All Forum Posts by: Arlen Chou

@Bill F. you are 100% correct that we are all a product of the randomness that surrounds us. But it is important to keep in mind that randomness in business or finance is not equal to all people. With money and resources a person or an organization can places itself in the way of more positive random situations than a person with very little. I would assume that is the reason why people want to learn more here on BP and interact with people online and in person. I don't believe anybody on BP randomly decided to join the community, they did so to better their chances of positive random encounters, but it did start with a decision.  This is what people allude to when they talk about "making their own luck".

Discussions about success or failure are not fables or story telling. They are tools to teach each other so that we can learn and put ourselves in the way of more positive random occurrences and to avoid potential negative random situations.

The REAL TALK should not be about how people got into these situations, it should be about what actions we take when we are in them. To much of what happens in real estate investing and in society revolves around "fairness".  The issue that nobody discusses is that fairness goes in both directions: fairness to the landlord and fairness to the tenant. Both sides basically see the other side as the bad guy who is trying to screw "me".

Much of this centers around the fact that most people do not fully understand the true meaning of the WORD "compassion". I am not aiming this comment at you, but since we are getting more philosophical in this discussion, I thought I would throw this into the mix. Compassion is not an action, it is a feeling, it is an emotion. A landlord or business person, by definition, can be hard line on his/her actions and still be compassionate. They can empathize with the person who is being evicted and feel bad for their position but still go through an eviction on a holiday. That person just chose not to act on their compassionate feelings.

However, I believe the true issue is that, as a society, we have lost our understanding of the word "civility". Much of that can be seen in the passionate posts by some of the people contributing to both sides of this discussion. There is no reason to use a backhanded comment to call somebody an ******* even if we use a bunch of random characters instead of the actual letters to pretend that we are being civil. Conversely there is really no reason to call somebody a "bleeding heart" as a derogatory term to try and put them down.

As @Thomas S. has pointed out the debate over the actions by the OP is really not productive, it is just a time drain on everybody here, including me, because there is no way to get everybody to agree on this topic. However, it is my sincere hope that we can all agree that civility is something that we should each strive towards in both business and life.

"We make a living by what we get, but we make a life by what we give."  - Winston Churchill

Give a little slack, you will probably be happier for it.

Happy Holidays, Peace out!

@Jay Hinrichs finding local food is the best part of travel!

@James Wise I appreciate the props and I enjoyed your podcast from a few years ago. Only way we grow and learn is talking things through with each other and that is what makes BP great. I appreciate your contributions here and if our paths cross, the first beer is on me.

@James Wise I agree with you that business is business and should be treated as such. My point about the thief is that I believe the penalty should be measured against the crime. This is really a subjective issue.  In the cases of the soda, the porch thief or the tenant being evicted I believe the the penalty should reflect the crime. Often people believe that they are being wronged and the penalty should be substantially higher than what they see is happening. 

The tenant should be evicted, no question but is doing it on Christmas really necessary? I mean really??? Unless we are talking about a high end SFR in Silicon Valley that rents for $15,000 a month, my opinion is that the dollar difference in 1 day or a couple of days is insignificant. The fact is, I would still get my property back. They still have the eviction on their record. To me it would be like breaking the thief's arm because he stole my stuff off my porch. Aren't a few scars and bruises enough of a lesson?

To be clear with you, I believe you are 100% correct that if we were to do a full accounting of the situation, there would be some additional $ loss. But really, who gives a "f" about a $20, $50 or what ever the loss would be. This mindset relates to my pop story. If that little amount of money makes a difference in my NET margins and defines success or failure, then there is something else that is seriously wrong with my business.

I don't see it as an issue of charity, because it is not. Charity is the active of helping somebody, which eviction is no where near that definition. I just see waiting 1 day as being civil. If I go through an eviction and I have the law on my side, I won. It is a "W" and everybody knows it. I just personally think that is enough. 

@James Wise it comes down to perspective. 

I was recently at a food court eating my lunch and a teenager walked up, grabbed my drink and started to drink it! I could have gotten in his face and demanded him pay for the drink.  However, I noticed he was mentally challenged and was on a field trip with a group from a nearby home. It was a soda, it was $2. Could I have made a commotion and demanded repayment? Yes of course, but was it worth it to make him feel bad over a $2 drink? Not in my opinion. I looked at the care taker and told her not to worry about it.

If I saw somebody stealing a package off my porch, I would chase the mf'er down to get my goods back. Even if I could go all "Jackie Chan" on him and beat him down, I wouldn't. I would get my goods back and make sure he did not F with me again.

As to your question of "why", I believe it is because we now live in a world where everybody feels entitled for everything and the image of the badass hard working SOB is going out of style. I totally agree with you that it f'ing sucks and it is wrong. However, the fact is that tenant is still the bad guy and it is wrong of them for what they did. In most cases they also know it even if they won't admit it, but they are doing what they can to survive. Again, I don't condone that, I just empathize with them. Not everybody can have the work ethic or inner strength to bust out of poverty to get to a stronger financial position. 

The idea of entitlement comes from the feeling that "it is not fair". Just like many landlords do not think it is fair that tenants can screw them. The 100% truth is that life is not fair and it is not suppose to be. My perspective is that dwelling on what is not fair is a limiting mentality. I try to focus on creating enough wealth so that a loss of a few dollars is not worth the effort of thought or emotional an emotional burden. Again, I am not going to let somebody take my stuff, but I don't feel the need to "f" somebody up just because I can or have the right to do it.

@James Wise just because we CAN do something or have the LEGAL RIGHT to do something does not mean that we should. This is evident in all aspects of life, not just real estate. There are people who cut other drivers off on the freeway because they can. There are people who let the elevators close on people as they walk up because they can. There are tenants who screw with landlords because they can. Just because you can emotionally crush somebody does not mean you should. The idea of having to do whatever it takes to get ahead as the only way of getting ahead is an affront to civility and humanity in general. 

As somebody who has spent the past 3 years fighting tenants AND the City of Oakland, I fully understand the trail that brings tenants and landlords to a point of legal confrontation.  

You wanted to get the perspective of investors on both sides of the isle. My perspective is that waiting a day or even a few days would not have cost you much if anything. Many people believe that kindness is a weakness, in fact it is a strength. If your business could not stand the economic pressure of waiting a few days, just so you could be nice, you have way more important business concerns that should be addressed. And even if the tenants don't acknowledge the fact that you gave them some slack, who cares... at least you know you were being nice.

No worries @Katie P. it was a last minute thing. Hope to get out to one of your meetups in the near future!

@Cesar Burgos being patient is definitely the hardest thing. The second hardest thing is to suck it up and embrace the grind while my friends were having fun. Hustle like it is nobody's business, because it is not, and always keep in mind that it sucks WAY more to be old and poor than young and broke.

@Jack B. it is not really clear why you would not just call it your primary residence so you won't have to worry about 1031 exchange later. The benefits of it being your primary residence probably out weigh the depreciation that you are considering.  Other than the mortgage interest payment write off, any appreciation up to $250k, if you have lived there for 2 of the past 5 years, is tax free to you at the time of the sale.  

Just a thought,

-Arlen

@Jay Michael unfortunately your question is to nebulous. If you gave more context as to your location, the strategy you plan to use, etc you might get more replies. Also it depends on your hustle and drive, things that most people will not be able to guess about you.  The reality of real estate investing is that the REAL money is made in the long term not on the "fast track". Not as knock to your goals, but for $6k gross a month, doing retail arbitrage has way less risk, way less headaches and is probably easier.