184: Rookie Reply: Should You Rent to a Bankrupt Tenant?

Real Estate Rookie

BiggerPockets

Entrepreneurship, Education, Investing, Business, How To

4.7 • 1.8K Ratings

🗓️ 21 May 2022

⏱️ 17 minutes

🔗️ Recording | iTunes | RSS

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Summary

This week’s question comes from Andrew on the Real Estate Rookie Facebook Group. Andrew is asking: How would you handle a prospective tenant that has a bankruptcy on their record? Tenant screening is almost as important as rental property screening. A bad tenant can not only cost you potential rent but cause thousands or tens of thousands in damages if not handled correctly. This is why landlords are so strict when evaluating tenants, as a good tenant can mean next-to-nothing maintenance and a bad tenant can mean habitual headaches. It’s up to you whether or not a potential tenant meets your criteria. When evaluating, remember to stay within your legal limits! Got a tenant with some questionable financial history? Here’s how to proceed: Speak with the applicant and get their side of the story while trusting your gut Verify the applicant is truthful by running a credit check and background check Use a property management software that allows you to report a tenant’s monthly payments to credit bureaus Look at the applicant’s job history, debt-to-income ratio, and if they have any repossessions Know that people who have filed bankruptcy may only have the option to rent (for a while) And more in the episode… If you want Ashley and Tony to answer a real estate question, you can post in the Real Estate Rookie Facebook Group! Or, call us at the Rookie Request Line (1-888-5-ROOKIE). Links from the Show Real Estate Rookie Podcast Real Estate Rookie Youtube Channel Real Estate Rookie Facebook Group Alpha Geek Capital Belmont Housing Authority RentRedi Check the full show notes here: https://www.biggerpockets.com/blog/rookie-184 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is Real Estate Rookie Episode 184.
0:07.5	My name is Ashley Care and I am here with my co-host, Tony Robinson.
0:12.6	And welcome to the Real Estate Rookie podcast where every week,
0:15.6	twice a week, we give you the stories, the information, the inspiration,
0:19.4	you need to kickstart your Real Estate investing journey.
0:22.4	So my wonderful co-host, Ashley Care, what's new? What's going on?
0:26.4	Not much. We're supposed to have great weather here in Buffalo.
0:30.0	This weekend. So that's exciting. And then I think it, you know,
0:34.0	probably go back to another snow fall or something.
0:38.0	But I had put an offer in on a campground last week and didn't hear anything back from the people.
0:45.3	They followed up, or I followed up with them, had my business partner follow up with them.
0:49.9	And then if it ended up, they didn't see, even see our offer.
0:53.5	So they actually looked at it, called us back a couple of hours later.
0:57.1	No, I'm not going to do it. So we went back, we ran numbers.
1:01.5	And what we submitted our second offer was there was a lot of land with this property.
1:07.6	We don't need all of the land. So we actually submitted our next offer with less of the land where
1:13.1	they can actually parcel off some of the land, sell that separately or keep it for themselves.
1:18.2	So hopefully that's a big enough incentive for them to accept our offer.
1:23.8	So we sent that second offer last night.
1:26.3	And hopefully get across.
1:28.7	Yeah, yeah.
1:30.4	Wait, so how many acres will it end up being for what you submitted on this last offer?
	...

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