All Forum Posts by: Jacob Hanson

A mobile home park tenant is refusing to pay rent, despite still having income coming in.  The rent is small (compared to a house) because it's just lot rent, but if one person in a park does it, soon everyone may think it's a good idea.

They are obviously taking advantage of a situation where evictions are on hold.  The state (MN) said that I still couldn't do anything.  Does anyone have any ideas?

P.S.  this may have gotten posted already.  I apologize if that is the case, just link to the other discussion, please.

What are landlords doing for tenants who were planning on moving in or out during a full lockdown?

I'm in Minnesota, expecting and preparing for a full lockdown like California or New York.  Will people be able to move in/out of units during the lockdown?  How are people planning of doing showings and planning for tenant turnover?

Thanks any help and advice!

Thanks John.  I'm happy to hear that CDs are ok.  They seem like one of the best ways to sell off POHs.  So my follow up question would be, with a contract for deed, who is responsible for maintenance, repairs, etc.?  The seller doesn't take any responsibility when he sells a home with a CD.  So it wouldn't be rent (besides lot rent), it's a house payment.

I have a small mobile home park under contract in Minnesota.  It is my first mobile home park.  The seller uses Contracts for Deed to sell POHs that get abandoned.  The seller's strategy is basically to keep reselling the same homes on Contracts for Deed to get down payments and higher cash flow from the CD payments on top of the lot rent.  The seller does this by doing CDs for anyone that can put money down on the POHs.  So I have two questions.

1.  Is this (contract for deeds) legal in MN?  

2.  Ethics aside, this seems like a good way for higher cash flow, without owning/being responsible for the homes.  Am I missing something?

Thanks BP

Credit reports should include reported debts, including credit and loans, I believe.  I can't imagine there's a way to get unreported debts and that would have to be left out of the equation probably.

But yes, someone could have a high paying job, but have a pile of student loans, a new pickup and boat to match that were both bought with loans. Any number of things could make someone with a good RTI have a bad DTI, which I think should be more important to landlords.

It seems like it's most common to use a 33% rent-to-income ratio to screen tenants, but debt-to-income seems like a smarter way to screen tenants to me. A tenant may have a good RTI, while having a poor DTI. Isn't it smarter to use DTI?

What debt-to-income ratio should be used?  I expect it can be a little higher than the typical 33% debt to income ratio.  What is everybody using?

@Brian Hughes 

That is a good point.  I suppose you could get around not being able to use credit score by using analogous metrics if they are publicly available.   Similarly past landlord interviews and evictions can show similar tenant tendencies.

But it does sound like you are fairly successful in navigating a tenant friendly city.  Would you still advise most people to avoid tenant-friendly cities or just major cities? 

Minneapolis is proposing to not allow landlords to use credit score as a factor for screening tenants.  Evictions older than 3 

years and felonies over 5 years cannot be used to disqualify candidates either.  I'm a new investor and I have a duplex in NE Minneapolis and an offer on a triplex in NE Minneapolis.  

Credit score is a metric that measures how well a tenant pays their bills and debts, such as rent and usually considered the number one factor in tenant screening.

It's only a proposal thus far, but Minneapolis might become the least landlord friendly city in America!

I just wanted to get people talking.  Does anyone have anymore information?  Should I run as fast as I can from Minneapolis?

Article below:

http://www.startribune.com/minneapolis-considers-limiting-landlords-ability-to-screen-tenants/510644802/

Hey J,

Great post and I very much enjoyed your latest podcast episode on BP.  Not sure on the timeline of the recording of the podcast, but I was wondering about the correction that occurred in December.  From my understanding, some of the metrics you mentioned were brought to more stable or normal values and were "corrected".  Did the December correction delay the larger recession that is being discussed in this post?  Please talk some more about what you think the December correction did for the market and how it will change how things play out.

Thanks

If this is your first property purchase and you are going to house hack a few times, you may want to look into a Home Possible loan (Freddie Mac). I'm using this loan for my first property. It is 5% down but you can get an FHA loan after the Home Possible loan. It must be your first owned property for the Home Possible loan, however. But, that's 2 properties for 8.5% down total! The home possible loan also has the benefit of the ability to reduce/eliminate PMI when you reach 20% equity (if you choose not to refinance). Home Possible also does a remodel/repair version of the loan I believe.

Good Luck!