All Forum Posts by: Kyle J.

@Monte K.  A few different options.  Try using another bank.  Your Zelle limit with Ally might be $500, but I just checked my limit with Chase bank and it's $5,000 on sending money and unlimited on receiving money. 

If you don't want to switch banks, consider using Venmo.  I believe their person-to-person limit is $4,999.99.

Lastly, you might also consider using Cozy.  It's specifically for rent-collection, and I don't even think they have a limit. 

All of the above options would allow you to electronically transfer money without using checks, and are free for both you and the landlord.

@Christopher Hernandez I know you asked specifically about Southern California, but the law I think you’re referring to (AB3088, aka COVID-19 Tenant Relief Act of 2020) is a statewide law. And it actually expires at the end of this month.

While it’s true that new laws are being considered, I can’t stop doing business because of what might happen. 

As it stands presently, I have rental properties in California and haven’t had any issues renting them out, or collecting rent since COVID started. Also, if I were to have a current vacancy at one of my properties, I’d definitely re-rent it.

I’d just make sure to screen my applicants thoroughly, like I always do. 

If this is a home that you rent out and do not live in, typically you would just get a landlord policy (also referred to as a dwelling fire policy).

You can also get an umbrella policy to cover you over and above that, and that’s a separate policy (which is usually pretty cheap).

Your insurance agent should be able to advise/quote you on the best coverage. 

@Frida B. That’s actually how I do all of mine...one year lease initially followed by month-to-month. It’s more advantageous for me (the landlord) that way. Tenants leave whenever they want anyway. 

For reference, most of my tenants have been with me (as now month-to-month tenants) for 5-8+ years. 

I don’t know anything about him as an agent or investor. However, I’ll give you this...he sounds like a great salesman with his comments to you about this “lending opportunity” and how he’s giving you the “first opportunity to assist and lend” him money. 

The reality is, this could work out great for you, or it could not and you could lose all your money. I don’t have any way to tell. 

You just sound really excited. There’s nothing wrong with that, but I get the impression he’s a little more experienced than you so I just wanted you to look at things from a different perspective. 

For example, let me ask you just three basic questions. (If you don’t know any of the answers, it’s okay. However, I would then suggest you do more research before agreeing to do this loan.)

First, if you were to do this loan, do you know who should/would provide the loan paperwork? (Hint: Not him.) 

Second, if you did this loan and all you had was a “notarized contract” where you both agreed to the terms/conditions of the loan between you two (also called a promissory note), would it be a secured or unsecured loan?  (Answer: Unsecured.)

Lastly, if this loan were to go bad, what recourse is available to you and/or what legal remedies could you pursue to attempt to recover your money?

I know that no one thinks their loan will go bad, otherwise they wouldn’t do the loan. But the reality is, it can/does happen.  So it’s better to think about these things beforehand and at least know what your options are. Plus, that way you can make a more informed decision about whether to accept the risks and go ahead with doing the loan. 

Ultimately, all loans have some inherent risk. But as you become more informed, you’ll learn there are ways to reduce and lessen those risks. Though sometimes when you’re new, you just don’t know what you don’t know. Nothing wrong with that. We all started somewhere. That’s why I’m pointing some of these things out. So you can learn, hopefully without having to lose any money in the process. :)

Best of luck with whatever you decide. 

@Kristen Shook You sound pretty excited, so I’m sure you’ll likely end up doing this deal. Just know that it sounds a little risky based on what you posted. 

You said this agent knows your hopes/goals, which is to save up your money for your own investing. Yet he wants to borrow your money for his investing?

On top of that, although there’s not enough info to say for sure, it sounds like he doesn’t have enough money to even cover his closing costs and wants to borrow that from you. (Does he have any skin in his own deal?)

Lastly, if I had to guess, this is going to be an unsecured loan. (Best case scenario, it’s a second position loan.) This is a risky loan with little recourse for you if it were to go bad. 

Not trying to rain on your parade. Just want you to see this from a different perspective so you don’t lose your hard earned money and put your own investing future at risk. 

@Adam Azam Not sure what your definition of a bad tenant is, but someone who doesn’t pay the rent on time, damages my property, and violates multiple terms of the lease is pretty much my exact definition. No way I would even consider renewing her lease. 

@Haley McLaughlin I agree with @Bjorn Ahlblad. I actually won’t even process an application from someone unless they’ve seen the house.

If you rent to them site unseen, you run the risk that there could be something that they don’t like about the house once they actually see it (e.g. their couch won’t fit, bedrooms too small, don’t like the layout, etc) and they may try to back out of the lease. (I’ve actually read posts on here like that.) And by that time, you will likely have missed out on some potentially other good applicants.)

Require everyone to see it and submit an application, and then pick the best/most qualified applicant from that group as your new tenant.

Lastly, always remember, an applicant who “wants to move ASAP” is not only not your problem...it’s actually a red flag you should watch out for and do extra screening on. After all, why do they need to move so fast?

@John Plonty The process is basically the same as when you buy with a loan, except some things become optional.

For example, you no longer are required to to get an appraisal, flood insurance (if in a flood zone), or even basic home insurance. Now, all of these things are generally good ideas, and you might choose to still get them. There’s just no lender to require it.  

You should also still close though a title company to make sure any existing liens are taken care of so you end up with clear title, get an owner’s title policy (obviously you won’t have to buy a lender’s title policy though), get any necessary inspections (e.g. home, roof, pest), etc. 

If you have an agent, they can help guide you through most of this. But if you don’t have an agent, and there’s also no lender to require these things of you, it’ll be on you to know what you need and request/obtain them. 

@Sydney Sigue In my opinion, it wouldn’t be a great use of your time or money to spend either creating your own lease. Why reinvent the wheel? Especially when there are already leases out there that are attorney-approved and widely in use. 

You don’t list where you’re located, but here’s a few options generally available:

- Pretty much every state has a state lease, usually from their Association of Realtors. (For example, my state has the California Association of Realtors Residential Lease.)

-  Many states also have large rental housing associations that offer their own version. (For example, my state has the California Apartment Association that has their own lease agreement.)

- BP has their own lease agreement for each state. 

- Often times, you may be able to find an experienced landlord-tenant attorney in your area who already has a custom lease of their own. (For example, my landlord tenant-attorney has his own custom lease that he’s built/perfected based on his 40+ years in the business.)

With all these options, why bother making your own? Just seems unnecessary, not to mention the bigger risk, which is that you likely wouldn’t even know for certain whether it would be completely legal.