put in  the purchase agreement that the property is to be deilvered vacant.   You can of course still ask this but the seller may say, nope that wasn't part of the original agreement. Depending on your local jurisdiction you may not be able to evict the tenants even if their lease and voucher are expired. Again, your Realtor should have educated you on this.

See if the tenant will still have the voucher afetr Aug 31st. If so, then they most likely become month to month tenants automatically and you will still get some income. If they have lost their voucher but saying, "We have Covid so you can't evict us" then things are potentially about to get a little exciting for you.

Fingers crossed. 

Matt,

I'm in the Bay Area like you..............and realized we are spoiled here in the Bay Area. We are used to quick responses,......but in the midwest it is a slower pace. My worst experience was when I flew out to Cleveland the first time.....looked at properties with an agent.....and on Saturday I told him to write up an offer on a property. He didn't get it over to me to sign until Tuesday night. When he did send it over it wasn't even an E-Sign or DocuSign......I was out having dinner with friends and literally had to go to a Kinkos, print out a bunch of pages.....sign them......and then re-scan them back to him. Needless to say we didn't get the deal and I certainly did not do business with them. The kicker is when he said, "Brian, you don't know how it is out here, it's different than the Bay Area." I told him, "No, you are a non-responsive agent that gives Realtors a bad name. I was born in Columbus and fly back to Ohio every couple of years to visit family so I know what is slow and what is bad. You are both."   The conversation went downhill from there :-) 

As another poster said, I would ask any prospective Realtor do they own investment properties in the area and ask them to tell me about their last couple of investment properties they bought in the area. Don't fall for the one who says, "I work with investors all the time." They ALL say that even if they just passed the exam that morning. As a Realtor here in the Bay Area since 2004 if I ever took 3 hours, let alone 3 days to write up an offer the client would walk and I would not blame them. 

If you want I am more than happy to get you the names of a couple of Realtors in Cleveland that own investment properties in Cleveland and have had great success at working with folks from the Bay Area.