All Forum Posts by: Nathan Seltzer

25% vacant? Why? That is an enormous red flag.

If that is normal in Detroit, then that means your tenants will be able to easily jump ship and find a place that will be cheaper if you saddle them with utilities all of a sudden.

Let me begin by saying that I'm NOT experienced, but I will get the ball rolling. I won't be even the slightest bit perturbed if you decide not to read my post.

The first thing to address is that (at least in Texas) the estoppel certificates are going to be written into the purchase by the title company, so that the overdue rent is not your problem and is quite frankly irrelevant to you from the perspective of completing your purchase. 

My understanding based on Texas law is that if you close tomorrow, the 17th, you will receive at closing credit for rent for the 18-31st of August from all the units (per the estoppel certificates) regardless of whether or not the tenants have actually paid. The fact that the current owner hasn't bothered to collect rent is entirely his problem at closing and will come out of the proceeds from the sale.

That still leaves the problem of what to do about tenants who are (reportedly) perpetual deadbeats. Right now, you don't know if the tenants are actually deadbeats, or if the problem is entirely the current owner's fault, but you do already know that the current owner is a terrible landlord, because he is allowing tenants to fall behind on rent without being evicted and/or charged late fees, etc. So if it were me, I would give the tenants the benefit of the doubt.

I am a car salesman by trade and student of human behavior and it sounds like these tenants have the same problem that many children do when they are not met with firm boundaries: They are doing whatever they want.

As the new owner, you have the fantastic opportunity to lay down the law in a way that the current owner (who sounds like a terrible businessman) really can't (not that he would anyway).

Just like a new babysitter has an opportunity to lay down the ground rules with kids who were previously unruly, you can sit down with each tenant with a properly drafted lease and have a very serious discussion. If it were me, the discussion would go something like this:

"Thanks for meeting with me, Mr. Tenant. I just purchased this property and I am sitting down with all my tenants to discuss your living arrangements and see how I can be of service as your new landlord. First of all, are there any issues or concerns with the property that need to be addressed?"

I would write down everything they say and make a list of any problems and tell them you will be addressing them. Then I would say:

"Do you like living here and would you like to continue living here? Good! Well, I purchased this property as an investment and I run all my properties like a business. In order to do that, I need all my tenants to be in leases of at least 1 year. This benefits you, because you know that your rent will not go up for at least a year after you sign the lease, and it benefits me because I know I won't have to find a new tenant for at least a year. So now I would like to go over the lease with you."

At this point, I would go over each aspect of the lease agreement without much detail. At the end, I would go back to the section on rent and make a special case of it. Remember, they've never paid you late, and you can pretend like you don't know anything about their late payments (a polite fiction, to save them embarrassment).

"As I said before, I run this as a business. Just like you have rent to pay, I have expenses to pay every month. I have a mortgage on this property, I have taxes, insurance, repairs, maintenance, and a variety of other costs. I need all my tenants to pay promptly on the 1st. You have a 2-day grace period. On the 4th, you will be charged a late fee of X plus Y per day. If I do not receive your rent by the 8th, I will start the eviction process and in Texas, that takes 14 days, so that means you will be out by the 22nd. I really hope that never happens, but that is entirely up to you."

Then hear out any of their concerns or questions. My strong suspicion is they are taking advantage of the current weak owner and they know they are getting a free ride that they won't get anywhere else, and that the ride has come to an end. If you need to explain to them that no one else tolerate them being late on rent, then do so.

That's how I would handle it.

 Based on what you said here pretty much, I went ahead and signed up with eRentPayment. I like that you guys report to the credit bureaus and the fee is very reasonable. It turns out that TU SmartMove is not related to RentalKharma at all (I guess RK is just one of their vendors), so there's no reason to really use them since they charge tenants for what you do free, and I would have to process rent anyway.

Great advice guys, going to try that. Spencer what you did is exactly what I have in mind but I figure no data set will ever be that complete. 

@Tim Macy , I guess I didn't explain my objective very well. 

I want to synthesize the data onto a map of my area with pins showing prices of sold and/or for sale properties. Whether or not you believe it is a good idea, I would still like to do it. 

As I said in my OP, I have no intention of buying off the MLS, but the MLS is the most complete and readily available source of data, and data is what this thread is about. I would be happy to use a map compiled from other sources if it were as complete as the MLS, but I don't know if those data exist.

I'm an investor so I am definitely not limiting myself to a handful of neighborhoods. I will buy where I find something that works as an investment, and the point of this map would be to set my barometer for the various neighborhoods in the section of the city I am focusing on. 

Does anything like this exist? 

My wife and I just closed on our first home, which is a duplex in the San Antonio area. We'll be househacking and renting out the other side for about a year to satisfy the terms of our mortgage. 

In about one year, we intend to make our second real estate purchase, which will be a more permanent home for us. I doubt we will buy off the MLS but I am trying to find a good way to visualize MLS data so that I can plan our next purchase and get a "steal" that I will have instant equity or rehab for equity with the goal of getting a decent HELOC going.

Because real estate values are so location based, it is hard for me to process the data on a spreadsheet, because I'm constantly trying to project it onto a map in mind.

To know if what I'm looking at is a deal, I would like to be able to see $/sq.ft. data visualized on a map with either current listings or preferably sold properties. Even better, I would like to make it into a heat map with blue pins being lower numbers and red pins being higher numbers.

My questions to you all: 

• Does anything like this exist? I would happily pay for the service.
• Is there anything similar out there that might be almost as good or even better?
• How do you immerse yourself in the data?

Thanks!

John, lets lay this to rest. Here is my rental history direct from MyFICO.com reported to TransUnion, not Experian since July 2015. 

Originally posted by @John Anderson:

RentalKharma only reports to TransUnion, not Experian. I don't know who accepts what type of payments because I don't work with any of the bureaus, but I can screenshot my TU report if you want evidence. :)

I don't want to get anyone in trouble but can you freely talk about your rent payment service? What kind of fees do you charge? RentalKharma charges the tenants $5/mo to report it, and I don't pay anything, but I have to process my own rent obviously.

The landlord service for screening renters is called TransUnion SmartMove, and I don't know if they pull reports from any other bureaus. Would it be thorough enough with just a TU credit pull?

 Its TransUnion, but yes only 1 bureau gets the reports. The actual service for tenant screening is called "TransUnion SmartMove" so presumably only the TU report is pulled when you use this service.

Greetings, I'm currently renting and I signed up with RentalKharma so that my rent would get reported to the credit bureaus and help build my score. They have been reporting my rent (can't say it has a made a difference in my credit score, but it hasn't been long and my score was already pretty good).

I'm currently in the process of buying a duplex. We'll be living in one side, and renting out the other side. Rental Kharma has a process for Landlords to get tenant screening when tenants sign up (prospective tenant pays) and then they build their credit every month when they pay on time. It seems like a win-win to me.

Has anyone used this? How effective is the screening? It says it checks criminal history, eviction records, credit scores, etc. Just wondering if I can really use this as a one-stop screening (plus my own sniffer) for screening tenants.

Thoughts? Experiences?