All Forum Posts by: Kevin McGinnis

I'm getting ready to start year 2 as a landlord. Year 1 went great, but tenants are moving out at end of month, so I'm in the process of showing my rental house, and getting lots of interest.

Here's my question: based on what I've seen other rental property owners do in the area, I'm requesting a $35 non-refundable fee for background check.  I intend to do credit report, criminal records check, employment history, eviction records, bankruptcies and past address history.  For husband and wife, do I check them both, and charge $70?  Or just check the main wage earner?  Since people are used to a $35 fee, I think a family would balk at paying $70 non-refundable fee.  I have two families who liked the house and are currently filling out an application.

Also, I was going to use Landlord Station.  Has anyone used them?  Satisfied with results?

To be honest, I did not have a real good reason for the $600 security deposit, other than that was what another investor in the neighborhood required from his tenants (for a very similar property).  He gave me the idea for 1st month's rent + last month's rent + security deposit.  I followed his advise.

Also, all co-signors for me lived in the same city as my rental property.

Thank you your input Colleen, Lisa and Olivia.  Everyone on site is providing valuable advise, perspective and information.  I also checked out MyRental, which I had not heard about before, and looks like a great resource.

Thank you Dick, and Nancy for the prompt suggestions and advice.

Out of curiosity, who do you use for background and credit checks?

I am close to the finish line of my first real estate deal. I purchased a HUD home, and spent about $30K fixing it up. It's finally ready to rent, and I put ads on Zillow, Trulia and Craigslist. Lots of response in the first 5 days-probably a dozen inquiries. Today, 3 female students (college town) looked at it with their moms, loved it, and said "we'll take it". First, I asked them to fill out an application, and will require each of the tenants to pay a $35 application fee, to cover background, criminal and credit checks. Each girl said no problem for their parents to co-sign, since they have not established credit yet. Here's my question: what type of background and credit checks do I run, and on who?

I'm thinking to do a background and criminal check on each student (to look for evictions or felonies) and a credit check on the parents, who will be guaranteeing the payment.  Also, each of the girls works while going to school.

Any ideas or suggestions.  I did not think I should run 6 complete background checks (one on each tenant & one on each parent), as it seems overboard.  Am I going about this the right way?  Rent is $1,200/month, and I've asked for 1st month, last month, and $600 security deposit.

Would love to know the secret sauce also.  Thanks for sharing.

Randy,

I just received a HUD contract this week, for a cash purchase, and it included a HUD appraisal. This is my first one. Sounds like this might be specific to your area. The home I'm buying is in Edwardsville, IL.

Kevin

This post is 2-fold. First, to introduce myself to Bigger Pockets. I've been staying in the background, learning as much as I can, and now feel comfortable enough to start participating. I'm a new investor near St. Louis (IL side), and intend to start with fix/flip, and ultimately buy/hold.

Second part is a question: I've had my offer accepted on a HUD property, and waiting for a copy of the signed contract. I've paid an earnest money deposit of $1,000, and understand it is not refundable. Also, the home is winterized, and inspection report indicates a leak in the plumbing system.

I have not done a property inspection yet, and do not see the point in doing it prior to getting the utilities turned back on, and the plumbing leak fixed (after closing). Any opinions on the timing of inspection for a HUD home that is winterized?

Thanks,
Kevin McGinnis

Robert,

I'm doing the same. My bank will allow me to borrow up to 80% of the appraised value minue the mortgage. In your case, the math would be:

$360K x 80% = $288K - 225K = $63K

That sounds right.