Obama and Immigration on REI

45 Replies

Let's for a moment take the politics out of the plan to allow 4million immigrants to stay here per executive order.  I don't want to debate the left or right.  I know we all have opinions and most are quite strong either way.

I am looking at this from a rental standpoint.  If I am a buy/hold investor this feels like a dream come true.  Millions of people who most likely cannot buy a home in the near term and will need a place to live.  My initial thought is that many of these people will be forced into lower rental areas and perhaps some a bit better.  

I feel like many will begin to travel away from the south and start going towards MW and NE without concern for deportation and the chance to work legally.

Any thoughts out there?

-Caveat - my opinions personally may not match my business view....but then again maybe they do?

Before replying please note that @Sean T.  is asking to avoid political discussion.  This is not in the Off Topic forum where political discussions are allowed.  So, any post containing any hint of politics will be removed without notice.

I feel like many will begin to travel away from the south and start going towards MW and NE without concern for deportation and the chance to work legally.

Begin?  I think we're way past "begin".  Lots of majority Hispanic areas here and we're not exactly in the south.

I don't think this will have much of an effect because these folks are already here and already renting properties.  Perhaps some rental demand increase as people who are living with friends or family may feel emboldened to move out and get a place on their own.

I think seller financing and lease to own over long periods (eg 5 - 10 years).

Even a lease and a ROFR.

Immigrants are appreciative and responsible, if you can speak the language!

@Jon Holdman   thank you for your thoughts.  I am thinking more in terms of what changes from "illegal status" to legal.  Government assistance, sec 8, higher education financial assistance and associated student housing will offer new opportunities.

I grew up in a city which was very diverse in Boston but now I am seeing a call in the suburbs for more affordable housing for "new" residents... yes it was a campaign.

Like was mentioned, they are already here and living somewhere. What I think will happen is that as they get access to better paying jobs, more stability in jobs, and the ability to be above the radar we will see them move up from what in many cases were practically tenement living situations to renting smaller SFR and apartments. I'm not sure about other places, but around this area even as illegals they were making $12-$15/hr mostly under the table just not reliably.

It seems they were moving around the country mostly unencumbered before. I don't see any effect other than if this allows them to bring in more family. I think generally that immigrants = population increases = more renters to whatever areas they settle or at least that is how it went down in Cali. Thanks, Matt

@Sean T.  

Section 8 - There will be a bit of politics played out over the definition of "eligible alien" status.  I have not connected the dots yet with Obama's recent declaration and what it means for the folks' statuses for housing options under section 8.  Here is the HUD document pertaining to the various ways people can apply for housing assistance.  It starts at the bottom of page 4 (5-3 in the document itself).

The politics that are important to the business ramifications of this surround the eligibility requirements for the new folks on the "path to citizenship." The issue politically will be what happens to the values of the section 8 vouchers. Personally I believe that section 8 plays are a great long term investment but that doesn't mean Washington will continue to support section 8 via HUD. If you have a long term relationship with a section 8 office, I'd make sure to check in with them at least once a month to see if they have heard any news on changes or proposed changes on section 8 vouchers/eligibility/qualifications.

The economics of section 8 may change on simple supply and demand.  Assuming the fed approves X dollars to be distributed to Y people: 

Does adding Z eligible immigrants increase the X dollars approved?

Or does adding Z eligible immigrants give us the equation X / (Y+Z)?

Or something else entirely :)

Student Housing - My guess is that the recent Obama declaration will increase the number of students by a fair amount.  With little fear of being deported, or having their parents deported, Jr High and High school students can focus more on school, and thus college.

How many of these people become college students is still up in the air.  There are 2 trends important here:

1. How many immigrant families push there kids to college

2. The simple fact that the US is facing a labor shortage in almost all the "typical" immigrant professions. Undocumented US Immigrant Statistics

There are ~1.12 million undocumented people under the age of 18 (same source).  Combine this with the number of people under 18 who are citizens (born here most likely) that are children of undocumented folks and you have your pool of possible college students over the next 10-15 years.

College student housing has always been a good financial play in my book.  The recent events should increase the number of students by a fair bit over the next few years.

In General (Spanish oriented, 59% of the undocumented immigrants are Mexican(same source)) - Start posting ads in Spanish and English.  

While they may be undocumented and working on your places now, soon these folks will own the businesses we rely on.  The 18-35 crowd of drywallers and painters are next year's small business owners.  Get in good now.

Find out what is important to the local ethnic populations.  Everyone needs locks, fire escapes and roofs but what do they WANT?  Outdoor space is always a plus, but would community cooking areas be preferable to pools?

I'm really not sure it will make a difference in lower income properties   They are already here and living somewhere.  They will typically live where the threat of getting caught is relatively low, which is lower income areas where they blend in more. If anything, it might help middle of the road properties some.   But I don't see it having any significant impact in any area.   I personally do not see anything wrong with getting them out of the shadows.   There are 11 million of them here, we are realistically not going to deport them all, we do not have the resources or fortitude to do that.  

@Aaron Montague   nailed it!  My thoughts have been on the 10+ year horizon.  As large industrial cities have fallen by the wayside and populations decrease could this be a turning point?  Where is affordable housing likely to be built?  Everyone wants good education, healthcare/hospitals, and safe communities.

I would venture that the current crop of undocumented workers are not headed into a specific demographic on the 10 year horizon. I.e. I wouldn't venture big into low income housing as a standard business practice in areas with lots of undocumented folks. 

Will there be money to be made there? Yes. Will it be even a locale based norm, I don't think so. I believe that 15 years from now today's undocumented folks will be spread out across the wealth scale in this country evenly. 

I'd work to get into these communities now. Work to establish a relationship with the business owners of next year. These folks may be customers for life 

The U.S census is predicting Hispanics to be the largest race in America by 2050 according to data and trends. They tend to have much higher number of kids per family.

U.S. Census Projections

I think the immigrants illegally here should come out of the woodwork and be qualified. At least then taxes would be paid other than sales tax to push revenue into the U.S. system.

I think they are already living here, renting, etc. so I do not see this massive wave of increased rentals from it. 

Be VERY careful renting or selling to undocumented workers ( previously called illegals).  I once sold a property to a guy who had an green card.  He had great income.  Then he moved 3 other illegal families in to the house.  The guy I sold to moved out and no where to be found.  I foreclosured for non-payment but the illegals stayed.  It was next to impossible to get these illegals out of the property.  I called ICE in Dallas, they said call DC. DC said call Dallas.  Three illegal families and Immigration nor the police would not do a darn thing.  

Finally, the illegals left with the HVAC system stolen, the garage door missing, a sledge hammer taken to the walls, all cabinets stolen.  Anything they could remove to sell... they took it.

Anyone who was previously in the USA illegally, obviously has no regard for the rule of law

So I would not consider the millions of new un-illegals good prospects for renting or selling to.

The problem with that @Jackie Lange  is that it puts you into dangerous waters with Fair Housing protected class issues.  I can see a slippery slope if you get hit by a tester.

I just got back from touring 6 multis in my neck of the woods.  I casually asked some of the renters who were home what they thought about the executive order that could be coming regarding immigration and the consensus seemed to be less reliance on cash and under the table jobs.  This of course led to my question(not insinuating any of them were not "legal) of what does this mean for housing.  Again, consensus seemed to be an ability to think about investing, retirement accounts, going to get education, and similar.

Truth be told it was motivating for me because when people believe they have something to work towards they are less likely to take silly risks like destroying an apartment or not paying bills.  Then again, what do I know?!

I agree w @Brian Gibbons  that lease to own strategy is something that could pick up big time as they can now settle in and buy without fear of deportation 

Originally posted by @Jackie Lange :

Be VERY careful renting or selling to undocumented workers ( previously called illegals).  I once sold a property to a guy who had an green card.  He had great income.  Then he moved 3 other illegal families in to the house.  The guy I sold to moved out and no where to be found.  I foreclosured for non-payment but the illegals stayed.  It was next to impossible to get these illegals out of the property.  I called ICE in Dallas, they said call DC. DC said call Dallas.  Three illegal families and Immigration nor the police would not do a darn thing.  

 What would have been different if these families were here in the country legally and did the same thing?

Well, to Brian, the solution of housing for the humane race is lease to own.

Let's not forget the reality, those here are already living somewhere.

You are not going to see some great influx of housing leases or purchases, the folks in this casted net are already in the economy.

The approach taken by the President is pretty much common sense, the expected or proposed boarder restrictions will most likely offset any greater influx of immigration, there won't be a greater intrusion of foreigners entering, bet my last dollar on that. That means there will not be any significant demand, it will remain rather stable. :)

@Bill G.  perhaps I am better off finding those 7th grade spanish language books!  I do believe you are right on with things remaining stable.

Maybe the question here is who will cater to and in turn profit from these folks as they grow their families and incomes/savings.  My family is from Ireland and came to Boston.  A generation later and we are all over the place.....

First of all, I've never had anyone who was in the country legally steal HVAC systems, cabinets, a garage door, and take a sledge hammer to the house.  

And when people are in the country legally, it is easy enough to get them out with a simple eviction.  But the courts would not touch it because they were all illegals - I was referred to Immigration.  But ICE kept passing the ball and would not do anything.

@Jackie Lange   out of curiosity when did this happen?  I saw you mentioned Dallas and am wondering if recent.

Question, how would you handle it differently?

@Jackie Lange hit send before I finished!  After foreclosing on the original gentleman, would it have been possible to claim some sort of trespass charge if no lease agreement was able to be provided?  

Originally posted by @Jackie Lange :

First of all, I've never had anyone who was in the country legally steal HVAC systems, cabinets, a garage door, and take a sledge hammer to the house.  

You haven't bought many REOs, have you?  :-)

Of the first 30 properties I ever bought, about 75% had stolen AC units, stolen cabinets and much, much worse.  And that was from the previous owners, who were likely all citizens.

I'm guessing pretty much everyone on this forum who has purchased more than a couple properties has seen theft and property damage done by renters and former homeowners who were legally in this country.

Originally posted by @Sean T. :

@Jackie Lange  out of curiosity when did this happen?  I saw you mentioned Dallas and am wondering if recent.

Question, how would you handle it differently?

 This was about 5 years ago.  I would not rent or sell to anyone who was not in the country legally.  If they came in to the country illegally, even initially, I would not do business with them.

I live in a foregin country now.  There is a process for living in any foreign country legally.  The rules are clearly defined.  I jumped through all the hoops and paid all the legal fees to become a legal permanent resident with a cedula and soon to be citizen.  So I have zero tolerance for anyone who enters any country illegally.  There's a right way and a wrong way to move to a country.

If there is no respect for the law when them move to a foreign country, then there is no respect for the rule of law when it comes to contracts or property rights either.

Originally posted by @J Scott:
Originally posted by @Jackie Lange:

First of all, I've never had anyone who was in the country legally steal HVAC systems, cabinets, a garage door, and take a sledge hammer to the house.  

You haven't bought many REOs, have you?  :-)

Of the first 30 properties I ever bought, about 75% had stolen AC units, stolen cabinets and much, much worse.  And that was from the previous owners, who were likely all citizens.

I'm guessing pretty much everyone on this forum who has purchased more than a couple properties has seen theft and property damage done by renters and former homeowners who were legally in this country.

I've bought about 800 fixer upper/wholesale type properties but none of them have been REO's and none of them had the kind of damage that I had with this property. I found that I could get much better deals (with no competition) by NOT buying bank owned houses. And I bought a couple hundred subject-to or seller finance properties but they were all in pretty good condition when I bought them.

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