All Forum Posts by: Jeff Bridges

I try to use online direct deposit website solutions that are geared to send automatic reminders to tenants  and deposit notifications to landlords. Cozy is a well reviewed free direct deposit solution that I would recommend you utilize. Intuit small business payments network also works well but is 50 cents per transaction and is a close 2nd. It does not have the email reminders and notifications for tenants like cozy. You will get notified via email however with Intuit but it has basic functionality. Finally, if your tenant likes to pay cash/physical check or not as tech savvy with internet, you can issue them a deposit-only ATM card via Bank of america and they can deposit cash/checks themselves at any of their ATMs. You'll need to get a BofA business checking account which is free, but has minimum monthly balance requirements. More info on how that works on the link below.

With your mortgage, I recommend you use the online billpay feature associated with your checking account using your personal login. every bank has this feature. You enter your biller address details and set it up to be a recurring monthly payment, and it will mail a check from your account at no cost to you. I set this up with as many of my recurring static bills as possible so I can automate the business. For those bills that are non-static, you have to setup the auto-bill pay at that companies website portal, like a utility bill for example, so that it can auto-deduct the precise amount of the bill for that month... your checking account billpay feature wouldn't be able to know that non-static amount, but its perfect for your mortgage. Billpay will usually send you a notification of payment so you can remember what is being paid in case you forgot.

More about the bank of america Deposit Card:

https://briankondas.wordpress.com/tag/free-bank-of...

Cozy:

https://cozy.co/

Intuit payments:

https://ipn.intuit.com/login/home

I use fujitsu scansnap desktop scanner, which is excellent for scanning large documents, leases, contracts etc at the home office. For receipts and one page documents, I use the free smartphone app "Genius Scan" to snap a picture of a document and it will convert to PDF (and auto adjust the image for easy reading) and allow you to save them on your phone or email docs to yourself. You can do your scanning anywhere. The best scanner is the one you carry with you. Yes it can do multiple page PDFs, but you can save those for your desktop scanner.

I use dropbox to organize my properties into folders/ document sub-folders for easy retrieval at whatever computer or mobile device I am using.

They successfully did that in DC and got approval to do it in a residential neighborhood for a house that now rents to college students blocks from campus. Your architect has to have the vision and the neighborhood zoning board would have to sign off on it...

http://dc.urbanturf.com/articles/blog/a_look_insid....

They interview the architect below:

http://dc.urbanturf.com/articles/blog/one_on_one_s...

Cozy has worked well for me recently for tenant application/ Screening. Makes tenant applications super easy and professional. also for me, W-2 income is most important part of the application (request a copy of their paystub), followed by prior landlord references, followed by credit history and criminal etc. to confirm there are no major issues that the applicant hid from me...

great BP guide below on tenant screening:

https://www.biggerpockets.com/renewsblog/2013/01/27/tenant-screening/

With condos, they are much more limited in terms of appreciation potential, but they can make up for that with inexpensive acquisition cost and cashflow potential relative to a SFR. It's good you calculated your HOA expense in your evaluation and it still works for you.

I'll share my anecdote for my rental condo related to refinancing. I tried one with WF, and all was on track until they got back the association questionaire which had 15%+ deliquency rate and high investor owner rate, which they did not like, and it wouldn't meet fannie guidelines. Portofolio loan might have worked but I didnt have the resources at the time to connect with an institution that did one. I ultimately got a HELOC on the rental property for 75% and got at least 75% back out for reinvestment. Not BRRR but I wasnt stuck with it all parked in the property. Not all banks will do HELOC on investment rental units but some do. TD bank I heard might. I recommend trying to find someone to do portfolio for you and then HELOC as a backup if you really want to get money back out and its still worthwhile deal to you.

Finally, make sure you fully read bylaws and association regulations to make sure there are no rental restrictions. I've had trouble with those even after buying a condo that initially had no restrictions and the board got fed up with a couple of bad rental residents and tried to restrict renting to 40% or less.

Certainly you have less freedom between financing and rental restrictions when you buy into an association, so be mindful of these risks....

I second recommendation of smartmove via USAA. Great pricing and detailed reports. It even listed speeding tickets for my otherwise squeaky clean tenants.

I also recently go background/credit checks using Cozy's $35 background/credit check service that uses experian. It looks somewhat comprehensive, however the accounts provided on the credit reports were not as detailed as smart-move reports. They both would likely show any red flags that need to be waived, just the smart move showed more details about the accounts opened and number of ontime payments, open date etc and current and prior addresses associated with their credit... Checkr does the criminal checks for cozy and they just had check-boxes that show "clear" when there was nothing to report for criminal, eviction, terrorist watchlist (very amusing). Cozy does not provide confirmation of prior addresses on credit report, which is disappointing.

Smart-move provides more details in general.

Also, the books are likely speaking to discount relative to After repair value (ARV) in the neighborhood based on comps for fully renovated properties in the neighborhood. You're not necessarily asking for a discount, but sometimes a property is listed under market value because it is trashed or needs rehab in some manner. There are some folks who have trusted contractors or their own renovation teams that can perform renovations for x and sell for $20k profit or more on top of the cost of repairs to generate a profit. Its much more rare to find a fully move-in ready property and be able to negotiate a discount unless the neighborhood is not desirable or there are other extenuating factors. You pretty much have to be following the local market, be aware for new listings with daily alerts, and be ready to identify a property that is being sold at a discount to ARV (hint: you'll have to do your own research for each property on your radar) and if your calculated profit works for that property, you move forward with acquisition. It takes alot of practice, time, and realtor resources to help you quickly find and identify these properties so you can act quickly...

Don't forget, its easy to say "I want to buy a property at 70% of ARV" but finding one can always be difficult especially if you live in a more desirable market. So understand that 70% discounts in some markets can be highly improbable or difficult to find or get offers same day they are listed. Just don't want to get your hopes up that LA will present opportunities to actually buy at a discount, however I am not familiar with that market.

You'll find discussions on BP about the 70% rule (see below). Don't forget to read the BP real estate investing guide below as it has full chapters on why it is important to buy properties at discounted rates and what that means.

https://www.biggerpockets.com/forums/67/topics/201...

https://www.biggerpockets.com/real-estate-investin...

a short sale contract is only a contract between the buyer and seller. Unfortunately since the sale requires the bank to forgive part of the original loan balance, you require bank approval to actually buy it at that value below the current loan balance. For example, I could sell my house right now as a short sale for $50, and get it under contract, but that will not guarantee that the bank will sign off on it (hint: they won't). Short sales and pre-foreclosure homes have so many moving parts like bank bureaucracy, appraisals, competent agents skilled in negotiating short sales with banks and steering through bureaucracy, when things fall behind schedule. You need so many resources on both sides to be on point and your seller organized. Because of this, people need to have very low expectations of a successful short sale and be pleasantly surprised when a short sale actually closes. I know of banks like nationstar, which require a seller of a short sale to list their unit on MLS, then they use an online auction method simultaneously and do some odd stuff as part of requirements. I'm not surprised the bank is listing the property on auction.com. I would still maintain a low set of expectations for this sale and not worry about it until you get bank approval. be prepared to move on if you need to get your dream house on a different timeline. Sometimes it's not worth the stress. I've waited 6 months for short sales in the past so nothing surprises me....

When I did a heloc, they only lent up to 75% of appraised value. It's unlikely they will lend you 100% of appraised value between the 2 loans. They will want you to continue to have skin in the game. Since you have an existing 1st loan, that gets deducted from the 75% give or take of appraised amount. I would assume that only 187.5k (75% of 250k) will be available for you to borrow, so you'll only likely get 87.5k from your HELOC. You can always call a credit union or bank you like and ask them what they would pay on your proposed loan scenario. You will definitely have a separate payment schedule for your HELOC on top of your existing loan, so expect the HELOC payments to be much higher since they tend to have shorter repayment periods. They are completely different loan payments and HELOC payments will be dependent on repayment period that bank offers and interest rate. Your loan officer would give you more definitive answers.

Tamara,

The DC, MD, and VA license databases are electronically available. I suggest always checking here even if they show you a card or paperwork suggesting they are licensed. If they don't show up there, their license is not current (or was possibly revoked) and you need to ask them why and consider finding someone who is. References from recent projects are just as important to make sure people are happy with their past work.

You want to be signing a contract with the company who holds the license to be a general contractor so they have to defend their license if something goes wrong and is not done per terms of their contract. If the contract lists something different than what's on the license information, red flag.

DC license check database:

http://pivs.dcra.dc.gov//BBLV/Default.aspx

@Manolo D. also rightly suggested to request a copy of insurance (proof of workmans comp and general liability need to be shown on the form). You can get a generic proof at first for initial vetting, but you'll want a custom one generated by the insurance company with your name on it right around the time you are ready to sign a contract with them to prove that their insurance is still current at the start of the rehab.

Some contractors let their insurance policies lapse during the off season or do other things to save money since paying their policy premium can get expensive. If this insurance is not current, you could have liability issues if someone were to be injured on your work site. You'll find many contractors who will try to avoid sending you insurance information or providing proof of insurance. You now know to move on from these folks...