All Forum Posts by: Foti Karastamatis

I agree with a lot of the posts that say you should become an expert in whatever you are doing. Just make sure your an expert in what you really want. I could be an expert in SFR but if I want apartments, the math isn't the same and the markets can be very different. I invest where I can feel comfortable with what is going on. I own properties in the Memphis area (but not in Memphis), Tipton County Tn, Haywood County Tn, Henderson County TN, Bay Area Ca (selling my last house there now) and involved in an apartment deal in AR and Fl.

Look for population growth areas within barriers... meaning areas that have NO or little room to grow unless its something crazy like Austin where tech is moving and there is limited housing. The harder to it is to build apartments, the better, usually. Make sure you have an exit strategy BEFORE you buy.  Pick areas that have a lot to offer....great schools, great jobs,  high traffic, close to major players like Trader Joes, Whole Foods, Starbucks etc. They move into those areas because they know the market. Surround yourself with people that know more than you do. I did the opposite when I first started and I feel it cost me dearly. Now I'm proudly the idiot in the room whenever possible. Join your local NREIA and network. The "old timers" love to share.

I realized I left out a couple important tidbits ... The tenant had tried to extort $20k out of me after I offered the $6000 : "give me $20k and I'll leave" and the son threatened to "beat my ***" for asking his father to move out. That's when things got ugly. I really don't respond well to threats like that.

Update: They skipped out on the "new " landlord after a few months because they were fighting with the neighbors

Why "lend" when you can "invest" in syndications instead? You could make 15-25% IRR with a lot less potential risk.

If it were me, I would take the $300k and use it as 25% down and get into a $1.2m apartment building(s). Buy value add and if I didn't have the cash, remodel each unit as it comes vacant with cashflow until all units are brought up to market standard. This will take longer with cashflow but I was done and rents are stabilized, I could refi and take most or all of my equity out and still cashflow. The trick is to not over leverage because there will be lean times, eventually. For instance, if I buy a 16 unit building and increase the rents by $400/ unit,(4 cap) that will add approx $1M in value. So if the asset is now worth $2.2M and I refi at 60% LTV I could pay off my 1st and take $420k out. So $420k- $300k capital repayment = $120k. I would use that + the $300 and buy more.. same formula... over and over again. There are a lot of assumptions but you get the picture. Even better, partner with others and buy more doors because you don't need to do it alone.

where in Collierville? Im very interested

They probably felt they needed to do something....I'm not crazy about it but at least this has some guidelines unlike Ca. I decided to sell a SFR in Ca and gave the tenants 60 days notice and a financial incentive ($1000's) to do so within the 60 days. Because I asked them to leave since the lease expired in June, they decided it was time to cash in. The form letter I received from my tenants stated under penalty of perjury that they "could not pay for this month or any other month in the future due to Covid 19." Didn't state any repayment guidelines or deadlines. Funny enough, the same tenants are moving to a new home and paying $1500 MORE a month.... must have won the lottery or something. What changed in the 2 weeks since I asked them to vacate?

Shakedown... $7200 cash for keys per their demands! 

What do you do? Dig your heels in and wait for the courts to reopen, wait the mandated 60 days AFTER COVID 19 moratorium is over to file for eviction and then wait for the eviction backlog to catch up to your case? By then your into next year, still paying mortgage, taxes, insurance, maintenance etc. For me, albeit wrong in every way, I consider the $7200 a cheap way out of a crappy situation. Now I can schedule the $100k worth of repairs and renovations to get it ready for the market, while its still HOT! We don't know what the market will be after November so I can't afford to NOT pay the extortion.

Click or cut and paste the link below to fight this 

https://nationalreia.org/action-center/?vvsrc=%252fcampaigns%252f77003%252frespond

@robertsteele The blue collar tenants in "c" properties will always get a bailout where as the white collar probably wont. If you feel strongly about it, maybe mix it up so at least someone is paying. I think apartments are the way to go. More doors = more cashflow and your odds are better with more tenants

Thanks for replying. I know the deal makes NO sense as it appears. My problem is with the the BP rental calculator. I have analyzed several deals using it and noticed the calculator has some issues. The analysis does not does not match the input info and therefore the deals NEVER make sense. It also does not allow for IO payments in the formula. If I break down deals long hand or with other apps, I get one number. If I analyze them with BP rental calc, they are always different even if I use the same assumptions BP uses. I was wondering if others were having the same issues.

Thanks again

I own several rentals in TN and Ca. I decided that I need to sell everything in CA. The one family in Ca that I asked to leave with a 60 day notice and financial incentive, decided they were not leaving. They signed that piece of trash affidavit under "penalty of perjury"  stating that they "could not afford to pay rent for August or anytime in the future due to Covid 19". It did not require any proof and it did not state anything about repayment of back rent. Just before that letter, they proceeded to give me a list of repairs that needed to be done, which I paid to repair, for issues that they created! Not one issue or late payment for almost 2 years before I asked them to leave. Mind you, they lived in that house since 1997. We remodeled the kitchen and bathroom and installed laminate floors a few years ago among other improvements over the years. Not only that, they were paying well below the $4000+ a month rent. After all that, they sent me a letter stating that they could not possibly leave unless there was a financial for them to do so. They told me that if I gave them 2 months free rent and their deposit back, they would leave within the 60 days. I bit my tongue and agreed, after all, that was basically my original offer to them from the beginning!

 I had to give them 2 months free rent ($6000) plus their original deposit ($1200) to get them to agree to leave. $7200.00 dollars to get MY property back plus the $100k I will need to spend fixing it up to sell! They ruined the house and I had to pay them to leave.

To add insult to injury, when I spoke to their new landlord last night I found out that since they "could not afford to pay rent for August or anytime in the future due to Covid 19" they are able and willing to pay $4500 a month for a new place. That's $1500 more a month than they were paying me! 

Ask me why I'm selling everything in Ca. Same reason I left there 16 years ago.

Bottom line: Until the courts are open and we can file for eviction, many can and will perjure themselves for free rent and anything else they can get. It needs to stop! I understand tenants are having a hard time. It doesn't mean property owners are not. Just because we are landlords (hate that word) doesn't mean we can afford to not collect rent. We still have taxes, insurance, mortgages, maintenance, etc to pay for. If the A/C or water heater goes out, we are still obligated to have them repaired or replaced. Our bills don't stop just because the tenants stop paying rent, yet landlords are made out to be evil money grubbin villains. Where would all of these people live if there were no landlords? Even public housing has a landlord, the government! And we all know how well they run things.

Good luck everyone, we're in for a little ride. In the meantime, this evil property owner is looking for more properties to buy!