Unfair madness! Landlords getting hosed.

Unfair madness! Landlords getting hosed.

Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes

Some Perspective... 0.15%

That's the percent of American people who have Covid-19 at the time of this writing.  NOT even 1% of the total population.

Suppose the disease were to quadruple before this is over, that would only be 0.6%. Still not even 1%

I am not saying the Covid-19 pandemic is not serious. It is serious! But bear with me, I'm going somewhere here.

Percent of tenants with eviction protection 100%

Specifically in California landlords have been totally neutered.

THIS IS NOT RIGHT, THIS IS NOT FAIR!

Private citizens should not be compelled by law to provide free housing at their own detriment. As a landlord for 20+ years this is the most backwards and un-American situation I have ever seen. What good are constitutional protections, checks and balances if they only serve us when convenient? We need our rights, and freedom most when times are difficult. Where is the ACLU?

Do I think a tenant who has suffered a hardship outside of their control should be thrown out into the street? No of course not. But, 99.9% of landlords will do everything in their power to work with a tenant ALREADY, if for no other reason because they don't want to pay for turnover and vacancy.

I think some responsible laws could be put in place that prohibit abusive landlords from unfair evictions and also require landlords to work with tenants, but the current situation is totally 1 sided and unfair!

Consider, if a tenant loses their job they have options. They can apply for aid, they can look for an online job. They could take a temp position at a grocery store if they like. However, if a landlord has a tenant who can't (or wont') pay rent they can ask for rent and hope for cooperation but can do nothing beyond that to improve their situation.

This absurd! Is anyone thinking this through? How can this possibly not end badly? Allow me to list some problems.

  1. If a tenant hears they "don't have to pay rent", many will simply push it as far as they can regardless of their actual ability to pay or not pay. Why not cease the moment? Wouldn't you?
  2. If a landlord does put a 3 days or quit notice and the tenant doesn't comply. Normal law states that the landlord can not collect anymore rent AFTER the 3 days are up, or the 3 day pay or quit notice is invalid. Does this mean landlords should just allow the tenant to live free till September or until (heaven only knows) when they are able to evict? Does letting a tenant free load till September seem like a good idea?
  3. Most landlords would agree that tenants who get behind really land themselves in a circle of debt they can't climb out of anyway. Thinking a repayment plan with landlords can work is basically fiction. AKA nonsense.
  4. How long till landlords start getting stretched too thin and start taking matters into their own hands? Anything is possible, Violence, fake insurance claims etc? That is a scary outcome that I don't want to even think about. (Please nobody do this)
  5. How long till landlords get fed up and say screw it and just let the bank have the property back?
  6. How long till word gets out about how landlords are being treated and many future (would be landlords) say, no thank you? How many current landlords will just get out of the game. (never want to take that risk again)

TL:DR; This is a disaster and I don't even know what to do anymore.

PS: I do have abusive tenants who are purposely leveraging the situation and not paying simply because they don't have to.

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
6y
Originally posted by @David J.:

@Jay Hinrichs Simply because it's not a problem for you or 90% of others does not mean it's not a valid problem. Landlords are being denied their civil liberties and property rights. The implications of this are huge! 
Also restaurants and hotels all each have their own arguments to wage but it's apples to oranges. At least restaurants can do take out, and hotels can claim insurance or sell their space to the government as a make shift hospital. But I maintain this is out of scope for my point. Regardless, how unfair it is for them, it doesn't suddenly make this fair for landlords. Landlords should NOT be denied their rights!

@Amer Mallah I agree about not making projections. Only casting some perspective. We have a whole lot of fear and irrational thinking taking place. I sure hope we see some changes. We need solutions that protect tenants without allowing landlords to be helpless victims themselves. That's just trading one problem for another. 
I also agree that the screening process is going to get much more intense. Also, I wouldn't be surprised if rents go up to compensate for the whole new level of risk landlords were just made aware of. 

these are once in a lifetime issues ..  I mean just think of all the small business's that were forced to close.. who is going to rescue them

if anything landlords to my way of thinking have gotten massive help.. their tenants got 1200 bucks ( at least most) and increased unemployment.. then you have section 8.. If the tenants choose to pocket the money and not give it to the landlord that's not the govmits fault..  it just is what it is everyone is suffering..  I mean there is no bail out for us homebuilder developers  !!!  Or real estate agents who cant show houses  it goes on and on.. so like I said to me landlords have gotten huge help far more than many.. Not to mention mortgage forbearances etc..

If the landlord for whatever reason gets in financial difficulty because tenant misses one a few rent payments.. then I think landlord needs to revisit their reserves policies.

See this reply in the discussion

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    6y

    Thoughts:

    1. How many of your tenants have decided to do as you say in your first post, i.e. not pay the rent and just milk it as far as they can?

    2. If the answer is anything greater than "Zero", do you think you might consider taking ownership of the situation and revising your screening and renting policies to better safeguard your assets?

    3. I don't believe anyone has said rent is free, only that the government is not going to assist with remedy of non-payment at this time. That is a risk of being a landlord and that risk doesn't only apply during a pandemic. Cities/states can (and sometimes do) revise their eviction statutes to make it more difficult, time-consuming or expensive to evict. Owning rental property is a business, and states generally have fairly free reign to regulate commerce. This doesn't leave you without options - you could sell a poorly/non-performing property, for example. 

    Bottom line to me is that it doesn't do any good to worry about something that cannot be changed. You cannot garner a groundswell of goodwill for landlords versus tenants who cannot/will not come up with rent during this situation. No one is marching in the street for restaurant owners or car dealers. It may be correct that renters plan poorly for future events, but that is also part of what makes the business model possible (otherwise everyone would own a home). 

    I would look at it as a positive, as it gives you an opportunity to really examine your business model and stress-test your enterprise. If you can't withstand a few months of missed rent, however unfair, you probably need to make changes to your model. 

    If all else fails, I suggest you take counsel from George Carlin, my favorite (warning: NSFW language):

    https://www.youtube.com/watch?v=m9-R8T1SuG4

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  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @JD Martin

    Thank you for providing a thoughtful reply.  Allow me to respond to a few of your questions/points

    1. Yes more than zero (one so far)

    2. This tenant was inherited when I purchased the asset. Thus "improving my screening" process is irrelevant.

    3. I don't need to pressure test my enterprise. This isn't about that. In fact I never made any claim relating to being unable to handle a few months unpaid rent. I would love to partner with honest tenants who have a REAL hardship and bear some of the financial burden. In fact I am doing so with 2 other tenants.

    The point is the current policy is lopsided and unfair. You say nothing can be done but that just simply isn't true. Policy makers can change this and make it workable. The mechanics of the market cannot function like this and private property RIGHTS are part of the fundamental fabric of our society. To simply tell a landlord they must accept theft is a crime and a gross abuse of public power. All the talk in this thread about being able to bear risks shocks me. We aren't talking about regular vacancy, repairs, rent controls, market changes or even natural catastrophes... we are talking about a naked violation of our property rights that compels property owners to accept tenant abuse with no recourse.

    I can certainly respect that we all have differing opinions, and that's great but understand I am merely defending mine.

    To sum it up, It's not that I can't afford the abuse, it's that I don't want to. Theft is not OK under any circumstance even if some bureaucrat says it's OK. I have worked to hard for what I have to let someone steal it away. I would much rather use it to feed my family. 

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @David J.:

    @JD Martin

    Thank you for providing a thoughtful reply.  Allow me to respond to a few of your questions/points

    1. Yes more than zero (one so far)

    2. This tenant was inherited when I purchased the asset. Thus "improving my screening" process is irrelevant.

    3. I don't need to pressure test my enterprise. This isn't about that. In fact I never made any claim relating to being unable to handle a few months unpaid rent. I would love to partner with honest tenants who have a REAL hardship and bear some of the financial burden. In fact I am doing so with 2 other tenants.

    The point is the current policy is lopsided and unfair. You say nothing can be done but that just simply isn't true. Policy makers can change this and make it workable. The mechanics of the market cannot function like this and private property RIGHTS are part of the fundamental fabric of our society. To simply tell a landlord they must accept theft is a crime and a gross abuse of public power. All the talk in this thread about being able to bear risks shocks me. We aren't talking about regular vacancy, repairs, rent controls, market changes or even natural catastrophes... we are talking about a naked violation of our property rights that compels property owners to accept tenant abuse with no recourse.

    I can certainly respect that we all have differing opinions, and that's great but understand I am merely defending mine.

    To sum it up, It's not that I can't afford the abuse, it's that I don't want to. If government doesn't fix it soon, I'm out. It's just that simple. Theft is not OK under any circumstance even if some bureaucrat says it's OK.

     🙂 Thoughts:

    1. Excellent.

    2. May or may not be irrelevant. The tenant passed your standards when you purchased the property, otherwise you would have demanded the property be delivered vacant or moved on to another property if impossible. In other words, your acquiescence voted them acceptable. 

    3. Excellent.

    My question then would be: since you seem to have an impassioned interest in this, what efforts are you making to correct what you perceive as a significant abrogation of your rights? You've posted on this board, to be true, and I would assume in an effort to persuade others to take action (if not to just vent), but that is the easy stuff. What steps have you taken beyond that? Have they had any effect? What plan for addressing this situation have you constructed?

    I once heard something that I thought was really profound. It's more or less a riff on the "Serenity Prayer", which says,

    "Grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference." 

    The riff version was "When you obtain information/observe a situation, you can choose to accept it, ignore it, or change it, but you will make one of those choices." If you feel this strongly about this, you might try taking your fight to a bigger platform. Or running for office. Or forcefully removing your tenant, changing the locks and conducting a barricade protest operation. That's if you choose to change it.

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  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @JD Martin

    All good, thought provoking questions. (much appreciated)

    Minor point, The seller lied to me about these tenants.  I'll admit I wasn't thinking to my self "I wonder how these tenants would perform in a worldwide pandemic situation" Your point is taken though, I suppose I share some onus here.

    I think the rest of your post is very interesting though, and even laden with some wisdom.

    Specifically about what have I done: I have sent email to our Governor, both senators and both of my legislature representatives.

    Beyond that I am going to be the first one here to admit I am a bit bewildered. Partly I came here to commiserate but also I came here to seek inspiration from others who are in the same situation. Candidly neither of these things have gone very well so far. LOL

    I really don't know man, I think I am at my wits end. I am not a big fan of "welp that's how it goes" but it doesn't seem like landlords hold any other cards at the moment. :(

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @David J.:

    @JD Martin

    All good, thought provoking questions. (much appreciated)

    Minor point, The seller lied to me about these tenants.  I'll admit I wasn't thinking to my self "I wonder how these tenants would perform in a worldwide pandemic situation" Your point is taken though, I suppose I share some onus here.

    I think the rest of your post is very interesting though, and even laden with some wisdom.

    Specifically about what have I done: I have sent email to our Governor, both senators and both of my legislature representatives.

    Beyond that I am going to be the first one here to admit I am a bit bewildered. Partly I came here to commiserate but also I came here to seek inspiration from others who are in the same situation. Candidly neither of these things have gone very well so far. LOL

    I really don't know man, I think I am at my wits end. I am not a big fan of "welp that's how it goes" but it doesn't seem like landlords hold any other cards at the moment. :(

     :) You sound like a smart, passionate guy who is concerned about his business, all of which are good things. And made some effort to attract the attention of your legislative leaders.

    I would caution you to not mistake lack of outrage for apathy or uncaring. I suspect most landlords here, myself included, view blanket efforts to halt the rule of law and the protection of basic property rights with healthy skepticism if not outright anger. We all know there will be people that will take advantage of the situation, and that there are likely better ways of dealing with all of this. I think most of us have chosen to focus our (collective and individual) efforts on that which can be effectively dealt with, rather than being a voice in the wilderness. Right or wrong, the scope of what is being dealt with at this time means landlords are not going to have any type of voice on these issues. Everyone is simply throwing pasta against the wall, hoping that enough of it sticks to avoid mass starvation and civil unrest. Halting evictions is just another piece of rigatoni.

    I think there's always a lesson to be learned in everything. For me, part of the lesson has been accepting some humility in my perceived abilities regarding my rentals and that some of my success is just good timing and good fortune rather than my own genius - so how can I translate that into shoring up my own defenses?

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  • New to Real Estate · Waterford, NY · Member since 2020 · 2 posts · 0 votes
    6y

    This is exactly what I had hoped to see, at a very low level, in my local area; this is not what I had expected from the BP community.

    Even if the courts were running at 110% and evictions were being churned out, that would leave many units empty, and the vast majority of prospective tenants having recent evictions on their records. Rent hiking aside, you're in the same boat next month, and now you have to go through a second eviction when the dust settles. It may appear that rights are being removed, but in reality, it protects the landlord from having 2+ evictions due to this crisis, and hopefully one or none. Also to note, courts are NOT running at 110%.

    The sentiment, in the moment, feels right. But even if you could evict today, would you? You'd probably wind up with a vacant unit until the pandemic is over and you can fill it with a tenant who has a job and the inclination to pay. Aside from damaging your unit, doesn't keeping the tenant there for now, with a chance that further government assistance is coming, make more sense? I'm not advocating this is how business as usual proceeds, but in this unique situation, are the alternatives really better than the course we're on?

    Don't get me wrong. I fully expect a non-zero number of landlords to be in a position where their reserves are not enough and/or their tenants choose not to pay although able, and I expect to pick up something/s for pennies on the dollar. I was under the impression that most landlords would not fall into this category, but I stand corrected.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @JD Martin

    I appreciate the kind words and thank you for helping me think though this. I don't know anyone in real life who can even come close to relating to my situation. I have one friend who has a single rental property but even he says that he can't imagine what I am feeling trying to hang on to 9 through-out this pandemic.

    You're right I am concerned about my business. It's my life's work. I've gone through so much struggle to get where I am. I started out living in a tent, and went months without a car so I could save for my first house. (my history is off topic but you get it)

    Now, I find myself with at least one tenant who outright admits she's got money but won't pay me because I can't evict her. It's such a helpless and frustrating feeling.

    If you figure out how to spin this into a win for yourself, please share because all I can see is myself paying to house this person for months with no end in sight.

    Worst part is I am scared next month there might be more who catch on to the fact that landlords are helpless suckers about now. 

  • Rental Property Investor · Corvallis, OR · Member since 2018 · 840 posts · 1k+ votes
    6y

    @Jason J. This is an interesting time for sure. I never thought I would see a virus that would shut down colleges and business where state and federal governments would intervene. I did not like the Oregon Governor making this mandate the way she did. It could have been more kind as local landlords I believe would have worked with people. One of my tenants got laid off but paid her rent. Another lost both her jobs but paid half. All others paid full rent for April. What concerns me is my 9 vacancies coming july when college students are vacated from existing leases. Some have already bailed and legally broken leases. At some point is economy shut downs exist, many more people will “die” as their businesses will never come back. I believe 98% of landlords are decent people and are not looking to evict fast anyway, but for the government to take control of my business makes me want to evaluate. Its quite a precedent that has been set.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Frederik Young I do believe you've missed something here. This isn't a plea to evict anyone who can't pay. We get some folks have hardships due to the virus. Nobody that I've seen is advocating to evict these people.

    I specifically have a tenant who would pay if I could drop a (meaningful) 3 days to pay or quit notice on her door. Because I can't she won't pay.

    This is why the system falls apart if landlord rights are completely stripped. (as they are)

  • Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    6y
    Originally posted by @David J.:

    The point is the current policy is lopsided and unfair. You say nothing can be done but that just simply isn't true. Policy makers can change this and make it workable. The mechanics of the market cannot function like this and private property RIGHTS are part of the fundamental fabric of our society. To simply tell a landlord they must accept theft is a crime and a gross abuse of public power. All the talk in this thread about being able to bear risks shocks me. We aren't talking about regular vacancy, repairs, rent controls, market changes or even natural catastrophes... we are talking about a naked violation of our property rights that compels property owners to accept tenant abuse with no recourse. 

    There is nothing for policy makers to change. We invest in California. From day one we knew the government was against us. They will make policy decisions based on votes and good feels even if they know it will harm the voters. As an investor in CA, I know that my property taxes will go up every year, that the state will come up with more fees to assess me, that they will disallow certain screening criteria, that they will continue to add tenant protections, that they will strip away landlord protections, that maintenance and insurance costs will go up every year, and that an eviction could take several months. We price that into the risk model and adjust our screening process. Ultimately, the tenants pay for all of this. 

    Now that we know the government is willing to take the step to not allow evictions under extreme circumstances, we will now price that into our risk model and adjust our screening criteria. Given this is an exceedingly rare situation, I'm not sure much change is needed, but maybe landlords will start looking a little closer at prospective tenants reserves. Maybe years that we let rent increases slide, we now do modest $25 a month increases just to help offset this new added risk.

    In the end, the tenant pays for all the crap the government does and for all the hoops they make landlords jump through. It might not be our current tenants that pay, but the future tenant will. If government crap becomes too much, we'll move our money elsewhere. 

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Todd Powell You get it, This is exactly my point here. We need a system that gets us through the difficult times, not one that deconstructs the entire fabric of our system.

    I agree, this is a whole NEW type of risk that nobody even knew we had. I really think long term, seeing what happens to us here and now will be in the history books about what it means to be a landlord.  It will no longer be people saying, "do you want to repair toilets?"... It will be people saying "Do you want to risk the government allowing your tenants to stay without paying rent while you pay the mortgage?"

  • Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
    6y


    The answer to complicated government processes is well, complicated.

    The answer to how we solve the current dilemma is not complicated.

    Build some respirators. Make some beds. Let the virus spread. Allow it to run it's course.

    Property rights are what allows every one of us here on BP to invest in real estate in the first place. The virus threatens our property rights. Wait what? Yup. We are already seeing them erode. But even worse would be to see them disappear like a magic trick. Never! You say. O yes! I say. It can happen real easy.

    Shall we have a history lesson in property rights and how they can be taken? I think maybe we ought to.

    How did we get them? Did we ever not have them? What did the world look like without them? How could we lose them?

    Before lots of people, there were no property rights given, they were inherent.

    But after some time more people came, and those people all wanted the same property, even though there was enough actual land mass for everyone. So from the beginning it was location, location, location!

    So the fighting broke out. He with the biggest fists and eventually biggest weapon and eventually largest army claimed rights to property. This arrangement still exists to this day.

    For most of history, anyone who was not the leader of the army had to request permission from the leader to use a piece of land the leader was not already using for themselves. This arrangement continues in much of the world to this day.

    But there have been a few exceptions to dictatorship rule, also known as warlords, also known as monarchy, also known as ultra-left government to put it into a modern definition.

    The exception was democratic. Where a group of people decided to work for the common good of all. They realized immediately that it must be democratic in nature always otherwise, it would be the same as dictatorship rule - this is why communism didn't exist until very recently - it is in effect a form of dictatorship.

    But democracy was outgunned. It's small uprisings were mostly squashed in short order. Again, he with the largest army won the day.

    Until the year 1776. This is when the British Colonies of the Americas declared their independence from Great Britain, renouncing their allegiance and loyalty to the ultra-left dictatorship monarchy and opting for a democratic form of government, called a republic.

    They decided they had enough of the old ways and wanted to try something new - an experiment they called it - which they would maybe like to take credit for inventing, but it was really not a new idea. The idea was that each man would be represented in government, and government would be as small as possible, including no taxation without representation, where taxation is the only measure of the size of government. What that meant is all tax dollars went to social causes serving everyone and no tax dollars went to luxury causes serving the few - like building a castle or fine clothing or building weapons and armies that could be used against the very people paying the taxes to make them pay even more taxes. They decided less was more, meaning less laws equaled more freedom, and today we call that ultra-right government, just left of absolute right, also known as Anarchy (the absence of government). And for good measure, they included a provision where each man would always have the right to keep and bear arms. Not so they could hunt rabbits, no, but so they could fight an army of their own government turned against them.

    Which brings us to property rights. The new democratic republic decided that land could be owned by a single person, and that any person could own land. In fact, the early republic limited voting rights only to land owners. Perhaps a bad idea to stray from that original policy? I'm telling this story to a biased crowd I know.

    So anyways, the King Of England was not pleased. He did not simply say, "ok fine my subjects, you can have America". O no. The king was was very angry for in fact, the subjects were stealing land from the king! How dare they! So he assembled his army and attacked the rebellious colonists. He lost that war. And the next war a few years later. He gave up after that. But I might think he never got over it, and possibly even vowed to take it back. Maybe even his descendants kept that vow??? Hard to say. Maybe we ought to ask them, Prince Harry has moved to the states so maybe someone could ring him for tea and bring it up?

    So there it was! The greatest empire the world had ever known was defeated by a rag-tag up-start of rebels. How could this be?

    Geography and resources mostly. But there was something else - the experiment. What could happen the founders wondered, if all men were allowed to own property and be free to do with it as they would - live or die - sink or swim? The result was more than they imagined, and out of many, one - e pluribus unum.

    The experiment was such a success that no nation could challenge it. Of course the geography helped out quite a bit, considering it made it pretty impossible for an alliance of dictatorships to attack - attack from sea across an ocean was not exactly easy back then, and still isn't to this day.

    And after a very short time the people of the world were brought the news of this new form of government. Rebellions around the world ensued, and in short order the great monarchies of the world were overthrown. Even the Great British Empire fell eventually. But this new form of government did not take over the entire world. Indeed, much of the globe continued under dictatorship and to this day, democratic government has yet to see the light of day in many places of the world.

    What holds it all together? Exception. Geography. The United States Of America.

    What could bring it down? What could destroy America? And if America could go down, could not all the other democratic societies go down too?

    The answer is money. The collapse of currency. You see the irony is, the very thing that makes the United States strong also is it's weakness. Out of many, one. Out of none, none. If our currency collapses, our nation collapses. Because at the end of the day, the thing that makes a country a country is it's currency.

    Our currency is not backed by gold, it's backed by faith. Faith in labor to be more specific. If we stop laboring, our currency stops having value. "Backed by the full faith and credit of the United States of America".

    This is why we must go back to work. This is why it is acceptable to sacrifice lives if that's what it takes. If America goes down, the democratic governments of the world might go down with it. We must not allow a virus to take America down.

    Want to keep investing in real estate? Better fight to keep our republic. Because when we lose our republic, we lose our property rights with it.

    R.I.C. - R.I.P. - U.S.A. - Give me liberty or give me death.

    1.2 Million dead so far. Will we honor our dead? The sacrifice they made so we might keep our freedoms? Or will we throw it all away, dishonor our dead just because we can't live with the thought of grandma dying? Has anyone asked grandma what she thinks? She might be more willing than you think if it means her descendants will live in the golden age of humanity as she has, instead of the tyranny that is inevitable as the alternative. You go girl! I'll remember you.

    Happy Easter. O yea, another story of sacrifice that one. I'll let the preacher tell that story.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Greg M. I was thinking about the exact same thing. I was just asking myself if I just put a 3 day notice on this tenants door and let her stay free until I can evict again how much would I have to raise the rent to be made whole in a year.

    I imagine so many others will be doing similar math equations. 

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Account Closed Very enlightening and true history. I wish more folks understood these facts. Property rights are incredibly important and foundational to our very way of life. 

  • Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    6y

    Nobody has any rights, and there is no justice in the world. These are the social illusions of the entitled. They don't matter to the child who died of starvation in Africa yesterday. They don't matter to the Chinese political prisoner whose family received a bill today for the bullet he was shot in the back of the head with last night. You are no better, and no more deserving than they are.

    If you didn't have six months of reserves going into this, well, now you know why you needed it. "The principle of the thing" is just your cheap self-serving protest against paying for a business outcome you didn't know you had to budget for as a risk a few weeks ago.

    In this world, the strong do what they want and the weak suffer what they must. Go do something to get stronger, this ain't it.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    Interesting @Jim K. Your profile says you manage tenants. So you are ok then to pay someone else's housing with money you earned? Would you be open to paying mine? (worth a shot to ask)

    I budgeted for any and all risks. So your claim about me is false. What I am against here is Government making bad policy that hurts both landlords and tenants. The very nature of how a tenant landlord relationship functions depends on the landlord having (at least) some kind of fair, leverage. 

  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    6y
    Originally posted by @David J.:

    @JD Martin

    I appreciate the kind words and thank you for helping me think though this. I don't know anyone in real life who can even come close to relating to my situation. I have one friend who has a single rental property but even he says that he can't imagine what I am feeling trying to hang on to 9 through-out this pandemic.

    You're right I am concerned about my business. It's my life's work. I've gone through so much struggle to get where I am. I started out living in a tent, and went months without a car so I could save for my first house. (my history is off topic but you get it)

    Now, I find myself with at least one tenant who outright admits she's got money but won't pay me because I can't evict her. It's such a helpless and frustrating feeling.

    If you figure out how to spin this into a win for yourself, please share because all I can see is myself paying to house this person for months with no end in sight.

    Worst part is I am scared next month there might be more who catch on to the fact that landlords are helpless suckers about now. 

    I think that's the case for a lot of landlords and why you, I and others gravitate here - it gives us someone to talk to and a place to sound out ideas and vent in general. Nothing wrong with that. 

    I believe the way you get through this is to adjust your perspective. First, even within your own situation, only 1 tenant has done this. If you have 5 units that's 80% of your tenants that are doing the right thing. So give them some credit rather than a "Who's next" suspicious eye. When it comes to your one bad apple, don't think of it as you paying for them to stay; whether they were there or not, you would pay the mortgage because you believe in taking the honorable action, and you also are putting money into your asset which only serves to improve your financial picture. 

    I believe you find what you are looking for. If you think all your tenants are just waiting for an opportunity to screw you over, that is what you will likely find. I believe most of my tenants are decent people - I screened them and ultimately invited them to live in my property. When they pay the rent, they help confirm my belief that I am a pretty good judge of character and that most of the time I make good financial decisions. That in turn gives me more confidence to continue investing and learning my craft :)

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  • Scottsdale, AZ · Member since 2016 · 8 posts · 2 votes
    6y

    1. Anyone who has property in California after 2008 at this time is going to have some issues.

    2. Given the "soak the apartment owner," LA Tenants Union suggesting that people not pay their rents and attitude, there is going to be some difficult turbulence. The laws have been written to give tenants the upper hand in 99%.  Also the delay to evict, only delays the eviction. The eviction fairy is coming in four months unless they pay their rent.

    3. My advice is to get out of California when you have a chance without losing your assets. Another rent control bill is coming and has good likelihood to pass. 1031 Exchange is one of three options. The second option is to sell each unit as an apartment home and take off Out of State. Finally, cash out refi to keep going. 

    4. We 1031'ed out and couldn't be happier. With this Black Swan event in California, I expect to see a lot of people lose significant wealth in Multifamily and Commercial Buildings. The first people to go are the 70/30 LTV guys who leveraged to the max. The next group are the Strip Mall owners who's tenants are not paying. Finally, people who have mortgages but cannot cover them when the tenants stop paying and have no reserves.

    5. Do not expect commercial lenders to be back to normal until at least September, 2020. The only people who are lending are hard money at 8-10 percent. They have increased credit scores required and possibly collateralized requirements. Right now most Finance guys are expecting 40% down just to get the loan looked at.

    6. On the residential side, big banks and gov will slow down the slaughter by delaying it. They do not want a repeat of 2008.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Jim K. I can do without the graphic visual. That aside, I actually agree with you. I don't think there is a single thing that ensures anyone has any "rights". It's a concept made up by people. Although, it's a concept I believe in, and would fight for. So I guess, if it means I end up in some twisted scenario as you describe, then bring it. 

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y

    @Ian C. What you're describing is the total collapse of California. I've often thought about getting out of here, don't get me wrong but if what you're saying is true, wouldn't there be no refuge anywhere? Not to mention 1031 is tricky if lenders won't lend. As kindly as I can say it, I hope you're wrong about all of this.

  • Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    6y
    Originally posted by @David J.:

    @Jim K. I can do without the graphic visual. That aside, I actually agree with you. I don't think there is a single thing that ensures anyone has any "rights". It's a concept made up by people. Although, it's a concept I believe in, and would fight for. So I guess, if it means I end up in some twisted scenario as you describe, then bring it. 

    LOL. Right. It's on like Donkey Kong in a thong singing a song.

  • Property Manager · Blaine · Member since 2015 · 209 posts · 276 votes
    6y

    Unemployment in Minnesota should be paying somewhere around $1200 a week, stimulus checks on the way, so most of our tenants should be doing better than ever.  

    The biggest issue I see is that unemployment doesn’t last forever and the fed said unemployment rate might be 32% by June vs a 24% worst during the Great Depression.  On top of that, the deflationary pressure in the economy is crazy, lending is being restricted, and according to the news only 70% of rent was paid by April 10th so what will may 10th look like?  I still like the sub $1000 rent to get paid because people can afford it, but if 80% of people are living paycheck to paycheck and 30% lose their job I would think rent, asset prices, and everything else is going lower.

  • Rental Property Investor · Jacksonville FL · Member since 2019 · 20 posts · 12 votes
    6y

    Imagine owning offices or anything in a "retail" space.  Most people will pay for their home before anything else.

  • Investor · San Francisco, CA · Member since 2016 · 338 posts · 444 votes
    6y

    @Jay Hinrichs, Exactly - it can be good or bad. My parents owned a plot of land in our NJ town that they bought back in the 80's with grand plans to eventually build, and then it got classified as wetlands or something in the 90's and that was the end of that! And there are certainly advantages that other business don't get, which is probably why most of us chose RE investment to begin with. 

    Anyway, everybody is a little bit right about the current situation, but I like to point out that we also need to pay attention to reality. And the reality, whether we like it or not, is that "landlords" are an almost universally despised group of of folks - especially where politics are concerned. So, we can't be that surprised that we're not going to be getting a flood of help. We're also living at a time where the wealth gap is the center of attention. And it doesn't take a history buff to know that the "haves" have always been considered the land owners for like thousands of years. I'm not saying the pitchforks are coming for us, but we can't be too surprised when we get thrown under the bus now and again. 

  • Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    6y

    Y'know, people, VICE and similar media outlets routinely read this board and cherry-pick comments to feature in their articles that make landlords look like navel-gazing greedy a-holes who should be gassed like war dogs. I've been quoted in one of their pieces.

    I can only imagine that at the moment how closely they're looking for villians to feature in their next pieces on housing inequalities that appeal to rent-paying Millennials.

    Why do we have to just give them all this lovely grist for their mill?

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