All Forum Posts by: Brian Ploszay

I started to read that proposed law;  it is rather long, so I have no comments yet.  Coronavirus in California is still very active, so I suspect that eviction moratoriums will continue to be in place.  If not, the courts will move very slowly.  And other tenant protections, such as this law, will slow things down.  California is a very lucrative place for a landlord, if they bought a long time ago.  Else, you're operating on fumes.  Not getting rent will put small landlords out of business soon.

You will have to build a small portfolio to reach 10K per month profit.  It seems like you might be undercapitalized.  If you are into real estate and have limited funds, I would try being a broker or leasing agent.

Yes and No.

Get liquid and keep it in cash.  There may be better real estate deals (and stock market deals) next year.

The positive:   Few tenants are moving

Lucky:  I am getting most of the rents

The negative:  I have two small apartment vacancies.  No one is calling that qualifies.  

I don't think my local market is on fire.

Two regions will get hit the most:  Bay Area and part of NYC.  

First the Bay Area:   This region had the best economy during the last real estate cycle and the region has the most innovation and some of the most skilled workforce in the country.  With the boom of the region, the housing stock was unfortunately constricted, and supply could not keep up with demand.  Housing prices are absurd.  Tech companies will be very adaptable for telecommuting.  Middle class Bay Area residents had already been leaving pre-pandemic.  The overall region will remain strong and real estate pricing will not collapse.  Educated people will still migrate to the Bay Area.  I'd bet that places in Sonoma County, Marin County, Sacramento will all have growth because of out migration.

NYC:  This City has more problems.  People are leaving for several reasons.  The City's safety seems to be eroding a bit.  It is a dense city with lots of shared infrastructure.  This is bad in the era of covid.  And telecommuting will erode office occupancy and business hotel occupancy.  With decreases in revenue, the City becomes fiscally challenged. Parts of Manhattan got looted and the famed restaurant and nightlife scene is closed.  Tough Tough Tough.

Outside of NYC are lots of nice places to live.  But they remained affordable because they were too far for a daily commute.  Maybe that will change now.

I am betting that Covid is not long term and we get back to normal eventually.  Telecommuting has amplified, productivity remains, and companies will enable it if they find value.   This might be a moment like the early 1950s, when people left for the suburbs.  Urban decline was a 40 year trend, which reversed itself the last 30 years.

Here is some potential advice:  If you can get a 30 year fixed rate mortgage, I would refinance with what will be the absolute bottom of interest rate in this real estate cycle.  Probably will not be able to replicate that in a few years.

As far as purchasing another property, potentially go for it.  But there are uncertainties in the economy to say the least.  If you are properly leveraged, have proper reserves and want to invest in a long term deal, probably ok.

What really caused the crash last time was a rapid negative change in mortgage lending.  Combined with an increase in supply of homes, especially foreclosures.  

Right now, the supply of homes is very tight and mortgage capital is great.  As a landlord, I've experienced the least amount of tenants moving - ever.  Same for homeowners.  Lots are withholding their plans, their moves, their listings because of this era of Covid.  So the supply is low.

I expect this to change in time.

For some sectors of commercial real estate, we can see the future and it is a correction. Defaults on a certain type of commercial loan (CMBS) is reported to be way up. Leading the pack is hotels, nursing homes and also retail properties. New lending tightens, and the prices tumble.

On the street, I see restaurants that will never re-open.  Hotels that have empty parking lots.  And retailers that are shuttering.   

Most of us on BP are investors.  For flippers - product is tight for now.  For landlords, some headwinds including tenants not paying.

For buying properties, this is a very dry time for me.  Few opportunities and lots of frightening economic data.  I am forced to remain on the sidelines.

That is eviction without cause.   Please consult an attorney when dealing with eviction issues.  There are several new changes.

The only time I evicted was for "non payment."   The 120 days should not apply.  

I do believe there is a new form required with non payment evictions, due to covid related employment.  It is a form that states the landlord must propose a workout remedy.  Again consult a good eviction attorney.

Eviction court closure has been extended another month, so these are trying times for landlords without paying tenants.

I would take the 1031 elimination.  What will reduce investment values  - for those living in my market of Chicago - are substantial real estate tax increases.

@Thomas Enright   I think it was because of an estate issue that had to be settled.  I was going to pull out of the contract, but I just let it ride for the two years.  I didn't have a lot of earnest money.  When I was younger, I wanted to build houses, which I did.  I sold it because the lot was worth went up in value, about the amount I expected to make on that house.  Something like 50K.  The next year, the great recession happened.