All Forum Posts by: Tim Swierczek

Also, the cost of buying a place in need of upgrades is sneaky because if you are paying or a 7% cap rate today but the place will need to up updated to maintain competitiveness in the future you can be in for some lean years.  IMO cap rates of 7% or less are only worth it if the neighborhood and building are both great.  

Hi @Kelly Conrad , yes you must pay 1% interest on the damage deposit for the entire time the tenant has the deposit with you.  This is MN law and has been for many years.  It's possible your previous landlord broke the law, but that was very stupid of him or her, since 1% works out to almost nothing per year, and its an easy way for a tenant to beat you in court on a much larger issue.  You always want to appear to the courts to be a knowledgeable and law following landlord, and this is one of the easiest ways to do so.  The math would look like this.  

Deposit $1,300

Deposit retained 17 months

1300*.01= $13/year interest

13/12= $1.08 monthly interest

1.08x 17 months= $18.36 interest owed

@Deanna McCormick Thank you, this is great and timely. You are my favorite contributor on BP.  Is this part of your lease or is only sent at move out?

Hey @Todd Dexheimer, I'm familiar with Todd Grill, do you know of anyone else in the TC that does Self Directed IRAs?

I am also very interested in meeting a person who is an expert on self-directed IRA's.  Please tag me in your response

You shouldn't have problems at that time.  You may have a few issues before that, depending on how the "group home" vibe is.  The 4th unit may be harder to rent traditionally so make sure that is reflected in your offer.  You will need to give everyone notice of your intent to change the rental structure when their lease expires, and then fill it as you normally would.

@Jestin Sorenson your analysis is totally flawed. When analyzing DTI you don't take one applicant's gross income and the totals of their debt obligations and then speculate what their potential student loan payments are going to be. The total they owe has little to do in most cases on what their monthly payments. Smart move will tell you their monthly payments, you must by law use those payments. You can have a written policy to determine a fair and reasonable buffer for the student loans but denying them outright Because of their total debt an easy case to win on a violation of either the Equal Credit Opportunity Act or the Fair Housing Act.

You need to come up with a fair and reasonable way to deal with this situation and your current analysis is not close.  Your experience with student loan repayment plans is out of date, the options have expanded greatly in the past few years http://www.ibrinfo.org/what.vp.html#IBR and even Freddie Mac & Fannie Mae recognize this http://www.fanniemae.com/portal/media/financial-ne...

It's cool to figure out your criteria and I'm glad your screening tenants, but you are making too many assumptions and frankly you are using facts that are not relevant and your assumptions are far from sound.  You need to seek better advice.  Based on what you have written you will not have grounds to deny them.

May I suggest that you find a reasonable criterion to estimate their future payments on these debts, and no $2,600 on 101,000 is not what people pay.  It is more likely the payment would cap at $1010 and be as low as zero for up to 10 years, after which the income would be forgiven depending on the person's current income a type of employment.

I think you are likely ready to deny good tenants, but even if they are bad tenants you are for sure denying them on unsound criteria and analysis.

opps I mean to add great, share thanks for the motivation

@Lee Yan

@DuWayne Jones just look it up yourself.  https://www.revisor.mn.gov/statutes/?id=82

Start at 82.66 and read downward.  You will know what to look for and you should have your answer.  In the end, if you violate state law on this issue you risk much more than scaring someone in with a purchase contract.  Note:  these laws are for a standard non-distressed sale and do not include disclosure requirements for contract for deeds or owner financing.  Even worse are the requirements for foreclosure bailout transactions.  Do not even consider attempting one of those without having the correct disclosures.  The penalties are more than severe.