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Cool
If it’s a triplex you can cut those doors into thirds.
FurnishedOwner
If it's a triplex you can cut those doors into thirds.
Great idea that I hadn’t thought of. I’ll give it try.
Mike
A standard door is 6’-8” and the standard ceiling is 8’. In my tradition of beating dead horses you must understand that my day job is explaining to executives that they can’t make the world give them what they want, the world works by certain rules and they have to use these rules to get the world to give them what they want.
If you are going to use credit you have to understand that 80% or higher the credit is telling the truth about the guy standing in front of you not the story that this sincere looking guy (reminding you of your childhood pastor) is telling you.
The credit score is an algorithm. It can be manipulated to get the outcome you desire. If you ask most people that get a paycheck whose money is that, they will say it is their money, but if they have creditors then it is not your money it is the creditor’s money. Their job is to take the money from their boss and give it to the creditors. If a person can’t understand that basic logic then he will have a problem paying you when he has a problem and you need to steer clear of him. Remember that credit problems are not financial problems they are behavioral problems. Since you can’t follow the guy around to see if he is using the fact that the lost a job 2 years ago and was only out of work for a month to justify his new found joy of playing the one-liners or visiting the local cat house with your money. So don’t get involved with the whys of his credit score just read the score.
I can’t believe I am giving you guys this knowledge for free!!
781 is a solid score. TO BLUE- bad credit and no money does not = a looser or a drunk. Im guessing you live in a box with no window, no tv or radio and no contact with people. Stuff happens in life that cause these issues often times they are beyond ones control. Me for example. I was a VP with Intel worldwide and when the .com went boom so did my 400k a year job. In the following year my credit went from 809 to 510 and I had no money. I have rebuilt my credit to better than that and now make plenty of money. Divorce also causes this, identity theft causes it, small business goes under. Geez man open your eyes!
Chris
I think this actually makes Blue’s point. As I read your response I couldn’t help but wonder how someone who made 400K per year could possibly be in a position to have no money and no credit from one year out of a job. I make less than half that, and I have used most of it to accumulate assets. I could quit and not miss any payments.
There are always stories that would make it outside of Blue’s generalization, but most are just excuses.
Divorce - Well, it takes two to make it work, and there is usually blame to both if it don’t. Character play a big part in divorce.
Small business goes under - I know a lot of people that take risks without understanding them well enough, or being conservative enough to make sure they can make it work. When the business goes down it is always someone elses fault. Just the kind of people that end up suddenly not paying rent.
I have to say that Blue is overgeneralizing, but if it is your rent coming in, would you figure that poor credit means you may not get paid? Or would you take whatever excuse was offered ( and there always is one ) and hope for the best?
my two cents,
DB
Not that I feel it is necessary to explain as it was just an example but here goes.
I along with 1200 of my colleagues were given the pink slip with no notice. I was still paying off an ivy league education and purchased a home as well as a car. someones in there 20’s does not often feel it necessary to invest especially with a large income. When I was laid off I had 100k in assets and I lived on that for a year, thats as far as it made it. I personally know several people with MBA’s that have had there salaries reduced by 80% or more since the .com boom. With 12k a month in expenses 100k does not go all that far. I learned my lesson and now could retire at 31 if I choose. I was recruited out of college and fast money spends even faster.
There are MANY situations where people can not control there situations. With that experience under my belt I look at peoples entire scenario before making a decision. What you two are suggesting here is bordering on discrimination. To say all people with no money and bad credit are losers and drunks. I only hope you have the chance to give living on your assets a chance. They aren’t worth what you think they are when you have to sell them to pay this months house payment.
Also, I have over the years had a dozen or so rentals and with the exception of one person I have never had a tenant not pay rent and none of them had great credit.
I suppose we dont all live in the beautiful bubble you and Blue share. Life is not that black and white, I assure you.
Just my opinion, but who am I.
Chris
The point that I keep coming back to is the idea that you had no control over what happened. I think you reference this when you say that you learned from the experience. This indicates that you could have done something differently in your spending to have been in a better position to weather the storm. Looking back, you seem to have learned from the experience and that is awesome, but it is not typical of most people.
What it comes down to is that everyone with bad credit has a reason, a story. While some of them are indeed out of the control of the person, the vast majority are not. That leaves a question of whether they have learned and changed. Again, I would wager that most will repeat their mistakes.
I realize that this is generalizing. I am using words like most and majority. I fully recognize that there are people in credit trouble that just got screwed somehow, but it is very hard to know enough about them to differentiate them from the many who just want to tell you that they got screwed and not own up to poor choices.
I don’t live in a beautiful bubble, I have worked my tail off to be in the position I am and I understand the process of how to gain security starting from a humble beginning.
I’m not looking for a fight, just pointing what I see from my perspective.
DB
Im done with the conversation. My point was simply that statements like the two of you made and validated were rude and rather uncouth and not reflective of reality. I do not wish to fight either.
Best Regards,
Chris
I think this actually makes Blue’s point. As I read your response I couldn’t help but wonder how someone who made 400K per year could possibly be in a position to have no money and no credit from one year out of a job. I make less than half that, and I have used most of it to accumulate assets. I could quit and not miss any payments.
Yeah, well, I’ll argue. Just once, though.
The above statement IS rude, and really shows your (and apparently Blue’s) ignorance of the real world or your desire to just completely ignore it altogether.
You can’t imagine how someone making $400K could be in dire straits in 1 year, yet you don’t have a clue as to the cost of living in the area or the particular situation. The truth is practically everyone in this nation is primed to live WITHIN their means, and in several cases, slightly above it. That’s all fine until a major life event occurs. If someone is living within their means, or even slightly BELOW it, saving money on the way and happen to lose a $400K a year income, it wouldn’t take long at all for it to ALL go away. Get your income slashed 80%, it all goes away FAST.
You making less than half that has no coorelation to what he made because cost of living is different. And it’s great that you’re able to simply quit if you want and not miss any payments on anything. I’m curious though, if you did NOT have an income from a “real” job, how long would it take for you to start being in trouble if your “assets” suddenly stopped performing? Also, how long did it take for you to be in your “comfortable” position?
The self-rightous can safely sit back and say things like, “I live below my means. You should have too” or “I was out of a job once, but I paid my bills.”
We’re not talking about some 2-3 week “time off” from work boys and girls. We’re talking about REAL job loss. One where you can’t find a job or if you do, it’s much less than before.
Truthfully, I almost feel sorry for you guys. If you’re only going to deal with good credit people and you truly feel that people with bad credit are bad people, then I’d get out of RE fast if I were you because in the very near future, your customer pool is going to be very, very small.
Raj
Hey Raj, thanks man. Nice words. It seems like there are others who can think beyond there own perfect bubble of wealth on this blog. Kudos.
Chris
[[[[[…feel that people with bad credit are bad people…]]]]]
While I do understand that stuff can happen out of a person’s control that ruins their credit, my real life experience is that people with bad credit are bad money managers.
Over a 30 year period of beng a landlord. I have seen hundreds of bad credit reports, with bad scores, because the applicant is simply in the habit of not controlling their finances and not paying their bills.
I have seen exactly 2 credit reports in 30 years where a medical problem harmed the credit, and exactly 1 credit report where the only problem was a divorce.
All three of those people had paid their bills after the event and credit scores were on their way up.
I rented to one of the medical, and he’s a great tenant. The divorcee, her roommate had bad landlord references, but I would have rented to her if she’d been with someone more rsponsible. The other medical got rejected because her roommate was a regisrtered sex offender wikth an 8 page criminal report, but I would have accepted her credit report.
Recent college grads might have no credit, but if they have bad credit, they are bad money managers.
Stuff does happen. But the credit report should clearly show what the “stuff” was and the applicant should be getting their finances straightened out after the event.
I don’t have a dog in this fight, but there are a lot of beginners reading, and they must learn to never accept an applicant’s excuses about the credit report. If they believe excuses, they are going to end up in a lot of trouble with their own business, and maybe be one of those who have their own credit ruined by “stuff” that happens.
It’s also my opinion that investors need to be honest with themselves and if their bad credit is due to bad money management, they should stop and learn how to manage their money before they go any further. Successful real estate investing requiress careful money management, and anyone who lacks that basic skill is going to have a very hard time with their investments.
I agree. Everyone with a bad CBR has a poor pitiful me story as to why it is not their fault. A credit report reads like a persons biography. If the credit was good then went bad for a period of time but is on its way back to good it is indicative of a good renter. If someone had 10 years of perfect mortgage history and then a year ago had a foreclosure it is obvious of a major life event that occurred. Some of the rules I follow with respect to approving rental applications are:
minimum of 1 year corporate complex rental history (I will not approve someone who has only rented from private parties unless there credit is good. It is too easy for a renter to get mom or a friend to pose as there landlord)
Income verification via the phone book. I do not call the provided numbers for VOE I must be able to lo ate the business in the phone book and or 1411 and call directly for the same reason as above.
Ah! Now, we’re moving forward.
Yes, every person with a low credit score has a story. And many are because they are simply bad money managers. Still, that doesn’t make them “bad” people.
Credit reports are easy to read. Heck with today’s report, it’s even in common english. However, by “easy to read” I mean that it’s easy to see if they had good credit at one point. If there was a problem period, and if they have, or plan to, start improving their credit again.
Simply looking at a credit score is not enough, though. You have to look at the credit history. And more important, I believe is you have to determine the character of the person standing in front of you as well.
For example, I have recently talked with two people where the credit report does NOT reflect real world. Their credit reports aren’t good. Their scores are low 500s. Yet, I would rent to both. Why? Because I know that they have NOT attempted to get any new credit in the last five years expressly because of what happened to them (overextended) before. They pay cash for everything now. If they can’t do that, they don’t buy it, period. Yet, that’s not reflected on a credit report. However, getting a power company pay period, phone company, water, etc. WILL show it.
And it is VERY important NOT to trust the numbers potential tenants give as former landlords. Verify the number before you call. When you call, ASK for the previous landlord’s number as well (the one NOT listed on your app), and call them.
Google the tenant’s name.
Raj
All true. It is more than a numbers game, There are people behind the scores.
Chris