All Forum Posts by: Tom Ott

So glad to be a part of such an amazing community. I have been reading BP content for a long time and looking forward to connecting with like minded folks.

I have been investing in Real estate in the form of wholesaling and rehabbing for the last 18 months while working full time. I am interested in taking my profits and buying my first long term rental property.

I also want to learn how to buy 6+ unit properties and structure mutually beneficial deals with other investors.

Best,

Carlo

Hello Carlo,

First off, I would like to say congratulations! It sounds like you have made great progress in the REI world. Sometimes it's not easy, but you made it work!

I would like to say that buying and holding is an excellent idea. It really guarantees a significant cash flow. My company specializes in turn key investment properties. We rehab every house and we help investors prepare for buy and hold. If you have any questions about it, feel free to contact me. I can help answer any questions you have.

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Originally posted by @Rob Campbell-Nixon:

I have been thinking about add a line on my rental application which would require a w-2 for the last two years from all applicants. My hope is that this will make screening a tenant's income/ job history easier and more accurate and it will help deter those who would try to lie about it and maybe put down a friend as there "boss". I already check facebook/ linkedin etc. to try to stop that, but does anyone have experience with requiring a w-2? Did it work, did it not work? Is there specific wording I should use?

Hello Rob,

That is a great idea, but sometimes people do not have their w-2s. I like to ask them for their most recent paystubs. I even ask for bank statements. Get the phone number and name of the their company. Search the phone number online and see if it comes up for that company. That is a great way to find out if it is the right phone number.

If you do not feel the paystubs are enough, you may ask for their bank statements. Those are simple to get and everyone should have them. You can see how often they get paid and how much. It is a good tool to verify their income.

I know it seems tricky, but some people are very hesitant to give copies of their w-2s.

Please let me know if you have any questions.

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Originally posted by @Jeff Ausdemore:

Originally posted by @Tom Ott:

Originally posted by @Jeff Ausdemore:

Hello BP'ers!

My wife and I are wrapping up the details on our 2nd SFH here in the Dallas-Fort Worth area. Thanks to a few meet ups and the fantastic podcasts/webinars on BP, we're "all in" these days for real estate to be a major wealth generating opportunity for us long term.

Thus far, we've been VERY fortunate with our renters, because we spend quite a bit of time vetting them to the very best of our ability. It's been nearly flawless so far. We've used Trulia, Zillow, Hotpads, Postlets, and Craigslist to post the ad, and we follow up with My Smart Move .com for the screening process.

Is there a better site/method to your success?

Thanks in advance for your replies/opinions!

Hello Jeff,

It seems you are already doing a great job! Those sites you named are great places to post ads for renters. I use them all of the time in my own work. Many times you come back with great tenants, and sometimes, not so great tenants. As long as you trust the site you are using for vetting, I am sure you are making the right moves.

Some helpful things I like to think of are:

Have them sign an authorization form, which allows you to look up their credit report and do a background check. Never simply look at a credit SCORE, but make sure you look at the whole REPORT. Someone could have a good score, but owe a lot of money on collections. (I know, but it happens)

Analyze their credit report and if you feel comfortable, do a background check and make sure their criminal history checks out.

Another key factor is employment history. Make sure they have a job of course! You also want to make sure they have had the job for more than a few days. Remember their ability to keep their job (or have a steady income) will directly effect their ability to pay the rent.

We always have them submit pay-stubs. 2 - 3 most recently ones give us the information we need. You want to use that information to check to make sure they have enough money to pay their bills, including the rent. We don't normally ask for a license until they are signing documents, but that might be different depending on your state.

Please let me know if you have any questions!

Great stuff, Tom- thank you very much!

I'm happy I could help, Jeff. Please let me know if you have any questions!

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Originally posted by @Marvin Meng:

How long is it customary to keep:

Old leases?

Applications (accepted and rejected)?

Thanks!

Hello Marvin,

This is a great question. I would recommend holing on to leases for at least 10 years. You never really do know when you will need them. I don't think you should hang onto the leases in hard copy form because they could take up a lot of space. You could use Dropbox or Google Drive to keep the documents saved online.

In terms of applicants, denied or accepted, I would hold onto for about 4 years. Sometimes it comes up where someone will apply twice or you may need to refer to them for a different reason. Same thing, you should save them online to save space.

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Originally posted by @Ian Dyer:

Thank you to each of you. I'm new to BiggerPockets, but I can already see the value of time spent on the site. We are now using Postlets and are amazed at the number of responses. We'll look into Appfolio.

Hello Ian,

Speaking from experience AppFolio is a great tool! It really helps you manage through all of your properties and tenants. It also offers a way for your tenants to pay online. Let me know if you have any questions about it!

1 Vote

****24281 DEVOE AVENUE, EUCLID, OHIO 44123****

Cozy 3 bedroom and 2 full bathroom Cape Cod offering 1,305 square feet of living space. The property has been completed renovated inside and out. New hardwood floors. Living room with large picture window. Kitchen with new oven/stove and refrigerator. Formal dining room with a ceiling fan. 2 bedrooms on the first floor with ceiling fans and closets. The entire second floor is the master bedroom with some built-ins and two closets. Full partially finished basement with the second full bathroom and laundry area. Covered and screened in back patio. 1 car detached garage. The fenced in backyard looks out to the 6th hole on Briardale Golf Course, don't worry there is a 20-30 foot hit net protecting the home. This cozy Cape Cod is located in Euclid, Ohio.

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http://www.cityofeuclid.com

Less than 10 minutes away from the highly acclaimed and award winning Cleveland Clinic, University Hospitals, and Case Western Reserve's main campuses.

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****24281 DEVOE AVENUE, EUCLID, OHIO 44123****

** The performance information shown are projections. These are not actual results. These projections are based upon various assumptions and representative properties. No representation is being made that a performance record similar to the projected returns will or is likely to be achieved.

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Originally posted by @Laura Hamilton:

Hi,

My husband and I are about to rent out our first investment property and need some advice, please.

Currently we're checking out our prospective tenant's information, including previous landlords and employers. To receive information from the previous landlords we have the tenant's authorization on the rental application to do that, but I wonder if it's normal practice to scan the papers and email the information to the previous landlords (so they can see the application and tenant's authorization to do that)? Why I'm asking this is because the application obviously includes their SSN and other private information and personally I always try to minimize sharing this kind of information about myself in an email.

Yet, I wouldn't want to drive around showing the paper personally to the previous landlords either. And I don't have a fax, so can't fax it.

Thank you in advance for the advice!

Laura

Hello Laura,

This is a great question, and one that I handle a lot! Getting information from past landlords is very important. It helps you find out what kind of tenant you can expect. First off, great job thinking of the authorization, you'd be surprised how many people forget that.

What I like to do is have a separate authorization form. I have it separate from the rest of the application. It is simple and states that the applicant is granting me permission in getting their information from past landlords. Have them sign and date it. This way when you need to scan anything with that form it does not have any revealing information on it. As long as it clearly states what you can do and they have signed it you should be in the clean.

I hope this helped! Please let me know if you have any questions!

2 Votes

Originally posted by @Terry Jacobsen:

Originally posted by @Tom Ott:

Originally posted by @Terry Jacobsen:

Has anyone had a tenant call there pet a service animal and try to get around the pet fee?

Hello Terry,

This is a great question! Yes, there is such a thing as a service animal. However, there will be documentation of it, either by a doctor or a license of some sort. A person cannot simply say it is a service animal because they think it is. That is an official title given to animals that actually do provide a service to the owner.

Also, if the animal is in fact a service animal, then you cannot charge a pet fee. If you charged a fee, that would be discrimination. I believe all state laws are the same, but I could be wrong. That would be like charging someone a wheelchair fee. You simply cannot do that.

There has been many instances of pet owners claiming their animals are service animals, but without proper documentation, then it is just a pet.

Make sure you get all of the documents on file so you know. I hope this helped! I know it can be a tricky situation.

Thanks for the help Tom. Have a great 2016 Terry J

Thanks! Same to you! Best of luck in the REI world!

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Originally posted by @David Pierce:

What are your thoughts on turn key investment businesses that handle all aspects of the investment to the management? Seems like a better option for out of state investing

Hello David,

Speaking from experience I can tell you that turnkey investing is an excellent idea for someone out of state. It is very difficult to manage your own property, or manage maintenance to a home you can't really get to quickly.

At my company we have plenty of investors who are from out of state. The best thing you should do is find a company who sells turnkey properties that are rent ready, and will also manage them for you. Sometimes companies will offer turnkey homes, but after the sale they leave you on your own.

I can tell you it is much easier to have a company manage the turnkey you just purchased. It leaves everything on your end pretty simple as well.

Please let me know if you have any questions!

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Originally posted by @Ben Staples:

Hi Everyone,

This is my first ever forum post!

My short story: I had my first ever "Vacancy" and successfully filled it in one week! I put vacancy in quotes because I don't actually own the property; I am renting.

A little about me: I am two years out of college and renting in the Boston area. I had a curiosity about real estate all throughout high school and into college, but never took the time to look into it. Now that I'm out of college, I've been reading as much as I can, learning as much as I can, and am now searching for cash flowing multifamily (2-3 unit) properties to either house hack, or invest in. So far, no luck, but I believe with enough determination I will eventually be able to find a property. Until then, I will continue to rent.

Currently, I live in a duplex with a roommate from college, and my landlords living above us. It is a well-kept, beautiful property, and my landlords are a late 70s couple with a focus on enjoying life. Last month, my current roommate told me he was moving to New York to live with his girlfriend. PSH.

He has been a great roommate, and I was really bummed. What I was also down about was the prospect of giving up this immaculate apartment and great landlords. I had a decision to make: either look for a new place to live or try to find a roommate.

Option 1: Look for a new roommate I know, and stay at my current apartment: I asked college friends, posted on facebook, asked people at my J.O.B. and unfortunately had no luck. I wanted to get moving and find a solution fast, so I moved on to option 2.

Option 2: Look for a new place to live with people I know: I asked around, had a few soft leads. Eventually I went to check out a place, and while I believe I could get along with the people there, the quality of the apartment was a definite downgrade. There were reductions in amenities, space, and overall upkeep of the property that I couldn't overlook. PLUS, moving is a huge pain in the butt.

Option 3: Finding a Stranger: With a focus on a buy and hold strategy, I have read many tenant screening postings including **The Ultimate Guide to Screening Tenants** and decided to use this challenge as an opportunity to test what I was reading. I've used Craigslist maybe twice before this. I sold a few things, and have had no weird interactions to date. That being said, I've heard stories of the craigslist killer, and other nightmares, so I definitely had my guard up.

So I began on this quest. I took pictures of the apartment with my landlords permission, focusing on the exterior of the house for the cover shot, and turning on as many lights as possible inside to keep things bright. While I do photography on the side, I decided to use my iphone for simplicity and its wide angle. I looked at competitive ads, and tried to replicate what they were doing well, and improve on their weaknesses.

Within the first hours I got about six responses. I decided to use a trello board as a mini CRM for this experiment. For those of you familiar with trello, I created a few lists;

"Email Lead" when an email comes in,
"Questionnaire sent" when I emailed them my pre-screener,
"Physical Visit" when they passed my prescreen and I scheduled an in person visit,
"Awaiting Application" I gave an application to everyone that came to a physical visit
"Application Received" When I received their application
"Background check" when they passed the application review and were sent a background check request
"To Landlords" when they passed the background check and now needed to be reviewed by the decision makers
"To Deny" for anyone that did not meet criteria

If anyone wants to see what this trello board looks like, let me know

For the background check, I used the SmartMove program recommended in the ultimate guide to tenant screening and it worked very well. It was very convenient, and allowed the applicant pay the background check fee directly through the system.

Overall this experience was great, and I believe I have found an awesome new roommate. He moves in September so I won't know for sure until then. Hopefully he doesn't murder me.

A few things this has taught me

Keeping a property well maintained is definitely enough to stop a tenant (me) from moving
Paying for those extra finishing touches seems to not only command higher rents, but also get a higher quality of applicants (and I hope tenants)
I very tightly scheduled individual showings. If I was looking for a pure tenant, and not a roommate, I would have definitely used a group showing approach, but because I wanted the chance to meet these people and find out if they were killers, I also needed to get to know them
Finding a new roommate/tenant was an enjoyable experience. Maybe I have a future in property management…

Let me know if you have any feedback, comments, or questions

Hello Ben,

First of all I would like to say congratulations! Welcome to the world of REI. It is great, and I know you will love it. It seems you are taking your first steps in becoming very successful. I wish you the best of luck going forward!

Please let me know if you have any questions.

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All Forum Posts by: Tom Ott

Tom Ott has started 941 posts and replied 4593 times.

Post: Wholesaled, Flipped, now looking to Buy and Hold

Post: Rental Application - w-2 tax forms

Post: What's your favorite site (or method) to find your next tenant?

Post: Record keeping?

Post: What are best ways to advertise a rental in Southern California?

Post: Investor Wanted 100%Turnkey SFR - 2015 REHAB - 22%ROI - Managed

Post: Tenant screening and protecting their information

Post: Pet Fee

Post: Turn key services

Post: My First Successful Tenant Screen!