All Forum Posts by: Thomas S.

With a low credit score and default credit reports this is a no brainer. Unless  this is the only applicant you expect to see throw his application in the garbage. You are not a personal financial advisor or a psychologist so don't take a risk thinking you will somehow magically turn this guy around. 

Also unless you are buying a bunny rabbit for your kids leave the feelings at home when making  business decisions. Cold hard facts and background information is all that's needed to make decisions, unless your a social worker, your not a social worker are you ?

Also raise your standards, a 600 score is near bottom of the barrel, 30% delinquency rate. He will not pay rent on time when other bills get in the way. Don't believe his present landlord that guy is probably glad to be getting rid of them. 

At a bare minimum I would need $1500/ month to insure not only positive cash flow on the property  but also a solid return on my cash investment. If not you would be better off spreading it over multiple properties.

Carful with your plan to buy as personal then rent. If your lender catches on you will get your mortgage pulled.

If it works look for singles that have or you can add a legal basement suite otherwise it is near impossible to cash flow a single family.

I personally prefer that young investors pay off all bad debt before they get into good debt.

Secondly if you buy a property never ever ever rent to family, boy friends or any friends in general.

Watch any 1/2 hr. episode of Judge Judy and you will find out why. Don't think it will happen to you, guess again.

You could wait till it attacks a child before you fire but then you would risk missing. 

Dogs don't pay the rent, don't allow pets period. They cause damage , they stink and neighbours complain. Every dog owner says their dog is perfect and none are. Expect your hardwood and property in general to be destroyed. If you have not had pets damage your property, as with tenants in general, you have been lucky.

PS. as soon as they declined to allow a viewing of their present residents I would have filed their application in the garbage.

If this is your first rental property and you have not yet learned all your State Landlord/Tenant regulations you need to sit down with a copy and find out what you can legally do before you decide what you want to do. Knowing your business regulations is step one.

Confirm the dog is getting into your yard, Speak to the neighbour and advise them your tenants will be calling animal control if it happens again. Instruct your tenants to call animal control to pick up the dog every time it enters your property.

Adam

The idea of buying a single property having negative cash flow with the intent of supplementing your tenants rent from your own pocket is defiantly doable. Your time frame may be somewhat underestimated but if affordable for the owner still can workout as a profit at time of sale.

Some assumptions on your part may be unreliable. First real estate investing is not low risk especially in regards to income investment properties. Tenants can and do cost tens of thousands in damages, lost rent and high stress. Difficult to sustain when not making a spendable income from the property.

Timing your sale may, for personal reasons, be beyond your control as well as surprise high cost  repairs. Both of which can and do eat up investors profits.

Keep in mind there is a distinct difference between buying and supplementing rental income on a single property as opposed to investing in income properties. One is a personal investment the other is a business investment.  

Knowing your market is key to the real estate business regardless of the vehicle you invest in.

I buy and flip in a MH market that generally sees renovated mobile homes sell in the $60,000 to $80,000 range on a consistent bases. If you want to be successful you must work with the manager/owner of the community. To do otherwise is a very poor business practice. Success depends on following the process not trying to figure out how to circumvent it. Working within community rules is simply part of the business you are entering. The community manager/owner is your silent partner in every transaction you do. If one community doesn't work move on to the next. 

Think of MHCs like a fenced yard with a very large dog. There are plenty of ways to get to the front door of the house but your choice has a major impact on the outcome. It may simply be a no go, you may chose to enter uninvited and suffer serious injury or you can make nice and actually be allowed to leave unscathed.