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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  • Murray, UT · Member since 2016 · 162 posts · 166 votes
    6y

    Fortunately not all landlords are subject to what Trump think he dictates behind the microphone.  The CARES act only applies to homes that have loans that are federally backed (fannie and freddie) and the remaining is up to the states.  Some states made the same mandate similar to giving surgery with a cleaver rather than a scoupel.  

    In Utah the governor has mandated that eviction be put on hold till mid may if: The tenant was current by March 31st and they have documentation that they have been affected by Covid-19.  That sounds reasonable and makes me feel like some state sovereignty is still in tact.

    Unfortunately for me though, my only Utah property is federally backed and the tenant was behind before the Corona hit, so I cant take any action till late July.

  • Property Manager · Riverside, CA · Member since 2020 · 107 posts · 65 votes
    6y

    For those of you not in CA, it's way different than most other states. We are one of the worst states for getting sued. And now we have rent control! What the Governor of CA just issued on evictions, plus the judicial council rule, is unfair. And there are stories of tenants taking advantage of it, because they can. At a recent AOA webinar, a speaker mentioned a property in Beverly Hills, tenant has money in the bank, I think the rent is $20K per month, and the tenant decided not to pay. And there is nothing in the state order about ability to pay, so it can be abused. And yes, the tenant is still legally required to pay the rent, but the first possible eviction data is 90 days out from the end of the state of emergency, so at least September. And Evictions to lockoutcan take a LONG TIME. And if the tenant starts playing tricks, it can be a year. That happened to a lawyer that rented a house to a paralegal, and that person stayed there rent free for a year. Amazing the tricks they pulled.

    @David J. - CA politics  has lots of big money influencing politics, and landlords make for convenient whipping boys.  It's very hard to get anything built, which limits the supply, especially for new economy multi family units - Class C. And the big boys can jump through all the hoops to get stuff built for larger complexes, paying prevailing wages to avoid lawsuit. And Silicon Valley funded the rent control law put into affect after the initiative was voted down, Gov. Newsom made worse. For the the rent control initiative that was voted down, the same guy, with lots of money from selling AIDS Medicine (claims rent control is somehow related), is back for round 2.

    And the chance of what AOA is trying to do working, by applying pressure due to landlords, I give a Zero Chance of working. If AOA focused on issues with stuff going  on with state response and report with CoronaVirus, there is some leverage there - testing in CA and reporting of statistics from https://covidtracking.com/ based on CA state reports is strange. And good luck trying to get county level information, such as growth rates, etc. of CoronaVirus. 

    What you can do is remind the tenant that they still owe the rent, and this will impact their credit, and will eventually lead to eviction. There are a couple of sample letters out there. And if they have any health related housing issues, they can still be evicted for that.

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

    @JD Martin interesting. Strong enterprise. Out of curiosity, are we talking zero rent on all your properties? Short of a drug ring on the side, I am not sure how that works. I do want to learn though.  :)

    LOL. No drug ring, just a decent " day job" that more than covers my personal bills and all expenses on the rentals. Mostly only possible because I own most of my homes outright. But that's not an accident. I purposely set it up that way. It meant I didn't grow as fast as some, but I also took on very limited risk by limiting leverage. 

    Skyline Properties
    View Page
  • Investor · Rockwall, TX · Member since 2017 · 5 posts · 4 votes
    6y

    Good afternoon, @ Jason J. 

    I was unable to read so many and understand now where you're coming from. I was responding to some comments and I guess I misunderstood. I will take more time to be sure I understand the situation better.

    Thank you, sir.

  • Brookfield, WI · Member since 2016 · 191 posts · 108 votes
    6y
    Originally posted by @Brian Van Pelt:

    I know this is going against 90% of the landlords who are highly leveraged, but this downturn shows the fault of purchasing properties using BRRRR strategy.
    . Little to no equity remaining in property.
    . High mortgage
    . Potential to unzip entire portfolio in a downturn
    . Small to no reserves

    We are going to see a lot of Investors loose their entire portfolios's because they cannot go a few months.

    Possibly, the flip side of that is that they have little to no money in their deals, and "should" have more liquidity to weather a storm like this. vs the investor that paid cash for a few properties, and used up all their available cash, now they MUST leverage the property to get by. Plus, if the BRRRR was done right, they should have 25% equity out the door, and within a few years, enough more where they could actually tap those funds if they absolutely had to. Even in times like this, it all comes down to the old saying, "you make your money when you buy the property" if you over paid in either scenario, your in trouble. Personally, if I was a traditional investor right now, I WOULD leverage those properties and brrrr a bunch due to low rates, but that's me. Actually, I'd probably leverage them and dump it into the S&P500 and play the rebound....but that's just me.

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

    @Joseph Walsh S&P rebound? Deflation seems likely at this point IMHO

  • Investor · Rockwall, TX · Member since 2017 · 5 posts · 4 votes
    6y

    I like your perspectives! I have never personally done a deal, but certainly want to. I'm trying to learn on my own, but some things just go over my head. I understand about BRRRR and want to leverage some properties that my husband has acquired. He's done some awesome work on so many! We also have many in need of rehab that have been vacant for a very long time. Does that necessarily mean we've lost money when we bought them? I'm really excited to get the rehabs done and get some of my own, but don't have my own legs to stand on...

  • LakeWood , CA · Member since 2018 · 268 posts · 331 votes
    6y

    @David J. we will get through this. I’m on the same page as you are. I’m here if you need someone to talk too. I’m in SoCal too

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Stephen Keighery:

    I am a landlord and do not like these laws @Jason J. I feel compelled to point out that your argument is flawed. It is not just people who have COVID-19 that are effected. The majority of businesses that are non-essential are closed down and people aren't working as a result of the response to the pandemic. The unemployment numbers are astronomical and this is why the government are trying to protect these people who are temporarily out of work due to Government policy. I am not saying I agree 100% with the ban on evictions but I think it is more complicated than you are considering.

     Stephen,

    I agree with Jason and feel it's not complicated at all, as you do.

    While we are all in this mess, as far as I can tell Landlords are the only people asked to give away their product for free. Mortgage payments can be skipped but the principal balance remains and the loan is collateralized.

    Why can't we all just walk into Kroger and take what we want? Well just because it's plain wrong. Not complex at all.

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @David J.:

    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.

     Jason,

    You are not only 100 percent correct, you might be the most sane LL on this site.

  • Stephen KeigheryBusiness Member
    Rental Property Investor · New Orleans, LA · Member since 2018 · 717 posts · 555 votes
    6y

    @Gary L Wallman, my comment isn't that it is right, I am just saying that Jason's argument is flawed as he is trying to say that so few people have COVID-19 yet all evictions are cancelled. The number of people with COVID-19 is irrelevant because its the number of people that are affected by shutdowns that matters. Also the practical matter is that the courts are shut down as well so even if you could legally evict someone you would not be able to do while there are shutdowns. 

    Home Buyer Louisiana4.855 Reviews
  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y
    Originally posted by @Gary L Wallman:
    Originally posted by @David J.:

    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.

     Jason,

    You are not only 100 percent correct, you might be the most sane LL on this site.

    I am honestly surprised I have had to spend so much effort (or any at all) defending what seems like obvious and indisputable logic. *shrug* 

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

    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.

     Jason,

    You are not only 100 percent correct, you might be the most sane LL on this site.

    I am honestly surprised I have had to spend so much effort (or any at all) defending what seems like obvious and indisputable logic. *shrug* 

     You don't "have" to. You choose to. 

    "I believe I've passed the age of consciousness and righteous rage - I found that just surviving was a noble fight; I believed in causes too, I had my pointless point of view - but life went on no matter who was wrong or right."

    Skyline Properties
    View Page
  • Investor · Hillsboro, TX · Member since 2017 · 358 posts · 245 votes
    6y

    Folks,

    Lets look at this from a broader perspective.  Yes, they hurt a lot of us by canceling evictions.  They will come back.  They could not, and should not be so aware of each of our business to make it fit us.  Some of us were prepared and of us were not.  I feel I am in the middle of the pack, because I have used a lot of my reserves for upgrades and improving my properties, but I did keep a small cushion.   

    Once this is over, we will have seen the true colors of some of our renters.  We will weed out the ones that took advantage of the situation, work with others that were trying and were truly affected to catch up in a humane fashion. 

    They are some bad tenants out there, just like some there are some bad landlords.  The key is not to panic,  those folks who sold their stocks 2 weeks ago are kicking themselves.  Some landlords will want out, others will see a chance to build the portfolio and some of us wish we would have kept a little more in reserve so we could have been buying now for those who want out. 

    People will have to have a place to live, so landlords are needed.  Most banks are going to stay with their loyal customers.  Warm weather is going to slow this virus down, at least until next year.  I am not saying this is a bad virus, but I do think it is being overblown.  If you are sick, stay home. Practice good hygiene.  Do not mingle with other people than what is necessary to conduct business, but do not forget about those individuals who cannot get out and are starving for human connection. 

    The key, to this is that the only fair that is right is at the County level with all the kids and their animals, (question the fairness there sometimes).  Life isnt always fair, but we will work with the cards we are dealt.  Come on guys and gals, we are all adults, yes, our income and livelihoods are at risk, but we plow on.  Lets just take care of business as we can.  

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Michelle Fenn:

    While the government has temporarily suspended our rights, they have also provided means to correct address the issue.     IE the Simulus Check and liberal unemployment benefits.   The real problem for landlords is the media.   Headlines on the internet and in the newpapers announcing that there will be no evictions for 60 to 90 days.  Mortgage forebarance for landlords.    Unfortunately very few of our tenants read beyond the headline.    Buried in the 3rd or 4th paragragh is what Paul Harvey would call "The rest of the Story".  It is there that it is explained that the Stimulus check is to be used to keep a roof over you head and put food on the table.   Instead many think this is Government sponsored Christimas in April.  If you want to know what your tenats are thinking, create an account on Nextdoor app wherever you own rentals.  

     Michelle,

    The problem, you see, is the government has no authority to "suspend our rights". The Constitution doesn't have an on off switch. Too many people don't seem to get that.

  • Investor · shawnee oklahoma · Member since 2017 · 194 posts · 148 votes
    6y
    Originally posted by @Gary L Wallman:

     Michelle,

    The problem, you see, is the government has no authority to "suspend our rights". The Constitution doesn't have an on off switch. Too many people don't seem to get that.

     THIS!  So much ... THIS THIS THIS. Thank you for saying. I only wish everyone knew how important it is to reject what is happening. 

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Brian Van Pelt:

    I know this is going against 90% of the landlords who are highly leveraged, but this downturn shows the fault of purchasing properties using BRRRR strategy.
    . Little to no equity remaining in property.
    . High mortgage
    . Potential to unzip entire portfolio in a downturn
    . Small to no reserves

    We are going to see a lot of Investors loose their entire portfolios's because they cannot go a few months.

     Brian,

    While I agree over leveraging can be an issue it's really not the issue here. I own 90 SFR's free and clear. Property taxes are around 60k every 6 months. I also own a small business with virtually no debt and around 38 employees. Payroll costs around 175k a month.

    How much cash reserves would I need to offset these plus a ton of other expenses with zero dollars coming in?

    See the problem?

  • Member since 2019 · 226 posts · 115 votes
    6y

    You think they are ruining the economy, printing money because they want to take away your rights?  They are doing this because they have no choice.  They listened to China and avoided to do anything to ruin the economy when they had a chance to stop it.  They only did it because they couldn't cover it up anymore.  My 7 years old can understand why there is a shelter in place, some of you full grown adult can't even understand it?   

  • Member since 2019 · 226 posts · 115 votes
    6y
    Originally posted by @Gary L Wallman:
    Originally posted by @Brian Van Pelt:

    I know this is going against 90% of the landlords who are highly leveraged, but this downturn shows the fault of purchasing properties using BRRRR strategy.
    . Little to no equity remaining in property.
    . High mortgage
    . Potential to unzip entire portfolio in a downturn
    . Small to no reserves

    We are going to see a lot of Investors loose their entire portfolios's because they cannot go a few months.

     Brian,

    While I agree over leveraging can be an issue it's really not the issue here. I own 90 SFR's free and clear. Property taxes are around 60k every 6 months. I also own a small business with virtually no debt and around 38 employees. Payroll costs around 175k a month.

    How much cash reserves would I need to offset these plus a ton of other expenses with zero dollars coming in?

    See the problem?

     90 properties and not a single income?  That's pretty bad luck

  • Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    6y

    @Gary L Wallman You are a business owner and landlord . All you have to do is dig up the cash that you buried in coffee cans in the back yard . 

    What they are doing reminds me of this 

    Image result for star trek the needs of the manyIn The Wrath of Khan (1982), Spock says, “Logic clearly dictates that the needs of the many outweigh the needs of the few.”
  • Chicago, IL · Member since 2016 · 22 posts · 11 votes
    6y

    Some common issues I see in this thread that annoy me:

    1. The difference between voluntary charity (landlords helping troubled tenants) and forced charity via the government (extremely over-broad).

    2. The idea that if someone can find people in a worse situation than you, then your troubles are not legitimate.  You can always find worse off people, even after this crisis ends.  Doesn't mean our concerns aren't legit.

    3. The idea that if you are concerned about being forced to house unwanted people and concerned about the hit to your business, that apparently means you have no cash reserves and haven't planned for problems at all and will go bankrupt immediately based on your poor planning.  I have cash reserves for quite a long time, but vast amounts of cash lost still significantly hurts my goals and my family.  We don't get to judge each other's goals.


    I think most people want to be compassionate and can weather bad things for a certain amount of time.  I personally am worried more about the indefinite nature of these orders.  ... and the illusion that the stimulus bill helps landlords when it really doesn't.

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Tom Makinen:

    You think they are ruining the economy, printing money because they want to take away your rights?  They are doing this because they have no choice.  They listened to China and avoided to do anything to ruin the economy when they had a chance to stop it.  They only did it because they couldn't cover it up anymore.  My 7 years old can understand why there is a shelter in place, some of you full grown adult can't even understand it?   

     Yes my naive dear Tom. That is exactly what I'm thinking.

  • Specialist · Owings Mills, MD · Member since 2017 · 485 posts · 415 votes
    6y

    @Gary L Wallman

    As a business owner and investor I understand your problem, I would have expected as a cash buyer that at least 75% of your properties have home equity lines you can draw on, If you don't my first question is why not ?

    If you have had had your business for any length of time, good business owners or a C corp will put aside 3-5% per year for cash reserves, or if your income funnels through to you, then you should have been setting aside 10% of your income annualy for emergencies.

    The issue is that too many people plan for vacations,quick business expansions, etc and in reality they are no better than people who live pay check to pay check.

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Tom Makinen:
    Originally posted by @Gary L Wallman:
    Originally posted by @Brian Van Pelt:

    I know this is going against 90% of the landlords who are highly leveraged, but this downturn shows the fault of purchasing properties using BRRRR strategy.
    . Little to no equity remaining in property.
    . High mortgage
    . Potential to unzip entire portfolio in a downturn
    . Small to no reserves

    We are going to see a lot of Investors loose their entire portfolios's because they cannot go a few months.

     Brian,

    While I agree over leveraging can be an issue it's really not the issue here. I own 90 SFR's free and clear. Property taxes are around 60k every 6 months. I also own a small business with virtually no debt and around 38 employees. Payroll costs around 175k a month.

    How much cash reserves would I need to offset these plus a ton of other expenses with zero dollars coming in?

    See the problem?

     90 properties and not a single income?  That's pretty bad luck

    Tom,

    I, of course, was not suggesting this was the case my unimaginative friend. I was simply pointing out that even with zero leverage you can't afford to have your income disappear. Whether by natural disaster or government sanctioned theft. 

  • Rental Property Investor · Beavercreek OH · Member since 2018 · 422 posts · 970 votes
    6y
    Originally posted by @Brian Van Pelt:

    @Gary L Wallman

    As a business owner and investor I understand your problem, I would have expected as a cash buyer that at least 75% of your properties have home equity lines you can draw on, If you don't my first question is why not ?

    If you have had had your business for any length of time, good business owners or a C corp will put aside 3-5% per year for cash reserves, or if your income funnels through to you, then you should have been setting aside 10% of your income annualy for emergencies.

    The issue is that too many people plan for vacations,quick business expansions, etc and in reality they are no better than people who live pay check to pay check.

     Brian,

    I don't borrow because I don't have to. Why pay a bank interest?

    I have plenty of reserves. The point I was making is regardless of your financial stability and or leverage, no one can withstand a prolonged period without income.  Particularly for business type overhead.

    While I feel for any family that lost its income, 7 or 8 grand a month can be recouped. On the business side that may be one hours expenses. Hard to recoup that.  Think cruise companies and airlines. Highly valuable companies one minute, then virtually bankrupt the next.

    Working people get stimulus and unemployment. Big business gets bailouts. Small business gets promises.

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