Month: December 2017

Guide to Rent a House Without Using a Real Estate Agent

Renting a property can be a daunting task. There are so many questions to be answered. How do you pick the right tenant? How do you know if this person will pay the rent and on time? Do you hire a Realtor to market and help you screen a tenant? Hiring a Realtor is the easy way to rent a property. However, if you do not have the money to pay the Realtor, you will have to do it yourself. Here are a few tips to help you market your property and choose a good tenant.

Prepare the property. A clean well maintained property will always rent for more money and faster than one that is dirty and unkempt. If budget permits, paint the interior with a neutral colored paint. Shampoo the carpets or replace if needed.


Price the property. Find out what similar properties are renting for in the neighborhood. You can ask a local realtor or look on the internet. Price your property to match your competition. If you are in a hurry price the property below your competition’s price.


Place ads. You can always place ads in your local paper. If money is tight, stick to Craigslist. Make sure to list the best features of your property. Make sure to state if you will be charging any fees (like credit check or processing fee). Decide if you will allow pets and say so in the ad. Add pictures whenever possible.


Show the property. Whenever you show the property make sure to let people see the whole house. Let them wonder around and view the house at their leisure. Don’t rush your potential tenants. Ask if they have any questions. Make sure to hand them an informational flyer with a picture of the house and a rental application and credit check form.


Get the right forms. You can purchase rental and credit application forms from your local office supply store. You can also purchase these forms online. There are websites that cater to landlords. They will sell you the forms and do a background check. Just do a google search for landlord services or tenant background check.


Do a background check. You will always want to run a credit check. Do research on how to read a credit report. These days a good credit score is anything above 600. This is part of the background check. You can choose to do an evictions check or a criminal background check. Obviously, the more you check the higher the cost. You can pass on the costs to the potential tenant. Just make sure that you post the fee in the rental ad.


Check references. Most people ask for references but few people bother to call and verify the information. Call the current landlord. Ask if he/she has paid the rent on time. Ask if he/she is maintaining the property in decent condition.


The interview. Review the information on the rental application. Review the credit report and background check. Ask any questions necessary to clarify any inconsistencies. Ask why they are moving. Clarify when they want to move in.


Drafting the lease. You can buy a general property lease from your office supply store. You can also purchase a lease online. Fill out the lease and sign. I recommend that you insist on collecting the deposit and first months rent in certified funds (bank check or money order). Make sure you and the tenant understand everything that is on the lease.


Make sure to check if you need a rental license and lead paint laws.

How to Get a Lender to Accept Your Real Estate Short Sale

In this unstable economy, real estate is plummeting and people are losing their homes left and right. What does this mean for the average real estate investor? Money! Not only can an investor help a homeowner in distress, but he or she can pocket some money as well. Sounds great, but there is the pesky little obstacle of getting the lender to agree to accept a lower price than what the homeowner actually owes!

The first step you need to take is to determine what the Fair Market Value of the home is. You can do this by researching recently sold comparable homes. What did they sell for? The average of these “comps” is your Fair Market Value, or FMV. You will need access to the MLS for pulling comps. You can easily enlist the help of a Realtor friend. Be sure your comps are very similar to your investment property in size, location, age and condition. You don’t want the lender to have any reason to refute your comps.


After you have 6 comps available, you will need to find the “average.” The easiest way to do this is to throw out the highest and lowest number and average the remaining four to get your price.


Next, you need to compute the “After Repair Value” or ARV. This is the value of the home after all repairs have been completed. You can find average repair costs by using the help of a GC or carpenter. There are also many software programs out there that will help you make a spreadsheet of costs.


You need to keep in mind that the final BPO or Broker’s Price Opinion is what really sways the lender. It is usually written by a well-known BPO specialist in the community, someone who knows the market very well and knows how to find the value of a home with a high accuracy rate. That person will sometimes simply drive by the property, or go inspect the inside.


With short sales, the investor will low-ball the home to get a short sale started with the lender. He or she will offer maybe 60% of the FMV or ARV of the home. Just because a home is headed toward foreclosure, it doesn’t mean that it is necessarily a great investment. You need to look out for properties that need repairs, have more than one mortgage, have liens, and have homeowners who cannot afford the payments. The last one is very important. Banks will work with people who are genuinely in financial distress. Please don’t waste your time on homeowners who simply do not want to pay or are using the money for things like vacations and other frivolous expenses.


You can either look for nice looking homes, homes with need of minor repairs, or downright damaged homes. Each type has its pros and cons. One factor that seriously helps or harms your ability to get a short sale through is the type of financing a home has. Conventional loans are the best, as they are flexible and willing to work with short sale investors. FHA and other government backed loans are very difficult to work with, as they have set requirements that are hard to meet.


As long as you follow this basic advice, you should have no problem sorting out the goods deals from the bad.