All Forum Posts by: Jeff Gates

Dwolla may have bad press only because of being first to market and it's initial use by the BItcoin underground.    As a service, Dwolla is just fine for rent payments.  I've used it on all my rentals and have not had a problem. 

Initially, they had issues getting people registered and verified in a timely manner, but that was a couple of years ago.

 The original poster was asking about the cons of CA which I added to. You disagreed so I asked what exactly you disagreed about. Now I see this post and I am in agreement with you in part. There are certainly markets in CA that have lower price points, for example, Bakersfield, Fresno, Antelope valley, & other desert cities) however, you typically lag behind the average on appreciation and you are typically in not as nice of neighborhoods to obtain cash flow.

The part of your statement above that I disagree with is that you believe paying $200k for a home and getting $1600 in rent equates to great cash flow. It does not. That is well under a 1% rent to purchase ratio. By the time you factor all the expenses (not just the ones that come each month but also those that come over time - capital expenses, legal fees, evictions, loss to rent, repairs, advertising, etc.) you won't have any cash flow. Cash flow does not equal rent - PITI. Lastly, I don't consider the legal disadvantages to be minor, perhaps you should read this thread https://www.biggerpockets.com/forums/67/topics/649...

and tell me if you still think they are minor! 

 I certainly respect one's right to disagree but how about telling us what you disagree with and why. The "folks buy in wrong markets" is such a general and unsubstantiated comment.

I don't see how anyone could disagree with the fact that CA landlord laws are much more in favor of the tenants than the landlords. That fact is pretty much common knowledge and certainly the biggest con to CA buy and hold (speaking of the residential market only of course).

Hi @Kim R. - I perform both the application and background check online through my website. You are correct that some websites only do the background check (credit + nationwide background/eviction), but you really want a website that also has a full application.

As far as questions, this is important (both past rental verification and employment). Here are the questions that I ask on the call:

RENTAL VERIFICATION:

Contact owner and ask following questions:

• Can you please confirm [name] lives / lived there?

Verifies living there. You want to make sure it's not a friend answering 

• What were the start and end dates of the lease?

Confirms dates (and helps determine whether this is the real landlord or just a)

• Were there any late or partial payments?

Confirms payments. We recommend not forgiving more than one late payment.

• Were there any noise violations or disturbances?

Confirms whether tenant will cause issues with neighbors.

• Did the tenant leave the property in the same condition as when he/she started the lease (excl. normal wear and tear)?

Confirms cleanliness of tenant

• Did tenant try to sue you?

Confirms tenants amiability. Tenants often feel entitled to get their full deposit back, regardless of the condition. If a deposit was rightfully withheld, and the tenant still took them to court, then it’s a sign that the tenant is “trigger happy” and maybe a little crazy.

• Would you rent to them again?

Sums up the entire experience.

EMPLOYMENT VERIFICATION:

Call employer and confirm:

1. Current Income
2. Type of employee
3. Dates of employment

In some cases, if it's a large corporation (employment verification) or apartment complex (rental verification), you need to go through a couple of extra steps and sometimes provide written consent to get this information.

Warning: If they are a bad tenant, then the current landlord may say amazing things about them (to get them out of the current unit) -- sad, I know. So I typically call the landlord that is from the place before their current residence.

I hope that helps!

I use Dwolla. It's free and I easily added a link to my website for tenant payment. It does seem to take a little while for payment to be deposited into my account however. Not certain if any of the other services are quicker.