All Forum Posts by: Ben Zimmerman

One thing that is worth mentioning as someone who has posted 75+ videos in the last 7 months on various personal finance topics, is that it takes a LONG time to build an audience.  I think I have very good, meaningful content and still only have about 185 subscribers.  Everything is exponential growth, and most people don't hit 1k subscribers (the minimum to get paid) for between 6-15 months after starting.

Youtube isn't going to just plop your video in front of tens of thousands of people.  My first video took MANY hours to make, edit, create the thumbnail etc, and during the first week it received a grand total of 1 view.  In fact even 7 months later the video was only shown in the Youtube sidebar to 107 people, so the absolute max number of views the video could have got during the entire 7 months is 107 views.  

Sure some videos go viral for whatever reason, but if you think that you will quickly get a lot of views because your content is 'better' than the competition, thats unlikely.  YouTube is nothing more than a business model paired with an algorithm.  The business side says to put great videos in front of people so that they watch a lot of content and therefore watch a lot of advertisements, and then keep coming back for more day after day.  The only way to keep people coming back is by ensuring that YouTube doesn't recommend 'crappy' videos (of which many videos are crap).  Instead YouTube recommends videos from creators that have a known track record of producing quality videos based on view duration, likes, and interactions such as posters leaving comments.  Therefore the larger your channel is, the more YouTube is going to recommend your video, and in turn your channel will get even larger still.

And this model is great once you start to become known on Youtube, but when your small, YouTube isn't going to recommend your videos because your videos aren't getting many views, and they aren't getting many views because Youtube isn't recommending it.  It's a vicious cycle that just takes time, and perseverance.  I'm still a small channel, but with each passing month I can tell that YouTube is slowly pushing my content a tiny bit more than it did the previous month which gives me hope.  The good news is that if you can stick with it, most people dealing with anything finance or real estate related where there is good advertising money involved, can start earning 5 figures/month within 2-3 years if you are consistent and have good content.

Final piece of advice, don't waste time on lengthy intros.  When people click on your video they are easily distracted, especially when they see that the video has been out for 3 weeks and only got 16 views.  If you aren't getting straight to the point and providing meaningful content within the first 20 seconds they aren't going to sit there and watch for 1,2,or 5 minutes while you do your intro and build anticipation.

Keep calling around to different lending institutions.  Just because one bank shot you down doesn't mean another bank won't accept your loan package.  Smaller banks and credit unions tend to be much more flexible with underwriting than the big box banks are.  

Never, ever give up after the first rejection.  Otherwise all of us would still be broke and single.

What am I doing to address the generational wealth gap?  I'm teaching my kids how to be on the right side of that gap, I am taking an active role in raising and teaching my children to be functional members of society.  I am a landlord, and contrary to what the woke movement might think my job is not to address income inadequacies or solve global problems.  My job is to provide clean, safe, and affordable places to live.  Even if I wanted to address racial inequalities and give preference to minorities, that would be illegal under fair housing laws.  You see the law works both ways.

Life isn't perfect, and life isn't fair, and as hard as we might try it never will be any of these things.

But I would argue that we live in an era where minorities of all sorts have more protections now than ever before in the history of mankind.  While there is still plenty of room to improve, if all you can do is play the victim card during an era of unprecedented equality laws, then I suggest taking a long, objective look in the mirror.  

HS Graduations rates by race: 2018

Asian: 92%

White: 89%

Hispanic: 81%

Black: 79%

American Indian: 74%

Percent of single parent families by race:  

Asian 20%

Black 66%

Hispanic 41%

White 33%

While there are some racial issues that still need to be addressed, that is only half of the problem.  The other half is taking personal responsibility for your actions and realizing that bad decisions have negative consequences that are nobody's fault except yours.

https://nces.ed.gov/programs/coe/indicator_coi.asp

https://actrochester.org/children-youth/single-parent-families-by-race-ethnicity

I would first check with your insurance company to see if they will even cover you if you have an aggressive breed living in the home.  

Next I would verify that his insurance is actually going to be paying.  Did his house burn down or something?

Finally I would charge as much of a deposit as is allowable.  Some states have various laws about how much money you can collect up front.  If you can collect 1.5 months rent as a deposit then that is what I would demand, or better yet 1 months rent and .5 months worth of a non refundable pet fee if your state allows for such a thing.

Otherwise if you can get guaranteed income, and above average rent during this crisis then I would say go for it.  Personally I've allowed pets as you otherwise alienate a large portion of renters and often can charge slightly above average rent.

Never trust anyone who has a financial interest in selling you something.  As others have mentioned agents advice should be taken with a grain of salt.  Take note of what they say, but never blindly accept it at face value and always verify for yourself.  

As far as mistakes go, one of the hardest things for me was to look at houses objectively.  As a new investor I always looked at houses and thought to myself, "I wouldn't want to live here".  The problem is we start to have standards in life, we want the open concept, walk in closets, granite countertops etc.  So anything less than that seems unacceptable.  But the reality is that many of these very same "unacceptable" houses make the best rentals.  A house doesn't have to be super nice, it just needs to be sturdy, clean, and functional.  Don't analyze properties based on your wants/desires and emotions, instead look at properties objectively from a cost analysis that includes rehab, versus the expected rent for the property.  

The other thing is that some things are easy fixes.  Replacing carpet or installing laminate and repainting a house is relatively cheap and can make the world of difference for some ugly houses and increase the amount of rent you can get.  Other items like an aging HVAC unit, foundation issues, or roof can be extremely expensive and won't change your rent rates at all.  Look for ugly houses that you can fix up for relatively cheap as opposed to a nicer house with aging bones that is going to be very costly to replace.  

I tend to be more aggressive with my reserve fund than many others are, in part because I have a guaranteed government job so I have no fear of ever being laid off so I know that I will always have at minimum my regular paycheck to help offset any rental downturn, and in part because I keep more than enough in reserves where even during a significant stock market downturn I still have more than enough to cover any expenses.

I keep a small portion of money in a high interest savings account, prior to covid I could easily get 2% with something like Personal Capital Cash, which was nice since I already used their app to keep track of general net worth type stuff.  I usually only keep enough in this account to handle day to day operations and general maintenance issues.

For large unforeseen expenses that is what my stock portfolio is for.  Since I will be paying for these larger items with a credit card anyway, I usually have between 30-45 days before I actually need to pay the bill which gives me more than enough time to sell something.  If the market is significantly down, or I don't feel like selling anything I can always suck it up and pay the 5.9% interest on my credit card (One of the perks of being military).  

Whatever you do, it's best to keep things simple. Don't over complicate things, if you are going to keep your reserves in the bank, just have one account and keep all of your money there. Always have reserves on hand prior to purchasing a property. If you don't keep reserves then you are just asking for trouble. The first 3 homes that I ever purchased the AC unit went out on each of them within the first 6 months. If you can't fix a problem like this as soon as it arises, your tenant will quickly move out or worse yet might take legal action against you. So now not only do you have an expensive HVAC problem that you can't afford, but you also have an empty rental property that isn't producing any income but the mortgage is still due on the 1st.

Some of my better purchases were from 'investors' who didn't keep reserves and lost the home at the first sign of trouble.

You will need to call your insurance company though to let them know that this is now a rental.  

Replacing a window screen takes 3 minutes worth of labor and maybe 4 dollars worth of supplies.  I would just replace it and move on with life.  Don't sweat the small stuff or you will drive yourself crazy.

I think I might be missing something, but if you currently own 2 duplexes and are looking to buy another then you would have 3 mortgages and not 2 for your final DTI calculations. You would also have 3 units worth of rental income + however many units are in the project you are attempting to purchase.

However regardless of the situation, you want to minimize your debt as much as possible. Since everything is a ratio, your debt hurts you more than your income helps you. So for example your 500 car payment needs 1250 worth of income every month to keep your DTI ratio at 40%. Try paying off any credit card debt, auto, student loans etc.

How long have you owned these units?  Typically I have seen most lenders start using 100% of rent income after being able to prove 2+ years worth of rental income via tax statements.  New rentals are typically subject to the 75% income problem that you are facing. 

 Sounds like you have already made up your mind so I'm not entirely sure what the purpose of the post was other than stating your beliefs.  Did you have a question in there somewhere?  

Financially speaking not paying 4% interest is the same as earning 4% interest.  If you are cool with your investments generating a 4% return then go right ahead and do your thing, nobody is stopping you.