*** Official Real Estate Forum *** (3 Viewers)

Random said:

BassNBrew said:

Random said:

Good lord, 2 out of 1500???

I had someone look at the place thats for rent a few weeks ago, fill out an app with an ASAP move in date. App was approved, they paid 800 of 1150 due (575 rent and dep) on a Wed and was supposed to sign the lease and pay the balance on a Friday. They called Friday morning and said his pay got cut and they were not going to be able to take the place. I refunded everything less a few days rent, and some expenses we incurred to prepare the place to their requests (remove appliances they were bringing their own and installing a handrail somewhere completely unnecessary).

Also, not very long ago I had someone fill out an app, got approved paid the deposit and never called to sign the lease despite me calling and leaving numerous messages, texts, etc. After 30 days I rented the place to someone else. She then called and asked for her deposit back.

Same timeframe as above I took a deposit from a couple (mistake here was that it was a check), supposed to sign a few days later (they had just lost the place they were staying to a fire). They never called to sign. I ended up getting a hold of them after a few days and they said they found someplace else. I told them they were on the hook until I got it rented and I would refund the remainder of the deposit. They did not agree with this and called the bank and cancelled the check. After it had cleared my account.

Bottom line is while I'm sure this has worked more than it hasn't for me, when it doesn't work out it puts me in a very bad position. I have started telling the people I approve to call me when they have $X and if the place is still available we can sign a lease.

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I can understand that. I takes all types and you seem to be getting more than your fair share. Got do what works best for you.

By the way, I think you would lose in court if you kept a security deposit without having a signed lease unless you had some type of binder clause in your application. I have people try to give me money all the time and I just tell them to keep it until they return the the signed lease. That's probably easier for me since I have online payment options and application and can conduct transactions remotely.

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I think my stuff and tenants may be a little lower end than yours, and that may be one reason I get more wishy washy people than you. Or maybe its something I'm doing wrong. I'm certainly re-evaluating my screening/deposit/lease signing process.

While I have no idea if it would hold water in court (Ohio and esp the county I work in seems to be pretty LL friendly), I do have the following at the bottom of my app:

"I understand that my deposit may be applied toward the rent loss if this application is approved and I am unable to fulfill the conditions of the occupancy."

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BassNBrew said:

Random said:

BassNBrew said:

Random said:

Good lord, 2 out of 1500???

I had someone look at the place thats for rent a few weeks ago, fill out an app with an ASAP move in date. App was approved, they paid 800 of 1150 due (575 rent and dep) on a Wed and was supposed to sign the lease and pay the balance on a Friday. They called Friday morning and said his pay got cut and they were not going to be able to take the place. I refunded everything less a few days rent, and some expenses we incurred to prepare the place to their requests (remove appliances they were bringing their own and installing a handrail somewhere completely unnecessary).

Also, not very long ago I had someone fill out an app, got approved paid the deposit and never called to sign the lease despite me calling and leaving numerous messages, texts, etc. After 30 days I rented the place to someone else. She then called and asked for her deposit back.

Same timeframe as above I took a deposit from a couple (mistake here was that it was a check), supposed to sign a few days later (they had just lost the place they were staying to a fire). They never called to sign. I ended up getting a hold of them after a few days and they said they found someplace else. I told them they were on the hook until I got it rented and I would refund the remainder of the deposit. They did not agree with this and called the bank and cancelled the check. After it had cleared my account.

Bottom line is while I'm sure this has worked more than it hasn't for me, when it doesn't work out it puts me in a very bad position. I have started telling the people I approve to call me when they have $X and if the place is still available we can sign a lease.

Click to expand...

I can understand that. I takes all types and you seem to be getting more than your fair share. Got do what works best for you.

By the way, I think you would lose in court if you kept a security deposit without having a signed lease unless you had some type of binder clause in your application. I have people try to give me money all the time and I just tell them to keep it until they return the the signed lease. That's probably easier for me since I have online payment options and application and can conduct transactions remotely.

Click to expand...

I think my stuff and tenants may be a little lower end than yours, and that may be one reason I get more wishy washy people than you. Or maybe its something I'm doing wrong. I'm certainly re-evaluating my screening/deposit/lease signing process.

While I have no idea if it would hold water in court (Ohio and esp the county I work in seems to be pretty LL friendly), I do have the following at the bottom of my app:

"I understand that my deposit may be applied toward the rent loss if this application is approved and I am unable to fulfill the conditions of the occupancy."

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Probably on average it is. My personal stuff on average is lower end than my business stuff and my struggles are directly proportional to my rent prices. Actually proportional isn't the right word since it's more like an exponential curve.

The reason I don't think it will hold water is because they haven't seen the lease. Basically you are asking the to be contractually bound to a contract they haven't seen or signed. You sound like an aggressive guy who is on top of things. I think giving them 24 hours to sign a lease and bring you security deposit and first month's rent would work fine. Can't met that deadline, then call me when you can and if it's still available we'll do business.

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Random said:

BassNBrew said:

Random said:

BassNBrew said:

Random said:

Good lord, 2 out of 1500???

I had someone look at the place thats for rent a few weeks ago, fill out an app with an ASAP move in date. App was approved, they paid 800 of 1150 due (575 rent and dep) on a Wed and was supposed to sign the lease and pay the balance on a Friday. They called Friday morning and said his pay got cut and they were not going to be able to take the place. I refunded everything less a few days rent, and some expenses we incurred to prepare the place to their requests (remove appliances they were bringing their own and installing a handrail somewhere completely unnecessary).

Also, not very long ago I had someone fill out an app, got approved paid the deposit and never called to sign the lease despite me calling and leaving numerous messages, texts, etc. After 30 days I rented the place to someone else. She then called and asked for her deposit back.

Same timeframe as above I took a deposit from a couple (mistake here was that it was a check), supposed to sign a few days later (they had just lost the place they were staying to a fire). They never called to sign. I ended up getting a hold of them after a few days and they said they found someplace else. I told them they were on the hook until I got it rented and I would refund the remainder of the deposit. They did not agree with this and called the bank and cancelled the check. After it had cleared my account.

Bottom line is while I'm sure this has worked more than it hasn't for me, when it doesn't work out it puts me in a very bad position. I have started telling the people I approve to call me when they have $X and if the place is still available we can sign a lease.

Click to expand...

I can understand that. I takes all types and you seem to be getting more than your fair share. Got do what works best for you.

By the way, I think you would lose in court if you kept a security deposit without having a signed lease unless you had some type of binder clause in your application. I have people try to give me money all the time and I just tell them to keep it until they return the the signed lease. That's probably easier for me since I have online payment options and application and can conduct transactions remotely.

Click to expand...

I think my stuff and tenants may be a little lower end than yours, and that may be one reason I get more wishy washy people than you. Or maybe its something I'm doing wrong. I'm certainly re-evaluating my screening/deposit/lease signing process.

While I have no idea if it would hold water in court (Ohio and esp the county I work in seems to be pretty LL friendly), I do have the following at the bottom of my app:

"I understand that my deposit may be applied toward the rent loss if this application is approved and I am unable to fulfill the conditions of the occupancy."

Click to expand...

Probably on average it is. My personal stuff on average is lower end than my business stuff and my struggles are directly proportional to my rent prices. Actually proportional isn't the right word since it's more like an exponential curve.

The reason I don't think it will hold water is because they haven't seen the lease. Basically you are asking the to be contractually bound to a contract they haven't seen or signed. You sound like an aggressive guy who is on top of things. I think giving them 24 hours to sign a lease and bring you security deposit and first month's rent would work fine. Can't met that deadline, then call me when you can and if it's still available we'll do business.

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While I understand what you are saying from a legal perspective, I have never had anyone dispute the terms of the lease. And to be honest, most don't even read it. And to take it even a step further, most don't even keep it after they move in. I know this because they text me asking where to mail rent. When I tell them its on the lease they "can't find the lease".

Anyway, I get what you are saying, but no one has yet to use that as a reason.

The part about giving them 24hrs to have deposit & rent is pretty much what I have evolved to doing, though I also let them know they are welcome to call when they get rent & dep and if the place is available they can sign then.

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ghostguy123 said:

Plumbing problems suck.

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Random said:

ghostguy123 said:

Plumbing problems suck.

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Supply or Drain?

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Random said:

We started in a similar way to you. We flipped two properties in 06 and 07 (one broke evenish, one did well). Used our primary residence HELOC (and 0% credit cards) to purchase and rehab those. At that time you could get 0% cards and not pay a dime for two years.

In 08 we went on to our third flip using the same HELOC, which was paid off from the sale of the prior house. This one turned out to be our first rental because this is when the housing crash hit us. I think we paid 50 for this place and had about 10 in rehab on it. Once we got it rented and realized we were going to be holding it for a while, we opened a HELOC on that property (HELOC#2). The house appraised for about 90K and the bank gave us a 65% LTV line. We used that HELOC to get house #3 which we purchased for about 30 and put about 5 in rehab in it. Opened HELOC #3 on this property and used it to buy house #3 (paid 28, rehab 5) opened HELOC #4, purchased rental #4. By this time they started to get really cheap as the purchase prices went to 20, 11, 9, 15, 15, and I think we ended up paying about 15 for each one after that. Including two duplexes.

Sometime during that purchasing spree I refi'd my primary residence and rolled that equity line into the mortgage. So today we are sitting with 4 open HELOCs and only one of them has a balance.

Pretty sure its mostly documented in this thread.

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Sand said:

Just moved into the new house. The cost of money is awesome right now - locked into a 15 year 2.875% rate loan.

Now I just have to sell the old place or I'll end up being a landlord...

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Tiger Fan said:

Random said:

We started in a similar way to you. We flipped two properties in 06 and 07 (one broke evenish, one did well). Used our primary residence HELOC (and 0% credit cards) to purchase and rehab those. At that time you could get 0% cards and not pay a dime for two years.

In 08 we went on to our third flip using the same HELOC, which was paid off from the sale of the prior house. This one turned out to be our first rental because this is when the housing crash hit us. I think we paid 50 for this place and had about 10 in rehab on it. Once we got it rented and realized we were going to be holding it for a while, we opened a HELOC on that property (HELOC#2). The house appraised for about 90K and the bank gave us a 65% LTV line. We used that HELOC to get house #3 which we purchased for about 30 and put about 5 in rehab in it. Opened HELOC #3 on this property and used it to buy house #3 (paid 28, rehab 5) opened HELOC #4, purchased rental #4. By this time they started to get really cheap as the purchase prices went to 20, 11, 9, 15, 15, and I think we ended up paying about 15 for each one after that. Including two duplexes.

Sometime during that purchasing spree I refi'd my primary residence and rolled that equity line into the mortgage. So today we are sitting with 4 open HELOCs and only one of them has a balance.

Pretty sure its mostly documented in this thread.

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Were these HELOCs interest only?

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Random said:

Tiger Fan said:

Random said:

We started in a similar way to you. We flipped two properties in 06 and 07 (one broke evenish, one did well). Used our primary residence HELOC (and 0% credit cards) to purchase and rehab those. At that time you could get 0% cards and not pay a dime for two years.

In 08 we went on to our third flip using the same HELOC, which was paid off from the sale of the prior house. This one turned out to be our first rental because this is when the housing crash hit us. I think we paid 50 for this place and had about 10 in rehab on it. Once we got it rented and realized we were going to be holding it for a while, we opened a HELOC on that property (HELOC#2). The house appraised for about 90K and the bank gave us a 65% LTV line. We used that HELOC to get house #3 which we purchased for about 30 and put about 5 in rehab in it. Opened HELOC #3 on this property and used it to buy house #3 (paid 28, rehab 5) opened HELOC #4, purchased rental #4. By this time they started to get really cheap as the purchase prices went to 20, 11, 9, 15, 15, and I think we ended up paying about 15 for each one after that. Including two duplexes.

Sometime during that purchasing spree I refi'd my primary residence and rolled that equity line into the mortgage. So today we are sitting with 4 open HELOCs and only one of them has a balance.

Pretty sure its mostly documented in this thread.

Click to expand...

Were these HELOCs interest only?

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Yes. The interest is automatically deducted (paid) from our business checking account at the same bank. I also log in at the end of the month and transfer whatever surplus is in the business checking to the HELOC, paying it down. I think our total interest is under $150/mo.

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Tiger Fan said:

Random said:

Tiger Fan said:

Random said:

We started in a similar way to you. We flipped two properties in 06 and 07 (one broke evenish, one did well). Used our primary residence HELOC (and 0% credit cards) to purchase and rehab those. At that time you could get 0% cards and not pay a dime for two years.

In 08 we went on to our third flip using the same HELOC, which was paid off from the sale of the prior house. This one turned out to be our first rental because this is when the housing crash hit us. I think we paid 50 for this place and had about 10 in rehab on it. Once we got it rented and realized we were going to be holding it for a while, we opened a HELOC on that property (HELOC#2). The house appraised for about 90K and the bank gave us a 65% LTV line. We used that HELOC to get house #3 which we purchased for about 30 and put about 5 in rehab in it. Opened HELOC #3 on this property and used it to buy house #3 (paid 28, rehab 5) opened HELOC #4, purchased rental #4. By this time they started to get really cheap as the purchase prices went to 20, 11, 9, 15, 15, and I think we ended up paying about 15 for each one after that. Including two duplexes.

Sometime during that purchasing spree I refi'd my primary residence and rolled that equity line into the mortgage. So today we are sitting with 4 open HELOCs and only one of them has a balance.

Pretty sure its mostly documented in this thread.

Click to expand...

Were these HELOCs interest only?

Click to expand...

Yes. The interest is automatically deducted (paid) from our business checking account at the same bank. I also log in at the end of the month and transfer whatever surplus is in the business checking to the HELOC, paying it down. I think our total interest is under $150/mo.

Click to expand...

Interesting, I'm in a very similar boat. I have a property that I'm eyeing where I can purchase it close to 100% (depending on final price) out of our HELOC (10 year IO @ prime - currently 4%). I think I can end up cash flowing about $1500/month from it, which I would definitely put it all back into the principal. I want a rental portfolio for retirement, I don't need any of the cash from the properties right now.

My only question is whether it's worth while to pay 100% from the HELOC or not. All the math is in my head right now, and I haven't had the time to put it all on paper

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BassNBrew said:

Tiger Fan said:

Random said:

Tiger Fan said:

Random said:

We started in a similar way to you. We flipped two properties in 06 and 07 (one broke evenish, one did well). Used our primary residence HELOC (and 0% credit cards) to purchase and rehab those. At that time you could get 0% cards and not pay a dime for two years.

In 08 we went on to our third flip using the same HELOC, which was paid off from the sale of the prior house. This one turned out to be our first rental because this is when the housing crash hit us. I think we paid 50 for this place and had about 10 in rehab on it. Once we got it rented and realized we were going to be holding it for a while, we opened a HELOC on that property (HELOC#2). The house appraised for about 90K and the bank gave us a 65% LTV line. We used that HELOC to get house #3 which we purchased for about 30 and put about 5 in rehab in it. Opened HELOC #3 on this property and used it to buy house #3 (paid 28, rehab 5) opened HELOC #4, purchased rental #4. By this time they started to get really cheap as the purchase prices went to 20, 11, 9, 15, 15, and I think we ended up paying about 15 for each one after that. Including two duplexes.

Sometime during that purchasing spree I refi'd my primary residence and rolled that equity line into the mortgage. So today we are sitting with 4 open HELOCs and only one of them has a balance.

Pretty sure its mostly documented in this thread.

Click to expand...

Were these HELOCs interest only?

Click to expand...

Yes. The interest is automatically deducted (paid) from our business checking account at the same bank. I also log in at the end of the month and transfer whatever surplus is in the business checking to the HELOC, paying it down. I think our total interest is under $150/mo.

Click to expand...

Interesting, I'm in a very similar boat. I have a property that I'm eyeing where I can purchase it close to 100% (depending on final price) out of our HELOC (10 year IO @ prime - currently 4%). I think I can end up cash flowing about $1500/month from it, which I would definitely put it all back into the principal. I want a rental portfolio for retirement, I don't need any of the cash from the properties right now.

My only question is whether it's worth while to pay 100% from the HELOC or not. All the math is in my head right now, and I haven't had the time to put it all on paper

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Capital preservation is very important in this business if you want to grow.

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Getzlaf15 said:

Just got this from title on a deal I'm working on...

"Title has been completed on this transaction. Upon my initial review, it looks like we have a lien showing on title that was filed by XXX Municipal Irrigation in the amount of $.01 we will need to address"

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Random said:

Recently put two more duplexes under contract.

Property 1 - 550+400/mo both rented - 30K

Property 2 - 550+425/mo one vacant (no work needed) - 30K

Scheduled to close next week.

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Tiger Fan said:

Random said:

Recently put two more duplexes under contract.

Property 1 - 550+400/mo both rented - 30K

Property 2 - 550+425/mo one vacant (no work needed) - 30K

Scheduled to close next week.

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wow, those are amazing ratios. are they being listed, or FSBO/craigslist?

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ghostguy123 said:

So I have been considering selling the one rental property that I have.  Just a small place, 2 bedroom condo that I put about 45k into as a total investment before renting out a couple years ago.  Just in case I am asked "why", it's because I was looking into paying off my house and maxing out my 403b, along with maxing out what we can for my wife as well. 

My question is, is this a good time to sell?  It seems some property values have gone up lately, and since I would be selling this solely for profit I would ideally want to sell at a time where sales are doing well. 

There are several condo complexes around my town, and these are by far the lowest value based on sales prices.  Does this matter at a time where values have gone up some?  Would it seem more desirable since other higher priced units have increased? 

I do currently have a tenant, a seemingly very good tenant actually, with about 10 more months left on his lease.  So selling right away isn't a huge deal, but if I could get a few thousand more NOW than next year, it would be worth it for me. 

Just spitballin here.  It's going "ok" but rental property probably isn't for me.  I am not a good handyman at all which hurts a lot of my potential profit margin. 

I guess just wondering if any of you other real estate guys are using this time to maybe "sell high" at the current prices.

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John Bender said:

How low are supply levels in your area?  Here in the West End of Richmond I'm seeing ridiculous prices and bidding wars and houses being on the market for less than 24 hours. 

Whenever something hits the market in a decent school district, your seeing them sell for $10,000 over asking price and within literally hours in some cases. 

How long does this last?  I thought it would get better in the spring and I would pick up my search again, but it's been very frustrating for a very.  And nerve-wracking as well that I'm going to spend way more than I should.  I was listening to CNBC today re: the real estate report and supposedly prices are at levels from 2007, just 4 quarters before the bubble busting.  I don't need to buy right now so I guess wait it out?  It sucks paying the high rent I am.  Any advice?

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John Bender said:

How low are supply levels in your area?  Here in the West End of Richmond I'm seeing ridiculous prices and bidding wars and houses being on the market for less than 24 hours. 

Whenever something hits the market in a decent school district, your seeing them sell for $10,000 over asking price and within literally hours in some cases. 

How long does this last?  I thought it would get better in the spring and I would pick up my search again, but it's been very frustrating for a very.  And nerve-wracking as well that I'm going to spend way more than I should.  I was listening to CNBC today re: the real estate report and supposedly prices are at levels from 2007, just 4 quarters before the bubble busting.  I don't need to buy right now so I guess wait it out?  It sucks paying the high rent I am.  Any advice?

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SaintsInDome2006 said:

Bump.

Any advice on building a house?




 

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Binky The Doormat said:

Get a reputable builder - long history and make sure he is still active in day-to-day business.  Most everything else takes care of itself.  

Maybe don't pay for things you can do yourself ...that you do very well.  

Build in a neighbor that is THE place to live in your city if you want to make money.

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Binky The Doormat said:

Get a reputable builder - long history and make sure he is still active in day-to-day business.  Most everything else takes care of itself.  

Maybe don't pay for things you can do yourself ...that you do very well.  

Build in a neighbor that is THE place to live in your city if you want to make money.

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Getzlaf15 said:

I also recommend visiting the site daily during construction.

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SaintsInDome2006 said:

Thanks one advantage here is it's neat out home already. I wouldn't say this is "the" premium place in the city but it is on the way up.

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Getzlaf15 said:

what area?  I was there two months ago.

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SaintsInDome2006 said:

Thanks a lot.

Let me ask this: have you or anyone ever heard of a builder which asks you to pay the bills for the subcontractors directly? Basically the idea is this saves costs and we would be asked to pick out all the details and arrange for the deliveries and payments. Essentially we would be the "contractor".

Is this a good idea?

He's a very reputable guy, builds very nice houses, it's just an unusual arrangement to my knowledge.

Lots of reasons to like this guy, we know him through family friends, lives across the street from the lot, nice guy, good recommendations. 

One problem is I could see us (me & the wife) getting very hung up on those details, from floors to tile to faucets.

Other  option is to go with a well known name builder but more of a cookie cutter design and more of a number as a client.




 

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BassNBrew said:

A condo should be next to nothing maintenance wise.  At a $45k investment price that place should be cash flowing nicely.

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ghostguy123 said:

Honestly, it's going fine, I just don't think I want it anymore .  I do have some stuff I have needed to do, nothing huge, but it's been a bother with all the other stuff I have going on.

It brings in $775 a month currently, and I do have a good tenant currently, though he will probably move out in about 7 months.   I shell out about $250 per month on property taxes and maintenance fees.  I own it outright, so no interest is being paid.  I think I profited maybe $4,000 last year and would be closer to $5,000 this year.

I was thinking about just selling it and paying off my house.  Peace of mind, I don't know. 

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comfortably numb said:

Hire a property manager for maybe $100/month and you won't need to be bothered with much of the smaller issues?

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ghostguy123 said:

I have one.  Cost is one month rent per year.  She is also the head of the condo association, and she knows everything about everything.  She actually owns a few condos in this complex herself. 

She is contacted for stuff then contacts me.  Like I said, I don't have all that much to actually DO, but it's still a bother with some random tedious stuff that comes up.  For example just something small, but I had to call the water company about an issue with the water bill and blah blah blah, and have had to do this two months in a row now.  Not a huge deal, but the little things add up and always end up bothering me at times where it is really inconvenient. 

I suppose I just prefer to work, make my money, and not take my work home with me.  I'm that kinda guy I guess.

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comfortably numb said:

Ah...I see.

Nothing wrong with not wanting to be bothered.

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ghostguy123 said:

I think if I had several properties, maybe like 5 or more, it would seem much more worth the "on call" aspect of it with a lot more rental income.  Just not sure if that is feasible.  At least not for another decade or so probably. 

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ghostguy123 said:

Honestly, it's going fine, I just don't think I want it anymore .  I do have some stuff I have needed to do, nothing huge, but it's been a bother with all the other stuff I have going on.

It brings in $775 a month currently, and I do have a good tenant currently, though he will probably move out in about 7 months.   I shell out about $250 per month on property taxes and maintenance fees.  I own it outright, so no interest is being paid.  I think I profited maybe $4,000 last year and would be closer to $5,000 this year.

I was thinking about just selling it and paying off my house.  Peace of mind, I don't know. 

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Getzlaf15 said:

Peace of mind for now.  What about later?  Why not take out 20k on this one and buy another that cash flows well? And then in ten years refinance or tax exchange into more?  In 30 years, you could safely build up to 10 to 30 units.  That's peace of mind.  

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James Daulton said:

Sure, what could go wrong?

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comfortably numb said:

Eh...

We're all different but I feel if you feel this way with 1 property having 5 would make you feel 5 times worse in regards to being bothered.

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Getzlaf15 said:

Not a whole lot when done safely and right.   He's already started off well. He can easily build off this and create long term passive income and wealth. 

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ghostguy123 said:

Umm, yeah, exactly, lol.  I wish it was as easily done as it is said.

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