All Forum Posts by: Account Closed

 Because I legitimately want to understand the way investors and landlords think. Why they behave the way they do. And to learn little tricks and things they do so I can look out for them when renting in the future. And to provide a renters point of view. 
I do not have an exaggerated sense of entitlement. Forgive me but I am on the spectrum and my mind works differently and views things in a different way than most people. 
it just seems inherently wrong that people who are only interested in getting richer have so much control over the day to day lives of people. That at any moment they can decide to force a person into the street and feel nothing at all about it. That they can ruin a persons name and credit, and blacklist them so they can’t find anywhere else to live, eventually just furthering the cycle of homelessness, poverty, death. 

Wow, so many wrong assumptions in one paragraph. First every business is interested in making money. Including more essential ones like doctors. Thats the system we live in and singling out any one business (rental property) doesn't make sense. As for "getting richer" the average net return on a rental property is only about 5%. Secondly we can't force anyone out into the street. There is a process and there has to be a reason. There are courts and laws. Third, yes, we can report on credit etc and other landlords will rightly not want to take a risk on such people and get stiffed. But meanwhile a tenant gets to occupy and control a property worth hundreds of thousands and do whatever they like to it while they live there. Shouldnt the owner of the property be compensated for that risk? As someone who has had property trashed by bad tenants I can tell you the risk is very real.

Actually terms for mortgages for rental properties are always more stringent than owner occupied loans. For example you can get a FHA loan as a owner occupant at 5% down. Most all rental property loans are 20% and often 25% down. Also interest rate on rentals are typically at least 0.5% to 1% or more higher than owner occupied properties. I think a more likely explanation is that landlords tend to have better credit because it is the lifeblood of an investor. While the average consumer is irresponsible with their credit and finds it harder to get a loan. I don't really think that investors drive market values of Single Family homes in any meaningful way.

The problem in the US generally is lack of wage growth. That is why I fully support the $15 minimum wage push. And unionization and policies in general that help people earn more money. 

My daughter has the same sentiments. I told her in that case I can feel free to change my trust to move all the real estate assets to charity after I die. :-)

But to be fair, you should be idealistic in your 20s. Its where you develop a heart and conscience that then slowly gets eroded by age and cynicism. 

Umm, can you please explain how landlords can easily get multiple mortgages at the same time banks are making requirements for a home loan so stringent nobody can buy one? Both at the same time?

Yes and no. Happy with my Bay Area property which is providing high steady ongoing cashflow to fund a good portion of my monthly spend. But for out of state, while its been profitable I can't shake the feeling of one bad tenant away from disaster. Just had my first post covid eviction, I was surprised how quick we got the possession order. On the other hand last year and this year I had two exits from apartment syndications that returned 15% IRR each with no effort at all from my part. And a hard money fund that returns 10% quarterly without me looking at it. I just agreed to a private hard money deal that should generate 14% over the next year as well and if these guys are good that money can be rolled. So for a $/effort ratio land lording isn't the best for me.

Also having recently "retired" the tax advantages are less as I have dropped myself into a much lower tax bracket than I used to be. So one of the big benefits of owning rentals has been reduced.

My tenant in my town house in Campbell got a new job and wants to break lease and move. He will be responsible for the lease until I re lease it but I want to make every effort to do so quickly. Any recommendation for a PM/agent who would be able to list the property? I don't need ongoing management, just someone to list and lease it. I will charge the current tenant the marketing costs.

If your market can guarantee 21% for the next 5 years Ill make a deal with you. I will give you one million dollars and ask for a guaranteed 15% return. You can keep the difference. I will need collateral equal to $1m for the loan but since your returns are "guaranteed" you should have no problem with that right?

OK so lets take your argument to the extreme. Lets say I raise a bunch of money with the explicit business model of buying up properties with under market rents populated mostly by elderly people on fixed income. I get these at a discount (because cap rate is high) and promptly evict all the tenants and raise rents. Legal yes. But does it sound like the best way to make money? There are a lot of other ways to make money that is less predatory. The problem with America is that people believe anything legal and profitable is okay. Hence gun makers, tobacco companies, polluting energy companies all make legal profits at the expense of society, the environment and the general public. I would not invest in any of the above nor would I do predatory investing. You are of course free to make your own decisions about your life and the impact you wish to leave in the world.

Its stories like this that give landlords the bad rap and have people with pitchforks coming for us. You can try to make yourself feel as good about yourself as you like. But you know that two elderly women living on a fixed income can't afford much higher rent. You knew that when you bought the building and probably got a good deal on it as a result. Your entire plan for making a killing rests on evicting these women and raising the rent to market rates. You also know that they will be unable to find equivalent housing elsewhere at a similar price. Now none of this is technically your problem but you became responsible when you bought the place. Do whatever lets you sleep at night but I don't think you can come out smelling like roses if you make them leave.

I add 7+8 =15 and 40+20=60 and 60+15=75. Or I think "where's my phone?". :-)