Real Estate Loan & Lending

Real Estate Investors & Due Diligence

When acquiring properties on a lease purchase, it is important to get good tenant/buyersin those properties that will pay on time and take good care of them. Make sure that you find out where your tenant/buyers have been employed for the past 2 years, how much they make, and weather or not they can afford the monthly payments. You want to contact their employer, or have your tenant/buyers provide you with a letter signed by their employer or supervisor. Also you want to find out where they have lived for the past 2 years, and who their landlord is. They may even be able to fax you a letter from past landlords. The more information your tenant is willing to share with you, the easier it will be to determine if they will be good tenants for you. In some cases, you might even want to do a background check on them by going to tenantsafe.com, or ntnonline.com. For a small fee, you can find out if they have a criminal background, have ever been convicted, and/or have had reports filed on them as being bad tenants. Some tenants have gotten the system down, and know to take advantage of their leasing agents . If your tenant/buyers have metioned to you that they have had some serious credit issues, you might want to go ahead and have them fill out a 1003, and then have your mortgage broker pull credit on them. Good mortgage brokers will work closely with your tenant/buyers to determine where they are at with their credit, and some of the things they will need to either improve on. One thing I have done with some of my tenant/buyers, is, I will set an appointment to meet with them where they are currently residing, so I can see for myself how well they care for their place. I also like to see how many vehicles they have. There are some tenant/buyers that will turn your property into a used car lot! Keep in mind…you want to set your tenant/buyers up for success not failure, so be sure to do your due diligence!

by Editor