OneSource IPS

How Poor Credit is Affecting the Real Estate Investment Industry

good credit bad credit sign

 

As real estate investors, when you rent units to tenants it is common practice to run both a credit and a criminal background check so that we know who these people are before we give them the keys to a unit. What we may not consider though is just how hard it is for those “innocent” people that have big black marks on their credit reports to get it fixed and move on with life. We tried to do some online research about who to turn to for help, what to do and what not to do and what the typical process is and the information is mind-boggling.

 

Google “credit repair” and the entire first page is dominated by sites that are either dedicated to credit repair or improving credit scores. The only site that seems not to be completely self-serving is from the government, but try to understand what they are telling you to do and how to do it and you may be even more lost.  This 60 Minutes story truly brings to life how hard of a problem this is to deal with.

 

Why should we care? After all, it’s not our credit score that’s affected and we don’t want to rent to someone that seems to have a history of not paying their bills. Because we may be missing out on some great tenants, simple as that. Those people that may have a poor credit score may just be as confused as we were by all of the information out there that they don’t know where to turn so they just continue to try to continue on with a poor credit score.

 

If you are going to rent to or consider these people as a possibility for a rent to own program, have you thought about connecting them to a reputable credit repair service and building a completion of their program as a term of the lease?  Would you even know where to turn to do this? We have a network of reputable credit repair companies that can help. Just reach out to us and we would be more than happy to give you some references.

OneSource IPS

Are “Free” Estimates REALLY Free?

We received a call the other day that really got me thinking…remodeling-estimates

Although it is common practice to request estimates for large projects, we got a call that really got me thinking more about the people that are making these calls and if they really know the questions they should be asking and what they should be looking for when evaluating an estimate since no two estimates are really equal.

 

1. Is it a free estimate? Many times free estimates mean you submit the exact details you need and the potential service provider will give you an estimate or exactly what you asked for. If they are coming out to the property, make sure to ask if there is a trip charge involved even though they tell you the estimate is free. Keep in mind that if the job that you are looking to get an estimate on requires a technician to do any troubleshooting to tell you what needs to be done the estimate more than likely will not be free since the person doing the troubleshooting has to be compensated for his work.

 

2. If there is an estimate charge, will it be credited towards your final bill? Some companies will happily agree to credit their estimate fee towards your final bill if you give them the job.

 

But ask yourself if it’s really free.free-estimate

3. How will the estimate be delivered? Sometimes you will have a company want to come out to give you your estimate when all of the homeowners are there so that they can get all of them to sign off on the contract that day. Keep in mind most companies will not give you a hard copy to review at your convenience unless it is already signed. So you wouldn’t really be able to shop with it.

 

4. What is included (or excluded) in the estimate? Read the estimate carefully and the real information you need is in the details or the omission of details. Read all the fine print. Some of the special pricing they may include doesn’t apply to rental properties.

 

5. Read the estimate carefully and don’t be afraid to ask questions. You are not expected to be an expert. If you don’t understand something in the estimate there should be no issue with you asking a question for clarification.

KDKA recently did a story on this issue focusing on estimates. You can read it here.

OneSource IPS

Buyer Beware; Avoid Hiring a Bad Contractor

Buyer Beware

As buyers, we need to do our research before jumping into any agreements.

As consumers we hear a lot of offers for both products and services that make us question if it is too good to be true. Many times the answer is buyer beware. If it sounds like it’s too good to be true, it probably is.

People make careers out of researching, testing and reporting on this stuff trying to save us the headache. And yet, we still buy into the hype.

In the world of real estate, the place that investors get hit the most is through contractors either taking your money and not doing the job or taking short cuts and then refusing to fix it because the short cuts were a part of your low price. There was a recent story where a woman found a painter on Groupon, hired the guy at a ridiculously cheap rate and allowed him to paint the inside of her personal home and then found out afterwards that he came in and took off with her jewelry.

 

So how do you be sure that you are going to hire a reputable person or company? Do your research. Don’t just hire based on the 1st interview, but on research.

What should you be doing when you’re doing your research? Here are a few things that we suggest.

 

Magnetic Car Sign

Removable car magnets with a cell phone number may be a sign of non-commitment.

 

1. Is their company vehicle a personal truck with a peel-off magnetic sticker with a cell phone? It might be a sign of a lack of commitment. Look for literature about their business and physical location.

 

 

insurance policy

Make sure to ask to see their certificate of insurance.

 

2. Ask to see their current certificate of insurance and be sure that it covers EVERYONE that works for them. What’s going to happen if they have insurance that just covers them and then they bring Joe from around the corner to help and Joe falls off the roof of your house? Chances are pretty good Joe will be looking to come after you.

 

 

 

References

Make sure you check the references of anyone you may be looking to hire.

 

3. Ask for references. Customers they worked for from their last several jobs. Why? Because anyone can give you the names and numbers of people that like them.

 

 

 

 

Visit the job site

Don’t be afraid to visit the potential contractor at a current job site or their offices. It will show you how they truly operate.

 

4. Visit them at their facilities or job site if you can. This will give you a better feel for the infrastructure they have built and how they operate when they are on the job.

 

 

 

 

 

 

The more research you do the more confident you can be that you aren’t hiring someone that is ultimately going to let you down.

If you are interested in OneSource’s repair and support services, feel free to visit us online at www.onesourceips.com and please feel free to come past and visit us anytime. We love visitors!

OneSource IPS

Avoid Renting to the "Undesirable Tenant"

Maintain quality housing to attract desirable tenants.

Maintaining quality housing will attract quality tenants and reduce the chances that you will rent to undesirable tenants.

So often we are asked how to avoid renting to the “undesirable tenant”.  Although there really is no clear-cut answer to this or a list of undesirable tenants there are some things that you can do to prevent renting to the less desirable tenant.

Maintain quality housing.  Having a clean unit with quality features including neatly maintained landscaping, flooring, lighting and fresh paint can make all the difference in attracting the tenant you desire.

Make sure all potential tenants fill out the same application no matter how they present themselves.

Have all potential tenants fill out the same application regardless of how they present themselves.

Screen applicants. Don’t be swayed. That person that may present themselves so well being nicely dressed and well-spoken might have a laundry-list of creditors after them, several evictions or even a criminal record. With that being said, make sure that everyone on the lease have their credit and criminal background checks regardless of how they present themselves.

Check the facts on every potential tenant's application.

Verify the facts on the application. Call the tenants employers and past landlords for references.

Fact check. The bottom line is that people can mislead you when they want something and you have the power to reject them. Verify everyone’s employment and call they’re past landlords.

Take a copy of every applicant's photo ID's.

Make sure that you get copies of the applicant’s photo ID. People will try to pull a fast one and have someone move in that is different than the person that actually filled out the application.

Require a copy of a driver’s license, state ID or other valid photo ID along with the completed rental application. Talk to experienced landlords and they’ll tell you that they’ve had the old bait and switch attempted on them. The person that goes to move into the unit is not the same person that you showed it to or the person that you had fill out the application. Without that photo ID how would you prove it?

Ultimately, no matter how many screenings and precautions you take trying to find the right tenant, you never know but treat everyone the same. For additional assistance running credit and criminal checks, visit us online.