All Forum Posts by: Michael Smythe

@Haim Halfon never really see anyone sharing contractors here on BP, because they are so hard to find and no one wants another investor stealing their crews.

Recommend you take coffee & donuts to the local Home Depot at 6am on a Saturday.

The contractors working Saturdays are typically harder workers than the ones that only work M-F, 9-5.

@John Williams politicians at all levels of government are taking away landlord property rights to protect slum-tenants.

We'll soon be like Ontario, Canada where they can't charge application fees or security deposits and it takes 12 months to evict a tenant.

Unfortunately, landlords are too cheap to make political donations to stop the madness:(

@Joseph Warren welcome aboard.

Be sure to post your deals under Classifieds or the Marketplace areas.

Anywhere else and the Moderators will remove your posts and eventually ban you.

@Sean Anthony website is down and Google states business is "Temporarily Closed".

Many times these guys just open another company, so his name will be more important than the company name.

@Lauren Christie what does the lease allow the tenant to do?

What are considered lease violation?

What penalties are in the lease for lease violations?

You are highly unlikely to curb the tenant's behavior because:

1) It seems they've been doing what they want for a while and now feel entitled

2) Your post shows you don't have the assertiveness necessary to deal with this situation

So, recommend you either hire an attorney to start the eviction process or handle a PMC.

@Steve Black welcome aboard!

We like this saying in our company, "if you don't ask the right questions, you won't get the right answers".

It applies here because you're asking a very vague question - so, how good & specific do you expect the responses to be?

Highly recommend you share more about the research YOU have put it into your dilemma, so we can poke holes in it, add to it, etc.

@Rachelle Bisaillon too much to write, so below is a copy & paste from our website (this is NOT a solicitation!):

A bad tenant can lead to thousands of dollars of losses via unpaid rents, legal fees and property damages. We’re one of
the few property managers that require W-2’s and a bank statement and we go way beyond the traditional, “income must =
3x rent” qualifier.

Below is more information about what our Applications Department does to screen applicants and find the best tenants
possible for your property.

1. 1. Required Info
      We require the following from each applicant over the age of 18, that is not a dependent of another
      applicant (as evidenced on a tax return):
      • Copy of acceptable state picture ID
      • Recent YTD paystub
      • Recent W-2
      • Recent Bank Statement, all pages, no info blacked out
      • Recent tax return if self-employed

      Applicants are often slow about turning this information in, asking us why we need it and then taking
      several days to submit. Then they complain that our process takes too long!

   2. Credit History
      Many companies use credit summaries, but we find these rarely tell the whole credit story. So, we obtain
      a full credit report and review collections, chargeoffs, age of credit accounts, active accounts, etc.
      to build an overall credit evaluation.

Source: Fair Isaac Company

1. Public Records
   We also obtain data from national databases about evictions, convictions and sex-offender histories. These all
   require applicants to submit an acceptable Letter of Explanation addressing each specific issue and occurrence.
2. Rental History
   Because a current landlord may say anything to get rid of a bad tenant out of desperation, we also require
   information for the previous landlord of all applicants. Verifying rental history often takes a long time to
   complete due to applicants not giving us correct landlord contact information, landlords not returning our calls
   or refusing to give us any details.We also deal with applicants trying to have family or friends pose as their
   landlords. To address this, we verify the property owner per government records and use this information to vet
   imposters.Anything that seems suspicious will lead to us requesting an acceptable Letter of Explanation to
   address.
3. Analyze Income
   Many landlords require a month of paystubs from applicants and just use these to calculate a monthly qualifying
   income. In our opinion, this doesn’t result in a viable income amount or analyze income stability. We use a YTD
   paystub and last year’s W-2(s) to calculate income several different ways:
   • Hourly or salary income calculated to a monthly amount
   • YTD income divided by number of YTD months
   • YTD + W-2(s) income divided by the corresponding number of months

   If these numbers vary too much, then we investigate and require an acceptable Letter of Explanation.

4. Employment Stability
   Unless an applicant has exceptional credit, we strive to determine their stability of employment to make sure
   they’ll always be able to pay the rent on time. So, we require a detailed employment history for the last two
   years and verify as much of it as reasonably possible.
5. Assets
   We are one of the few management companies that requires a bank statement as part of our application process. We
   think it’s important as it allows us to check for Non-Sufficient Funds (NSF) issues and to determine if an
   applicant is living paycheck-to-paycheck. Bouncing payments or only being an illness or accident away from not
   being able to pay the rent, are issues considered by our underwriting.
6. Letter Of Explanation
   Any time there are credit issues or we discover an inconsistency, we require a written letter of
   explanation (LOX). Many applicants just want to tell us their excuses over the phone, but if they won’t take the
   time to put it in writing, we find they rarely end up being good tenants.
7. Underwriting
   Traditionally, landlords have only looked at the income of applicants and approved those having income equal to
   three times the property rent. This crude method ignores all the other debt payments tenants have. Given that
   many tenants will make their car payment before their rent payment, we’ve copied the mortgage industry’s method
   of debt-to-income (DTI) ratios. We calculate rent plus all debt payments as a percentage of gross monthly
   income.
   Our underwriters strive to analyze and balance all the information above to determine the statistical likelihood
   of a tenant paying their rent on time.
8. Approval
   Once an applicant is approved, we require a nonrefundable Holding Fee to make sure they are serious and don’t
   change their minds. We actually keep marketing your property and accepting back up applicants until your
   property is actually occupied.

@John Michael Roberson

Recommend exploring as many sources as possible to get referrals AND cross-reference them to get as much accurate information as possible.

Check out NARPM.com, BP’s Property Manager Finder (BiggerPockets: The Real Estate Investing Social Network), etc.

Also, encourage you to learn from the mistakes of others - by reading posts here on BiggerPockets about owners not having their expectations met by their current Property Management Company.

To avoid going through the same poor experience, keep reading.

Even if someone gives you a referral here, do NOT make the mistake of assuming that the PMC will meet your expectations, just because they met the expectations of the referral source.

In our experience, the #1 mistake owners make when selecting a Property Management Company (PMC) is ASSUMING instead of CONFIRMING.

It's often a case of not doing enough research, as they don't know what they don't know!

Owners mistakenly ASSUME all PMCs offer the exact SAME SERVICES and PERFORM those services EXACTLY THE SAME WAY, so price is the only differentiator – so, they often select the first PMC they call or that calls them back!

So, the first question they usually ask a PMC is about fees - instead of asking about services and HOW those services are executed.

EXAMPLE: PMC states they will handle tenant screening – what does that specifically mean? What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.? You’d be shocked by how little actual screening many PMC’s do!

This also leads owners to ASSUME simpler is better when it comes to management contracts.

The reality is the opposite - if it's not in writing then the PMC doesn't have to provide the service or can charge extra for it!

A well written management contract should clearly spell out what is expected of both the PMC and the owner, to PROTECT both and avoid misunderstandings. Why do you think purchase contracts are so long and have such small print?

We recommend you get management contracts from several PMCs and compare the services they cover and, more importantly, what they each DO NOT cover.

EDUCATE YOURSELF - yes, it will take time, but will lead to a selection that better meets your expectations & avoids potentially costly surprises!

@Ty Green we have a lot of info on the 183 Detroit Neighborhoods.

Please DM us.

Why wouldn't you use your VA loan to buy a 2-4 family property? You could live in one unit, rent out the others.

You might be able to get a HELOC for up to 65% of your CT condo.

How much equity do you have in your current primary condo?
It's easier to get a HELOC on a primary!