All Forum Posts by: Brian Van Pelt

Buying or Selling ?

This is going to be a trying time for past BRRR Investors, especially for those who have the last R-Refinance to pull equity out for either purchasing properties or for living expenses.

I've never been much of fan of BRRR investing due to the high risk during recessions. I know that it works if you get your portfolio together AND have 10 to 15 years to build equity during a rising real estate market.

I've generally been a pay cash and use the income to save up for the next property investor. Longer build up of inventory, but safer during turbulent economic times.

During the last downturn in Real Estate, many of my BRRR investor clients saw their entire portfolios unzip when a small number of tenants.
Currently I am seeing a huge increase in calls from my investor clients inquiring about unloading their highly leveraged investment properties.

30 - 60 - 90 Day notes called by commercial Lenders (The commercial credit market will probably lock up soon if Banks don't act soon)
Closing of Equity Lines by Residential Lenders (yes, a lot of lenders have it in the small print)
Calling on Equity Lines by Lenders (again, the small print)
Margin Calls on mortgages by lenders especially hard money lenders.
A declining Real Estate Market (Many areas especially Southern CA are seeing dramatic price drops on listed homes)

My questions for current BRRR investors are:
. How prepared are you to weather a downturn in a declining real estate market.
. How many months can your portfolio handle missed Tenant Payments.

Add any other insights you have to help BRRR Investors in the COVID-19 and post COVID-19 investing environment.

The upside is that once things settle there WILL be great investment opportunists especially for those who have equity or cash to pick up discounted properties or from other investors who seek to balance or elimanate their portfolios.

@Nathan Gesner You mean you DON'T demand a huge discount when buying a car ? I do ! They may laugh, they may feel insulted, but in the end I ALWAYS find a dealer who will discount. Buying a car or renting is always about trying to find out who the better negotiator is. I do agree with you that the OP need to be firm. However just like a car dealer if he can't move his inventory he WILL adjust his price or he won't make much as a salesman. And ALL Landlords are salesmen.

No, Don't be a greedy landlord. Tighten up your lease for the next tenant.
My lease's include the following.

. Charge for re-keying locks.
. No holes in walls, Tenants are allowed to use  3M Command™ Picture Hanging Strips

@Josh Bakhshi

I applaud the thoroughness of your post and would like to add the following.
. Any change in lease terms requested by a tenant because of COVID-19 deeds to be documented via a lease modification signed by Landlord and Tenant or else you risk ending up in a he said/she said situation if it ever goes to court.
. If a tenant asks for a lease modification because of a loss of job permanent/temp/reduction in hours/reduction in pay. Make sure the Tenant provides documentation. 
. Don't make the assumption your tenants can't pay rent because of a temporary loss of job. Recheck their lease application. Anyone with large balance savings or 410K balances can and should pay their lease.
. Process late notices as normal. Again this is just documenting according to terms of the lease.

call a local realtor, ask for current rental rates and inventory on the market within a 1 mile radius. in the area. With the school so close, check the boards for students looking for lodging. Two students sharing a room will give you a higher return than 1 person in a room. 

You have all the answers, call zoning ask for the local process, and what fees for the application are. Zoning,zoning,zoning

Walk away, Keep the friend. With everything going on with him, there is a big probability that he will fall behind again and you may face the real probability of evicting a disabled stroke victim who is a friend. If you have the funds offer to hold a private note (mortgage) paying off the current note holder. I'm in agreement with Mike S

. The best is a Real Estate Brokerage, since they will to the Application, Credit check, Background Check and Lease for one low fee.

I had a hard time following this post.  What happened to the sink hole ?