IN V E S TO R IN S ID E R S GU ID E L
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PASSIVE INCOME
MANAGEMENT
MARKET
How you can make money every day without going to work.
How you can make real estate a truly low-stress investment
What makes the Las Vegas Real Estate market so friendly to cash-
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~ Our Investor Insiders Promise ~ We are committed to providing the highest quality service to you through focus, honesty and integrity.
We adhere to the following maxims: We always do what is best for you, and will never let you close on a bad deal. We never recommend deals that we wouldn’t buy ourselves! Real estate should be purchased for cash flow only! Appreciation should be treated as a bonus. Real estate investing is a non-emotional event – we do our math and make sure you have the numbers you need. You, as an investor, play a vital role in the real estate market and deserve to be treated accordingly. We go the extra step to take as much as possible off your plate. We know you are busy – and we strive to make real estate a means for truly passive income.
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Investor Insiders Questionnaire We ask all new clients to fill out the following information to better give us a picture of what your priorities are. We will also add you to our Investors’ Insiders List. Client Name(s): _________________________________________________________________ Client E-Mail: __________________________________________________________________ Home Phone: ___________________________ Cell Phone: ___________________________ Current Mailing Address: ___________________________________________________________ City: _________________________________________ State/Prov:_________ Zip ________
PART I: Goals Questions 1. What are your specific goals? ¢ Passive Income ¢ Retirement ¢ Short-Term Flip ¢ 1031 Exchange 2. What cap rate or rate of return are you looking for? ____ % PART II: Investor Type Questions 1. Have you purchased residential property before? ¢Yes ¢No 2. How many times have you purchased residential property? ¢Never ¢1 time ¢2 times ¢3 times ¢More than 3 times 3. Have you ever rented out your primary residence? ¢Yes ¢No 4. Have you ever purchased a residential property as an investment? ¢Yes (How Many: _____) ¢No 5. How often do you purchase residential investment properties? ¢ Never (only primary residence purchases) ¢ Once every 7 years or more ¢ Once every 3 years ¢ Once a year ¢ More than once a year
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PART III: Investor DNA Questions 1. What are your priorities in selecting an investment property? ¢ Location ¢ Cap Rate ¢ Repair Costs ¢ Low Price ¢ Low Risk ¢_________________ 2. What is your strategy for the property as an investment (select all that apply)? ¢ Cash flow ¢ Rehab & resell ¢ Appreciation (equity) ¢ Retirement ¢Build equity to re-leverage ¢ Other (notes) 3. What type of property do you intend to purchase? ¢ Condo ¢ Single family detached ¢ Duplex ¢ Triplex ¢ Fourplex 4. How long do you plan to hold the property? ¢ Less than 6 months ¢ 6 months to 3 years ¢ 3-10 years ¢ 10+years 5. What are your short-term investment goals? ¢ Immediate cash flow ¢ Eventual cash flow ¢ Equity/appreciation ¢ Reselling for profit 6. What are your long-tem investment goals? ¢ Cash flow ¢ Equity/appreciation ¢ Retirement asset ¢ Re-leveraging or multiple properties PART IV: NEEDS 1. How much cash flow do you need to see in the first year? ¢ Not a consideration ¢ Less than $1,000 ¢ Less than $3,000 ¢ $3,000 or more 2. What is your required return on investment in the first year? ¢ 1-5% ¢ 5-10% ¢ 10-20% ¢ 20% or more 3. Do you have a specific timetable for closing on or reselling a property? ¢ Within 180 days ¢ 180 days to a year from today ¢ 1-2 years from today ¢ No PART V: ABILITY 1. Are you comfortable buying properties needing maintenance and repairs? ¢ No ¢ Yes, but only if minor (under $1,000) ¢ Yes, but only if limited (under $5,000) ¢ Yes 2. How much cash do you plan to put towards on your investment purchase? $_____________ Cunningham Group 2012 Investor Insiders Guide 5
Meet Cunningham Group Shawn Cunningham ABR, CRS, CDPE Licensed #55212 Co-Owner/Client Consultant Permitted Property Manager Direct: 702-530-5002 shawn@cgroupvegas.com TWITTER: @shawnvegas
“ I enjoy helping our clients realize wealth through real estate. I start and end my day looking for great opportunities and getting the word out! “
RE/MAX Chairman’s Club | HALL OF FAME
Kyle Cunningham Licensed #55212 Co-Owner/Property Manager Licensed Realtor Direct: 702-530-5008 kyle@cgroupvegas.com TWITTER:
@kyle_cgroup
Jack Thompson MBA Accredited Buyer Representative Licensed Partner Licensed #53400 Works with Buyer and Sellers Direct: 702-6827525 jthompson@remax.net
Debra Fitzgerald Account Manager – Property Management Dept Not licensed Direct: 702-530-5010 debra@cgroupvegas.com 6 Cunningham Group 2012 Investor Insiders Guide
“ I am on a mission to change the perception of owning rental property. By using our experience, thorough systems and mitigating risk, we have succeeded in creating a stress-free environment for our rental homeowners. “ “ I enjoy helping our clients achieve their goals. It’s not about the commission check – its about the smile of a satisfied buyer or seller. “
“ Sometimes a curve ball comes our way whether it be a repair issue or a tenant issue. My job is to deal with what comes our way in the best interests of the client and the property… and do what we can to prevent issues. “
CORPORATE CONSTITUTION Preamble We, the partners of CUNNINGHAM GROUP, in order to build fulfilling personal and professional lives, to effect positive change in the community we live in, create a following of Raving Fans, revolutionize the practice of real estate, do ordain and establish this Constitution of this company.
Our Axiom
Doors Opened. Dreams Delivered.
Our Partners Our partners are a diverse group of individuals with different experiences but bonded by common values. We are integrity-powered leaders who deliver what we promise to our clients and each other. We are dedicated to changing the perception of the real estate industry by adhering to an unparalleled code of honesty and excellence with everyone we encounter in every transaction. We live to bring our clients the results they want and help them reach their dreams.
We
embrace a fierce commitment to giving back to our community. We share a passion for learning through experience, education and relationships. We see challenges not as an obstacle but as an opportunity to learn and grow. We are driven to improve what we do every single day. We keep ourselves accountable to each other and our clients.
Our 10-‐Point Pledge to our Clients 1.
To listen to our clients’ needs and hold ourselves accountable for meeting them. We understand that helping our clients realize their goals often requires us to tell them what they should hear, not want to hear.
2.
To secure the greatest savings for our buyers and obtain the highest market value for our sellers. We enhance our market and product knowledge along with negotiating skills to deliver the information you need to make an informed decision.
3.
To always hold your needs above a commission check. Our commission is our ‘success fee’ and we hold success as the satisfactory completion of our clients’ goals.
4.
To communicate diligently and consistently. We understand that communication is vital during a real estate transaction which involves your most important financial decision.
5.
To deliver you a high quality of service. We have a team of skilled partners who exercise effective communication. We consistently utilize systems to get the job done accurately and in a timely manner.
6.
To utilize cutting edge technology to keep you involved in your transaction. We utilize the latest technologies and resources to provide you the control to be informed 24/7. To be your REALTOR for Life. We provide our clients with a high level of service far beyond the completed transaction.
7. 8.
To be fair and honest with our fellow REALTORS. We are revolutionizing the industry by maintaining consistent; straight-forward communication with cooperating agents to ensure our clients’ transaction is a smooth one.
9.
To become better at what we do. The passion to learn and grow through advanced training and consulting is what allows us to adapt to changing market conditions. We have the ability to deliver our clients’ dreams – anywhere, anytime. 10. To make your experience a memorable one. We amaze, amuse, surprise and delight our clients. We want Raving Fans, not just satisfied clients.
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T E S T I M O N I A L S “ From a renters view point, we have had excellent service from Kyle Cunningham. We had rented a property for 2 yrs ( 2 leases) from his management group and were very pleased with his attentiveness and professionalism. Unfortunately , we moved out of state for our business, but , if we were ever to return to NV , The Cunningham group would be the first call. One additional comment though, the lady who is at the front desk at the office on St. Rose, needs to be a little more "people friendly" and be a little more grateful she has a job! “ — Sylvia B.
“The thing I like the most about Cunningham Group’s overall service was the professional advice I received from them. He knows Las Vegas real estate. They listed to my requirements and diligently worked to fulfill my needs. – A special note goes out to Shawn Cunningham for his unparalleled service and commitment. He used his technology savvy to locate a property that fit my needs and then successfully negotiated on my behalf to achieve price and terms that were acceptable. He attended all inspections and made numerous visits to the property for me in my absence, including supervising the final walk-through. He spoke candidly to me and really educated me on the market and the home buying process. Working with Shawn was like having a best friend looking out for me. He is a wonderful human being and an extraordinary real estate broker.” — John J. Piazza
“Ever since I hired Kyle and Cunningham Group to manage my property, my stress level has dropped dramatically! Now I can focus on things other than my investments! It's a tremendous relief!” — Dulce Moran
“The Cunningham Group is by far one of the best property management companies in Las Vegas! We've hired Kyle nearly two years ago and haven't had a single issue yet. We would give ten stars to Kyle and his team if we were able. We have no intention of losing Cunningham Group as our Property Manager as they've been the best for us!” — Terry M.
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“I just bought my dream home thanks to Kyle, Debra and Shawn. Kyle was really diligent and showed us so many properties. When we bid on the property it was already sold. The deal fell through and Kyle was right on top of it to put in our offer. We won and 60 days later we are in our new home. They will be managing my other home and I am so happy to have them take away all my worries and headaches of dealing with tenants. Money well spent. “ n
Cindy V.
“I reside in So. California and for the past 5 yrs. Kyle and Shawn Cunningham have managed our two properties in Las Vegas. I couldn't be more pleased with their services. They collect our rents in a timely manner and automatically deposit it into our account. Two months ago they did an inspection of my properties and provided me with a report of current conditions. I can get a quick response when I email a question.” n
Bryan S.
“We recently purchased 2 properties in Las Vegas and hired Cunningham Group to manage our houses. They not only handled the entire repair process but also found us good tenants in great time. We really appreciate their hard work and efforts for us.” n
Jake M.
“We recently purchased our first home, and what a task! It was full of ups and downs, hurry up and waits, but Kyle Cunningham was with us through every step! He answers your questions fast, is very easy to get a hold of, even text messages! His brother, and partner in the business, was also very helpful as well! They made buying our first home a vey enjoyable process. And even more importantly, Kyle is still very available and willing to answer questions and help us get settled even though we have closed and he really has no obligation to do so. Thanks for everything!” -- K.M.
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C G R O U P
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www.vegasvalleyinvestors.com
www.allhomesinvegas.com
www.lasvegaslandlords.com
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Research the Las Vegas Market
Population (2012 estimate): • City of Las Vegas - 603,093 • Clark County - 2,000,759 • Median Age 34.5 Household Information: • • •
Number of households – 701,836 Housing units – 848,118 Median household income - $55,961
Climate (based on 30-year average): • • •
Average minimum temperature - 56.3 F Average maximum temperature - 79.9 F Annual Sunshine - 294 days
Land: •
Las Vegas Valley Area: 133.2 square miles
Culture and Recreation: • • •
Parks - 68 Golf courses 14 Public swimming pools 4
Public Safety: • • •
Fire stations 17 Fire Training Centers 1 Police stations (countywide) - 7 area commands
Education: • • • • •
Elementary schools - 64 Middle schools - 15 High schools - 10 UNLV satellite campus - 1 CSN satellite campus - 1
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Best cities to buy rental properties - Las Vegas (1) - CNNMoney
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Best cities to buy rental properties A combination of beaten down home prices and rising rents make these cities promising places to become a landlord -- just as long as you understand the risks involved.
1. Las Vegas
1 of 10
Median home price in 2012: $122,000 Projected home price in 2015: $121,087 Projected annual rent in 2015: $12,829 Ever thought about becoming a landlord? Now might just be the perfect time, especially if you're looking at a real estate market like Las Vegas. Home prices in Sin City are still greatly depressed -- down 62% from the 2006 peak, according to the S&P/Case-Shiller home price index -- making for some great bargains for investors. Meanwhile, rents continue to climb, according to a recent report from HomeVestors based on analysis by Local Market Monitor. Of the 316 markets Local Market Monitor reviewed, Las Vegas ranked number one based on estimated returns on investment for single-family rental properties. Cities were ranked by estimated future returns investors can expect when they buy single-family homes and rent them out. According to Local Market Monitor's data, for example, investors in Las Vegas will have a 5.6 percentage-point higher return on a rental property than the national average of 5%. But there are risks with investing in cities like Vegas. The markets with the highest ratings are typically those where home prices have plunged the most, said Ingo Winzer, founder of Local Market Monitor. And in Vegas, investors are buying up so many properties and turning them into rental properties that there is a glut in supply, said Winzer. In some cases, that could make it hard to find tenants. And letting a property sit vacant could take a big bite out of profits since an empty place can pile up expenses quickly, he said. NEXT: Detroit Source: Local Market Monitor, HomeVestors, National Association of Home Builders, and Rent Jungle. Cities were ranked by estimated future returns investors can expect when they buy single-family homes to rent out, compared with the projected national average future return of 5%. BY LES CHRISTIE @MONEY - LAST UPDATED JUNE 28 2012: 12:54 PM ET
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M L S
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M A P
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L A S
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V A L L E Y
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S T A T E
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How to Evaluate Cash Flow
Capitalization Rate or Cap Rate is a ratio used to estimate the value of income producing properties. This is a “Cash on Cash” return – that does not include any financing costs as part of the calculation.
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Rental'Cashflow'Analysis'Spreadsheet
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Using Your IRA
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How to Get Started
STEPS TO PURCHASING REAL ESTATE: 1)
2)
3)
4)
5)
6)
Submit the information requested in the Investor Insiders’ Questionnaire to us! Join our Investor’s Insiders List – a weekly email list of investment options that we have personally previewed and evaluated. [ See a sample on Page 30 ] Sign a PRE-OFFER. This is a standard purchase agreement [ See a sample on Page 35 ] that omits the address and price, and allows us to submit offers rapidly upon your approval. Given the competitive nature of the market, it may take several offers to get one accepted. View the numbers and click on the Details Link for photos, a detailed MLS Sheet and usually a floorplan. When you determine a property that you are interested in, please contact us immediately to answer any questions and submit an offer. Upon successful negotiation, we can proceed to the ESCROW period. With SHORT SALES, the seller’s mortgage holder(s) must sign off on the offer before we can proceed to the ESCROW period. This may require a second negotiation on price/terms, and can take up to 3-4 months.
Cunningham Group 2012 Investor Insiders Guide 29
T H E
I N S I D E R S
L I S T
The Investor Insiders List is a specific list of properties that we have personally evaluated and visited, with our own photos, rental and sales comps and floor plans (if available) for your review. It’s a first-come, first-serve list we don’t write offers for multiple buyers on the same property. Let us know ASAP if you have interest in any of this week's options. If you would like a custom search, let us know, we’ll be happy to accommodate! Option A Address:
3650 Great Bear
Target:
$239,900
SQ*FT:
2,012
YR*BUILT:
1998
MLS*#: List*Price: $240,000 LOT*SF: 4,356 HOA: 0 EST.*REPAIRS: $
2-STORY 2&CAR*GARAGE TAX:
6,000.00
1335530
BED/BATH: 3/2
$1,714
EST*RENT:$1,700
COMMENTS: [Regular Sale] Good condition. Pool property in nice location - near Summerlin, The Lakes, a few miles west of china town area. Included costs for cosmetic repairs Estimated Estimated Investment Annual Net
CAP*RATE*(at*target*price):
7.06%
$245,900
$17,366
Option B Address:
705 Azure Banks
Target:
$130,000
SQ*FT:
1,159
YR*BUILT:
1999
MLS*#: List*Price: $120,000 LOT*SF: 6,098 HOA: 47 EST.*REPAIRS: $
1-STORY 2&CAR*GARAGE TAX:
2,000.00
1335296
BED/BATH: 3/2
$828
EST*RENT:$950
COMMENTS: [Regular Sale] Great condition. Single-story single-family home on a huge lot. Hard to find at this price. Will sell fast. Seller prefers owner-occ buyer but I'd submit an offer anyway. Estimated Estimated Investment Annual Net
CAP*RATE*(at*target*price):
6.58%
$132,000
$8,688
Option C Address:
3035 Beaufort
Target:
$140,000
SQ*FT:
2,127
YR*BUILT:
2002
MLS*#: List*Price: $130,000 LOT*SF: 7,405 HOA: 0
2-STORY 2&CAR*GARAGE TAX:
EST.*REPAIRS: $ 12,000.00
1333151
BED/BATH: 4/2
$1,098
EST*RENT:$1,150
COMMENTS: [Short Sale] CGROUP listing - tenant is vacating so will be empty. Located in North Las Vegas. No HOA. Large lot and a lot of square footage for this price point. We manage several properties in the area. Had 17 offers previously - falling out of escrow. Estimated Estimated Investment Annual Net
CAP*RATE*(at*target*price):
7.49%
$152,000
$11,382
Option D Address:
2914 Calmada
Target:
$209,900
SQ*FT:
2,188
YR*BUILT:
1991
MLS*#: List*Price: $209,900 LOT*SF: 4,792 HOA: 40 EST.*REPAIRS: $
2-STORY 2&CAR*GARAGE TAX:
5,000.00
1336024
BED/BATH: 3/2.5
$1,496
EST*RENT:$1,325
COMMENTS: [Regular Sale] CGROUP listing and we currently manage the property. Located in heart of Green Valley - very popular area to live. Backs to a four-lane road but overall location is excellent. Lease through Sept 30, 2013 Estimated Estimated Investment Annual Net
CAP*RATE*(at*target*price):
For loan rates of return, visit: http://www.calcxml.com/calculators/inv04
30 Cunningham Group 2012 Investor Insiders Guide
5.87%
$214,900
$12,604
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******** FOREIGN INVESTORS ******** Hart & Associates Tax Preparation, Consulting & IRS Audit Representation. 1445 American Pacific Drive Suite #110-352 Henderson, NV 89074 Office: 702-985-7148 Fax: 888-235-8263 richard@hartassociate.com Is there a "Best" Way for a Foreign Individual to Own U.S. Real Estate? When planning to acquire U.S. real estate, foreign individuals have a number of ownership alternatives to consider, each of which offers its own advantages and disadvantages. Following is a brief summary of the most common options, along with other items a foreign investor should consider when evaluating the most advantageous method for holding U.S. property title. Foreign individuals considering an investment in U.S. real estate should assess a number of important factors including risk, economic impacts, and the income tax consequences in both the United States and their own home country. Here we will briefly examine the four most common ownership options for those acquiring U.S. real estate:
• • • •
Direct ownership by foreign individual Investment in U.S. real estate via U.S LLC (limited liability company) Investment in U.S. real estate via foreign corporation Investment in U.S. real estate via foreign corporation and U.S. corporation or LLC
READ MORE AT http://www.hartassociate.com
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SERGIO CHAVEZ (702) 567-3700 Office (702) 232-4266 Cell
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Working with Your Property Manager
RELAX
Cunningham Group has built a property management business specifically designed to take a big piece of stress out of the lives of busy professionals. Whether you are a seasoned investor or just biding your time for the market to change, our business is designed to serve you. We understand how important your real estate investment is to you and institute a thorough tenant screening process and management protocol to help you be a stress-free landlord.
PERSONAL TOUCH
There are many big management "shops" out there that treat you like a number. We built our business from scratch to serve our valued clients and give all of our new owners the same level of service we give our clients we've worked with for years. Fast response (yes - even on lunch hour and weekends), evening and weekend showing times for vacancies and accountability to YOU. You are not just a number - we take very seriously your property and your money!
AFFORDABLE. RELIABLE. CONVENIENT
We work hard to keep our services reliable and affordable. Our fee is more than paid for with peace of mind and reducing the chance of getting a challenging tenant.
EASY-EXIT GUARANTEE
We value our clients and if you are dissatisfied at any time - you may terminate our services with 30 days notice (for processing purposes) at no cost and no questions asked. That's how confident we are in what we do!
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ADMINISTRATIVE SETUP CHARGE (INCLUDES ALL MARKETING) = $295.00 v v v v v v v v v v v v v v v v v
All Pre-Leasing Consultations Pre-Marketing Inspection Coordinate with Vendors on Owners' Behalf Setup Trust Account Setup Bank Deposits Brokerage Rent Collection Setup Setup Online Access for Owner Order Home Warranty if Requested Includes RentalHomesPlus.com and nearly 50 additional websites at no additional charge!! (A $79 value) If applicable, our sign installation company can install a professional full size For Rent sign in your yard for no additional charge! (A $60 value) MLS Placement w/ Photos & Lockbox on Property MLS Data Sheet/Marketing Sheet Filled Out Multiple Photos for Marketing Placement on LasVegasLandlords.com.com Process Rental Application, Run Credit & Background Check for Tenant Complete Lease for Tenant & Process Security Dep Move-in Walk-Through with Tenant
B. SHOWING COMMISSION = $350.00 v Does not apply if you have your own tenant. Only applies if tenant must be located.
C. MONTHLY MANAGEMENT COMMISSION v 10% of gross rent receipts OR Minimum monthly commission: $110.00 v Contact us to find out about our DISCOUNT plan for multiple-property clients!
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P R O P E R T Y
O W N E R
F A Q s
WHY USE CUNNINGHAM GROUP? Cunningham Group is affiliated with the premier Re/Max name. We strive to adhere to the highest standards of ethics and professionalism that come along with the Re/Max brand. Our company manages homes in every area of the Las Vegas valley. Through communicating the truth to our clients and aggressively marketing our rental listings, we're proud to say that we rent the typical property on average within weeks, not months. Our belief is that everyday a rental sits vacant, the owner of the home is losing cash. That's the mentality we work from and that's how we keep our clients' rentals occupied with great tenants.
WHAT IS A SECURITY DEPOSIT? Some people confuse 1st & Last Month's rent with a “Security Deposit”. Laws that govern the use of rents vary substantially from those that involve security deposits. Our company requires all our tenants to remit an amount of money equal to one month's rent (at least) in addition to their first month's rent before they can move in. This additional money is called a security deposit. The deposit is held in a brokerage trust account and can't be touched unless the tenant vacates the property. The security deposit is then 100% refundable minus any expenses that are incurred to restore the property to the condition it was in when the tenant moved in. The benefit of taking a reasonable security deposit is that the money acts as leverage for a tenant to leave the property in great condition when they move out. If we were to take First & Last Month's “Rent”, that money would never be returned to the tenant and thus would not provide any real security for the owner as the tenant has no real motivation to leave the property in good condition.
WHAT CAN A SECURITY DEPOSIT BE DEDUCTED FOR? We can deduct any costs related to restoring the property to its previous condition from a tenant security. Tenants fill out a pre-occupancy inspection report that absolves them of any issues that were in existence before they move in. This signed report is kept on file until the tenant vacates the home. Examples of things that can be paid from security are: 1. 2. 3. 4. 5. 6. 7.
General cleaning Carpet Cleaning Repairs of items that were not broken when the tenant moved in Unpaid utilities that were supposed to be maintained by the tenant but were not Landscaping Repairs Painting And More Cunningham Group 2012 Investor Insiders Guide 49
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HOW MUCH DO YOU CHARGE FOR SECURITY DEPOSITS? We charge a security deposit that is equal to 1 month's rent. In some circumstances, we may elect to require a deposit of two to three times one month's rent. This would only happen if we can't verify a strong credit history and residence history for a prospective tenant.
WHEN IS FIRST MONTH’S RENT DUE? Rent is due immediately upon lease signing. One month’s rent is required to move-in.
HOW DO YOU SEND ME MY RENT MONEY? We offer direct deposit of your rent check directly into your bank account. We do not mail checks. We can do this to any major national or local bank: Bank of America, Bank of Nevada, Washington Mutual, Wells Fargo, US Bank, Citibank, and Nevada State Bank. You will need to have an account at one of these institutions to receive rent checks. Out of state accounts are perfectly fine.
WHEN IS THE RENT MONEY DEPOSITED INTO MY ACCOUNT? Rent checks are deposited on the 10th of the month. The only other delays to rent deposits could be caused by late rent payments. If a tenant pays late (which is not common), they are also required to pay late fees which you would see reflected in your deposit.
HOW LONG IS A TYPICAL LEASE PERIOD? Lease periods are typically 1-year. In some cases, we can authorize short term leases of 3 – 9 months depending on owner discretion. Additionally, we prefer not to end leases between Dec 1 and Jan 30 except in special circumstances or when absolutely necessary because of the difficulty of filling vacancies during the holiday season.
HOW MUCH RENT CAN I GET FOR MY HOME? How much rent you can get depends on the size of your home, the community it's in, and any upgrades to the property. To get a free rent comparable analysis, go to the “Contact Us” Form above. You'll want to send us the full address of the property you want to rent out. The comparable is done free of charge and there is no obligation to utilize our property management services if you don't wish to.
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WHAT THINGS CAN I DO TO HELP ME GET MORE RENT FOR MY PROPERTY AND RENT IT FASTER? There are several things to remember when you are trying to market your rental property. • The important thing is that the home is “clutter free” and extremely clean. Prospective tenants are most attracted to clean homes when they are walking through them. They need to be able to see your home as a place “they” could call home. • Paint your home in neutral colors. If not white, then any beige or light cream color would work. We recommend strongly that you avoid green, blues, or other more custom colors; especially dark colors. • Fix anything that is broken: If we turn over a clean, operational and maintained home to a tenant, it is much easier to hold them accountable for returning it back that way. • Install landscaping: If your property is dirt and barren in the backyard, we highly recommend that you “at least” pour some rock down to make the yard more appealing. Additionally, having a patio back there adds a great amount of value to your home and will get it rented faster. Homes can still rent without anything in the backyard, but it will hurt the rent you can get and the speed in which you could get it. • Have appliances available: 98% of potential tenants do not have their own refrigerator, washer/dryer, stove, or dishwasher. These items are covered under the security deposit if damaged and the tenants will have to maintain them if you leave them in the home.
WHAT ABOUT PETS? They are a lot of horror stories about pets destroying homes. In our opinion, the damage a pet can do to a rental is far more indicative of the quality of the tenant we find and NOT the pet. A great tenant will keep the house in great condition, regardless of the existence of a pet. It's our job to find the great tenants so that you don't have to worry. Additionally, we charge anywhere from $300 or more in additional security deposit to allow pets in rental properties. Also, you should remember that more than 2/3 of potential tenants have or will have a pet at some point. Turning down applicants with pets can “significantly” increase the amount of time your property sits on the market.
HOW DO YOU QUALIFY A TENANT The criteria that we use to qualify prospective tenants is a “tiered” system. The higher the credit score, the easier it is to qualify. Verifiable rental history, co-applicant qualification, and income verification can all be used to qualify a tenant. • Applicants who have been evicted in the past are automatically disqualified. Evictions typically show up on credit reports • All applicants MUST submit a Greater Las Vegas Board of Realtors rental application. We conduct our own credit check in all circumstances. • If a tenant cannot qualify under our normal qualification procedures, additional security deposits Cunningham Group 2012 Investor Insiders Guide 51
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(up to triple the normal amount) may be requested to qualify a tenant.
HOW LONG IS THE MANAGEMENT AGREEMENT I SIGN WITH YOU? Our agreements last at least for one year. After a year, they automatically renew until cancelled.
WHAT IF I WANT TO SELL MY HOUSE LATER ON? Selling your house is always possible, with or without a tenant in it. It's important to remember that the lease agreement you have with your tenant supersedes anything else. This means that unless you wait for a lease to end, you'd have to sell your home to an investor. When you do this, you “sell” the lease right along with the home. There are plenty of investors looking for homes that they will end up renting out anyway. Otherwise, you can sell your home once any given lease period ends by giving the tenant a 30 day notice to vacate.
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