All Forum Posts by: Chris C.

 I am actually cash flowing AND profiting in Hawaii specifically because rental income growth goes hand in hand with appreciation.  I would STILL profit even if my rentals were unoccupied. You cannot say the same thing.

The reason I can cover missed rent payments is because I focus on profitable markets, not to be confused with "cash flow" markets on paper.

Landlords are freaking out all over this forum due to the anticipation of 1-2 missed rent payments.  But they purchased fantastic assets in cash flow markets with dreams of cash flow right. Why are these landlords getting so nervous, I thought "cash flow" would help them in times of trouble?

The chickens are now coming home to roost. We will see which investors understand the difference between cash flow and profit.

To all the landlords.

DFW is not immune to the current economic turmoil. So yes, things are not all fine and dandy right now. So, I figured I should give a short, maybe premature, rental state of the market here. To understand where I am coming from, we focus on class B & C single family homes in North Texas. We also have two mobile home parks and very few apartments units.

Let’s step back, take a deep breath and calm down to make ration decisions. True there are many negatives in the marketplace. I don’t feel the need to state the obvious ones. So let’s just point out some positives.

• As of 3.25.2020 less than 1% of our tenants have reached out to our firm about potential interruption in rental payments.
• Our number of inquiries from potential tenants has decreased only 20%
• This may because people realize that living in a small apartment is less desirable during a shelter-in-place situation.
• Many of the professions our tenants have are in the fields that have the strongest demands now. i.e. Amazon delivery, truck drivers, Uber Drivers, Certified Nurse Assistants, School Teachers, City Workers.
• It looks like the government is cutting checks to our tenants. Many of them don’t even have an income disruption. So this is just a bonus.
• Many of our tenants already did or can work from home. Gotta love technology.
• On the bright side as of March 25th none of my tenants April rent is delinquent. 😊 And yes many have paid early.

Going forward you may want to consider a few slight changes to your business model.

• Having tenant default insurance is starting to look very attractive. Most of our clients declined it. But for less than a $1 a day, it sure looks like a good deal now.
• You need to make it easier financially for tenants to rent from you. We reduced the cash out of pocket tenants need to move in. We use an insurance product to replace the security deposit. This allows tenant to move in with the purchase of a very cheap insurance policy. Ironically, it covers us better than a traditional deposit.
• Use professional photos and video tours. This makes it easier for tenants to decide on your property without visiting it.
• Electronic lockboxes allow self-showings. You need to be very diligent with this as there is still fraud out there.

I hope everyone finds some value in this. Don't let fear control your actions. I pray my optimistic gut feeling is correct. Time will tell.

We are in this together.

@Stone G. If he’s offering you $1,000, I would take that and be happy all day because usually inspectors have you sign an agreement that they are only liable up to the cost of the inspection, which I’m assuming was considerably less than $1,000. Also seeing as he covered his butt and recommended in writing that you have a separate roof inspection, I don’t see how he’s liable for anything technically, unfortunately. This may not be typical, but what I do is meet my inspector at the property and go through the entire inspection with him. My inspector is great and enjoys having me tag along because I crack jokes and make it fun. I doubt he enjoys working by himself crawling through nasty crawl spaces and attics all day, so I think he actually enjoys the company. He’s a wealth of knowledge and I almost always learn something from him and occasionally he learns something from me. I always learn a lot about the property we’re inspecting that I wouldn’t if I wasn’t there. He takes a lot of photos if I’m not there but photos only tell you so much. He also gives me a big discount because he hates writing up reports and if I’m there with him he just does the minimum required for the lender/insurance and we discuss the rest in person so he saves to me uploading a ton of photos and completing a detailed report. If I don’t have the time to spare to do the whole inspection with him, I at least meet him at the end and he does a quick walk-through with me looking at the trouble areas he found. I’m usually looking at occupied MF buildings so this is my only time to see inside the occupied units anyway. One other thing about inspectors and not sure if it’s the same in Texas, but in CO there is zero certification or regulatory body for them so anyone can walk off the street and call themselves an inspector, so you’ve got to vet them well on your own. I would definitely be on site personally when working with a new inspector to see if they actually know what they’re doing, see if they actually go on the roof, etc. Good luck!

thanks Daniel, why is everyone around here recommending the FHA.

I thought it was because only the one year rule applied to FHA only and not conventional, but if conventional loans have only one year rule, and you can buy a duplex as long as you live in one side, for 5% down, then would save on having to refinance the FHA loan later if you just start with the 5% down conventional loan, and the PMI falls off after principal or appreciate hits 80% LTV.

Right? What is the big deal with FHA when you should think ahead down the road for your second purchase