Screen Your Tenants to Make More Rental Profits

Screening is perhaps the most important activity relative to your ability to profit in the rental business, once you have acquired a rental property.

rental-incomeI know. It sounds too obvious. BUT. It has been my experience that is exactly where most rental problems originate. Once you have a decent property in a decent area – a moderate income area, you should be able to turn a profit. This shows up in the form of Net Operating Income (NOI). You would have to really screw up to not make money. The easiest and most common way that people screw up is to lease to the wrong people.

An effective screening process is what is required in order to minimize risks and mistakes and maximize successes and profit. It is better to have a vacant unit than to have a bad tenant. Not only is a bad tenant more likely to not pay rent, on time or at all, a bad tenant is also more likely to be a filthy person and even damage your rental unit. So not only will you likely not collect your rent you will likely lose money due to filth and damage. All the while you will have to pay taxes and insurance, principle and interest if you have a loan, and likely utilities like gas and electric or at least water and sewage.

The negative effects of having a bad tenant can be quite devastating. This needs to be taken very seriously. One of the easiest ways to screen tenants is to use NTN – national tenant network. The bottom line is that if a prospective tenant is not paying other people they will likely not pay you either. Furthermore, if they are getting or have been evicted, it is likely for a very good reason. Believe the current landlord not the tenant when it comes to why they are being evicted. In fact, you not only want to check current landlord references, you also want to find and check prior landlords for the history of the prospective tenants paying on time, being clean and respectful of your property. Sometimes current landlords will give a good reference to get rid of a bad tenant. Beware of this trick from unscrupulous landlords.

I have had prospective tenants give me all kinds of reasons why they are getting evicted. All of them were due to someone else’s fault. And almost every time it was the landlord who was the jerk. They didn’t take care of the place so the tenant didn’t think they should have to pay rent. The tenant started filing all kinds of complaints with every agency under the sun to make the landlord out to be the bad guy. Imagine that – the tenant is behind on the rent and it’s the landlord who is the bad guy!

I have had prospective tenants give me fictitious references. One easy way to divulge this deceit is to ask questions. Remember, before you even entertain the thought of turning possession of your property over to someone, you must get an application and proof of income and residency. This is in the form of paystubs and a current lease. You always want current and previous landlord contact info. This is because you may not want to believe what the current landlord is telling you. Whether you are speaking to the current or previous landlord, use their lease and the application as a guide. If the tenant states they were paying $750 in rent per month, ask the landlord on the phone to verify that the applicant was paying $700 per month and see what they say. By asking questions in this way you can ferret out the phony landlord.

Essentially, what you are looking for is people with jobs and income and a rental history you can verify.

Screen Your Tenants to Make More Rental Profits

If you have any questions on investing, we are happy to help.
If you need alternative financing, we can help with that as well. When you are ready to begin investing, make the right choice and call The Swain Team at (215) 757-7257 or e-mail us at

We are friendly and always willing to go the extra mile to help you.

Investor Wholesaling 101

Investor Wholesaling 101

The Goal Financial Independence Financial Freedom Everyone one of us, including you, want to be financially independent. You think you know what you want but I can tell you that what you need is to be financially free.

Wholesaling allows you to have some control over, and therefore, profit from, Real Estate without actually taking ownership of it.



Why Wholesaling It Works

Wholesaling works because of two important factors. 1. Some people have available time but not available money and 2. Some people have available money but not available time. Everyone fits in one of these two categories. There are exceptions. Some people have available time and money. Your goal is to be one of these people! If you are in category 1 (Party B) then you can serve those in category 2 (Party C).

How It Works

If you have a short term memory then make sure you implant permanently what I
am about to tell you into your short term memory. The way wholesaling works, in fact,
the only way it can work so that everybody wins, is that you, as the wholesaler (Party B) must find your buyers first! That’s right. You first market, advertise, and capture and nurture a growing list of people who are interested in finding great real estate deals, whether they be flips or rentals, and have the money but don’t have the time to do it.

Then and only then do you go out and find 24 great real estate deals and get them under contract. Nothing could be more damaging to your reputation than getting properties under contract then not being able to sell the contract or follow through on the purchase of the property. Those who teach that it is easy to get out of a contract if you can’t sell it, so it is not something to be overly concerned about, are damaging to the world of investing and wholesaling in particular. This implies a lack of proper execution of the principles and if you have to break a contract then you violate the principle of “Everybody Wins”. In this case the sellers 25 (Party A) lose. And you lose too because you will develop a reputation of someone NOT to deal with. Don’t fall into this trap.

Follow the easy, simple processes that I am teaching you here and you will profit so that everybody wins! All you are doing is filling orders. Part of you nurturing your buyer clients is asking them questions, listening to their answers and understanding what types of properties they want. Then you go out and find those properties, get them under contract and sell the contract to your buyer.

If you have any questions on investing, we are happy to help.
If you need alternative financing, we can help with that as well. When you are ready to begin investing, make the right choice and call The Swain Team at (215) 757-7257 or e-mail us at

We are friendly and always willing to go the extra mile to help you.

Investor Wholesaling 101

Identifying the Right Neighborhood to Invest In

Identifying the Right Neighborhood to Invest In

Most investors are looking to develop cash flow fast! They want to be in rental areas that are more inclined to positive cash flow. So a grading system for neighborhoods was developed. A, B, C neighborhoods.

Investing is Key

Investing is Key

A Neighborhood

An A neighborhood: typically luxury homes. $500,000 and above. Some areas it will be 2 million and above. It is difficult to invest in an A neighborhood. Your best shot if you want to invest in an A neighborhood is to invest when you’re in a hot market.
There will almost never be a positive cash flow, most often it will be a negative cash flow. Most often, if someone does buy an A property as a rental they are looking to bury their money.
The more money a home, the higher the risk.

B Neighborhood

The B Neighborhood is a middle class neighborhood. Usually most flips occur in a B neighborhood. Rentals are not as common.

C Neighborhood

C Neighborhoods are generally lower income areas, below middle class. C Neighborhoods are great for rentals! Most inventory in C Neighborhoods. You can out rentals in Upper C class and Lower B Class. But your cap rate may suffer. (Cap Rate = is your net operating income/cost basis of the property) So the lower the cap rate the less rent your bringing in as well as less risk. The higher the cap rate the more you bring in, but MORE risk. That rent will cost you more time and energy to collect.

C- Neighborhood

C- Neighborhoods are great from investing and rentals. You may see one boarded home per street.

Below C- Neighborhood

We do not recommend going into. The risk is too great.


If you have any questions on investing, we are happy to help.
If you need alternative financing, we can help with that as well.  When you are ready to begin investing, make the right choice and call The Swain Team at (215) 757-7257 or e-mail us at

We are friendly and always willing to go the extra mile to help you.

Investing in Bucks County, PA

Investing in Bucks County, PA

I am speaking to a lot of investors and they are asking, “Can we still find homes in your area?”  And my answer is YES!  Bucks County has ample opportunity for those looking to invest.  However, you need to do it right.  The days of slapping on some paint and putting in new carpet are over.  Completely rehabbed homes are in high demand!  When priced correctly they sell very quickly.

The vast majority of buyers today are looking a home that is completely remodeled.  They don’t want to do any work, and they will pay the money if it looks like a home from HGTV.  Yes, HGTV.  The HGTV effect has changed the real estate market. Effectively driving down the price of fixer uppers and driving up the price of rehabbed homes.  Buyers want it to be pretty and perfect.

Flipping Houses

So if you are an investor looking to flip in the Bucks County area you are in luck.  There are plenty of properties to be had.  And we are here to help.  The Swain Team understands how to work with investors.  We understand it is all about your bottom line.  We are knowledgeable about the area, foreclosure processes, short sales, and government owned homes.  So let us help you.

When you are ready to sell your flip, we are there to help as well.  We gear our marketing towards buyers looking for a rehabbed home with a remodeled kitchen and remodeled baths.  We will also start marketing the home in advance with our unique “coming soon campaign.”  Our goal is to create demand for your home in advance.  So hopefully we can have buyers lined up for the day it is ready to go on the market and get it sold FAST!  Essentially eliminating expenses you incur while the home is on the market.

If you have any questions on investing, we are happy to help.
If you need alternative financing, we can help with that as well.  When you are ready to begin investing, make the right choice and call The Swain Team at (215) 757-7257 or e-mail us at

We are friendly and always willing to go the extra mile to help you.

Investing in Bucks County, PA

Investing in Apartment Buildings Basics

Investing in Apartment Buildings Basics

The following is a description of the different classifications of residential multi-unit properties. If you service investors or are interested yourself in these types of properties then this article is for you.

Apartment Building

Apartment Building

Common Classifications of Residential Investment Properties

1. Garden

2. Mid-Rise

3. High-Rise

4. Others

Garden Apartments

Located in suburban or rural areas where land is less expensive, garden apartments are generally one- and two-story properties, consisting of one-, two-, and three-bedroom apartments. Most units can be accessed from the outside of the property, using an exterior stairway to gain access to the second-story apartments. Rarely do garden apartments have elevators. Most units have individual utility meters and individual air-conditioning units. Garden apartments rarely have more than 25 units per acre and have extensive landscaping and parking. The property usually has a central laundry facility and might have one or more swimming pools


Mid-Rise Apartments

Located in the suburbs and on the edge of urban areas, mid-rise properties generally run from four to nine stories, consisting of studio, one-bedroom, two-bedroom, and three-bedroom units. Most units are accessed from a central hallway, which might be serviced by an elevator. Although the units have individual utility meters, the building might have central air conditioning. These properties often have parking structures, a central lobby area, and recreation facilities—often including a swimming pool, tennis courts, or an exercise room.


High-Rise Apartments

In the major urban areas, where land is scarce and expensive, high-rise properties are built, sometimes to a height of 30 or more stories. They contain a high density of units for the amount of land they occupy. Studios, one-bedroom, two-bedroom, and three-bedroom units all have access from the central hallway, which is serviced by an elevator.

Located in urban neighborhoods, these properties often take advantage of city skyline views and offer their tenants proximity to employment, security, recreation, and other amenities.


Other Types of Residential Properties

There are many other types of residential properties, including single family, duplexes, triplexes, and four units. These properties do not have professional management, often being managed directly by the owner of the property, who might own several of these small properties.


Lender Classifications of Apartment Buildings

Lender Ratings of Residential Investment Properties

1. Class A: Newer, Institutional Grade

2. Class B: Older, Institutional Grade

3. Class C: Older, Declining Area

4. Class D: Older, Declining Area

Lenders have developed general classifications of apartment buildings so they can communicate among themselves and other members of the industry with some level of uniformity. The classifications are Class A, Class B, Class C, and Class D.


The Institute of Real Estate Management of the National Association of Realtors (IREM) prints an annual publication titledIncome/Expense Analysis: Conventional Apartments. For this publication, IREM® gathers actual income and expense records of apartment owners throughout the country and then prints summary information that is used by property managers and owners to measure the financial results of their properties against the financial experience of similar properties. Information about IREM® can be found at

IREM® has many valuable publications regarding residential real estate management. IREM® groups multifamily properties into four categories, primarily based on the construction of the properties: Garden style, Low Rise, Low Rise–25 units and more, and Elevator.

If you are thinking about investing in real estate, we frequently work with investors and know the market.  If you need financing we have alternative mortgage options as well.  Contact us at (215) 757-7257 or

What to rehab, how much and how far do you go?

What to rehab, how much and how far do you go?

Knowing what to rehab, how much you spend and how far you go with it is a moving target. Always keep in mind that you are not living here, tenants are. You need to rehab according to the market that your rental property is in. This means the socio-economic market. You don’t put $50/yard carpet in a rental that is located in an upper low end neighborhood. Likewise you don’t put indoor/outdoor carpet in the living room either. This is a skill you will develop over time. My intention here is to help you shorten the learning curve and avoid as much expense as possible.

So let’s go over the basics. First we’ll discuss carpet since we mentioned it above. In these rentals use a good brand name like Shaw carpet. Get a very neutral color like Candy Truffle. I call it the color of dirt. And it looks nice! Get the lowest grade or weight. Then put a middle grade pad underneath. This is one of the secrets. A better pad will help the carpet last longer. The color will hide a lot of crud. It is appealing to the eye. It is a 10-year warranty carpet and is a standard in the rental business. I think Shaw carpet owes me some love. What do you think?

Perfect Color Carpet and Paint

Perfect Color Carpet and Paint

When it comes to painting, always use a good paint at least as good as Behr. Stick with one color for the wall surfaces like off-white satin and one color for all the trim like white semi-gloss. I like the two tone look and I always use semi-gloss on trim. Use can use flat on ceilings and even walls if you’d like. The challenge with flat paint on walls is that it doesn’t clean well and you have to repaint more often. You can also use a more appealing very light neutral color on the walls other than off-white. The two tone look is very appealing and it really doesn’t cost that much more. Hiring a pro to do the painting is a must. They’re better and faster than you and I, and your time is much more valuable than theirs and you will use that time to find more deals.

When it comes to plumbing fixtures don’t make the mistake everyone else makes when they first start out, and that is buying cheap plumbing fixtures. If you pay $29 for a kitchen faucet you will get what you paid for — CRAP. There’s an old saying in plumbing, “If it ain’t heavy, it ain’t good.” If you buy a plumbing fixture and it is loaded with plastic it will be a waste of your time and money. I like American Standard products. The product you and I get off the shelf at the Home Depot is the same one the plumbers get at the plumbing supply house. This is not true of other manufacturers. Also, the American Standard warranty is like gold. No fuss no muss. If you have a problem they take care of it. You won’t have a problem though. Their products stand up to a lot of use and abuse. I think American Standard owes me some lovin too!

Don’t go cheap on windows. For rentals I use American Craftsman. They are good, double hung, double pane, and all vinyl clad windows with a good long and solid warranty. If you get the cheapies you will be wasting your time and money.

My favorite subject is contractors. OK, it’s not my favorite subject. This is one of the worst parts of this whole business. It’s hard to find good contractors and they don’t last forever. I have had contractors I’ve known for years turn bad on me. At the first sign of trouble like with women, trucks, alcohol, drugs, money or health they seem to disappear into the dark side quite rapidly. Not all of them do this but an alarmingly large percentage relative to society seem to. I have friends who are contractors. I love them like brothers. But when %@#$ happens I have to cut them off. They can harm you as much as they can help you. Always remember this: When you are hiring contractors, even if you have solid referrals on them you must do a background check just like you do with tenants. Always make sure they are insured and bonded. Ask for these credentials. If they screw something up and they are not insured, the liability will fall directly to you as the owner of the property. This is not something you take a short-cut on. Period!

I had a pair of contractors working with me for years. They became friends of mine. They were twin brothers and worked well together. One was the straight man and one was the booze swigging, whore mongering derelict who I don’t even think had a valid driver’s license. They were some of the first guys I ever hired. I hired the straight man and he later brought in his brother. I still should have checked him out. What I discovered after years of good work was a little bit of fraud. Nothing major but I decided not to take any chances. I caught them cheating on supplies. They would buy more than enough supplies and charge me for it… then return the excess to Home Depot after job was completed. It may not sound like a big deal especially since we are only talking about a few measly dollars and cents. However, my knowledge of human nature, and the propensity of people to keep taking when they get away with a little bit, dictated that I act and act swiftly to send a message to everybody else working for me. I had another guy try this prior to this occurrence. He was dumb enough to turn in a receipt for some lumber that he already charged me for. He didn’t turn in the receipt before and thought he could use it on this next job. The problem was that he had 4 X 4 pressure treated lumber on there to the tune of $400 and this current job was an inside kitchen job requiring no pressure treated lumber. What an idiot. He must have assumed I didn’t check receipts. I did. I have friends who have been ripped off by their own family in business. One such situation involved over $100,000! You can never be too sure. Embezzlement and employee theft is a huge problem in business. My parents owned a business before they retired and they had an accounting category just for theft. And it was about 10% of business. That is ridiculous. But it is real. You need to have systems to track your income and your expense. Expenses will already eat you alive if you’re not careful. Throw loss due to theft on top of that and it’s no wonder so many people go out of business.

You can find good contractors. They are out there. Always ask for references. Look at other work they have done. Ask their prior customers how the contractor was when it came to keeping to the schedule and the budget and how well they communicated. Start new guys off small before you give them big jobs. Look at their appearance. Do they look like they are living the clean life or do they look like hell? Who do you want to give the keys to your property to?

Whenever you are involved in a big job – more than a few thousand dollars — don’t pay all at once. Give the contractor a little supply of money up front. Then give them a little more when they have the basic work done. Then give them another payment when they are near completion. Hold on to the last payment until the job is complete to your satisfaction. No excuses here. If you go to the final walk through and the contractor says, “Oh, I’ll come back tomorrow and finish that little bit myself,” do not give him the last of the agreed upon payment. If he is good to his word, he’ll finish completely and then you can pay him the rest. A lot of investors fall prey to this little gimmick. Even if it is innocent it is still a problem. Don’t do it!

If you are thinking about buying a rental, we frequently work with investors and know the market.  If you need financing we have alternative mortgage options as well.  Contact us at (215) 757-7257 or

How To Save Money When You Sell

How to Save Money when you Sell


There are so many ways a seller can lose money when selling and it starts with not hiring the right expert realtor.
You need a Pitbull negotiator. Someone that is relentless. People don’t understand how important an aggressive negotiator is for the sale of your home.
When another agent accepts a lower commission they are not going to do much marketing and they are not a skilled negotiator.
If they can’t negotiate their own commission, why would you want them to negotiate your sales price?

    Negotiating Points

  • Settlement Date
  • Inclusions/Exclusions
  • Settlement Date

Be very careful with seller’s assist most Realtors will make you pay a commission off total sales price, not your net number. Because it is their policy to be paid on the sales price. When those agents sell my listings, We make sure they know commission is paid off of the net. Why should a realtor get paid more because buyers bumped the price up?
You need someone to treat your money like it is their own.
We spend thousands on marketing to bring you the most amount of potential buyers as possible so you can yield the most money for your home.  Hire an Expert Realtor with Experience the average Realtor lists 1-2 per yr