Landlord Tenant Screening Tips Every Real Estate Investor Should Know

Karla Ross (00:00)
when you’re screening tenants, just put on your private detective hat. I mean, look at their social media. If geography allows for it, I’ve always lived in a fairly small market, go drive by their place. I mean, if it’s an apartment, you can’t necessarily tell much, but if it’s a house, go drive by. If your gut starts telling you something, keep digging. Look on your

tax appraisal records and see if the person they list as the owner or their current landlord is actually the owner of the property.

Scott Bursey (02:08)
Welcome back to the Real Estate Pros podcast powered by Investor Fuel. I’m your host Scott Bursey Today, Pros were injecting some serious at-home properties fuel into your portfolio strategy. We’ve got Karla Ross in the house. Karla is a powerhouse when it comes to scaling residential strategies and brings absolute fire.

to the property management and investment game. Get ready to level up because the energy and insights Karla is bringing are going to reshape how you are looking at your next single family investment. Karla, welcome to the show.

Karla Ross (02:44)
Thank you, I’m excited to be here today.

Scott Bursey (02:46)
It is awesome to have you here and to kick things off for those of our listeners who may not be familiar with your journey. Where did your career begin and what is your main focus now?

Karla Ross (02:58)
Well, I accidentally became a real estate investor. I bought my first house to live in it and update it while I lived in it just for my own purposes. And someone approached me and wanted to buy it and wanted me to own or finance it for them. And I had no clue that that was even a thing at the time. I was like 23 years old. So I did that. And then I realized, ⁓ this could

you know, this could be something. So then I went and bought a duplex and I lived on one side of the duplex and rented out the other side. And then I kept that duplex and moved into a triplex that I bought and so on and so forth. And that’s how I started building up a portfolio of rental properties. And from there, moved a couple of times to different parts of the country and just started building up.

what wound up at one point I had about 100 units and then I as I was managing my own units and joining investor groups and meeting other investors, people started asking me to manage their property. So I started building up a, you know, property management portfolio that way. And then Texas made it a rule that you had to have a license to

manage someone else’s rental property. So that’s the point when I got my license about ⁓ in 2012, I believe is when I got my real estate license. And then I had at that point, I’d kind of stopped growing my own personal portfolio. I would only buy something if it was like a complete home run, which didn’t come along very often at that point. But I started really building the property management business.

and doing that. And it was just kind of a seamless fit because I was already managing my stuff. I just threw everybody else’s in the mix and treated it the same way I treated my own properties. And ⁓ that’s what I did for a long time. I burned out on doing that, to be honest, because it was just I did so much for so long and just was ready for a change. So about seven years ago, I

turned all the management over to someone else and I just started doing residential sales. And as part of that, a good share of my client base is investors. And I love helping new investors build up portfolios, find good deals, know, time things, analyze things, and just really try to use my experience to help them.

Avoid some mistakes maybe that I’ve made.

Scott Bursey (06:29)
Well, that is a great journey and your passion certainly resonates. Karla, let’s dive right on in here. If someone is listening and they’re thinking, hey, this is someone that I’d like to partner with or learn from, what do want them to know first about your business?

Karla Ross (06:38)
Okay.

Well, it’s really what I do when I work with any client, but especially an investor, is I just lean on my experience. Like I kind of alluded to, I’m not going to let one of my clients make a mistake that I’ve already made in the past. There’s no, you know, there’s no reason for it. I’m happy to share my tools that I’ve learned along the way, tips, tricks, ways to look at things, you know. So I just try to really

look at every deal that I’m helping a client with the same way I would look at it if I were the one doing it.

Scott Bursey (07:20)
Absolutely, and that is just a great way to approach things. Karla, no business is perfect. What’s one thing that you’re still trying to figure out or working around recently?

Karla Ross (07:32)
⁓ A couple of things that I’ve noticed recently, and I’m not trying to step on any toes of any wholesalers, we deal with a lot of out of town wholesalers or even out of state wholesalers, which is perfectly fine. ⁓ But the deal analysis isn’t always super accurate. I’m not sure where they’re necessarily getting their numbers for when they’re claiming a property has a certain ARV or

what the repair costs are going to be or things like that. So that’s something that I typically can be of assistance with since I have access to the MLS and I can provide actual comps and help straighten some of those things out. That’s something that I noticed that I see a lot recently, it seems like. Over the last couple of years, it’s increased. And also, sellers are just being stubborn now, man.

I see deals all the time that have been, know, someone’s been trying to sell for a long time, but they’re just holding out for a certain price, even though it’s not really justified that price or, you know, things like that. So being someone who has access to the data and the experience to kind of lay out for someone, this is how I’m arriving at this number. How are you arriving at your number?

tends to be helpful just because I’ve done it so many times.

Scott Bursey (09:00)
Absolutely, that experience really pays off. And Karla, what do you feel is your biggest opportunity right now? This could be a market shift, a new offering, or just a part of your business that you’d to double down on.

Karla Ross (09:15)
You know, if you follow like the typical real estate cycle that cycles over and over again historically, we’re just kind of teetering on, I feel like shifting from a seller’s market to a buyer’s market. The sellers are, like we said before, sellers are holding on hard, but we really should be transitioning and entering a buyer’s market.

It’s just taking longer than it typically does. We’ve kind of been at that plateau for longer than what I feel like typically it takes for that shift to occur. So I’m just watching it like a hawk so I can be ready to let my people know like it’s time to move or the shift is happening. Let’s be the first ones on the bandwagon to get those deals when they’re ready to happen.

Scott Bursey (10:43)
Absolutely, staying on top of things is everything in this business. Great point. That was spot on. And Karla, are there any challenges you’re watching closely? This could be market risk or competition, perhaps access to deals or capital. You know, that sort of thing.

Karla Ross (10:48)
Absolutely.

You know, one thing we’re seeing a lot in our market, I’m in Lubbock, Texas. We have a lot of new construction in our community right now. And it’s really hard to get good contractors and workers. it’s my investors who are doing rehabs, whether it’s for a rental or a flip, are having a really hard time locking down people that will actually

show up, do what they said they would do for the price they said they would do it. And that’s been a huge problem that I’ve noticed. And I’ve seen it over, you know, over the years I’ve been doing this, it seems like that kind of is better or worse at times, but it seems to be really a problem right now. And so I guess if you find someone that does a good job, treat them well and

hang on to because it’s really hard to get good work done these days. feels like that’s just the first thing that came to mind.

Scott Bursey (12:01)
I love that framing. Again, you’re spot on. And if you could instantly, Karla Ross, solve one pain point for every landlord, what would it be?

Karla Ross (12:13)
You know, the problem obviously is always just getting good qualified tenants who are going to take care of your property. Tenant screening is so paramount. Who you let in the door in the first place is huge. There’s more and more fair housing complaints every day.

Anyone who is doing leasing needs to be completely educated on the fair housing laws because there are a lot of lawsuits. There are a lot of bogus lawsuits. There are actually groups that go around and file false. They’ll take drones and take pictures of your parking lot to see how many handicapped parking spaces you have. I mean, the stories are crazy, but

But people really need to be educated about what they can and can’t screen for, what the fair housing laws are, ⁓ joining your local apartment associations. Even if you’re an independent owner and own single family rent houses, you can still join the apartment association. That’s probably one of the very best ways to get educated. It’s all online. mean, just go to the HUD website and you can find all the rules, but

Knowing those is probably what could save your business, honestly. It’s fine until it’s not fine. And I’ve literally seen people go through years of financial, mental torture trying to defend a claim. And it may not even be a real claim. So.

Scott Bursey (13:44)
Absolutely.

That’s a huge distinction. Vetting is everything, Karla. A quality tenant changes the entire profitability equation. know, the quality of your resident directly impacts your return. You were spot on. And is there any…

Karla Ross (14:13)
man.

tip. A lot of people

have a little tip if I may.

Scott Bursey (14:25)
⁓ yes.

Karla Ross (14:27)
Of course you’re going to call someone’s current landlord, but the best reference is their previous landlord, because the current landlord may say they’re great because they want to get rid of them, whereas the previous landlord will tell you how they really were.

So I learned that the hard way.

Scott Bursey (14:46)
That is a great tip.

Absolutely. Absolutely. Is there any golden nuggets or any advice you’d like to leave with our listeners here today?

Karla Ross (14:57)
gosh,

when you’re screening tenants, just put on your private detective hat. I mean, look at their social media. If geography allows for it, I’ve always lived in a fairly small market, go drive by their place. I mean, if it’s an apartment, you can’t necessarily tell much, but if it’s a house, go drive by. If your gut starts telling you something, keep digging. Look on your

tax appraisal records and see if the person they list as the owner or their current landlord is actually the owner of the property.

Look up, if you have access to a local realtor partner, which I highly encourage every single investor on the face of the earth should have, we’ve got a program called Forewarn. I can look up phone numbers and tell who that phone number really belongs to. People put down their mom or their…

sister or their whoever, their friend who poses as the landlord. mean, there’s no end to how crazy it can get when someone’s desperate to find a place to live. So just, if your guts telling you something’s off, keep digging because you’ll find it.

Scott Bursey (16:51)
Karla, this conversation has been high octane. For those of our listeners who want to follow your journey or collaborate with you, what’s the best way for them to reach out?

Karla Ross (16:55)
Hahaha

Well, I’ll tell my phone number. It’s out there, so I don’t mind. My phone number ⁓ is 806-570-8488. I’m on Facebook as Karla Ross. Karla Ross Realtor is my business page, and Karla Ross is just my personal page. Happy to connect with anyone. I love talking real estate, all different types of investing. And I love collaborating and networking.

helping connect. I know realtors in all different parts of the country who are also investors who make great business partners for investors.

Scott Bursey (17:39)
Karla, Thank you so much for being on the show today.

Karla Ross (17:42)
absolutely. been a pleasure.

Scott Bursey (17:44)
And to our listeners,

we appreciate each and every one of you. If you got value from today’s episode, please subscribe. We’ve got a lineup of exceptional guests, just like Karla, who are making huge moves in the market. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.