Tenants with a Bad Credit Scores

Rehabbing bank foreclosures, a.k.a REO’s, for long term positive cash flow with little to no money down, will typically require investing in low to middle-low income neighborhoods.  When working in these neighborhoods, there will be times when the pool of tenants to choose from will all have bad credit along with several delinquencies on their credit report.  So how does the real estate investor, rehabber, and/or landlord choose a tenant under these circumstances?

Steady Employment

When credit scores are low and late payments take up the first three pages of the credit report; look for the tenant with a steady a job with at least a year of current employment.  The longer the tenant’s current employment, the better.  Steady predictable income shows that the person is capable of holding on to a job and… Read the rest

There are certain items on a tenant’s screening report that should make any landlord deny the application immediately.  Once in a while the landlord will be presented with an exception to consider; be very careful and conservative in your decision.  Remember, once a tenant moves into your rental property, you cannot legally remove that tenant with a baseball bat for non-payment of rent (even though it can be very tempting).

Previous Evictions

Immediately throw this application in the garbage.  Any tenant with a previous eviction knows how to manipulate the tenant-landlord laws in their favor and will more than likely be a headache from day one.  An eviction on a tenant’s record means that they refused to move out, even after getting served the proper legal paperwork by the sheriff.  The landlord  had to actually go to court for a… Read the rest