Chris over at Kansas City Real Estate Investing has a great post that many people don’t think about. Go on over and check out why it may be better to pay down your credit cards than to Buy An Investment Property.

Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.

Everything you ever wanted to know about Foreclosures, but was afraid to ask!

Previously, I have written a couple posts about foreclosures, especially how they relate to investment properties. Most of my topic was information I have gleaned from training and talking with other agents.  I came across a monster of a resource regarding foreclosures. It includes websites, articles, tutorials, and more-100 sites in all.

Go and check it out over at International Listings. It is called the The Foreclosure Investor’s Cheat Sheet: 100 Useful Web Resources

Here is an example of a recent email exchange that I had with someone interested in my 2 bedroom plus loft, new construction townhouse in Forest Lake, MN. I was using Craig’s List to rent this property. I decided to post the exchange so you can notice the interesting way they are trying to avoid having to complete a rental application and why red flags were going off everywhere [note the grammar and spelling errors are from the original text]:

Prospect:

Hi. Me and my fiance’ are very intrested in your town home. When will it be available for renting? We just had our first child and need the space asap. Let me know, also quick note we would be willing to pay a few months up front if you’d take 1100 a month plus we got a dog. But we like what we saw so please let us know.

Me:
Thanks. It is available on June 1. I can take the dog (depending upon size and type), but I can’t take $1100. I would be willing to go to $1150 if you paid in advance. [rent is advertised as $1175]

Prospect:
OK we could do 1150 a month. Dog is a pointer terrier and about 45 pounds, does that work? Also were not looking to fill out application that why we’d paid a few months up front, does that work for you, you can also call or landlord now, would that work?

Me:
What is in your background that you prefer not to fill out an application?

I am OK with bad credit as long as you have good income (paying in advance will cover that also).
How long have you been at your current apartment?

Prospect:
We were on the market for buying and had our credit run to much, so we perfer to do what our current landlord did and meet us face to face and we liked each other. Wrote the check and have lived here for over a couple of years. It just tough because alot of people scam people so anyone that is interested in the face to face way is what were looking for. And that is why we want to pay a little extra up front to show that the trust can build. So what do you think?

Me:
I would be happy to rent to you, but it is simply my policy to run a credit, criminal, and rental check on every adult in every one of my properties.

A single credit check run for a rental application is going to do nothing to your credit. Even if it was run 10 times, your credit recovers quickly from those type of checks. Plus, unless you are planning to open new credit line in near future, it doesn’t matter anyway.

Attached is a copy of my rental policies for your review.

Prospect:
Yeah see were trying to by pass all that because were trying to not mark anything.

Me:
Thanks for your inquiry, but I can’t lease to you without a full rental application which includes credit, criminal and rental background checks and verifications.

Clearly this person is trying to hide something. Why else would they not want to fill out a rental application for an apartment they claim they are interested in? Plus, why not simply tell me what the problem is (felony, evictions, collections). I will not be renting to this person!

I probably look at 100 investment properties per week on a busy week. These days, 90% of the properties I tour are bank owned or REO properties. Every so often one comes up that is a short sale. Initially, I was pretty excited by short sales. Here were properties that were often in better condition, selling at REO pricing, and had less rules for submitting offers than foreclosures.

In the last couple months, though, my attitude and mood toward Short Sales has changed dramatically. Here is why:

1. Short sales can take weeks and months to receive any response from the bank regarding the offer.
2. During this time, you will get no information about the process or offer.
3. Despite the length of time it takes to get a response on a short sale, often the end of the redemption period deadline is looming.
4. After weeks and months, another offer can come in at the last minute and be accepted by the bank.
5. Banks have been doing foreclosures for decades and have systems and people in place to handle these. It seems like they make it up as they go along when it comes to short sales.
6. I have had full price, non-contingent offers turned down because the bank has decided to wait and let the property go into foreclosure.
7. Unfortunately, some real estate agents are not trained to do short sales and simply don’t understand all the intricate details of a short sale.

Of the last 5 purchase agreements I have written for short sales, 4 have ended in complete frustration. Knock on wood, but one is going OK to date (but we submitted it 4 weeks ago). Although I will submit any offer, I am advising my customers to avoid short sales at this point.

Have you always wanted to buy investment property, but never knew where to start? Don’t Wait! Get Started now.

Scott Ficek is a Minnesota Real Estate Agent with RE/MAX Advantage Plus in Minneapolis and helps new and seasoned investors with their Property Investment. He owns and manages almost 30 investment property units from single family to multi-family. Find his website at www.minnesotainvestmentrealestate.com or receive his blog via your RSS Feed or in your Email.

Amy Dickinson is a great read over at the Star Tribune. She writes a column called Rent in the Homes section and takes email questions from readers and answers them.  I suppose you could say she is kind of like a Dear Abby for renters and landlords!

A recent one article I found funny and tragic at the same time. It seems the landlord is actually a little too quick and helpful to fix things. He barely knocks before he uses his key to enter the apartment (one time catching the renter in a towel, just out of the shower). See the question and Amy’s response here.

After last week’s Stupid Property Repair #4, it seems to be the week for notches out of doors. This next one I just found at very nice, but vacant single family house in St. Paul. This property could be a good investment for a single family rental as it was priced at $165k.

I have seen my share of small bathrooms and creative layout. I have even seen the bathroom door almost touch the toilet, but this one seems extreme.

I didn’t take the picture, but that notch is so wide that you can actually see into the bathroom when the door is closed!