George Skidis
-
Posts
58 -
Joined
-
Last visited
-
Days Won
2
Content Type
Profiles
Forums
Blogs
Events
Articles
Downloads
Gallery
Posts posted by George Skidis
-
-
Tenant Screening is an Art
After being in this business for a while you realize that tenant screening is an art. However, that is a misnomer. It should really be called applicant screening. No one is a tenant until you give them the keys.
There are several strategies in tenant screening. None of them work alone. They are like wearing layers in the winter time to stay warm when outside. A great big bulky coat is great. But without layers underneath you will soon freeze.
What you need
You need the applicant’s written permission to perform any type of research on them. Always have an attorney approved “Authorization to Release Information”. Even if you buy our course on tenant screening all of the forms included need to be checked by an attorney specific to where you do business. What works in southern Illinois might not work in liberal Chicago or any part of Cook County. A LegalShield membership will handle the review of all of our tenant screening forms for under $40.00 a month. Go to www.Skidis.Biz for more details about a LegalShield membership.
Electronic Data Searches
The same is true with screening prospective tenants. No one tool does it all. You need to check ALL of the following records: credit history, credit score, full criminal history, address history, sex offender records and see if they are on the government watch list. Who has time for that? That is why we use Rent Perfect. As an entrepreneur your time is more valuable than that.
With Rent Perfect you can set your rental criteria before the house is even available. Then if the applicant does not reach your standards you can click the box and send out an Adverse Action letter in compliance with all Federal Law.
When you should play private detective
After completing the Electronic data searches it is time to move on to Step 2 - Playing Private Detective. Just remember that tenant screening is an art and from here on out it is up to you. Each and every one of the actions below may require that a copy of the “Authorization to Release Information” be provided to get the answer you are seeking. For the most part you are an arm chair detective and should do this from the comfort of your desk or kitchen table.
Call the Current Landlord
Call the current landlord and ask them if they have any units for rent and what the price is. If it is a landlord they will respond appropriately. If not the landlord it is a friend or relative of the applicant who is screening the calls. If it is a landlord call back from another line and ask about the applicant.
Call the Prior Landlords
Ask the prior landlords for the last 5 years if they would rent to the applicant again, did they leave owing money and if the damage deposit was refunded.
Call the Employer
Employers are getting gun shy. They do not want to become a target in a lawsuit. Call the employer and get a fax or e-mail to send your request to. Be prepared to be refused. Use the “Employment Verification” and the “Authorization to Release Information” forms you received with the purchase of the “Ins and Outs of Tenant Screening”.
The Last Step
If the applicant has made it this far then it is time for the last step. If at all possible drive to their current residence and see what it looks like outside. That is the best predictor of what your house will soon look like.
If the outside looks ok and you are brave enough stop the car, and go up to the front door and knock. If the door opens only a crack and they do not invite you inside they might have something to hide.
If they do not ask you in then tell them that an inspection of their current residence is required to complete their application. If they refuse you can use that as one of the factors they did not qualify.
Get to the Kitchen
Once inside if you think it is clean enough ask for permission to go into their kitchen. Again is it clean enough? If clean enough then suggest you sit down and complete some additional required paperwork.
There are a couple of reasons for choosing the kitchen. First, if handled properly it can help establish rapport with your applicant. Secondly, most kitchen chairs are either hard surface or lightly padded. That makes them easy to get up and out of. Kitchen chairs normally do not have hidden pockets or creases for something to crawl out of. This is very important for your personal security.
Additional Paperwork
On your forms disk included with “The Ins and Outs of Tenant Screening” you will find two applications. The first application is a one page document that you fill out at the first meeting. It is short and sweet and will not chase any applicants away from a showing or open house.
The second application is more detailed. It is long and detailed for a reason. You are about to rent your property to someone you just met. Wouldn’t it be a good idea to know about their vehicles, insurance, doctor, next of kin and other pertinent details that would allow you to track them down latter and get what they owe you?
Tenant Screening is an Art
You must use all of the tools at your fingertips to do the best job possible. Don’t get in a rush. Use good judgment and avoid being involved in a lawsuit for violating fair housing laws.
Remember, Tenant Screening is the first step in the eviction process.
Good Luck and Good Investing!
-
What is your preferred e-mail tool for mass communication? Do you use Mail Chimp, Constant Contact or some other program?
-
This question was just posted in the Madison County Rental Housing page on Facebook: “Why is it so hard to get a decent place here? It’s like buying a house.”
My Answer: As a landlord, here is what I think you may be experiencing. The pandemic and the accompanying eviction moratorium have come close to destroying the smaller mom and pop landlord industry. This includes families which own one to five rental properties.
If the mortgage is $500.00 a month and the tenant pays no rent who owns the home now? Unfortunately for some landlords it is now the bank. This means thousands of fewer homes for rent. Some of those left belong to less than scrupulous slumlords.
The eviction moratoriums have made the good landlords "EXTREMELY" selective on who they rent to. They are only choosing tenants whom they believe can actually pay the rent. Can you imagine that? Wanting the tenants to actually pay the rent and not providing free housing at the landlord's expense! No more taking a chance just to fill a vacancy.
For applicant screening we use a nationwide tenant screening company called "Rent Perfect". We set the standards we will accept. If you don't meet them, I am sorry but the rules of the game have changed. We have to protect ourselves. That includes not making an exception to the rule for you because the applicant we didn't make an exception for will file a lawsuit.
Many landlords I know are selling their properties and getting out of the business. The main reasons are the vanishing profit margin, a lawsuit crazy world, Madison County jury verdicts and excessive government interference. That doesn't even begin to talk about what is happening in Chicago right now.
The profit margin is currently so slim it isn't worth it for smaller investors to fight the red tape. So as the pool of rental homes shrinks and evaporates you can thank the select group of morons in both in Washington DC and Springfield, IL. They are constantly trying to pass rent control, forcing landlords to rent to unqualified residents and the previously mentioned eviction moratoriums. There is a bill right now in Springfield, IL - House Bill 2775 – If passed it will force landlords to accept Section 8 with no choice. Why would someone become a landlord when they can't have any say in how they run their own business?
If you get a bad landlord, vote with your feet and leave. But don't make every landlord suffer because 1 in 100 landlords doesn't do a good job. If you do there will only be government projects left to live in.
-
Join the Local REIA and Learn more than an out of town guru will tach you for pennies on the dollar.
-
1
-
-
There is a huge incentive to stay a real estate investor and not be classified as a real estate dealer. The main issue is the multiple income tax consequences. Real Estate Investors are taxed much more favorably than Real Estate Dealers and receive several tax benefits, including:
· Depreciation of a capital asset (the investment property).
· Tax Deductions on real estate investment-related expenses.
· Opportunity to participate in tax-deferred 1031 Exchanges (at least for now).
· Ability to sell properties using an installment sale contract
· Long term Capital Gains on the sale of properties held over a year which is around 15% to 20%. Verses the infamous Short Term Capital Gains.
· Opportunity to offset passive and earned income with passive losses.
Real Estate owned by a dealer is not seen as a capital asset. Because of this real estate dealers are unable to depreciate the asset. Additionally, the gains made from real estate transactions are taxed as ordinary income, which is subject to higher income tax rates than long-term capital gains (up to 39%).
This means the dealer may be subject to paying not only self-employment tax of 15.3% (FICA) but also ordinary taxes on their profits as long as the property is not held in a business entity like and LLC. Dealers d have one positive tax advantage: Their gains are considered ordinary, meaning they can use any losses to offset the gains.
-
Here at Varski Properties, LLC we send out a warning letter when the weather starts changing. Here is an example
-
Lou Brown has some of the best "Buyer Friendly" and "Seller Friendly" contracts available. However, you should always have any contract you buy reviewed by your attorney. That's why I use and sell LegalShield.
-
1
-
-
One reason to keep pets out of some units is for to reserve and allergy free environment for prospective residents..
-
There is also a difference between the types of pets. Cats are really hard on window treatments. They climb curtains and shred blinds. We remove all window treatments and hang the treatment purchased by the resident. I like cats but I not a fan of unchanged litter boxes.
We no longer install carpet. The flooring material depends on the type of home. Low income housing gets commercial grade floor tile. Everything else gets a vinyl plank floor. We add area rugs as needed. These are disposed of and replaced between occupancies.
To check for pet urine use a black light. Turn off the regular lights and turn on the black light. Pet urine glows in the dark.
The size of the pet also determines the pet deposit. The bigger the dogs the higher the deposit.
We have to meet the pet before the lease is signed. If it is aggressive no die.
The pet owner must also purchase renter insured with a minimum of $500,000 liability insurance and it must protect the rental company as well.
-
As much as I dislike warrantless searches. Contact the local code enforcement office and see if they have any issues on file.
-
What I found was that the more deals I made that more that were brought to me.
"Hey are you the guy that bought 123 Main Street"?
"Why Yes"
"My house is over on the next block are you interested"?
-
Duncan Wierman should weigh in on this.
-
Have you completed any deals?
-
We manage a small park in Illinois. Lot rents in this area are climbing.
-
Sounds interesting. How does it work?
-
We are holding steady on rents for existing clients but raising them as much as possible when filling a vacancy.
-
Interesting
-
First thing joint your local REIA. Make sure it is affiliated with National REIA.
U-Tube is your friend. It is also your enemy. Make sure you research who you are following.
Once you join a REIA you can enroll in online classes with National REIA University. Some are free some are $10.00, $20 or more. These classes help you earn the Professional Housing (PHP) Designation. It takes a little over 60 hours to earn it. Many of those hours can be earned at your local REIA as well.
Books by Mark J. Kohler can help you understand the finance side.
Courses by Lou Brown and Lee Phillips can help you with the asset protection and management side. Buy them through your local REIA.
Good Luck and Good Investing.
-
Roofing prices vary from year to year, from one area of the country to another, pitch of the roof and by roofing material type. Having been an insurance adjuster the first half of my life I can give you some tips, but your local prices are out of my reach.
ROOFING: is estimated and sold by the square. A square measured as a 10 foot by 10 foot area which totals 100 Square feet. It takes 3 bundles of 3 in 1 tab shingles to roof one square on the roof.
PITCH: Also called slope slope is a matter of rise over run. The run is normally calculated as a 12 foot length. The rise is how high the roof slopes up in 12 feet. So a roof that rises 3 feet in 12 feet is determined to have a 3/12 pitch. If it rises 6 feet in 12 feet then the pitch is 6/12. Any room which has a pitch greater that 6/12 will incur an additional steep pitch charge. Safety harness work is slower and costs more.
AREA is the total roof measurement. In your question you mentioned 16 Squares or 1600 square feet. If this is a gable roof then each slope is only 800 square feet. so that each slope would be 20 by 40 or some similar combination.
STORIES: The number of stories also impacts the price. Back to the safety harness concern
TEAROFF: The number of layers of shingles that must be torn off will increase the price. Most insurance companies will only pay to tear off one or two layers of roofing material. The more layers the higher the cost.
MATERIAL: Do you want 3 in 1 tab shingles or architectural shingles. Do you want a shingle lifespan or 20, 25, 30 or 40 years. The longer the life the greater the cost per bundle. Also the greater the weight which increase labor and delivery costs.
MATERIAL WASTE: A 16 square roof will have a material waste factor. For a Gable roof figure 10% cutting waste. For a Hip roof it amounts to 15% waste However, when roofers calculate waster it applies to both labor, extra charges and materials.
DELIVERY: Do you want a rooftop delivery of materials on a three story. Factor in the increased cost.
WASTE: Where are you dumping the debris from the tear off and installation. In D.C that could be very expensive.
SUMMARY: Every roof is different. My advice is to get an old phone book and start calling roofing companies. The older the phone book the better. That could mean that the company has been around for a while and has a good reputation. But not always. After a major storm, traveling roofing contractors, even what are known as gypsy roofers and contractors will come to a town and try to buy out an established roofer. Their goal is take over the existing phone lines and wait for them to ring. Some states require roofers to be licensed. Get at least three bids and check their references. Ask your friends and neighbors who they used and if they would use them again.
Good Luck and Good Investing!
George
-
Are you Nationwide or local?
-
Duncan, We need to get together at Mid Year and talk about moving forward. Are you available to participate in a Zoom Meeting. Currently booking virtual speakers for the last half of 2022.
-
Warning: Your FIRST LLC Tax Return is due March 15th the year after it is set up. So if you set it up in 2021 your first tax return is due March 15th 2022 - EVEN IF YOU DIDN"T MAKE A DIME! The late filing penalty is $290 per month per member. 4 months late with 5 members the penalty is $5,800. Make sure you file on time.
I prepare almost 200 tax returns a year. When it comes to an LLC the IRS will let you choose how you wish to be taxed. As a Multi Member LLC you can be taxed as a Partnership. Not a way to save any money. You can choose C-Corp, also not a great choice. However without looking at anyone's tax returns I would think an S-Corp would be your best choice. It allows principals to receive a distribution which is not subject to self employment tax only passive income tax.
Example: The LLC makes a profit after expenses of $100,000 and there are two members. If the LLC issues paychecks to each member of $30,000 ($60,000 total) that leaves $40,000 not subject to self employment tax. Each member then receives a distribution of $20,000. That saves around 15.3% self employment tax or $3,060 per member. They will still pay income tax depending on their individual income tax bracket but they saved $3,060 each on self employment taxes.
Each of you should purchase "The Tax and Legal Playbook" by Mark J. Kohler and study this topic in more detail.
Your LLC also needs an operating agreement to holdup in court. If you treat it just like a C-Corporation when it comes to maintaining meetings, minutes and record keeping it will protect you. Failure to do so can end up with the LLC being set aside. This works just like a when a judge allows a plaintiff to pierce the corporate veil and pursue each officer individually. Lee Phillips at LegalLees.com has a great course on LLCs. Let me know if I can help you with that.
Good Luck and Good Investing
-
Are your members earning PHP credit and working towards Earning the PHP Designation? Does your REIA need a speaker to that can cover both the INCOME TAX, INSURANCE & ETHICS requirements in a Saturday Seminar?
George Skidis has worked in the insurance industry since 1980. During that time he has worked as a Field Underwriter, Insurance Adjuster for both Property & Liability Claims, Public Insurance Adjuster representing the policy owner and Insurance Agent. George is a licensed insurance agent in four (4) states.
In addition to Co-Managing Varski Properties with his wife Maria, George also runs Skidis & Co. an Insurance Sales and Income Tax Return preparation company.. He personally prepares over 180 tax returns a year. Many of those returns are for Real Estate investors.
If you would like to have a Saturday Seminar that meets the education requirements, is informative, entertaining and explains the connection between The Pirates of the Caribbean and Worker's Compensation Insurance then you need to hire George to teach your seminar.
George spent 20 years on the board and as President of a not for profit REIA. He is President and Founder of Illinois REIA a National REIA Chapter located in Southern Illinois. He has also served on the board of National REIA for almost 9 years serving in various capacities including Treasurer and Vice President.
The cost to your REIA is minimal compared to the accomplishment of getting these PHP classes in the books for your members. Call George at 618-520-8999 for more information and to schedule him to speak at your REIA.
-
There are several tools available for your use in locating deals. Some are free and others come with a minimal cost.
1. Find a Real Estate Agent that understands what you want in a property If they are hungry for business they will find it for you. We purchased our first dozen properties with the same agent.
2. If you are not a member of a local Real Estate Investors Association, Join one. Go to https://nationalreia.org/ and click on find a local group.
3. Your local REIA has access to RealFlow a software search engine starting as low as $7.99 a month
4. Once you find a property look into House Canary here on uniting investors and get an accurate evaluation of what it can be,
If you don't have a local REIA go to www.ILREIA.com and join us to access phenomenal benefits of membership.
Always Change the Locks
in Buy & Hold/Landlording
Posted
Always Change the Locks
Always change the locks when a tenant moves out. It keeps them moved out, removes the temptation to return for the faucet they like or the copper plumbing etc.
You never want to stand up in court and tell the judge your soon to be former tenant was assaulted, burglarized, raped or killed by a previous resident who returned and used your laziness as an entry tool.
The Illinois Landlord and Tenant Act was amended via Public Act 097-047001 on Jan 1st 2012 it added section 765 ILCS 705/15, This requires landlords in counties with a population in excess of 3 million residents to change or re-key the locks on a dwelling unit after a tenancy ends.
There are two exemptions to the law:
1. owner occupied buildings containing four or fewer units
2. rental of a room in a private home.
ALWAYS check your local landlord tenant laws to be sure you are in compliance.
Our Procedure
We always change the cylinders (not the knobs) between tenants.
We always buy our "Master Keyed" handsets and deadbolts from Ernie Riddle at Landlordlocks in Indiana. www.landlordlocks.com
We always install the satin chrome finish since it ages better than the brass look-a-likes.
Landlord locks sells hand built versions of the Ultra Max series similar to a Kwikset Titan. However these locks feature a 6 pin pick resistant tumbler. Most of Ernie's employees are Amish.
There are three kinds of keys: tenant key, master key and control key.
The control key lets you change the cylinders "WITHOUT" using a screwdriver. Put it in, turn counter clockwise and the entire lock assembly slips out of the door knob or deadbolt when you pull back on the key.
They sell hundreds of lock series. Each series is coded with two letters. AA, AB, LZ for example. Each lock series works with one master key and one Control Key and has 217 possible combinations.
We use key number 217 in our series as well as the matching cylinders as a contractor's key system.
When a tenant moves out we change the cylinder to brass so it is in contrast to the handset and deadbolt. We install cylinder 217 top and bottom.
Each contractor gets a copy of key #217. We also have a code that is unique for them in our alarm system, This way we can tell not only "IF" someone went inside "After Hours" we can also tell what crew they are a part of.
We leave #217 in place until time to move in. Then as part of our resident move in process we change the cylinders while they are watching and have them sign a document that acknowledges it.
Good Luck and Good Investing.