atlanta landlord summit 2.18.17

A TEN-X COMPANY

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• 100% of funds due at the time the property is sold. This information can be found on the

Property Detail Page

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Cobb $137,831 Dekalb $95,000 Clayton $81,000

Chatham $130,000 Gwinnett $172,000 Fulton $136,000

Once you find your

favorite property,

register for the

auction, and get

ready to bid.

Search for properties

that interest you.

Save them as your

favorites or sign up

for alerts.

Bank-

Owned

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MONDAY TUESDAY WEDNESDAY THURSDAY FRIDAY

Southeast

Southwest

CA / NV

Nationwide Live

Qualifying

Northeast

Midwest

Pacific

Northwest/Hawaii

Nationwide Live

Qualifying

Special

Events*

Special

Nationwide

Live Qualifying

Southeast

Southwest

CA / NV

Nationwide Live

Qualifying (2)

Northeast

Midwest

Pacific

Northwest/Hawaii

Bank-

Owned

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Bidding on Occupied Houses – online auctions by Darlene Coquerel

Acquired $75 Million Dollars in Residential R.E. in 2014!

I want to Buy a House!

Occupied Property Addendum• Basically says you understand

that the property is Occupied.

• If you see this, the property MAY BE OCCUPIED but not necessarily performing.

• You will be responsible for getting the occupant to leave.

• No Security Deposits will be transferred.

• Rents will NOT be prorated.

Due Diligence

• Drive by only – can’t talk to tenant…

• Estimate your rehab (without entering the property) to determine your MAO – BE CONSERVATIVE

• Include CASH FOR KEYS

• Understand and have your attorney review the “Important Documents” i.e. Occupied Addendum & Title Information

Visit me at www.darbuyshouses.com

67

Curt is a former software engineer who found his

passion in real estate. As both an investor and a

property manager, Curt specializes in finding the

right opportunity for investors. His average

portfolio cash-on-cash is an impressive 20%, with

LTV at 23%. He is also blogs on

biggerpockets.com with landlord investing advice.

Bullet Proofing Your

Rental Portfolio

How to buy high performance rentals

Curt Smith, http://MyGaREIA.org Board Member, mentor

Buy-and-Hold Investor since 2011

[email protected] / 678-948-7151 (prefer text)

Our Company’s Investing History and Portfolio • Our real estate investment company consists of my wife and myself.

• Quit my day job 6 months ago thanks to my rental income

• Spend around 2-3 hours/month self-managing current properties (this can peak to 10 hrs/month occasionally). My wife spends 5 hrs/month on bookkeeping and rent rolls.

• Own and self-manage 36 single family rentals (scattered in metro Atlanta and north GA with a few south of Macon)

• Bought, rehabbed and rented 33 of these rentals with full-time job over the past 6 years.

• Averaged buying 6.1 new rentals/year

• Average portfolio cap rate = 18%, just the SFRs = 14%

• Current portfolio LTV = 23%

• Use solo-401Ks for 38% of rentals and the rest are taxable

What buying goals allowed us to “have it all”

Our buying goals:

• High appreciation

• High cap rate (like 13% or better)

• 3 bed/2 bath or better

• Nice, safe neighborhood

• Decent schools (GreatSchools.com >= 6 is best, can buy down to >=5)

• Low rehab costs (<$15k)

• Low all in costs (drives up cap rate)

• Low effort to manage (from good tenants)

• Low turn over, tenants stay many years typically

• Few competitive rentals on the market, so it rents fast

• Good deal flow. (I.E. enough raw houses hit the market / yr to meet your needs).

• Low ball offers get accepted. IE raw houses have little competition when buying.

What happens when you give up the most desirable rental quality goals?

• Buy too low priced rentals you may end up with high management costs, turn over and low net income and slow appreciation

• Buy too high a priced rental and your cap rate sags but you often get appreciation• Buy in high competition areas and your deal flow and cap rate sags• Buy in low (Great Schools) rated school systems and you can’t attract high quality

tenants. IE under Great Schools rating of 5• Buy an ugly houses, on a busy street, and its tough to find good renters• Buy far from transportation and you’ll take longer to re-rent due to a much smaller

renter pool

Add a few of the above together and performance plus ease of management drops fast.

Set business goals and your business will improve

And you likely CAN accomplish what you previously thought impossible

• Resourcefulness is your #1 resource. (Tony Robins)

• Just do it. (Art Williams, Original Art Williams speech)

• You’ll be 100% successful at NOT accomplishing a goal you never set.

• When I talk to landlords mostly I get told their latest war story. Why compete in that contest??

• Set A LOT of great goals, work toward accomplishing as many as possible and your portfolio will improve

Your rental business can only improve by setting ALL of the above goals, right?

HOLD, HOLD IT

We’ve got the landlord success criteria BACKWARDS…

What is your primary capital asset as a landlord?

I.E. what is MOST important?

• Your rental house? Asset or Liability?

• Your tenant? Asset or Liability?

Most investors focus 99% on houses right?

What is your main capital asset as a landlord?

• The tenant!!!!!• An empty rental is what? A liability. Your tenant your main asset.

• Learn to make one of your most important business goals targeting YOUR ideal tenant.

• Know what they want

• Know where to they want to live

• Know how to market to them (The rental ad copy and subject line).• IE do they want to see a rental ad subject in all caps and see 1st month free???

You need to make your rental business TENANT focused

What “good” tenants wantThey want many of the same things your business wants:

• Attractive house in a safe neighborhood

• Good schools

• Convenient to freeways and good paying jobs (buying near good jobs is important)

• Nice rehab with a clean attractive look. (sometimes this means some laminate floors, upgraded fixtures, freshly painted cabinets, nice backsplash etc)

• Fair rent

• Quick response to maintenance requests

• Being treated fairly. (This is very important to me. I have a great relationship with all my tenants. Positive attracts positive --- it does work! Create a positive rental ad, mentioning the things good renters want and you’ll attract good renters)

J-O-B-S

Underpin all real estate especially rental portfolios

• Landlords who buy in the metro counties don’t even think about why some rentals rent easier then others, or at least one factor most don’t think about. Access to good jobs.

• Near by plentiful good jobs are key to an easy to manage, low turn over rental business.

• The farther a renter has to commute to work, the fewer choices of jobs, the weaker the tenants jobs skills the more likely you’ll have turn over, late rents and evictions.

• Doesn’t this make sense? The linkage between good jobs, a short commute and a good rental business?

• For example: there’s fewer good paying jobs South West of Atlanta VS straight North. Areas matter a lot!

• An even BIGGER tail wind for a rental (and renter) is to buy in the path of GROWING JOBS. Which I’ll get to.

Our current business rules circa 2017Our current rules are not the same as the day we started. Our rules have changed through trial and error. So yes we own some houses that don’t meet all of these rules. This is what we currently look for:

• Blue collar dual working parents with kids and dog(s) are our target tenants.(Dogs..why? Because most landlords are now turning them away, I WANT (smaller) dogs!!)

• Cute house in a nice, safe neighborhood, 3 bed/2 bath (a garage and fenced yard even better).

• Our all-in-costs vs rent yields a cap rate of 13% or better.• 10-15 minutes to a major freeway or road, 30 minutes to good jobs.• GreatSchools.com rating of 5 or better• Low competition. We search craigslist and zillow for areas with few rental ads. • And our newest rule is 30 min to nice restaurants and entertainment (If we’re going

to be working hard and staying at hotels we want really good meals and something to enjoy).Plus areas with great restaurants tend to attract good renters.

Over view of tenant types we target• We buy nice rentals, fixed nicely in nice areas and we do not take Sec-8

• We do tend to screen OUT white collar workers. They never stay long and are more of a pain, can’t do simple maintenance, break leases to buy houses.

• We target financially stable blue collar workers who can’t afford to buy a house, are permanent renters, they just want to create a “home” in our rental and stay forever.

• I screen for: moving back to be close to relatives, in same school system or near their job

• Our written requirements are (Re HUD/Fair housing you need written requirements):• Dual income, has a bank account with a balance of > 2x rent plus utility deposits• 3x take home income vs rent• Long term rental only. IE I say during the face to face that my typical renter stays 5 yrs.• No evictions or collections• We are ok with pets. IE dogs not on the dangerous breed list and under 25#.• We take the most qualified applicant not necessarily the first application.

• End result: they never leave, fix things, never call, treat my house as their home.

How to target GROWING JOBS areas

• Find employer PR announcements:• Atlanta Business chronicle

• Georgia.gov – use google advanced search on this domain: term=jobs, number > 500

• Indeed.com – use locale search and set radius to 5mi. Use same sized city names to get total jobs listed top right. Right jobs down.

• Indirect indication: no rental ads for same sized population area. Growing blue collar jobs soaks up all the rentals. IE if indeed.com says there’s more jobs vs other cities and there’s no rentals,,, this is a great area to buy rentals in!

Blue collar job growth areas

Just South of Chattanooga Rossville through Ringgold

316 from Lawrenceville East on 316 All the way to Athens

RULES: see all the “goals”- 10 minutes to a freeway- 30 minutes to good jobs- Cute, in a neighborhood- All in meets YOUR cap rate needs- Good schools

Henry co, 10 min to the freeway

I75 all the way up toCartersville, 10 min to The freeway

I-20I-20

I-85

I-85

I-75

I-75

I-400 I-316

Buying criteria we DROPPED because we chose to go after our “goals” as mentioned

• Buying near where I live.

• Paying market price or upping my offer to a highest-and-best

• Chasing low prices into bad areas

I gave up owning rentals near my home for:

• All of the goals given early in this presentation

• **** Deal flow

• ***** High cap rate IE >12%. All of my 2016 purchases are >=13.5%

• *** Low competition to buy and then to rent. IE zillow neighborhood heat range for where I buy is blue (cold to stone cold, a sliver of blue) These areas do exist, just NOT in the metro area

Summing It All Up

• Believe in yourself and drive yourself to set high goals!

• It _IS_ possible to buy rentals that have more positive qualities than you previously thought.

• Challenge yourself to buy better rentals!!

• All of the goals given at the beginning we are achieving for the past few years. Not at the beginning, but certainly now!

• Top performing and LOW management effort rentals are possible. But they probably will NOT be in the metro area. You need to get out of your comfort zone for location.

Additional topics• I could not have achived quiting my day job last July without being a

member in GaREIA – http://MyGaREIA.org . They have the deal makers google groups and face to face groups and a ton of experts giving free education. Click the calendar off the above URL.

• How to buy houses below market• Writing rental ads• Screening tenants • How I remote manage houses >1hr away with little effort. 2hr – 10hr per

month 98% via text.• How I find contractors in small towns. How I pay them.• I post a lot on these topics on http://biggerpockets.com

Curt Smith: [email protected] / 678-948-7151 (prefer text)

http://mygareia.org/

http://biggerpockets.com/

mailto:[email protected]

Where we own 36 rentals bought over 6 yrs

Byron/Warner Robins

Rossville/Ringgold

Commerce And area

Covington & Stockbridge area

Toccoa area

Norcross,Duluth, Roswell And Dekalb area

I-75

I-75

I-85

I-85

I-20

I-400

I-20

86

Joe Thompson is an experienced financial

advisor who entered the financial consulting field

in 1982 and has been awarded numerous awards

for his achievements and quality of work. Joe

focuses his practice on working with Real Estate

Investors, Entrepreneurs and Business Owners,

all of whom have unique challenges and

opportunities, which require experience and

additional skills not commonly found in the

advisement industry.


http://www.havesandwants.shutterfly.com/

http://www.havesandwants.shutterfly.com/

www.visiolending.com

Visio LendingHOW TO FIND MONEY


Avenues of FundingTraditional Finance Sources

Banks

Credit Unions

Community Banks

PROS

Lower interest rates, lower fees

CONS

Borrower based, documentation heavy, longer closing timeframe, too many rules, limits on # of properties you can finance

Non-Traditional Finance Sources

Hard Money Lenders

Private Lenders

Private Investors

PROS

Asset based, no to low documentation, quicker closing timeframe, fewer rules, no property finance limits

CONS

Higher interest rates, higher fees


Avenues of FundingFIX N FLIP (SHORT TERM PROFITS)

Great way to build cash reserves and learn the real estate business.

A lot of moving parts to oversee from finding great deals to hiring contractors, sourcing materials, project management to completion, hiring real estate agent to list property and then selling property for a profit.

Profits are heavily taxed by IRS and state.

BUY & HOLD (LONG TERM WEALTH)

Great way to build rental portfolio and retirement income.

Depending on property condition there can be a lot of moving parts to oversee from finding great deals to hiring contractors, sourcing materials, project management to completion, hiring property manager to screen tenants, and then renting to receive positive monthly cash flow.

* Cash flow is less taxed by IRS and state.


Who We Are I Loans for investors, by investors

A nationwide lender that understands the

residential real estate investment market

Deliver fast, simple and dependable long term

mortgage financing to investors

Provide purchase and refinance loans

that meet the needs of investors purchasing

1- 4 unit residential investment properties


Snapshot I By the numbers

In Business for 6 Years

Originated over 4,000 loans since 2011

A- Rating/Accredited by the Better Business Bureau

Member – American Association of Private Lenders

2016 Fast 50 Award Recipient


Where We Lend I 35 States

We lend in 35 states: AL, AR, CA, CO, CT, FL, GA†, IA, IL*, IN, KY, LA, MD, ME, MI*, MO, MS, MT, NC, NH, NJ, NM, NY, OH*, OK, PA, SC, TN, TX, UT, VA†, WA, WI, WV & WY.

*We do not lend in Cook County & Chicago, IL, Detroit & Flint, MI, Cuyahoga County, Dayton & Cleveland, OH. †Must close in an entity (LLC, partnership or corporation).


Contact Me I Dedicated local service.

Michael BraswellAccount Executive678-522-5760Michael.Braswell@visiolending.comwww.visiolending.com/Atlanta

Office Location:3440 Peachtree Rd NESuite 1010Atlanta, GA 30326

99

Steven is an Attorney at North Atlanta Law Group,

P.C. He represents individuals and businesses all

phases of law. He specializes in negotiating real

estate contracts, leases, construction contracts

and development agreements. He has

represented numerous landlords in retail,

residential and office lease disputes and litigation.

LANDLORD RIGHTS IN GATRAPS TO AVOID

STEVEN M. JAMPOL, ESQ.

NORTH ATLANTA LAW GROUP, P.C.

© 2017 North Atlanta Law Group, P.C., All Rights Reserved

SECURITY DEPOSITS

• Residential Leases- If LL has ≥ 10 rental units then LL must:

1. Place Security Deposit in Escrow Account and only use that account for security deposits of Tenants. (O.C.G.A. § 44-7-31)

2. Notify T in writing of location of account and account number

3. Landlord is Trustee- fiduciary duties

• Exemption: (a) natural person; (b) who with spouse and minor children; (c) has (have) <10 units; (d) does manage with a property manager (should be self-managed). (O.C.G.A. § 44-7-36)

• Commercial Leases- No escrow requirement

INSPECTION- PRIOR TO MOVE IN

• Residential- For a Lease Covered by the Act

1. Prior to LL accepting T’s security deposit, LL must give T a comprehensive list of existing damage conditions

2. Tenant may inspect premises to verify the accuracy of the list

3. Landlord and Tenant must sign list- conclusive evidence of condition (except for latent [hidden] defects)

4. If T disagrees with any items, then he must write them out and sign statement of his dissent (O.C.G.A. § 44-7-33[a])

INSPECTION- UPON TENANT LEAVING


1. Landlord MUST: ≤ 3 business days after T vacates, LL or Agent must inspect and prepare list of damages and estimated $ value of damages

2. Tenant MAY: ≤ 5 business days after vacating inspect to ascertain accuracy of LL’s list of damages

3. LL and T MUST sign. List should notify T of duty to sign or dissent. T may issue a written statement of dissent.

4. If T leaves without notice to L, then L has “reasonable time” to do the inspection and come up with the list

(O.C.G.A. § 44-7-33[b])

RETURN OF SECURITY DEPOSIT


1. LL MUST within 1 month after termination of tenancy or surrender and acceptance of premises return the security deposit

2. LL cannot withhold for ordinary wear and tear

3. LL MAY withhold for physical damage beyond ordinary wear and tear

4. LL MAY withhold for negligence, carelessness, accident or abuse by T or T’s guests or invitees.

5. If LL withholds, LL MUST provide reasons and list w/check for difference addressed first class mail to T’s last known address

6. LL MUST use reasonable effort to locate T- then after 90 days becomes LL’s money

7. IF LEASE PROVIDES, offset allowed for T’s non-payment rent/late fees, utility charges, repair work, pet fees, actual damages from breach, abandonment, but L must attempt to mitigate damages. (O.C.G.A. § 44-7-34[a])

CONSEQUENCES

• If LL doesn’t do the required inspection, or create the required list, or handle the security deposit in accordance with the statute, or timely do those things, then LL FORFEITS his/her right to ANY PART OF THE SECURITY DEPOSIT and CANNOT SUE TENANT FOR ANY DAMAGES WHATSOEVER (O.C.G.A. § 44-7-35[b])

• T cannot recover security deposit or penalties from LL if T was given notice of right to sign or dissent from the list and T failed to do so or take advantage of T’s rights (O.C.G.A. § 44-7-33[c])

• Penalty to LL is 3x sums improperly withheld plus reasonable attorney’s fees of T (O.C.G.A. § 44-7-35[c])

REPAIR OBLIGATIONS

• LL HAS THE DUTY TO KEEP THE PREMISES IN GOOD REPAIR (O.C.G.A. § 44-7-13)- THIS IS THE DEFAULT REQUIREMENT IN ABSENCE OF LEASE LANGUAGE

• LL CANNOT SHIFT THE RESPONSIBILITY TO REPAIR THE PREMISES TO THE T IN A RESIDENTIAL LEASE (O.C.G.A. § 44-7-2[b][1])

• LL IS LIABLE TO T OR TO 3RD PARTIES (GUESTS, ETC.) FOR FAILURE TO REPAIR (O.C.G.A. §44-7-14)

• ORAL NOTICE FROM THE TENANT MAY BE ENOUGH TO TRIGGER LL’S DUTY TO REPAIR

• IN COMMERCIAL LEASES LL MAY SHIFT THE DUTY OF REPAIR TO T; AND THE LEASE CAN PROVIDE THAT T WAIVES LANDLORD’S REPAIR DUTY AS TO PATENT DEFECTS THAT T KNEW OF, OR SHOULD’VE KNOWN OF, AT THE TIME T SIGNED THE LEASE

• IF THE LL MAKES A REPAIR, HE’S ALSO CHARGED WITH REPAIRING ALL OTHER DEFECTS THAT COULD REASONABLY HAVE BEEN DISCOVERED WHILE REPAIRING THE ORIGINAL DEFECT HE’S REPAIRING

MISCELLANEOUS LEASE PROVISIONS

• ACCELERATION OF RENT- must not be an unenforceable penalty; reasonably relate to anticipated actual damages; should include discounting to present value; other issues may apply

• INTEREST- Lease may specify and should specify and watch usury statute O.C.G.A. § 7-4-2: monthly rental ≤ $3,000 rate should not exceed 16% per annum simple interest; if monthly payment > $3,000 then can be 60% per annum simple interest as per O.C.G.A. § 7-4-18

• ATTORNEY’S FEES- To be enforceable must give proper statutory notice under O.C.G.A. § 13-1-11 (a)(3); In writing to the T or guarantor, sent after maturity of the obligation, state that it is to enforce the Lease obligation (plug in the Lease section number), state that if principal and interest is paid (plug in the $ amount), within 10 days of T’s receipt the attorney’s fee obligation will not be enforced ◊ In a residential lease, the attorney’s fee obligation must be mutual to landlord, as well. O.C.G.A. § 44-7-2(c)

SAMPLING OF SOME OTHER RULES/STATUTES

• FAIR HOUSING- Don’t discriminate. Fair Housing Amendments Act of 1988. 42 U.S.C. § 3601; O.C.G.A. § 8-3-202; 24 C.F.R., 54 Fed. Reg. 3232-01.

• MILITARY PERSONNEL- T Active Duty or Temporary Duty exceeding 3 mos., or signs lease for an immediate family member, receives orders for change of station, he/she would not be liable to LL for more than 30 days rent after giving notice to LL and proof of the assignment; and is liable for repairing damage to the premises. O.C.G.A. § 44-7-37

• ANIMALS/PETS- LL cannot charge a pet deposit for a SERVICE animal (one that performs a specific task) or an ASSISTANCE animal (doesn’t perform specific task but provides some kind of other support or assistance)

MISCELLANEOUS- ANIMALS/PETS (Continued)

• If a person needs an emotional support animal to help alleviate the symptoms of a disability, he or she must first make the request to his or her landlord. HUD states the following in its FHEO Notice: "Housing providers may ask individuals who have disabilities that are not readily apparent or known to the provider to submit reliable documentation of a disability and their disability-related need for an assistance animal." (FHEO Notice: FHEO-2013-01 at page 3). Most sources indicate that the request should be in writing and explain how the reasonable accommodation helps or mitigates symptoms of the disability. While the tenant or owner does not need to disclose the disability, he or she will need to provide documentation from a doctor or other health professional. According to HUD, a physician, psychiatrist, social worker, or other mental health professional can provide documentation that the animal provides emotional support that alleviates one or more of the identified symptoms or effects of an existing disability. (FHEO Notice: FHEO-2013-01).

• The landlord must make a reasonable accommodation to the tenant and allow the assistance animal even if he has a policy that for example bans cats, and the assistance animal is a cat. The landlord may ask for a letter from a treating physician, therapist, or psychologist.

• The landlord should ask the following questions in making his determination: 1. Does the person have a physical or mental disability? 2. Does the person have a disability related need to live with an assistance animal. The landlord should not deny the request because he is uncertain about the request. There are some limitations and exceptions in FHEO- 2013-01.

https://www.animallaw.info/administrative/service-animals-and-assistance-animals-people-disabilities-housing-and-hud-funded

https://www.animallaw.info/administrative/service-animals-and-assistance-animals-people-disabilities-housing-and-hud-funded

www.MyGaREIA.orgwww.MyGaREIA.org

Georgia Real Estate Investors Association (GAREIA)

www.MyGaREIA.org

MissionHelping you succeed in real estate

Register at www.mygareia.org

• GaREIA is a not-for-profit, volunteer organization

• Our purpose is to educate, motivate and provide networking opportunities for its membership

• Accomplished through organized educational and networking programs

www.MyGaREIA.org

Education & Networking

• General Meeting (2nd Monday of each Month)

• Subgroups (tailored education & networking)

• Seminars for focused training

• Coaching Programs for hands on training

• Online Groups (info and deal sharing)

• Business Associate Directory

www.MyGaREIA.org

Coming EventsHosted by Experts and Investors Active in GaREIA

Helping you succeed in real estateCheck out our calendar and Register at www.gareia.org

• Landlord Subgroup 2/23/17- Date: 2/23/17- Location: GAREIA - Time: 7:00 pm- Meets ever 4th Thursday

www.MyGaREIA.org

GAREIA Benefits Overview:

Members have these benefits and more: • 2% Home depot rebate, 20% Behr paint discount at the cash register• Office depot 20% discount +/- depending on item• Real Flow, lead generation and CRM deal system, deep discount.• NREIA health insurance exchange.• Real Protect landlord blanket policies. Decent rates and it’s a blanket pol.• Real Protect offers renters insurance• ISC renter screening. These guys are one of the best, with an NREIA discount• NREIA discount for Got Junk 1-800 got junk removed• Discount at Rentals.com• NREIA discount via FedEx• 20% off at buildasign.com• NREIA discount using constantcontact.com email list serving

www.MyGaREIA.org

Investor Membership

Business Associate Membership

2-2

Types of Membership

www.MyGaREIA.org

Individual Membership

• $240 for first year

• $99 per year renewal

$149

www.MyGaREIA.org

Business Membership

• Different Membership Packages• Bronze, Gold, Platinum

• Includes an Individual Membership

• Info packets available at booth

• MyGAREIA.org

www.MyGaREIA.orgwww.MyGaREIA.org

GAREIA OFFICE INFORMATION

4353 Tilly Mill Rd, Ste 130

Atlanta 30360

Tel 770-451-8800

www.mygareia.org

[email protected]

http://www.gareia.org/

How To Be Great at Tenant Screening

February 2017

Pam Storm

Benefits

Process Overview, a Step by Step Guide - 10 minutes

Detailed Screening Tips - 10 minutes

3 Topics

Mitigate Risk & Better Decisions

Avoid Emotional Pitfalls

Strong Compliance

Scale Portfolio More Quickly

Benefits to a Good Process

Process Overview:

A Step by Step Guide

Screening

Quick & Detailed Process Tips

Credit: Use Credit Header Data

Credit Header Data

● Name and aliases

● SSN, masked

● DOB, partial

● Current and Prior Addresses

● Phone #s

Non-Credit Header

● Employment

● Credit freeze

● Do the addresses and timing of addresses

match the application?

● Any flag that an address is non-residential?

● Any aliases

● Do the employers match your application?

● Any “red flag alerts”?

○ SSN issued

○ SSN issued in year range to correspond

to applicant age

○ SSN deceased?

Rental History Verification Tips

Ask:

● Has candidate given you notice?

● Would you rent to him/her again?

● Do you expect to return a full

security deposit?

● Dates the candidate living there

● Monthly Rent

● Any pets, noise issues etc

Note: Prior Landlords are best

resource

● Go back 3 years and/or 3

landlords if possible

● 2 Objectives

1. Verify info on application

2. Ascertain behavior

● Validate to whom you’re

speaking:

○ Prior to introduction, ask if

rental still available

○ Drive-by

○ Check deed

Income Tips

3 Evidence Sources:

1. Bank Statement detail

2. Pay Stubs

3. Tax Info / 1099’s

Match application info to sources above, LinkedIn, Employment

references etc

Debt:Income and Rent:Income ratios: Use Gross #’s

Resources

Rent Marketplace (Guides, Toolkit) www.RentMarketplace.com

Consumer Financial Protection

Bureau (CFPB)

www.ConsumerFinance.gov

Georgia Landlord Tenant Handbook www.dca.state.ga.us/housing/housingdevelopment/

programs/LandlordTenantHandbook.asp

Free annual credit report www.AnnualCreditReport.com

National Consumer Assistance Plan www.NationalConsumerAssistancePlan.com

Fair Housing www.Hud.Gov

Thank You!

“Buy and Hold” and The Four Legged Passive Income Stool

Steve Laube, GaREIA Treasurer

Buy and Hold investor since 1979

Traditional 3 Legged Passive Income Stool…

• Pension

• TDA’s , savings

• Social Security

RE is the “IDEAL” investment• I = all income minus all expenses, normally called PCF

• Key point, you can live off it

• D = depreciation, amounts to an interest free loan from the IRS

• 3.636% of the building value each year for 27.5 yrs; recaptured at 25%

• E = “equity through loan amortization” someone had to stretch for this one LOL!

• Tax free when you sell; similar to ROTH but no annual limits! Only one of the three RE money makers that is certain!

• A= appreciation

• Key pointy, typically taxed at only 15%, can be 0 % or 20% as well

• L = leverage, commonly called a loan..or “other people’s money”

• Key to growing your wealth assuming you do not have infinite cash

Growing PI with Leveraged RE vs Stocks

• Stocks; assumptions• Earn at rates shown in next slide: 7,10,and 15% (long term average is about

11.5% but most don’t know how to achieve it)

• Withdraw from the stock account using the “standard” (Bengen) approved rates of about 5%, IP. Results in annual PI as shown in the table

• RE assumptions• buy at “cap rates “ shown in the next slide; 7.5, 10, and 15% (covers most)

• 20% down, get 5.5 % 15 yr or 6% 30 yr loan. Property value inflates 3% / yr

• Apply the entire NOI to the mortgage to get F+C; then enjoy the PI shown

Inflation adjusted Passive Income Generation from a $20,000 Investment; Stocks vs Real Estate

PI summary 6 yrs 10 yrs 15 yrs

Real Estate

15% cap rate $17,910

10% cap rate $13,400

7.5 % cap rate 11,700

Stocks 15% rounded $2,300 $4000 $8,100

Stocks 10% rounded $1800 $2,600 $4,200

Stocks 7 % rounded $1500 $2000 $2,750

What if I Buy Cash or Own F+C ?

• Be careful with this one as you loose a big advantage (leverage)• Say you own a “10 cap” F+C

• You will make 10% PCF by definition and any appreciation..long term average appreciation is about 3% , so total return of about 13 %

• Buy the S+P 500, reinvest dividends, long term return is 11.5%

• RE advantage mostly if you are in the “5% withdrawal” situation• and you are likely not if you own real estate

• So always question why you are a landlord (annually, each property)

Other Long Term Options with RE• Refi, getting a bucket of cash

• Keeping the RE for inflation protection

• And use the cash to buy more leveraged RE…

• Or set up an accelerated withdrawal to enhance your “retirement”

• Or use the refi proceeds to “domino” other mortgages, increasing your PI

• Or you could

• Sell, simplifying your life and use the proceeds as in lines 3 and 4 above

• Hire a property manager, simplifying your life and allowing you to “hold till you fold”, creating generational wealth and avoiding cap gains and depreciation recapture taxes (step up in basis)

• 1031 exchange into “simpler” properties

Property Managers “101”

• Steve Laube, Feb 18, 2017

Blessed be the Property Managers• Have had 6 : two in Clemson, 3 at North Topsail Beach and one in

Duck…Clemson is most applicable.

• Charges me 8% / month on only $1320 gross rents (was 7% when I had dozens of condos)

• Finds tenants (no extra fee), signs leases, handles security deposit, move in / move out inspections, manages 24/7/365.

• Directly pays POA/ condo fees, any utility bills

• Supplies reasonable maintenance, monthly statements, annual summaries per unit

• Gave me a lead I will make $70 - 80,000 off!

• Other charges: $50 per unit per year advertising, $400 mandatory paint for a turnover. No apparent mark up on repairs

Advantages of Property Managers• Gives you your life back..no more “tenants, toilets, trash”; or “rents ,

roaches, repairs” yet lets you keep the property..ANNONYMOUSLY

• Can save you from lawsuits: fair housing act, neglected property etc…be careful, read the agreement etc

• Minimize vacancies; maybe better than self managing

• And keep rents at market better than most landlords

• Reasonable repair rates; better service (no intermediary)

• May provide leads to “don’t want” owners

Other PM Thoughts

• Negotiate! 10% plus one month rent is way too high IMO

• Read the contract, watch out for “nickel and dime”

• Get a reference or two from satisfied owners

• Start with your worst property (you decide) and see how they do

• Get copies of repair receipts

• Let them spread the word if you are thinking of selling

Doing Business with AHA’s Housing Choice Voucher Program

AHA- Preserving affordable housing

• AHA needs to house more families in the city of Atlanta • Thousands of working, low-income families who need assistance with rising rents

• AHA’s Housing Choice Voucher Program provides assistance in the form of Housing Assistance Payments (HAP), paid on behalf of the program participant directly to the landlord of the property they lease.

• AHA opened its waitlist in January 2015, for the first time since 2001• Over 100,000 people applied and 10,000 were selected to assess for eligibility

• We are currently issuing vouchers to eligible families and they are searching for housing now

• AHA houses all types of households:• (including) working families, disabled and elderly persons, and homeless

veterans

We Need You

• In order to meet our goal, we need relationships with new investors, property managers, and realtors and new housing units to be made available to HCVP applicants

• All housing types• Single family, townhomes, condos, apartments

• All city of Atlanta submarkets • Particularly in areas of low poverty concentration

• All bedroom sizes• But, one- and two- bedroom units are always most critical

Benefits of Partnering with AHA

• Guaranteed rent payments• For most AHA participants, all or most of their total rent payment is covered by AHA and

payments are made electronically• Market rent payments

• A market rent assessment is performed at every lease up and rent offer will be made based on comparable rents

• Pre-screened, long-term tenants• All participants are screened for criminal backgrounds, all non-elderly, non-disabled adults must

work 30+ hours/week• Average tenancy of an HCVP participant is 27 months

• AHA actively facilitates a quick lease-up process• Hosts property tour/caravans for applicants to view available properties in an open house format• Hosts housing fair where owners/PMs can come to meet applicants and complete paperwork in

AHA’s offices• AHA has a motivated tenant base, all of whom must lease up with 120 days of

voucher issuance

Benefits to Multi-family Owners

• AHA can occupy up to 50% of the units in a multi-family community

• AHA will pre-negotiate rent amounts for all floorplans (rent schedule)• This provides greater consistency of cash flows for the owner and speeds up the lease up process

• Large multi-family communities units will qualify for one of two programs

• Expedited Lease-up for High-Performing Communities:

• Self-Certification for Multi-Family Communities

• Lease up in DAYS, not weeks

Self-Certification Expedited Lease-Up

Required AHA Assessment Score

87, minimum to be admitted to HCVP

96 or higher; considered exceptionally high

performing community

Community Requirements25 or more units;

negotiated and signed rent schedule

25 or more units; negotiatedand signed rent schedule

Lease-Up On-Site Allowed?

Yes Yes

Initial Inspection Required?

Yes, 45-60 days after move-in

No

Benefits to Single Family Owners

• Applies to single family homes, condominiums, townhomes, and duplex, triplex, and quadplexes owned by individuals or institutions

• New Contract Incentive for Single Family Homes• If an owner leases up an HCVP participant family, they will receive a $250 check

• If the unit passes inspection on the first landlord visit, AHA will pay an additional $250• The owner will receive payment 6 to 8 weeks after the a confirmed move-in

New Contract Incentive First-time Pass Bonus

Lease to an HCVP familyUnit passes inspection on the 1st

inspector visit

$250 $250

Earn up to $500 for leasing to AHA-assisted families!

For Realtors and Property Managers

• Licensed property managers can choose to become vendors on our program and serve as a single point-of-contact for their owner clients

• They can:• Attend the landlord briefing and arrange with their clients to become an authorized signer of

all documents

• Manage communications related to participating HCVP properties

• Collect rental payments

HCVP Enhancements

RENT

Rent Determination - Major Systems Boost

• For single family properties built in year 2000 or later- owners will receive an automatic $105 boost on their rent offer .

• Owners of older properties (built 1999 or earlier) can also earn up to $105 in boosts for upgrades to the following major systems at $35 per system:• Electrical- $35

• HVAC- $35

• Energy Efficiency- $35

New Payment Standards

• In July 2016, AHA rolled out a new Atlanta submarket map with 23 submarkets and new, increased corresponding payment standards (rent maximums) for each.

• More submarkets means smaller market areas, and more neighborhood-driven rent analysis

• Your property will be assessed using the market activity and rent levels in your neighborhood

• Every rent maximum was increased with the roll out

New Payment Standards

HCVP Enhancements

INSPECTIONS

Pro-rated Abatements for Inspection Issues

• Under the new procedure, if the unit fails to pass inspection prior to the deficiency due date, (24 hours, 72 hours or 30 days, dependent upon severity of the deficiencies), the owner will incur a daily, pro-rated abatement penalty until repairs are made and the unit passes inspection instead of a full month.

Streamlined Inspection Standards

AHA has recently reviewed and revised the HCVP’s Enhanced Inspection Standards and some changes include:

Gas certifications are only required at the inspector’s discretion

Window screens are no longer required

The site/vicinity portion of the assessment is based on a measurable, more objective formula to determine site feasibility

The Lease-Up Process for New Landlords

Select an HCVP ApplicantComplete the Request for Tenancy

ApprovalInspection Rent Negotiations Sign HCRAA Move In

Property Assessment

Qualify for expedited lease-up

Rent Schedule Negotiation

Select HCVP Applicant

Sign HCRAA Move In

Attend Landlord Briefing

Complete Property Owner Application

Multi-Family

Single Family

So, could HCVP work for you?

Could the Housing Choice Voucher Program work for your portfolio?

If so, Atlanta’s working families are waiting on you.

We can get the process started today.

The paperwork is minimal, and we have a marketing and landlord services team ready to help you through the process. All necessary forms are available at atlantahousing.org/for_landlords.php

atlantahousing.org/for_landlords.php

166

Alpha Evictions specializes in landlord-tenant and

Eviction Law. They will assist landlords by

preparing, serving, mailing and filing all

necessary documents at the courthouse to

remove tenants as quickly as possible. Barbara

Finney and her team provide prompt, quality

service and precise information about the

dispossessory process.


http://www.alphaevictions.com/

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