All Forum Posts by: Andy Luick

In any market right now, renting single family is risky.....as seen here, the great tenant lost his job sounds like before he even moved in.  That's just the state of things.  Mom's income and employment is pretty risky even with cash in the bank but with the son co-signing, I would have taken the gamble as well.  His loans are deferred right now so it's as if the debt doesn't exist for the moment...and probably he'll defer for a couple of years.  Not sure it's legal in CA but most owners I know here in GA would have done 1st, last and a month deposit.  Let us know how it goes with her but, if I were you, I'd chat with her and suggest getting a roommate if that is possible.  With someone else paying $1,400 a month for a room there, she'd always be able to pay the rent....unless the son is planning to live with her.  That's why I prefer shared housing...it minimizes the risks, maxes the revenue, minimizes the expenses & maintenance and always keeps someone in the property.  

If the tenant doesn't have a receipt for the payment, I doubt very much that it was ever paid.  I'd give him a "credit" for now for the deposit and leave him in place as long as he pays the rent.  Keeping single family rentals in atlanta filled....at least inner city atlanta is a challenge.  Good tenants are hard to come by so I hope this one works out for you.  Keeping the fingers crossed.  If it should go empty, you may wish to consider changing to shared housing, getting it rented and selling out of it......

Sorry Naga, I'm not sure where in the world you are from...but this is an utter waste of time.  The best thing you can do is what you already have....let folks here know of the experience and call it a day.  You will waste a ton of time, energy and money and more than likely never get a dime back.  

How do you know the tenant actually paid the deposit?  Ask for a copy of the money order or a receipt.  Just let the tenant know that they prior management left with the records and you are trying to confirm what has been paid.  If this is a hood property, the rent & deposit may have been paid in cash.  From experience over the years, tenants will often say they paid something to someone but not be able to SHOW it....this is especially true in inner city properties.  Can't tell you how many times I picked up a property with an existing tenant who said his rent was paid in advance....yeah right!

It isn't a bad thing to use unlicensed property managers....just know who you are dealing with...some of the best ones around the country are not licensed and I have used some of them with good results.  We now manage our own so I don't contend with outside PMs much anymore.

My home repair company is available for repairs in metro atlanta and we've been doing it for years......all the best!  Andy

Try to spend some time on the podcasts and you will find that ALL of us have issues with property management.  Depending on your market, some of the best are unlicensed.  Most decent PMs will not want you selecting the tenants yourself either to avoid inheriting a problem OR more importantly giving up 1st months rent which is the only real money in managing.  If they don't get you there, most PMs will rake you on the maintenance.  You might want to find a market you are comfortable with and ask the PM to just let you give final say on a renter.

As the others have echoed, you are not and never were the typical renter...at least not in today's world.  Anyone with decent credit will buy if they can get a loan....which also isn't easy in a lot of markets.  Maybe 10% of renters could buy but choose not to...unless you're talking about 20-something and that's not the renter I want.

Have you considered starting out with triplex or quad in your market?  That might be the way to go?

Every person who buys a home is an investor.  In BP, you can benefit from the 100's of years of combined experience that we collectively bring to the table.  If it's doable, one of us here has already done it....with success or failure and you can learn from both.  One of the biggest things to remember about any of these forums is that dealing with investors is a lot like talking to gamblers....they all with talk about their "big" wins but you don't hear much about all of the losses.  Here on BP, some of us will share that with you....for FREE.

You have some very savy investors in this string who share your pain and would caution you to move very slowly.  Do exactly what you are doing...take your time...read, network, question and find someone like us in Atlanta where you can do a small investment of $100 bucks with groundfloor.us and work through the project with me.  It very hard to learn to handle every facet of the business....and you will find that you have to reinvent yourself with different cycles as many of us have had to do this current go round.

You did the smartest investment you could already...using the 203 to purchase and renovate a home...I'm sure you learned a ton.  Play with some wholesaling if you wish but realize it is a total waste for the most part aside from networking you might do.  Read up on real estate laws in your state and take the course if you can...again more to network then to pull your license.  Many times, having your license works against you as an investor.

See if you can qualify your husband separately for the 203 next year.....then consider renting your current house or turning it into shared housing as I do.  I teach couples to split the loan and each do a deal every year.  It's the smartest, safest back-door approach to investing PROVIDED that your initial intent is to live in the home.  I love this approach and have watched couples like you use it successfully for many years now.  The 203 is a pain but it works and it's the only way for non-cash buyers to purchase most investment property.

Many of the wholesalers are plain full of it...just like the guy who had you running around doing free grunt work.  We have a ton of those in Atlanta and I get the same properties sent to me repeatedly by ten different guys at different prices.  States are starting to crack down on this so avoid those operating illegally and unethically.  You have a marketing background...find a flipper who can use your marketing skills and do so for a percentage of sale with a joint venture agreement or a consultant's contract.  You might find yourself "suddenly" doing the same thing for a bunch of flippers.....and making great money at it....and you're not limited to your state.  The internet and social marketing are HUGE...master that and you're on your way to big money.  Find interesting programs that you have a passion for...I created an affiliate program build around what I have a passion for and people can earn a percentage of the profits on our deals simply by referring.  Try to take your skills and color outside the box.....you can be a Mom, a wife and make great money while honing your skills in the investing world!

Take your time....there are things in are present world economy that do not bode well for the long term.  Try to take a short term view and learn whatever you can.  If you do get your license, specialize in teaching others how to use the 203 and stick to that niche.  No one every masters this business...maybe aspects of it....but all of us learn something new on a regular basis.  I'll be here cheering for you!  Happy Investing.

Most problems are similar to a house I am working on for a client....it's not any one thing that did them in....just a bunch of things that came together to spell disaster.  Giving mortgages to those with little skin in the game or marginal credit is the same.  My clients bought a gorgeous ranch home in an upscale atlanta neighborhood about 2 years ago.  It had a new roof, new 6" aluminum gutters and new hardiplank siding.  Sitting on the toilet last week, the husband noticed the base tile next to the shower seemed loose...he kicked at it and it fell to the floor along with some drywall. The drywall was all soft in the area so they called HandyANDY.

The 60' gutter at the rear wasn't handled well as it was installed.....probably 2 guys instead of 3....and it creased in one section slightly; that crease lined up almost perfectly with the bathroom window; the window was never caulked properly nor was any of the siding...unless you consider spray paint to be caulk which many contractors do!  The gutter should have had an additional downspout installed and probably did BEFORE the renovations, more than likely it was removed so you wouldn't see an ugly downspout in the middle of the rear wall; this caused water to back up in the gutter so that water run over them and behind the gutter; there's no drip guard to kick water back into the gutter either.  

I could see mold in the wall cavity around the tub so the adjuster wanted us to remove the hardiplank from the rear so we could see whether the tub needed to be removed or not (it does).  When we started to remove the siding, we discovered that it was nailed with finish nails and that whatever Craigslist contractor did the work, installed it directly over cedar siding.  It was board & batten siding which is basically large boards butted together with a smaller strip, the batten, cover the joint.  Some Einstein removed the batten leaving the gap between unsealed.  The old cedar was installed over 3/4" insulator board.  Whatever you do...don't ever install one siding over another...remove the old stuff and let the wall breathe.  If you don't do this, especially in my southern market, you are just asking for trouble.  Here, after 2 years the siding is cupping and dry-rotting and there is mold at the bottoms.  For my clients, all of these factors came together to create a huge problem.  Water got in from the gutters and rain hitting the siding face, where it couldn't escape.combined with condensation formed on the inside wall cavity from temperature differences between an air conditioned room at 75 degrees and an outside wall over a 100.  All of it came together to create wood rot, fungus and mold.

Many of you are way smarter than I ever hope to be.  If anything, IMHO, the gift rules should be relaxed so that "borrowers" could get whatever help they needed to in order to have 10% or 20% down.  With no skin in the game, borrowers who should have been renters just walk away.  I shouldn't complain too much as this creates opportunities for investors.  With 20%, the banks would never feel much loss and neither would we.  Or take it a step further and create a program of lease purchase where an investor would have zero or little taxation on lease purchase income up until the renter achieved 20% equity and could then be funded either as a virgin loan or add them to title and refi the seller off.  Seems to me a more private sector program could achieve more stable homeownership and provide an incentive for savings.  Instead, we've built a society where everyone at lower levels feels entitled to EVERYTHING.  Many of us on BP have had to work for ours.....and everyone should. They will appreciate it more and in turn, hopefully teach their children to do the same.

Doing otherwise, creates the same deal as my clients bathroom wall.  Each little mistake didn't do much alone but collectively, it created a disaster.  Now, because it wasn't done right the first time, the owner has to shoulder the cost to rip everything out and start over again.  Banks will gradually relax...and it becomes follow the leader as it always have.  Someday again, you'll see 100% loans as we once did here in Atlanta.  The next "bailout" will be all of the hedgefund buys that are now being turned into derivatives and sold off. That's a whole other discussion.  Happy Investing. 

In today's market and for what we do, a credit score is worthless.  A clean criminal just means that they never got caught!  We use a variety of sources but nothing is better than meeting in person, face-to-face and getting to know them.  Meet in a very public place like McDonalds and take a good look at the interior of their car at some point....they will certainly treat their car better than your rental.  We put a ton of stock on length of employment, old employer references and personal relationships.  We have our own proprietary scoring system that works well for us after several decades developing it.  Most tenants are lazy so whatever service you have to use needs to be EASY.  I'd try AAA for that reason if I were you.....all the best!

Sure, firm up the date and let me know....be happy to meet and network.....and say hi to those I already know.....

There are multiple schools of thought on this....I never make an offer so ridiculously low that it is insulting but, then again, with my shared housing model, I can afford to pay more for properties and often do.  I will often ask....what's your bottomline number cash today price and I generally get good responses with that.  In my market, I typically pay over list price but if I am with a private seller then I certainly ask.  You just don't want to be insulting about it.

It's great to have goals....really is but 3/year for a newbie investor is a bit much.  Try to take her to some local real estate investor meetings, read & participate here on BP...lots to learn & share here.  Connect with a local wholesaler or two in your market and start following some actual deals from start to finish....then connect with an investor savy agent...not all agents are created equal so ask around.  Audition some handymen/contractors on your personal home to get a feel for pricing and quality of work.  Fellow investors will rarely share good contractors with you....maybe plumbers or electricians or hvac but typically not full service contractors.  Work to get your team together.  Then get ready to do ONE deal....start to finish.  If you're handy and like this kind of thing, you can handle some of the repairs yourself.  I'm a 4th generation contractor and I still play a small hands-on role in every project we turn.  I love the stuff really.  We are actually being considered for a reality tv show based on our buy, repair, rent as shared housing and sell it off model.  Who knows there that will go.

A good starting place for short term investing is a crowdfunder like groundfloor.us where you can invest as little as $100 up to $250k and earn a secure 8% to 12% on projects that they have vetted.  It is really an interesting model and when you figure the average investor today is lucky to take 3% to 4% on average....that's a huge return.  Keep reading and sharing with your wife.  Once you do a deal and she sees how it goes then maybe you'll get to do your 2 to 3 a year.  I owned 100s of rentals at one time and it nearly swallowed me whole when the market went south so please be very cautious in how you go about achieving your goals.  You will find that there are plenty of people to get you into deals but very few to ZERO to get you out of them!  Nothing is more important in this life than a marriage and family....I envy you that much....happy wife is usually happy life!