How We Use Scalable Systems to Place Better Tenants, Faster | Ep 77

James: Strap on because this week we're giving you a behind the scenes look at how we do tenant screening, which enables us to scale to doing a lot of units with a very small very small group of people. It's a team of people. Very small team of people. That's what I wanted to say. Yeah. So we're gonna be talking about that this week on the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing, which includes amazing tenant screening.

So that, oh my gosh. Can invest both

Speaker 2: properties. No, no, no. We dive into

James: the intricacies of passive real estate investing. Oh, yes. I got this. And our mission is to equip people to invest wisely in both properties and residents, which include screening, so that together we can build wealth while improving housing.

Oh man. Whew. It's a lot harder than it looks. Anyways. I'm Jessi, I'm not Jessi, I'm James. And this is my wife Jessi. I'm Jessi. Wow. It's gonna be like that tonight. Okay. That was,

Speaker 2: Reminding me that I made root strawberry rhubarb Ooh. Bars. I know. That's all I can think about right now. But yeah, it's kind of, it was a brand new recipe that a neighbor walking by That's right.

Commented on the rhubarb, and I was like, I need some recipes. I don't know what to do with this. So she brought some. That's awesome. And so it was a new one, so I followed it. Kind of

James: Okay. Kind of that sounds about you. For those of you who don't know, Jessi rarely ever follows a recipe. And if she does, she only does it once, and then from there on, we're off to something new.

Speaker 2: I just, I feel like someone created that recipe. This is a probably not. Okay. You got like 10 seconds, like tenant screening at all. There's a tie in here. Okay. I feel like someone created that recipe. For themself, Uhhuh. And they were like, yeah, this is the way I like it,

Speaker 3: Uhhuh,

Speaker 2: and I make it. And I'm like, nah, that's not the way I like it.

Okay. Like, I would do this differently. You know, it's similar to tenant screening, you know, like we have our own Yeah. Tie this in for me of like process and mm-hmm. Recipe. But you followed that time. Every time. I do. I do. Because it's really good. Back in the day when you did it. I did back in the day because we like, we flushed it out to be very effective.

Yeah. And I. I, I, there's a couple of recipes. My mom's banana bread recipe. I do not mess with that one. Okay. Because it comes out good every time if you follow the recipe. Okay. Certain other things, I'm like, nah.

James: So you would say tenant screening is your banana bread. That's right. Recipe. That makes sense.

I have such a recipe for that. I actually gave it a name. And I called it the solid. Oh yeah, that's right. Yeah, I remember this. Yeah. The solid screening method is what I called it. And solid was an acronym that I can't remember. So it's not that good of an acronym. But let's see. It's super

Speaker 2: awesome with an o No,

James: I wrote it all down.

We'll go through it. They're not in order, which is part of my problem.

Speaker 2: So

James: it's sy I got it. Oh, I know. We're good. It's systematic uhhuh. It's subjective, it's lawful. You gotta be interested in your answers and discerning. At the end. Okay. Yeah, yeah, yeah. That's a great acronym. I remember that now.

Yeah. So solid. Ultimately, what do you remember what our, like what our big goal is? Like what are we trying to do find through the screening method?

Speaker 2: Good tenants.

James: Yeah. Not good

Speaker 2: find. Well, it was like responsible. Yes. Yes.

James: That's it.

Speaker 2: Find responsible

James: tenants. Yeah, yeah, yeah, yeah. But we define that three ways.

That's where you Yeah, that's where you were headed down. Yeah. So yeah, it was something like is like quizzing you on what we used ago, what makes a responsible tenant is like

Speaker 2: they paid their rent Uhhuh on time

James: and in full. Yep.

Speaker 2: And they communicate.

James: Yep.

Speaker 2: And they're res Oh, and they take care of the place.

James: Yep. There you go. Yeah. They take care of the place. They pay their rent on time and in full and they communicate appropriately with ourselves and other neighbors. Yeah. Yeah. So if they do that, their team's responsible, but that is very squishy. And so you have to have, yeah. There's lots of different way, you have to have someone argue a systematic objective, lawful interesting, discerning way in order to determine what those things are.

Yeah. You have to measure that. That's what we would take them through to do it. So so step one in this process, and part of my objective here is to show you how amazing we are and you to the point where you go, man, I want to hire you to manage my properties for me. Or to say, okay, I understand what James is doing as the asset manager slash property manager for any investment that I'm in part of where we have you know, where we have tenants.

That's kind of, that's why we're sharing this. Mm-hmm. And I just think it's really good information if you. Do you decide to, to go off on your own? Mm-hmm. Good luck. But yeah, this is kinda what's involved for, so step one is you gotta create objective and lawful screening criteria. 'Cause that's part of the thing right.

In, in Oregon well anywhere really, you have to have a set of criteria that you judge everybody against equally. Mm-hmm. Otherwise you really can fall, you can fall into trouble with discrimination laws. Yeah. And so so you have to, they could be, I almost said they can be whatever you want. That's not true.

But they could be. A lot of things as long as you are consistent. So like for example, you can't have one person where you go, yeah, I want you to be two times the rent, and then the next person be like, actually you're like five times the rent because I didn't like the way your car looked. Like that's not, you can't do that.

So you kind of gotta establish it ahead of time and then you can actually give it to people. And that's actually, for me, it's a super, it's, it's helpful 'cause if people are interested in a property, I'm like, sweet, here's my screening criteria. FYI. Yeah. And so they just know it ahead of time.

Speaker 2: Mm-hmm.

James: And yeah, I,

Speaker 2: no, that, that was super helpful when I was screening tenants back in the day.

Yeah. Because I think I actually printed off what those was. I it was, it was very measurable, you know, I could just go down the checklist and I think we actually put a score, you know, for each one of 'em. It was like that we get a, you get a, you gonna hand yourself,

James: but Yeah. Oh, this criteria. Right? This is what you'd share with other people, not.

Speaker 2: Not the screening, not R, what you call that. Yeah. I don't know what you call it. That's a different step. Yeah. Is that discerning? Not our scoring.

James: We had a scoring system. Oh. We had a scoring system. Which is,

Speaker 2: I mean, you look at the same things I guess, but yeah, the criteria. The criteria is Yeah,

James: yeah, yeah.

Speaker 2: Here's what we're looking for. But we

James: would talk about things like their income. Yeah. What the requirement for that was. We would talk about their credit history, their rental history, their criminal history. Mm-hmm. We talked about pets smoking, whether or not they met occupancy guidelines, and just if their information was either false or incomplete.

Yep. And I think I've, I've definitely hit people who have income issues. Mm-hmm. Credit issues. Mm-hmm. We did hit one with rental history issues. I remember that. Yeah. A lot with criminal history. Some with pets. Mm-hmm. The interesting one with pets is they may or may not mention them if it's a comfort animal.

Speaker 3: Mm-hmm.

James: It's not a pet. Yeah, I know, but I still need to know about it. Mm-hmm. Smoking definitely have people try to try to lie about that one. They only smoke outside. Yeah, yeah, yeah. Or they dumb answer. Yeah. Or I only do it when I'm stressed. That was, that was actually, that's my favorite answer.

Speaker 3: And I was like, oh, I just once or twice a day.

Okay. Cool.

James: Oh boy. Occupancy guidelines. Oregon actually, predef defines that for you. It's two per bedroom plus one. You gotta make sure that they, that they hit that. Mm-hmm. And then, yeah, the false or incomplete. I definitely have had people at least incomplete. Yeah. Maybe not false, but incomplete for sure.

Speaker 2: Yeah.

James: But yeah, so that's gotta come up with the screening criteria. That's step one. And that is our objective and lawful, that's the ol,

Speaker 2: which I, I'm remembering we had somewhat of a screening, an idea of a screening criteria when we very first started. And. Like, I remember adding things to that list.

Ah. You know, where it was like, okay, we set this as an income requirement, but that didn't really get us what we wanted. I think we need to adjust that portion of it.

James: Yeah. I think when we first started, well, I mean, our very first one we didn't have anything and then, which was, we learned a lot on that one.

Yeah. But then our second one, we said it at two point a half percent. Mm-hmm. Or two and a half. Their income had to be two and a half times the rent. Yeah. And that was an interesting one because he was fine most of the time. Right. Except it seemed like every, like fourth or fifth month mm-hmm. Something, something would happen.

Yeah. And he just wouldn't have the funds Yeah. To pull it off and then he would be delayed and then it was like, it just seemed like he was always on the edge mm-hmm. Of not being able to make it.

Speaker 2: Yeah. It wasn't quite enough, you know, or, or there was. Just not, not great planning with like emergency funds or things like that or something.

What didn't have the margin? I think that

James: was his biggest problem. Yeah. Was it was just super tight. It was like one month this cat got sick, had to go to the vet and he decided to pay for the cat instead of pay for us another week. Something happened, but that was the same guy who I remember he was talking about struggling and we walked into the unit and it was like, it was, it was so hot.

I'm like, dude, turn your heat down. I mean, it was, it was mid eighties in there. It was unreal how warm it was, and I was like. And it was like he had his television, big television with cable going and he had his phone with internet and this was like, not like today where like everyone has a smartphone.

This was like the beginning part of it and I just remember thinking like, man, I don't feel that bad for you, dude. Turn your heat down. Unbelievable. Yeah, I was glad he was paying for it. Alright, so that's step one, right? And that part's critical. You gotta do that and you gotta be okay to morph it over time as you do learn stuff.

Mm-hmm. You can't be super rigid in it. Yeah. The next step. So here's, so here's what I do now. I set the criteria, do an ad. People see the ad, and then they reach out and say, Hey, I'm interested in getting, I go Sweet, apply online. That's my next step. I don't actually talk to them, I don't interact with

Speaker 4: them.

James: I just go, yep, do it. It's free. And I don't charge. And that's for a few reasons, but really it's just like to get people in so I can learn about them. Mm-hmm. Then my very next step is to. Ask the right, then I call them on the phone and I essentially do the pre-screening. It's kind of, it's not really pre-screening anymore.

It's like now the way I've the way I frame it with them is like, oh, hey, I just wanna clarify a few things on your application.

Speaker 3: Mm-hmm.

James: And that's where I need to be interested and discerning. Mm. Right. Because when I see stuff. I go, oh, it looks like you worked for whatever. How long have you been there?

What do you like about it? Are you still gonna keep going? Mm-hmm. That kind of stuff. And, and you gotta be discerning about their answers. So like, for example, I had one where they barely qualified on the income piece. Like it was super close and it was the, it was boyfriend girlfriend, I think. And but they bear quite with his income alone.

Mm-hmm. They barely qualified. Like they were slightly below it. It was something like it was super close. Mm. And I remember her being like, well, I'm looking for a job and like once I get a job will be totally able to afford it. And I was like, yeah, a hundred percent. I, I get that. But I told him, I was like, okay, I'm concerned, you know, it might take a while to get a job, so I'd love to see like your just say show me a budget.

Mm-hmm. On what you plan on doing. Which, that one was nuts. 'cause they spent like $200 a month on internet expenses. Holy

Speaker 2: moly.

James: Well it was 'cause he did some Twitch gaming stuff and Oh, he had to have a fast upload speed and so so they paid for it.

Speaker 2: Interesting. I was like, yeah,

James: okay. But then she was like super gung-ho to be like, yeah, look, I.

I'm looking for a job. Here's my resume. And this is this. We already told this story a little bit. She goes, yep, here's my food handler's license. Here's my marijuana handler's license. Which I was like, that's a thing I didn't even know. But that's where it was like discernment, right? And that's, I suddenly went, oh, interesting.

So I see this. So does that mean, I think at the time I was super awkward about it. I was like, so do you do you part a tank? And, and, and that was, that was her answer where she goes only when I'm stressed. And I was like, oh, okay, well how often are you stressed? And she was like, yeah, once or twice a day at least.

And I was like, awesome. So you regularly smoke? Awesome. Cool. And but like, but you gotta have that level of like interest and discernment to see that kind of stuff and, and to like, to go, I wanna ask more about this. Mm-hmm. I'm, I'm interested in this part. I had one, actually it was earlier to. Today? No, yesterday.

Yesterday I was talking to a guy renting out a room and he's got a dog, but it's a service animal.

Speaker 2: Yeah.

James: I'm like, okay, got it. But it was one of those where I just told him, I was like, Hey, just straight up like this is a bedroom, like legally. Oh, that's right. Yeah. A hundred percent. You can rent. Not a problem.

I just wanna make sure you are okay with this situation because. It's a bedroom and your dog's kind of gonna be like inside all day. Mm-hmm. And like, I don't know how he's gonna go to the bathroom. Like, I just got questions. Yeah. And, and again, that's that, that interest in discernment. And ultimately he said, oh, okay, I see what the situation is.

He was thinking it was more like, almost like a, not a fraternity home, but one where it's like. Yeah, I have where I sleep, but it's ultimately, it's a shared home. Yeah. And my dog can just roam around wherever, and he is like part of the family. Mm-hmm. And, and I just would leave my door open. Right. 'cause and I'm like, yeah, it's not really that.

Speaker 3: Mm-hmm.

James: And so he opted out. He was like, yeah, okay, I understand. He was like, no, I'm good.

Speaker 3: Yeah.

James: I was like, all right. I'm, you know. Cool. Because my owner doesn't actually want dogs. And I'm like, and I told him, I was like, you may not have a choice on this. Like, yeah, this is how, welcome to Oregon. And so but again, it's like you gotta have interest in this sermon when you're doing it.

Mm-hmm. I love the phone interview stuff. It's super helpful. I've, you don't actually know this, but I've even, streamline that part a little bit more.

Speaker 2: Like after they've given you the application and you're calling them that portion.

James: Yeah. Well it's actually they submit an application and now what I do is I have a pre-canned text message and email that I send to them saying, Hey, awesome, saw this, thanks for applying.

Would love this set up a time for us to talk. Here's my Calendly link. Mm-hmm. They send it to, 'cause that was always a pain in the butt to try to coordinate that time. And I always felt like I was a little beholden to like. To when they were free. Mm-hmm. And, and it's kind of, it flips it a little bit where I'm like, yep, you schedule it with me and it's like, I forget what, it's like a 20 minute phone call.

Yeah. And it's, I, because it's to 15 minutes and it's like they can schedule any time from like two hours out for the next like two days. That's it. And that's actually worked really, really well. Interesting. I've, I've, I've really enjoyed that. Yeah.

Speaker 2: You have mastered that whole Calendly thing. Dude, I'm a Calendly master.

I do not like to give up. Control of my calendar. Mm-hmm. And like have people add things. I like to determine like when I have That's fair. Certain conversations and stuff. Yeah, that's fair. But I get it. I get the positive side of, well, and you've seen, they set it up, show up every once in a

James: while. Like you'll notice I just like, I have a section where I go just block.

And that's my signal of like, I just needed to be busy here. 'cause I didn't want to meet at this time. Like for example today, right? I was giving,

Speaker 3: mm-hmm

James: I was looking at a new property to manage and then we had this scheduled tonight and there was like a two hour block in between and I was like, right.

You were like, I don't

Speaker 2: want something there. Yeah, no, not

James: happening. So just blocked that out and that just guarantees no one's gonna schedule during that time. Yeah. I mean you can also do time limits and whatever, but Yeah, sure. Yeah. So I do that phone call. We chat on the phone and, and it's usually pretty quick.

And and then we do the tour,

Speaker 2: the tour, the tour, da

James: da. And I think I had some, I think I was like, I remember at one time I wrote a blog post about it and I was like, how to make like the tour, a walk in a park or something like that. I was trying to do some sort of top gun thing. There's lots of different ways you can do it.

There's the one-on-one meeting. There's like an open house. You can give 'em a lockbox. Mm-hmm. Oh yeah. Six tips to make the tour. A walk in the park. Yeah. It was in this thing that I wrote, I wrote this whole guide to help people do it on their own if they wanted. So now I just follow my own guide because that's what I do.

But I don't do the open house piece anymore. Yeah. Just 'cause I now, I, I only do like one or two tours because of how I've set it up. Right. I'm not doing let's people, they've

Speaker 2: already applied. You've already had a conversation with them. Yeah.

James: And, and usually I'm told like by that point, and they haven't spent any money.

Mm-hmm. And I'll tell them like, Hey, the next step is to go through the validations process where you'll get a background credit check. Right. But before you spend any money. Let's just verify that you actually want the place, let's make

Speaker 2: sure you actually like this place. And then

James: it's like, and then I go, and once you've done a tour and you like it, boom, we're moving on to the next step.

Mm-hmm. Just lemme know. And so it's just, it's so much better Yeah. To do it that way. 'Cause like I said, I do one, maybe two tours. Yeah. That's it.

Speaker 2: Which it, the thing I like about this screening method is it, it totally flips, the time and energy that you have to put into things, right? Where it's like you are putting your time and energy into already qualified, interested tenants who are responsible because you've screened them and you've asked the questions, and you've followed up.

You're not just. Spending hours walking people through who you would never rent to in the first place. Right. You know, so it's like, I, I remember when we kind of flipped that model and they were

James: super nervous at first 'cause we were like, oh no, will people pull this out? Yeah. Yeah. What if people don't

Speaker 2: really apply?

Like, what if they won't, you know, will people apply if they don't know what the property's like? They haven't seen it and it's like, oh yes, they absolutely do. Yeah. You know, so it was like, I get, there's

James: the concern of like scams and stuff online. But I'm also like, it's free. Like I don't Yeah. If this is a scam, it's a really bad one,

Speaker 2: right?

Yeah. You're not, I mean, I guess you give us some contact information, but

James: Yeah. I, I do a couple things for the tour. I used to, now I carry pepper spray with me. That used to be a thing.

Speaker 2: Yeah. Yeah. I remember I made that change. I've enough stories

James: where I'm like, eh, I should probably do this. It's not a huge deal, but.

It's, it's a safety thing. The other one is don't point out features. Don't go like, and this is the kitchen or here's the refrigerator. Like if you're going to point out anything, talk about benefits. But I actually, I usually just kind of hang back. Mm-hmm. I just, like, I let 'em in, I flip and then I go through and actually I flip on all the lights Mm.

On stuff like that. And then I'll just kind of hang back and just semi follow, just kind of hang out in the room, let 'em do their thing. Just kind of give 'em the space. 'cause that's what I would want. Yeah. And, and so that's just be

Speaker 2: there to answer any questions.

James: Yeah. So it's not a big deal. I've, I've tried the lockbox method mm-hmm.

Where I just tell 'em, Hey, there's a code on the lockbox. Go for it. I find that's a very low hit rate. Hmm. Like I've, if I give the tour, I tend to, people say yes and they wanna move forward. Oh, if it's just a lockbox, I found a low percentage of people wanna take that next step.

Speaker 2: Really? Yeah. That's interesting.

James: Yeah, it's kind of a bummer. Especially like a sweet home personal touch because that's like being there with one way.

Speaker 2: Yeah.

James: Yeah. There's something about me being there. You sure it's not just because it's sweet home? Nope, I'm not. 'cause I have not tested it anywhere else. If

Speaker 2: you haven't done the lockbox, no.

The thing about Sweet Home that

James: was hard was it was 200 square foot. Tiny cabin. Yeah. Well, and people would show up. That's probably more the case. I would, so I would drive 50 minutes one way they'd walk up, like look through the window and be like, wow, that's really small. Probably too small. Like tried to explain this and I would like.

Awesome. Well, thanks for coming. You can see that in the pictures. Hop back in the car and go 50 minutes back home. And I was like, oh my gosh, what? Live my life. And so I remember that. And so, yeah. So now I have a floor plan with measurements. And when I get on the phone with them, I am, I'm so emphatic about it.

I'm like, this is small. This is very

Speaker 2: small. Here's what I want you to do.

James: Take four steps in one direction. That's the width. Okay. Now I want you to take whatever it is like, it's like six or seven steps.

Speaker 2: Yeah.

James: The other way. That's the length of it. I really want you to really

Speaker 2: visualize this. And then that's

James: after they go, oh, okay, okay, okay.

Yeah, I get it. Or like, they go, oh, that's really small. Like, cool if they gimme the, oh, it's really small. Like, all right, let's do this. Drive by peek in the window. And then if you're still, I'm like, you'll see the entire thing. Yeah. Like you can, you'll see the place from the window. Like if you're still interested, lemme know and we'll go from there.

But you know, yeah. It's a,

Speaker 2: it's a thing. That's a, that's a, yeah. An interesting property.

James: Yeah, maybe a video would help with it. I don't know. I gotta like, I feel like there's opportunity to streamline the tour as well and I haven't quite cracked that nut yet, but I'm gonna get there 'cause we're getting closer with VR and videos and all that stuff.

So I'm getting there, but not quite yet.

Speaker 3: Yeah.

James: Step four is the lawful applica. Oh yeah, dude, I did this, I did this backwards now. So my step one, my step one has now the lawful application of the rent general rule of thumb. Allow everyone and everybody to fill out an application, right? That's everyone's welcome to apply.

You never say no otherwise you get you get in trouble for steering. Mm-hmm. And so I'm like, yeah, no, a hundred percent. Now I do not offer a paper application. I only offer it on the website. I, that could potentially be an issue, but I'm also like, no. They're like, this is, this is how we operate. Like, there's no rule that says it has to be a paper application.

Yeah. So I don't do it.

Speaker 2: I suppose you have, if someone requested. A printed copy, you would give it to them? I don't know.

James: Nope. I would not. I'd be like, go to library. You can figure this out. Oh,

Speaker 2: yeah, yeah. That's true. We would just tell them, you can print it yourself if Yeah. That's what you prefer. Yeah.

James: No, I go, this is the way to do it.

And then you would scan, scan it, and get back. Remember when we first got started, I was super pumped when we had an online application. I used to have business cards. They were like these little, and they had a key on one side. It was a picture of a key. I can't remember that. Then the other side, it was a URL.

Yeah. That was like go here to apply and it was like a Google form or something like that. Yeah. That I had created and

Speaker 2: the original that was, yeah, online application. I know.

James: I was trying to figure it out. I was so cool with that. I was so cool with that key, but now it was sudden like I just like in the posting, like, if you wanna apply, here it is.

There's a link. And then they ask me on Facebook Marketplace all the time, is it still available? I'm like, yes. Step one. Let's visit this URL to apply. Go from there. Another rule for applications that's a good one, is to screen 'em in the order in which you receive them. Mm-hmm. Because this whole discrimination thing is a problem in theory.

You could say, Hey, this thing's open and we're gonna get as many applicants as we can. Mm-hmm. And then we will screen them and we'll quote, choose the best mm-hmm. From them. The problem is what do you do if you have multiple people who pass your screening criteria? Mm-hmm. Now how do you choose who the best is?

Yeah. And it's just, it's hard. May, perhaps you can do it without running into some discrimination issues, but it's extremely difficult to at least prove that in court. Mm-hmm. Because all they have to do is, and in Oregon, like, they just complain and like, boom, wheels come off. So if you do 'em in order.

Problem solved. Mm-hmm. First one to pass the screening criteria wins. Yeah. And so

Speaker 2: and if you have good criteria, then you're okay with that.

James: Yeah. So lawful application, do 'em in order. Once you receive that. Prescreen phone questions, be interested, show discernment. Mm-hmm. Then you do a tour like a boss, and then you want to trust, but verify everything again with interest in discernment.

Some more of that please. And so you just ask for a bunch of the stuff. And again, you're just trying to prove out the, like gimme your I want your copy of your identity, your id. I want proof of. Income verification. Mm-hmm. I'm running the background. I'm running credit check. Yeah. Talking to previous landlords, you know?

Yeah. All the stuffs try to figure out.

Speaker 2: Yep. You verify it all.

James: What's up with them?

Speaker 2: So I have a follow up question to the application, the actual document that you use.

James: Yeah.

Speaker 2: Is there is there something within each state like. That is an official legal rental application, or no? I guess a lease would be, there's just

James: stuff you can and can't ask about.

Okay.

Speaker 2: So you could create your own set of questions that you're asking for someone to apply. Yeah. Do you have to run a background in credit check?

James: No, you don't have to.

Speaker 2: I mean, I didn't think you did, but it's, if it's like, why would you not?

James: They would love to make that out. I think in, I may be speaking outta turn here, but I believe in Portland you're not allowed to run a background check anymore.

Speaker 2: Really?

James: Yeah. I So thinking there's something like that, I may be wrong 'cause I'm, I don't have anything in Portland. But,

Speaker 2: or if, if you do, you can't,

James: there's, you can't hold it against 'em or mm-hmm. Like, you can't use it as a screening criteria in the same way that you can't. Discriminate against skin, color, race

Speaker 2: Wow.

James: Orientation, all that stuff. Interesting. So, yeah, they're just trying to get rid of the background, the criminal history mm-hmm. Piece as well. Hmm. Yeah. Yeah. Wow.

Speaker 2: I, I also had this other question as you, as you were talking about having this discernment in conversations and as you're looking through their information, are there any.

Common red flags that pop up that you're regularly like, oh boy, here we go.

James: Well, yeah, usually it's pretty clear, like if you have your listing and their very first message is something like, do you accept felons?

Speaker 2: Oh man.

James: That's when you're like, all right, I know where this is going. That's a red flag.

Okay, tell me more. Yeah. That's definitely a red flag. I mean, just let me think about other red stuff, which

Speaker 2: in Portland apparently you would say answer's Yes,

James: yes. I actually get that question a lot about accepting hud HUD

Speaker 2: payment.

James: Yeah. Like, do you accept hud? I'm like, yeah, I'm in Oregon. Legally required to.

Yeah, you have to. We all do. And I actually usually reply with that. Right. Because in the back of my head I'm always like, is this some sort of like fair housing test? It's like, is someone pretending to apply? And, and so I'm always like, like. We are in Oregon and we're required by law to accept hud. So yes, I and every single other landlord except HUD and I think, let me help you out

Speaker 2: here.

James: Yeah. Which I think they were like, really? I didn't know that I had one person that was like, really? I was like, yep, here's the link to the statute that says it. Yeah. Like yeah. But even if I didn't, I think I would. 'cause in general they're okay. Other things that are red flags. I mean, for me, the red flag, obviously like the smoking's a thing.

Mm-hmm. Oh, an next, another red flag would be if you've got a lot of people trying to cram into a small space. Oh

Speaker 2: yeah.

James: That's was like just not a normal amount. Right, right. Where like, yeah, it's me and my, my girlfriend and her. Her mom and like my little brother. Like what? That's like, just like this conglomeration of people.

Or even if it's like, yeah, we got like three friends. Mm-hmm. Or usually three's not too bad, but like, yeah, we're random people and we're gonna make it work.

Speaker 3: Mm-hmm.

James: Like, oh, okay. That means, and that's usually what happens is it's through the three of 'em. They barely qualify. Yeah. For the three times rent.

That's the other, like, that's probably the one thing if I were to refine my criteria would be how do I. Because we've had that where it was like we had five people apply mm-hmm. For a three bedroom place. And it was like, okay, technically, like we're, we're under the, the occupancy limit, so we're cool.

Mm-hmm. And even though we only had one bathroom and they were mixed gender so that we could have, we could've said something. Mm-hmm. But but they barely qualified. They were just over the three x limit. Yeah. I was like, you have five people and you barely qualify. I'm like, that's a red flag. Yeah. 'cause it's, it's like.

Yeah. Which if I were smart, it would be some sort of weird algorithm where it's like three x for per, like for the first two people or something, excluding kids. And then for each additional adult we add like half an x requirement or something. Sure. So in that case, it would've been like the first two or three I can do this.

Then it would've been. Three and a half. Four. Four and a half. So I would've done like a four and a half times, which they would've never qualified, which is part of the like, I'm like, yeah, good. Right? But as long as you're consistent and that's what you're written down as your rule, sweet, you can do it.

Mm-hmm. I just have never gotten that sophisticated about it. Mostly. 'cause situations like that, there's something else inevitably that comes up. Right. Yeah, it's

Speaker 2: very, it seems like it, it was very rare that everyth healing looked great, except for just one thing. Right. You know? It was kind of like, okay, that's, that's a little concerning over here.

They said something about smoking or they didn't quite qualify, and then once you started asking more questions and digging, it was like, okay, there's actually more here that Yeah, you're not, you know?

James: Yeah. Non-starters for me hit the criteria. Income. I'm kinda like, man, you gotta be there. Like, I've had too much experience of trying to help people out, trying to make it work.

Yeah. It just doesn't work. That's a, that's a non-negotiable for me. The non-smoking, non-negotiable for me. Those are probably the two big non-negotiables I have. Everything else, like, man, we can work with you. We can talk about it. Mm-hmm. Then we, like, we, like you started into, we have a scoring thing and we have, it's like an 18 point checklist mm-hmm.

Where it's, and it's all those different pieces and the screening criteria just broken out into objective criteria. And if everyone, if anyone ever wanted to see it, like, this is, here it is. We did, here's a score, here's why we accepted you or didn't, or whatever. Mm-hmm. And it works pretty well, has been my experience.

I mean, honestly, I'm at a point now where. I can see an application and I've got like, I know if I'm gonna accept them or not. Yeah. You have the mental checklist get passed. Yeah. And then I get on the phone and I'm like, oh yeah, a hundred percent. Like, yeah, we're good to go. Yeah. But I still run through the entire process.

Yeah. And 'cause you never know, and part of it's too, like I want them to have experienced running through the entire process. Mm-hmm. To know like, oh, this is a landlord who will check on things. Mm-hmm. He doesn't just take me on my word. He like, he cares about process and doing things right. Mm-hmm. Like I want to send that message.

Yeah. And so even if I kind of know the answer, I do it anyways. Yeah. Don't care. Just good. So, so there you go. That's a, that's a little inside backdoor. What do I call it? Behind the scenes? Look at, I don't know. Behind the scenes look on what we do to screen tenants. It's a process, but I find if I put a lot of the work in upfront to screen tenants wealth, then it makes everything afterwards just that much easier.

Yep. So there you go. Alright, well if you are, I dunno where we're going with this. So that's it. So if you are interested in having us screen tenants for you, whether as a passive investor or as a property manager, would love to chat about it because I do think it's a fascinating process. So with that, you can check us out at furlo.com.

And thanks for listening. Have a great day.