All Forum Posts by: Ben Zimmerman

And here I thought we had 5 pages debating whether your home was an asset or not.

Equity paydown should certainly count.  Yes you are buying that equity paydown, but so what?  Whether you rent or buy, you are ultimately spending money in return for a place to live.  So either way that money is being spent, but at least when you buy you are getting something in return for that money that you spent in the form of equity paydown and appreciation.

As for the second part about utilities, the same concept applies.  Who cares that you have to mow the lawn for a house that you live in and own.  If you didn't own the home you would instead be renting a home then you would be mowing that yard instead.  So one way or another you are mowing a yard its just a matter of which yard are you mowing.  The same concept applies to all of the other utilities that you listed, one way or another you are going to pay a water/sewage bill for whatever home you are living in whether you are renting that home or if you own it.  Either way you are paying it.


When it comes to housing, ultimately you only have a few choices...

1. Be homeless

2. Live with mom and dad forever

3. Go to jail

4. Rent

5. Buy

I think we can all agree that 1-3 aren't very good options.  With option 4 you spend money on rent and receive no economic benefits in return.  If you buy, you instead spend money on a mortgage and repairs.  Either way in option 4 or 5 you are spending money to obtain a place to live, but at least with option 5 you get some economic benefits in return.

If you buy a house for 200k at 0% down and 3.5% interest rate, then over the course of the loan you will likely spend somewhere in the neighborhood of 395k in total payments.  If you assume that over that time you spend 100k in random remodeling and repairs, that brings your total expense to 495k.  In order to break even, you only need a 3.06% appreciation rate such that your 200k home is worth 495k in 30 years such that when you sell it, you end up breaking completely even.

If you break even, then ultimately you have recouped all of the money that you had spent over the years, such that you have essentially lived for free for the last 30 years since you have now gotten back 100% of the money that you had spent.  This is in sharp contrast to if you had instead rented that 200k home for 30 years at a rental price of 1500/month and a 3% annual rent increase, then you would have spent 856k over the same 30 years in rent.

Since I need to spend money for a place for myself to live, I can either break even if I get a 3% appreciation rate on the home that I buy, or I can throw away 856k in rent over the same timeframe.  It's not exactly a difficult decision.  

Even if I break even on the home I bought, I'm still going to call that home an asset since it essentially saved me 856k in rental fees which was the only other viable option since one way or another you need a place to live.  Owning the home provided me 856k in economic benefits relative to any other viable option.  

Bankruptcy less than a year ago, only 5% down payment, wants to buy a million dollar home and is willing to pay ANY interest rate.  What could possibly go wrong?

Come to think of it, I recently got an email from a Nigerian prince who needs some help moving some funds.  Maybe I could put the two of them in touch?

When it's all said and done the landlord should take her to court and sue for damages and lost rent.  If the councilwoman admits that she has the ability to pay but willfully chooses not to, then it's pretty much an open and shut case for a judgement.  

Washington allows for wage garnishment, so in the council womans case, this would be a prime example of your government literally working for you.

Stop asking and start telling.  You are in control, not your tenants.  If this unit is detached and the tenant doesn't have to open a front door for the contractor then there isn't much your tenant can do about stopping you from performing work on an adjacent property.  Write him back stating that you, and your contractor team will be at the property at XXX time.  Open the gate yourself and let the contractor into the back unit.

After this is all over, get rid of the tenant at the first available chance.

That there is a real estate agent out there trying to drum up some excitement about his area and get some new clients?  I don't know, what answer were you looking for? 

I'm 100% not trying to be rude, but there is no way to say this without being blunt...  It's you.

Now I'm not saying that some (or most) real estate agents dont suck.  But you certainly aren't helping your chances of finding a good agent.  You are dismissive, and aren't interested in hearing criticism from others, instead all you really seem to want is for a bunch of "yes men" to agree with you.  You say you look at all aspects, but your actions indicate otherwise.  Many respected people in this community have offered their advice and came to the same conclusions, and you don't seem to want to hear it.  You haven't offered many specific details, but the details you have given are a terrible way to go about things.

Just because you are an agent, doesn't mean that you know how to effectively talk to other agents as you claim.  In the same manner just because you claim to be a cash buyer, doesn't mean you don't need to show proof of funds.  I see 10 bandit signs on every street corner from people claiming to be cash buyers, but guess what, none of them actually are.  Take a step back and actually do an honest personal inventory of your processes and ask if the situation was reversed, would you waste your time on a potential client who operated the way you are operating? 

Narrow your market down to one city and get to work.  There are deals to be had in any market, and each market has hundreds, or thousands of homes for sale at any given point.  There is zero need to try to be looking at a dozen different markets simultaneously unless you have several hundred million to deploy.  In fact every market that you try to expand into actually stunts your growth because now you need to spend time to find quality people in each and every market to scout, manage, and repair all of these properties.  In addition you are reliant on others advice, as you yourself will actually know very little about all of these various markets.  As someone mentioned earlier that you quickly blew off, "if you are looking everywhere, you aren't looking anywhere."

As someone who is also in sales, if you called me as an out of state investor, and said you were calling all over the country and weren't interested in even attempting to legitimize yourself by providing proof of funds, or other direct and actionable steps to move to the next phase of purchase, then I wouldn't return your calls either.  Why should a successful agent waste their time on a no-name person who is supposedly looking at a dozen different markets?  If you are looking at 12 markets, that means you have an 8% chance of picking my market, from there you have to actually be a serious investor, of which the majority of people are not.  After that, I still need to find something that fits your specific criteria.  So do you really expect someone to do a bunch of running around and do all of the scouting and leg work for you, on a 1% chance that you actually buy something from them?  The best real estate agents already know the heavy hitters in the area and can sell a good deal instantly, so there is very little reason they should try to pass that deal on to you until you at minimum establish that you are a serious and competent buyer.  A good agent doesn't need to prove themselves to you, they are already successful and don't need to prove themselves to some random person they have never heard of.  The onus isn't on them to prove that they are a good agent, the onus is on you to establish that you aren't some schmuck wanna be out of state investor that is going to waste their precious time.

Do some research, pick a market, identify your specific criteria as far as neighborhoods, size, price point, repair condition, etc, put that information of what specific types of properties you are looking for in writing, and give that to your agents that you are contacting along with proof of funds to show that you are a serious buyer, and you will get a MUCH different reaction from all of those "terrible" agents.  

100% of everybody thinks that they are right.  And even when they are wrong, they don't like to admit that they were wrong.  When I finally learned the lesson that contrary to what I had always believed, I didn't know everything, that was the day that everything in life suddenly became 1000x easier.  It was at that point that I could honestly evaluate my shortcomings, and improve on my weaknesses instead of turning a blind eye and blaming others.

On what gets you into trouble by Mark Twain. It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so.

There is a massive difference between changing zoning code because drunk people are living in an existing home that is being used as a makeshift rehab facility, versus constructing additional housing and demanding that anyone with a disability be allowed to move in.  

Per the court case, "Whether an ordinance violates the FHA requires a two-step inquiry. At the first step, the Court must determine whether the plaintiff has made out a prima facie case of discrimination."

In your instance, there is no discrimination because nobody is allowed to live in these illegal ADUs.

In addition, even if there was a legitimate disability, you would still need to prove that this person is a caretaker. I'm assuming you are renting the main house since you specified loss of income from the main home in your original post. So what happens when that family moves out? By definition the ADU is no longer necessary. And how do you compel the court to believe that one person is the others caregiver when the person isn't trained, has never met the other person before moving in, isn't being paid by the other person, in fact the only link between the two of them is that they are both paying you rent. Are you going to give the caretaker a key to the main house? Hard to be a caretaker if you don't have access to the property.

But hey, I always get a good chuckle out of reading news articles about wanna be lawyers, so go ahead, what could possibly go wrong....

Should food be free during the corona virus?  What about your medical expenses, should those be free?  What is so magical about rent that landlords should simply bend over and accept no payments from their tenants?

If someone was laid off, they are getting at minimum 600/week in addition to whatever your states regular unemployment benefits are.  They also got at least 1200 in cash.  

If it weren't for the media and constant articles about rent strikes and crappy companies like Cheesecake Factory declaring they aren't paying rent even during the very first month.  Are we really to believe that a billion dollar company cant afford April rent?  The restrictions on evictions doesn't help either.  They know that they can simply get free rent for however long this lasts so why should they pay?  Why not just keep that 1200 and unemployment and just not pay the bills and move out once the evictions start up again.  How many landlords are actually going to waste money on lawyers and take their former tenants to court afterwards and try to obtain a judgement?  -Not many.

I have all rent payment info sent to the credit reporting bureaus and have notified my tenants that I am willing to work out payment plans, but that rent is still ultimately due and will negatively impact their credit if things can't be eventually resolved.  So far I've had 100% on time payments during this crisis in my B class units.

LLC's are very over rated when you are first starting out. They complicate paperwork/taxes, and there is rarely a reason to sue if you are just starting and have highly leveraged properties. There's not enough equity to be worthwhile in a lawsuit.

If you get sued, the LLC will protect you from losing your personal assets, but ultimately you would still lose the house within the LLC if you lost the case.

With an umbrella policy if you lose the lawsuit, you keep the house and the insurance simply pays up.  It's unlikely you will ever successfully get sued for more than 1m, so you should be more than fine with a simple $200/yr, 1million insurance policy.