All Forum Posts by: Nick G.

@Alex Johnston From my experience, and having a healthy, happy, and fiscally-respectful relationship, I can say that doing the total opposite of what has been suggested to you here is what worked for me.

What @Charles said is spot-on. I would never. EVER. ask my woman sign a lease or "pay me rent," that's probably the mindset behind why 50% of marriages/relationships fail and why money is such an issue in so many marriages. What worked for me is to absolutely not make it about the house, or any bills specifically at all. The fact is, you guys share a life together. That life costs you $X per month. What would you both like her (and your!) contribution to be toward your shared life costs? That's the end of it.

As soon as you make it about specific things, you're headed for trouble, and it'll often cause tension. Instead, figure out what your life together costs you both, and figure out what both of your respective contributions to that life together should be. If your life together costs you $2000/month, maybe she pays for 50% of that - but she's not paying for anything specific, it's simply her contribution toward your life together, and you do the same. 

As soon as you make it about specific things, I think that's a recipe for disaster. So, don't split bills, don't split HOA, don't split any item in particular - simply total up how much your life together costs, and you both contribute toward that. The house is in your name, there's no more discussion to be had about who's responsible for those bills.

And for the love of god, if you care at all about the long-term health of your relationship with this person, do not have her sign a lease. You're not married, she probably has no claim to anything anyway, so quit worrying about it. Once you get married, there's no sense worrying either since you don't have a choice about it! :)

Cheers mate, good luck to you, hope a little different perspective helped. 

@Austin Mack I may not be understanding your question, but the only time you'll typically "use" your SSN will be when qualifying for a loan, which is... pretty darn important, for most investors.

@Elaine Fawcett I've been told by auctioneers that the hidden reserve is generally at least 70% of whatever the total outstanding debt is on the property, if not closer to 100%, particularly in the competitive market most areas are seeing. I can't offer much more help than that, though, sorry, other than to say it never hurts to try!

@Sushil Sureka Probably not, but it depends.

1. Does the borrower have a great track record of successful deals/projects/ventures?

2. Do you know this borrower well? How about his/her family?

When somebody wants to run a deal with zero of their own money into it, they are exposed to no risk, meaning you are taking the risk for them, and you're depending hugely on their character. Not a place I want to be 99.99% of the time. I'd be asking those questions first before I even started looking into the borrower's income and credit worthiness. When somebody wants to do a deal and has zero of their own money going into it, if they don't check out on steps 1 and 2, I'm not even going to bother vetting them the rest of the way.

Hi @Frank Ochmann, the best use of that $20,000 once you have it would be to spend it on none of those things. 

Instead, spend all of your time learning how to analyze properties and the markets they're in, and how to use that information to be able to invest that $20,000 in the most effective way possible. New investors sometimes spend a lot of time trying to learn how to set up their business, assemble their team, set up their systems... all of which are great and necessary eventually, and they make you feel busy, but none of them actually make you money. Good investment properties are what make you money, so spend all of your time and money in the beginning just focusing on them. Everything else you can work on later once it's needed. 

As the old adage goes, things in life and business are 80/20. 20% of things in your business make up 80% of your success, so focus on that 20%, not other 80% fluff.

Well-said @Dan H.. I live in Ventura County, and our area echos yours precisely.

@Ramy Barsoum I'll take info on anything in Ventura County or the San Fernando Valley. Thanks.

Hi @Sean Autry, call it tough, but I personally never recommend asking for less than 1.5 months' rent - especially for a lower-class area. However, my area is nearby to that of @Christine Swaidan's, so the trend may be different in your area.

The general idea is that because CA is so tenant-friendly, and because our property costs are so high, one bad tenant can wipe out months - or even years - of profitability. That is why I will typically always ask for a full 2x the rent value as a deposit, and I'd be doing so more than ever in a lower-class area. As @Kristina Heimstaedt said, if they fight back on it, then they're not the tenant I'm looking for. 

Honestly, if somebody can't afford to come up with $4,000-5,000 for a deposit (which ideally is returned to them anyway), I probably don't want them as a tenant. Plus, the more they have at stake, the less likely they are to cause issues. Therefore, there aren't too many convincing reasons for me to ask for less than the full 2x as a deposit.

@Brittany Bauhaus Hey there, I live, work and invest in this area and have a few thoughts. 

1. You should probably be buying buy that home within 0 - 5 years, not 8. Five years from now, we should be in the midst of a market correction, which would make it more effective to buy 1. in the correction, where prices may be a bit lower, or 2. now, when interest rates are still very low. 8 years from now, we may already be going up again from that market correction. As @Andrew Johnson wisely pointed out, interest rates are also very likely to be higher.

2. You shouldn't be buying anything right now to sell in three years. Based on history, our area experiences market corrections every 10-15 years. Assuming that 70-year-old trend continues, that means our market will be lower than it is now in 3-5 years' time.

3. I don't necessarily think buying now is a bad plan, but if you do, you need to hang onto it for at least ten years - in ten to 15 years, the value will probably double again, as it has done many times over the past ~70 years. Investing for appreciation is definitely not the BP way, but it's why most investors buy here and do extremely well in our area, we are not a cash flow area.

4. Personally, I'm not comfortable investing out of state at this time, so I can't speak to that other than believing that it's a very risky move for a newer investor and a very easy way to lose your hat.

@Catherine Angle Nope, not illegal at all, and it's why smart landlords call a tenant's past landlord references. 

However, it's worth keeping in mind that if you are calling the landlord that the tenant is currently departing from, I personally don't think their testimony is as reliable as the landlords' before them. Why?

If a less-than-ethical landlord has a horrendous tenant, that landlord may tell me all kinds of positive things about them - whatever it takes in order to get me to accept them, since it means they get to be rid of the problem tenant.

Similarly, if a tenant upsets a landlord on their way out of a property, even if the tenant is totally in the right and the landlord is totally in the wrong - that landlord may feel spiteful and badmouth an otherwise perfectly good tenant.

I don't say any of this to discredit calling past references, I believe in it wholeheartedly and think it's a must-do. I simply just put a little more faith into what previous landlords say, as opposed to the one they're currently leaving, and never rely too heavily on a single avenue of diligence.