All Forum Posts by: Ryan Canfield

@KARLA V.  Hi Karla, I currently have 4 of my 5 units setup on Cozy.co.  Cozy is a free website for landlords as well as tenants.  They make their money off of tenant screening.  I have also used them for all of the prospective tenant screenings that I've done and I've been happy with them across the board.  I have also not had any tenants complaints since I started using Cozy in July'15.  Our tenants have their rent setup through I believe ACH which I know it seemed that you did not want to use.  There is an option to pay by credit or debit card which one of my tenants uses.  I think it is about $3/transaction that the tenant pays.
I have another tenant who still pays in check.  The property is a 7 minute drive from my house so it does not bother me that much.  I did however ask this tenant about electronic payment last month when I collected the rent.  She told me that she doesn't understand new technology and did not want to do the electronic payments. (She has never been late on rent and does not trash the apartment so this did not bother me).  
An option that I've heard of others doing that this tenant was OK with is opening a bank account at the tenants bank (or bank of your choice) and having them deposit the rent into this account.  I know there are ways to do this so the tenant cannot obtain the exact information about this bank account.
We recently had a tenant overpay us and we mutually agreed to return the overage via Google Wallet.  That was the first time I've used Google Wallet and it was an easy process to use.  I would be interested to hear of anyone else that uses Google Wallet to collect rent.

@Jason Ines Hi Jason, In my opinion, there are numerous ways for someone to get started in real estate and not one strategy is right or wrong. Different strategies work for different people. My wife and I got start by buying and living in a 3 flat. 9 months later we were able to buy another 3 flat and owner occupy that one as well. We went down the road of using a conventional mortgage on the first property and an FHA on the second to allow us to buy another property quicker. There are conventional mortgages out there that allow you to put down as little as 5% on owner occupied multi-unit properties. My advice would be to look into that option as it would allow you to buy the property with obviously less money down and allow you to buy another property quicker via FHA assuming you can qualify.
As far as finding a lender to borrow you money to buy a property from a wholesaler, I am not going to comment as I have never done this.  If I had to guess, I think it would all depend on the condition of the property and the balance owed on the seller's mortgage.  From my understanding, a lender will lend on a property as long as the property is in "livable" condition.  To my understanding, livable generally means it has functional mechanicals, plumbing, electric, kitchen and bath areas.  Just because something is outdated does not mean it is not livable.  Going off of that, if you were able to find a property that is livable and the other factors are all in your favor that may be a viable option.

Good luck to you!

@Ajay Keluskar  Hi Ajay, Like the others are saying in this thread, you cannot get discouraged by one bad property.  I looked at a property last week that was on the market for about 2 days before I saw it.  Nearly the same situation as the property you visited, this one was listed for about $300K less than fixed up properties in the immediate area.  The outside needed some updates but did not give off an impression that the inside was completely wrecked.  The inside layout was not friendly, both the 1st and 2nd floors needed a complete rehab, electric, plumbing, layout - EVERYTHING.  Then we go down to see the basement, oh the basement.  Literally mold everywhere, the floors, the walls, the ceiling, it was disgusting.  The property has been vacant for just about 3 years.  
The initial asking price is what peaked my interest to go see the property knowing what it would sell & rent for in good condition but good grief that property was a mess.  It seems that there is a reason why properties are listed at such a discount compared to properties in good condition within the same neighborhood.

@Cassidy Burns  Hi Cassidy, I know what you mean, it's frustrating when you want to get started but there are obstacles in your life preventing you from doing so.  As someone who is currently house hacking their second house, that is where my thoughts lie.  Do you have a significant other that you share your house with?  If not, are you able to rent out rooms of your house to offset your mortgage?  Are you able to sell your current property and buy a flat that you could house hack to offset your monthly living expenses?  Can you sell your car and buy a used one to lower your monthly expenses thus reducing your debt to income ratio?
I don't think there is any harm in continuing to meet with banks in hopes of finding one that says yes, but if your debt to income ratio is too high, are you prepared to do what it takes to lower this to give yourself an opportunity to buy another property? 

@Benjamin Allen  Hi Benjamin,  I agree, keeping a roof over their children's heads should be high on the priority list, thus providing the landlord with the money rent.  I have only had to deal with rent being late 1 time and I received the rent + the late fee on the agreed upon date.  I never received rent late again, I even received it early on another occasion because the tenant told me he had something come up in his life.
I would give them to the agreed upon time later today to pay the rent + the late fee.  If not, in my opinion you should serve them a 3 or 5 day notice and move forward with the eviction process.  I would guess to say that if the tenant is having trouble providing rent on-time they are not going to be able to provide you with a security deposit.  The last thing you want is to have this become a regular occurrence and a monthly headache/added stress for you.  If you do want to keep the tenant, maybe by you demonstrating to this tenant that you are serious will be the wake-up call that this tenant needs to know that you are messing around and you will pursue eviction if needed.

@Benjamin Allen  Hi Benjamin, did you communicate it to them in advance of them signing a new lease with you or at the time of signing the lease?  I bought a property and inherited 2 tenants as well.  Neither of the tenants had an active lease, they were both MTM leases but one of them did have a security deposit from their original lease which I inherited and provided the tenants documentation stating they I now had their deposit and it would be returned to them assuming the apartment is in the same condition as when I bought the property since there was no record of their original lease and move-in condition. 
The other tenant did not have a security deposit and we had a discussion of if they were going to continue to live in the apartment I would be needing a 1 year lease from them as well as a security deposit.  They had a 2 month heads up that a security deposit would be needed and given that I had not had any issues with this tenant during their MTM period with me, I would allow them to spread the security deposit out over 2 months.  I know I took a gamble with this and unfortunately it did not come back to bite me.  I think it comes down to communicating with and working with the tenant in your situation.  Are you willing to spread out the security deposit over a month or two with them? 

@Thomas Clark   Hi Thomas, another aspect that residential real estate investors can fail at least from a house hacking perspective is not treating the house as a business.  My wife and I are house hacking our 2nd property in the last 15 months and we've had a wonderful experience and I've often like you, wondered how someone could not be successful at it.  We know a married couple who recently bought a 3 flat literally on the next street over of us who've not gone about it the right way and so far things are not going well for them.  Like others have posted in this thread, you need to have reserves and recognize that things will go wrong and you have to be able to weather the storm. 

The couple that we know, have had their basement flooded twice, cleaned it out but have not done anything to prevent it from happening again.  They bought the house in fair condition knowing that they need to put some money into it to not only improve the future value but to also improve the current cosmetics.  So far, they have not done either.  They actually had a tenant in the basement during their 2nd flood, and their solution was to move the tenant up to the 1st floor since it was already conveniently vacant.  They then moved in her sister and her boyfriend, they are not charging them for rent.....  So far they are failing in my eyes because they are not taking their house and house hacking strategy seriously.  To me, just because you are house hacking does not mean you're going to be successful at it.  Like anything in life, in order to be successful you need to work hard.  I can't fault this couple we know because it's their life and they are living it and using their property for how they want.  We can talk to them and give our suggestions until we are blue in the face but at the end of the day, if someone doesn't want to change their ways and be successful, you can't make them.  

While I get your perspective about how can someone fail with residential real estate, I think it's incredibly easy to fail.  Life happens in different ways for different people and they sometimes handle the problem in a way that they will not succeed.

@Daniel Orkin  Hi Daniel,  send me a PM and I would be happy to give you my roofer's information who I've used twice and been very happy with.  He also did a nice job tuckpointing my chimney.

@Clementene Taylor Hi Clementene, if you are willing to do so, buying a duplex or even a 3 or 4 flat if you have them in your area would be an incredibly smart thing to do. My wife and I are currently house hacking our 2nd property and we've enjoyed it so far. The biggest drawback that I can think of is obviously you are living right next to your tenants. We are fortunate enough that we live in an area where quality applicants want to live and we do not have to live next to sketchy people. The biggest advantages that immediately jump out to me are you are getting experience firsthand at being a landlord and will find out right away if you have what it takes to be a buy and hold investor. You are also substantially reducing your monthly living expenses by having your tenant pay a portion of your mortgage in the property you live in. You are also able to buy the property with a smaller down-payment as an owner occupant. More than likely you could probably qualify to use a conventional mortgage with 5% down to get into a duplex. If not, there is generally the option to use an FHA loan with 3.5% down to buy the property. The FHA option has a few fees associated with it and you have to refinance to eliminate the monthly PMI as with the conventional loan the PMI automatically drops off once you get to roughly 78% equity.

@Account Closed  Hi Chandra, I think the feeling is normal as well.  I remember when we made our first offer we were extremely nervous.  You start to wonder what will happen if for whatever reason you decide you want out of the deal.  If you are working with an agent and put in the proper contingencies, there is nothing to be worried about.  Even when we bought our 2nd house we were still nervous when putting in an offer and afterwards we were still nervous!  Pretty soon it won't faze you!

Good luck!