Typical issues faced by Real Estate Investors.

April 30, 2009

Typical issues faced by Real Estate Investors.

by James Miller


These are some typical issues that I am faced with on a normal day and how I chose to handle them.

I grab the stack of papers from my desk on different Real Estate related “issues” I need to review.  I had set them aside last night, so I could focus on them today.

The first issue is my fault since I accidentally overpaid a bill (by $200) for a 20 yard dumpster that we were using at one of the construction sites. I have another account with the same company where I am getting billed monthly for a dumpster that I am providing at a rental apartment. I call to see if they can apply the overpayment to the other account.

I am a little apprehensive as this company has been less than friendly in the past, which has caused me to often wonder about the validity of the myth that the Mob is into waste disposal.  I am also worried that they will not have a record of the overpayment and I will have to prove it.

It turns out that they do have a record of it and they can transfer the balance, no problem.

My second issue is that on one of the properties we picked up “subject to” the existing mortgage, the lender (Wells Fargo) shot out two letters. One letter was about how the amount of hazard insurance coverage wasn’t adequate, and the other letter was about how the deductible amount on the hazard insurance policy was too high.

We have a few different policies for the properties we have, this property was on one of our business owners policy with a bunch of other properties that provides a total coverage of around a million dollars.

Their records indicated that we only have coverage of $2000 on the house, and that the mortgage balance was about $50,000 so we needed at least that much coverage.

My immediate concern was that since we are continually dealing with so many properties, we may have missed something and somehow inadequately insured this property.

The other letter from Wells Fargo indicated that we had too low of a deductible, and with a policy this size needed a deductible of no more than $100,000.  That seemed really odd to me since I would never have a deductible anywhere near that high on any property.  A deductible that high would mean that we would need to cover the first $100,000 worth of damage and their policy would kick in the rest.   Having a deductible that large is really like not having a policy at all.  It was confusing to me at best.

I grabbed a copy of our business owner’s policy and the other papers I needed and headed out the door to lunch with my girlfriend. On the way there we grabbed the mail.  I noticed that I got “proof of service” back on a Tenant-Buyer who was behind on payments to the tune of about $3000. I don’t usually let them get in to me that far, but his business is landscaping, which is seasonal, and he gets paid sporadically. He has been with me for four year and usually makes good on what he owes me when his clients pay him.

This time around he had gotten in too deep and did the worst thing possible, which was to not respond to my calls and letters. When I lose contact with a tenant and they owe me money, I am forced to file a small claims action for eviction and judgment.  The letter I received back from the sheriff indicated he had been served proper notice of his court date, but also told me that he had moved out and they had served him at his new residence.

Unfortunately he could have contacted me to work something out, I may have given him time, hell I may have lent him some moving money. I understand that life can throw you a bad shake. But now, my big concern was to get him out of the place so I can get it bringing in money again.   If we are communicating and on good terms, I find that things usually work out the best for both parties.

Since it didn’t happen that way, I am now worried about the condition that the house is in. My girlfriend and I make a plan to go review it.  I will bring the camera with in case I need to take some photos to tack on damages to the small claims action.

The other problem with the tenant just taking off is that I will still have to go through with eviction.  While I know he has a new place to live and can reason that it is certainly very likely that he doesn’t intend on coming back, I am not in communication with him so I can’t be sure.   This means that I while I can show it, I can’t rent it until the eviction is final.  I plan for a trip to the house and mentally brace myself for the worst.

At lunch I review the Wells Fargo letters and the insurance policy. I quickly realize the problem. The $2000 they have listed as the amount of hazard insurance we have, is actually the amount we have on just the storage shed on the property.  We actually have over $100,000 on the house itself.

I see that we also have a deductible of $250 and not over $100,000 like they had indicated. I make a call to our insurance agent to verify my information is correct (which it is) and to have him send yet another policy declaration page to Wells Fargo.

I then place a call to Wells Fargo to see if I can explain their mistake to them.  I navigate my way through the automated voice system, which makes me wade though an inordinate amount of choices before letting me know to hit “0” for he operator.

Once I get a real person on the line I run into a problem that faces most “subject to” investors. The name on the mortgage is not my companies name or my name, so they can’t talk with me.  I have been down this road a few times before. I let them know that there should be a Power of Attorney and a Right to Release Information on file with my name on it.  They verify that there is, and ask how I am related to the owner.  This is where it gets tricky, if I blatantly state that we have purchased the property, we can start down the ugly road of “due on sale” issues.  Most, if not all, mortgage documents have a stipulation where if ownership interest transfers, the lender can call the mortgage due.  Taking over a property “subject to” flies in the face of this, as the seller’s name remains on the loan, but the deed transfers.

I carefully pick my words and tell her that I am not related to the seller, but “calling on her behalf”.  These are the magic words that allow us to talk freely, but don’t get me transferred to another department because the place has been “sold”.

I explain the mistake that was made to the lady on the other end of the line, and even while we are talking Wells Fargo  receives in a declaration of coverage from my Insurance Agent, which eliminates these two issues.

That night my girlfriend and I make it to the house where the tenant bolted and find that it isn’t totally abandoned. The tenant isn’t there, but lights are on, there is a nice mountain bike on the porch and miscellaneous personal items strewn about.  I resist the urge throw the mountain bike in the back of the car to hold as a hostage, and instead walk around the outside of the place.

As I peek in the windows I can see that the furniture is gone, so no one is likely living there.  They were, however, kind enough to leave at least 30 trash bags full of beer bottles, cans, and junk in the back of the garage, in front of the garage,and strewn about the lawn.

As walk around to the front of the house I see that my girlfriend has already started putting up a “For Sale” sign in the yard.  While I commend her on her aggressiveness, I tell her that it is too early to put the sign up. I either have to get back in communication with the tenant and work something out with him, or wait for the eviction to be finalized.

There is no legal reason we can’t put the sign up, just a practical one. I understand that the tenant is just as unhappy about things as I am, placing a “For Sale” sign there will piss him off, and likely end up damaged or stolen. This guy has lived there for four years.  It has to be hard for him to give the place up, and is probably also embarrassing for him. A sign would just be like slapping him in the face.  The last thing you want to do is to aggravate a tenant while they still have control of your property.

She reluctantly removes the sign and puts it back in the car.

I give the tenant a call and leave a message asking if he would call me to see if we can work something out to possibly avoid court.  It weakens my position a bit to say this to him, but my first priority is to get him to a point where I can work with him so I can fast track new tenants into the place and get it cash flowing.

My idea is to work out some sort of payment plan with him on the money he owes me and get him to move his trash and other stuff out of the place.  In return for this I would lessen the amounts owed, and temporarily fore go court as long as he held up his end of the deal.
This is a great offer for him as he is otherwise facing at least a $3000 judgment and having me garnish his wages for payment.

I would let him know all of this if I could talk with him, but so far he hasn’t called.

In some cases you can’t even get the horse to water, let alone make him drink.

Renting vs Buying

March 9, 2009

Renting vs Buying

James Miller


I saw this article on Yahoo about the benefits of Renting over buying a property. This fellow seems to make a broad statement that Renting is better. My take on this familiar argument is that it really depends on your situation.

1. It’s not apples to apples.
You can rent a decent two bedroom in the area where I live for anywhere from $600 to $750 per month.  A small, two bedroom house is going to set you back about $70,000 to $90,000.

Costs will be comparable on both.

But a house is not the same thing as living in an apartment.  Sure they are both “places to live”, but so is a cardboard box alongside the highway. You could argue pretty low living expenses for the cardboard box when compared to a house or apartment, but it’s a lot different.  Human taste and comfort comes into play. How much value do you put on not being packed into a building with other people? How much value on not dealing with a landlord or management company.
These intangibles make a difference too.

2. “Rent instead of Buy” pundits always make this mistake:

As Taken from the Yahoo Article:
“Houses looked like smart investments in 2007. They had returned 9.3% a year for a decade, while stocks had returned just 5.9%. This year, with investors fleeing both houses and stocks, both probably look like a waste of money.”

Sounds reasonable. Until you realize that the return on investment only makes sense if you buy your house all cash.  Since most of us don’t, you have to take into account the return on the amount you have in the house, which is usually the down payment plus some closing costs.  If we use numbers from his example and you are getting 9.3% on your $100,000 home, but only put 10% down You are getting an equity return of $9300, on a $10,000 investment, or about a 93% return.
Try that in the stock market.
I am sure it can be done…..under very speculative conditions.

3. The final thing to keep in mind is that too often people get more house then they need, and as of late can afford.  If you stick to a reasonably sized house for your needs, the payments are often comparable to renting, and the lifestyle is much more comfortable.

Getting people to keep apartment showings

February 27, 2009

Getting people to keep apartment showings

by James Miller


It happened to me again yesterday.

I had a 5:30 showing set up at one of our vacant apartments. I arrived promptly, unlocked the place flipped on all the lights and set out the applications.

The guy never showed up to look at the apartment.

I waited for him to show for 20 minutes and then decided to take off.

It may or may not surprise you, but the events I just described are not that uncommon for property managers. I am pretty diligent about calling people the day of a showing appointment to remind them, but even with that measure in place, I still get around a 50% no show rate.

It really blows my mind that people will take the time to ask you about a place, set up an appointment and get directions, then decide not to show…or even call.

I have to admit I didn’t call this guy the day of the showing, but I had talked to him the night before.

Here is what I think happens in these situations and some of the steps I am going to take to try to resolve them. If you have any suggestions or ideas, please let me know..

1)The person I am talking to forgot about the appointment… although in this guys case, I doubt that you can forget about it that easily. We set the appointment  just the day before.

2) The person I am talking to is too polite to tell me on the phone that they are not interested in the apartment, so they set up a showing, knowing they will not show.

3) they may have looked at an apartment earlier that day and decided to take that one, blowing off the rest of the showings they had set up.

4) They knew about the appointment, but after a day of work were just too lazy and decided the couch or a trip to the bar sounded better.

There are probably a lot of other reasons that they won’t show as well.

Here are a few of the things I am going to start implementing:

1) I am going to call them back and ask why they didn’t show.My girlfriend was a recruiter for an insurance company. She would have the same problem with potential candidates and it drove her crazy. she would go so far as to call up people who blew appointments (and didn’t call) and tear into them, telling them that they just blew their chance to ever get a job there and that they should have at least called.
While I am not sure that affected her no show ratio, it apparently made her feel better.

2) I am going to start letting them know that I get a no show rate of 50% and if they can’t make it to call me.
I currently tell them to call if they can’t make it, and they have my cel phone number, but it doesn’t seem to make a difference. I will also point out that if they don’t show and don’t call, I will be calling them back to find out what happened.

One part of the problem, as I see it, is that they have nothing to lose by not showing. Since there is no realistic way for me to get a deposit over the phone, the only thing I can leverage against them is their contact information. I am not going to harass them or anything, but I will let them know that I was waiting for them at the apartment and it wasn’t cool to blow me off.

3) I am going to start letting the apartments show themselves.
While I like to meet the potential tenants, I have, in the past, been so busy that I had to unlock an apartment to let people through to see it without me being there. It works pretty well as I let them walk through and grab an application if they are interested and I think people like to be able to take their time when looking at a place.

I have been doing this with a lot of our lease option houses, as before the market slowed we would get so many requests to see the places it was virtually impossible to handle them.

I would like to hear from other landlords, property managers, and real estate agents, or anyone who has to set appointments with the general public. .

What are your no show/show ratios?

How do you prevent people from not showing up?

Taking on the language barrier as a landlord

February 3, 2009

Taking on the language barrier as a landlord.
by James Miller


I have had two semesters of Spanish in high school. Since that has been over twenty years ago, I now know just enough Spanish to unintentionally insult someone or get arrested in Tijuana.

I am guessing that this topic will be a foregone conclusion in places like California, but here in the Midwest I am finding that intolerance and discrimination is indeed prevalent in my local rental area, and there are lots of qualified Hispanic tenants who are being turned down because their primary language is Spanish, and the mom and pop landlords don’t know how to deal with this.

I find that many of these landlords characterize all Spanish speaking people as “Mexican”, and seem to believe that letting in Hispanic people will cause their apartments to become run down and create all kinds of trouble.

I realized that because of this, catering to English as a Second language (ESL) tenants was basically an untapped market.

When I started taking on Spanish speaking tenants, I also found them to be some of my best tenants. Rent was paid on time, apartments were kept very clean, and I even see that the majority of them who take their shoes off at the door.

This wasn’t always the case, but in my experience I had a better than average experience with my Non-English speaking tenant base.

The only time a problem arose was when I needed to communicate with these tenants.

Here is what you will need to do as a landlord or property manager to bridge the language barrier:

1) The first thing that I needed was a translator.

There is usually someone in their life who can communicate in English fairly well. Often times they are in contact with professional translators who can get the job done. many times job placement agencies have people who are fluent in both languages. Then there is also the local high school Spanish teacher.

Many times they will jump on this opportunity, and can become a faithful resource if you compensate them modestly.

2) Get the leases changed over to Spanish.

I am not sure of the legal ramifications of a ESL tenant signing a lease written in English, but getting the lease changed over is a one time cost for something that can be used over and over again.

3) Use written communication.

I use freetranslation.com, which can translate into several different languages. It doesn’t always translate everything 100% correctly, but gets the general idea across.

After having tenants laugh at something I had translated using this service, I figured out that using a two step English to Spanish, then Spanish back to English translation lets me verify if there is anything that can be potentially confusing or embarrassing.

4) Don’t be afraid to try.

Not knowing a language can be intimidating, but I found that we can communicate quite a bit with some broken words and pointing. Even though they all have my phone number, most of the time my Hispanic tenants will wait for me to stop by the apartment building and pull me aside if they have something that needs to be fixed.

The language barrier also helps to reduce nuisance calls, as ESL tenants will take care of the issue themselves if they can.

Some of my English speaking tenants will call me for just about anything. I have received calls asking me to replace burnt out light bulbs in apartments (even though that is their responsibility), or how the neighbor doesn’t always put his garage door down. yes, true story.

5) Make an effort to learn some key words in Spanish.

Don’t give me the “They should speak English if they want to live here” routine. That isn’t even the point. The point is to fill the apartment wit the best qualified tenant that you can.

By at least partially learning another language, you are opening yourself up to a ever growing tenant base.

How to avoid arguments over security deposits

January 26, 2009

How to avoid arguments over security deposits

James Miller

It is no secret that property managers are one of the most sued professions. As landlords and investors we need to be able to reduce the possibility of this any way we can.

It is my contention that most arguments that ultimately lead to court actions stem from some sort of miscommunication.

While there are people out there who try to sue for just about anything, I think most people who end up in court feel that they have been wronged by someone, but have not been able to work it out with that party.

For landlords and property managers, having a good explanation of what is expected will help to reduce the possibility of arguments and court.

I found that repairs cost me much more than tenants expected and I was constantly getting challenged on the costs.

My answer to this problem was to create a schedule of fees for security deposit withholding.  Here is what I came up with:

Schedule of fees for security deposit withholding

This is the general guideline used to determine what charges to hold against a tenants security deposit. It should be noted that this is a general guideline and charges are determined on a case-by-case basis and may be higher depending upon the situation. It should also be noted that we have 21 days by law to return your security deposit. We will do everything we can to speed up the process.

We are fair in our evaluation of what to withhold from a tenants security deposit and do not treat it as a way to profit from the end of a tenants lease. A large amount of effort is needed to turn an apartment, and money is only withheld to cover any excessive damage that is beyond what is normal wear and tear.

Time for our personnel is expensed out at $50/hour.

Materials are expensed pass through.

Light Carpet Cleaning $25 per room, no remaining or difficult stains

Heavy Carpet Cleaning $50 per room, stains remain or are difficult

Extra Heavy stains in Carpeting that require replacement of the carpeting will be charged on a time & materials basis.

Light wall patching (larger than pencil eraser, smaller than quarter) $15 per occurrence

Medium wall patching (larger than quarter, smaller than baseball) $30 per occurrence

Heavy wall patching (Baseball size & larger) minimum $50 per occurrence, or time + materials

Cleaning toilet $25 (as evidenced by remaining stains, dirt, mildew or hair)

Cleaning tub $25 (as evidenced by remaining stains, dirt, mildew, or hair)

Cleaning sinks $25 (as evidenced by remaining stains, dirt, mildew, or hair)

Cleaning Windows $10 per window

Missing/damaged outlet or switch plate $5 (plate plus installation)

Removal of trash/debris $45 per garbage bag full. Large items such as furniture and appliances the size of a microwave or smaller at $75.00. Large appliances and furniture at $150 per item.

Property damage: I.E. broken fixtures, windows, appliances Etc. charged at time plus materials. Any cost for outside labor for repair will be passed through with a $15 up charge.

Light bulbs: All lights were supplied in working order with light bulbs. It is the tenants responsibility to provide the apartment to us in the same fashion any missing/out bulbs will be charged at $5.00 per for normal 40-60 incandescent. (bulb + installation) Special bulbs

Fire alarms: Were supplied in working order with fresh batteries. Will be charged $20 per missing/broken alarm.

Unusual odors: If deemed caused by the tenant (pets, spills, left out food) damage will be charged on a time and materials basis.

Lost/damaged Keys $40 per key

Thelpa.com, a landlord protection agency has a great settlement charges guide, as well as a ton of other free landlord forms.

I also created the next document to give tenants as a map to work toward getting as much of their security deposit back as possible.

Hints for getting your security deposit back.

We take photos for our files before and after you move, so we do know what was there before you moved in. Anything unusual or excessive should have been noted on the move-in/move out form. These will be the two major things we use for comparison to determine what charges to apply.

Let us know of any items that need to be repaired or taken care of before you move out. If we can plan for it, it will cost us, and you, less.

Leave all hardwood and vinyl floors in a broom swept condition. Vacuum and Shampoo all carpets.

Use 409 or other cleaner to remove any stains or marks from walls. Check heavy use areas such as switch plates and cupboard handles.

Open a couple boxes of baking soda and put it in the refrigerator and freezer.

If you know you have marks that will need to be touched up, ask us for some paint. In most cases we have the color on record and can provide you with a small amount to touch up any marks.

If you would like to try to fix any holes in the walls, drywall patching compound can be bought in small inexpensive containers. You can save the expense of a putty knife by using an old plastic credit card or ID as a spreader. Just make sure you don’t make the problem worse by leaving a rough surface.

Switch plates and outlet covers are inexpensive; In the large chain stores you can buy a package of ten for under $5. If you have more than one that is damaged it may be worth your time to replace them yourself.

Vinegar and Newspaper works well to clean windows.

Make sure any utility bills, (especially water and sewer if you are responsibile for it) is up to date and paid. Providing us a copy of a last billing statement is a good way to help ensure quick return of your deposit.

Remember to return any loose items such as remote controls, keys, etc.

If you have a difficult stain or other damage you are trying to repair before we go through, call us, as we have seen a lot of situations and have many helpful hints for removing difficult stains and fixing items in a cost effective way.

Our focus is to turn over an apartment with minimal time in between. Any effort on your part to go the extra mile will be noted and taken into account when looking at what we need to withhold from your security deposit.

Both documents are given to the tenants as they move in and when they move out so they know what to expect.

Five things you need to know before becoming a landlord

January 22, 2009

Five things to know before becoming a landlord

by James Miller

These are things I didn’t really give much credence to until I started investing in Real Estate.  I share them with the hope it will raise awareness for those just starting out.

These five items are targeted to those of you starting out who will become landlords in the process.

Note that if you think that the lease option exit will not make you a landlord, you are mistaken.  While you do seem to get a higher caliber of character as a  tenant-buyer (probably because as they have more money on the line), you still have to do most of the same babysitting duties as you do with a  straight rental unit.

1) If you are going to be a landlord, you will have to evict tenants.

There is no “if it ever happens”. You will eventually have to evict someone.

People who seemed so nice moving in are the very same ones who will be saying how terrible  you and your apartment are to the Judge when you are in court.

I knew this was a possibility when I bought my first property, but by the time I got to 20 rental units, it seemed I had to start the eviction process more often than my lawnmower.

I have really only had to go through with a full blown eviction a few times, but I have had to serve “pay or quit” notices at least 30 times.  As with a lot of things in Real Estate investing, the things you really don’t want to do, are the very same things that you most urgently need to do.

Serving notices and evicting tenants goes with the territory of being a landlord.  You should accept this and start learning the eviction laws and court system in your area.

Getting a good attorney to guide you in this area is crucial.  If you don’t serve papers correctly, or miss a step in the process, they may hold the case over for a later date, costing you money as the defaulted tenants continue to live in your apartment. And once they know you are taking them to court you have zero chance of the tenants willingly paying you anything.

2) Paperwork, bookwork,  and paying bills will take a lot of time.

Before I started obtaining properties, I could bang out my monthly bills in about 15 minutes.   It now takes me over two hours,  just to get bills for the properties written out every two weeks.

I really should be assigning this task to someone else, but never seem to get around to it. I have to admit that part of it might be my controlling nature not wanting to let go of something so integral to the business.

Paperwork and bookwork take a lot of time too,  getting the paperwork done for a new tenant or tenant buyer to move in involves: a lease,lead based paint disclosure, move in move out sheet, welcome letter, and a schedule of security deposit withholding fees.

Most of these I have multiple copies of, but they all need explaining when turn over the keys.

My brother who is my partner in the majority of our properties is in charge of the bookwork. We use Quickbooks as our accountant seems to speak to that software very well.

Even with this premium software package to speed our bookkeeping, I am sure my brother spends no less than five hours a week on entering information. This is mainly due to the fact that we have several rehab projects that generate a lot of receipts.

The properties are  costing us ten hours per week just to keep the papers in order and get bills paid.  This doesn’t even include the periodic phone calls and letters to the tenants.

3) Advertising expenses will be a lot more than you think.

The classified ads we place are a lot more expensive than I thought they might be.  When I have vacancies, it is normal for me to ring up a classified ad bill of over a $100 before we get the right person in.

Now there are a lot of places where you can advertise for free, like posting flyers at the local convenience store, or on Craigslist, but for us the newspaper classifieds out pull the free ads by about 4 to 1

When you have an empty apartment that is costing you $150 a week to hold, you want to generate as many leads as possible as quickly as you can. Newspaper classifieds becomes a necessary expense.

4) You will have to clean and touch up most apartments after tenants move out.

The law allows for “normal wear and tear” to an apartment. What this means to you is that you can’t force the old tenants to make the place move in ready for the new ones.

Some tenants are really good about leaving things in good shape when they leave, but in most cases you will need to have someone go through and clean the apartment after they have left.

In my experience no one ever cleans the stove.

You will be able to deduct for some cleaning and repair expenses, (I do deduct for a stove cleaning) but this is  a built in cost to apartment turn over.

5) You will need to keep a bigger reserve amount than you think.

“Reserves” is the money that is set aside each month for replacement of things like a worn out carpet.   The problem is that the big ones can take a huge bite out of your checkbook.  A water heater will set you back about $300 if you install it yourself.  A furnace can easily be $5000.

Even if if you have  reserve amount of $50 a month being set aside, a new furnace will take over eight years of reserves to pay for it.  This assumes you don’t use the reserves for anything else during that time, which in eight years, is pretty unlikely.

Four Red flags to watch for when prescreening tenants

January 19, 2009

Four Red Flags to watch for when   prescreening potential tenants.

by James Miller

I have to start off by saying that the four red flags are not intended to be used as prescreening criteria, as landlords we should be aware of, and strictly adhere to, the federal Fair Housing Guidelines. I strongly feel that discrimination in any form is bad for the individuals involved and bad for the economy.

The four red flags are items that are intended to give hints as to the applicant’s ability to pay, and how they will treat your property.

1) Watch their reaction when you hand them an application.
After I have shown an apartment I will hand the person who just looked at it an application. If they are surprised by this or get a disappointed or frustrated look on their face, I know that there is probably something in their past that they realize will be revealed by a background or credit check.

I have even had people respond with “ oh, you need me to fill out an application?”  in a way that makes it sound like I am asking for a kidney.

My response to that is always “ Yes, everyone has to fill out an application.”

The next thing out of their mouth usually starts with “ Well here’s the thing….” and opens a window right into their problem zone.  This saves us both a lot of time,  as I quietly listen to them tell me about the very thing they were hoping to hide from me.

2) Look at the car they are driving.

If they can’t afford to put on a muffler, they might have trouble making the rent payments.

If you get a chance to, walk them to their car.  While it is a nice thing to do, it will also give you an opportunity to peek into how they live.  Is the car filled with trash? Good chance the apartment will be too.  Does it smell like smoke? You can feel confident that they will smoke in the apartment too.

Like most of these “Red flags” this isn’t conclusive, they may have had a reason to take the beater car that day.  I, myself, could afford a brand new car, but I choose to drive a 1990 GMC truck.

It can’t lose any more value and I am long past caring about door dings.

3) Do they seem overly concerned about the security deposit?

It is normal to ask about the security deposit for an apartment. I have a lot of people ask about it in their long list of questions.  If it is a focal point for them and they are mentally totaling how much they need to come up with , or starting to ask about whether or not they can pay it in installments, you might be talking with someone you will have to evict a couple months later.

The money you get as first months rent and security deposit (it is customary not to get a last months rent where we are at) is the only real protection you have.

The more money you get out of a tenant up front, the more leverage you have on them to do what you need them to.  Evictions, turnover and lost rent cost too much to take a chance on someone who is running their life at financial redline.

4) Notice the level of respect they show.
Not just being polite toward you, but things like whether or not they show up on time for the apartment showing, If they call when they tell you they will, etc.

Watch for the level of respect that they show the apartment. Do they wipe their feet before they walk in? Do they bang the closet and cupboard doors open and closed, or are they careful enough to pause slightly before letting the doors go shut?

These subtleties can indicate how they live their life and their level of respect for other people’s things. It can be a good indication of how they will treat the apartment and you.
As an example of this, I had some Spanish-speaking applicants who took their shoes off before coming in to look at the apartment. While it is a nice apartment, I didn’t consider it “take your shoes off” nice.  After doing a proper screening I took them on as tenants.

To this day when I stop by, I see their shoes lined up at the entrance to the apartment. This is the level of respect they have for the apartment and it carried through right from the showing.