All Forum Posts by: Joe Cassandra

You're not going to find many 1%-2% deals on the MLS...unless you're shopping in C-D neighborhoods.

Most of these deals you'll have to source off market. We're buying a house near us, 155k, should rent for 1.6k...and rents should keep ticking up from there. 

If that same house was on the MLS being sparred over like the last fish on earth...the house would likely go for 210k or so...and not be a good 1% deal anymore.

Bottom-line ---> it's impossible if you look on market...

As someone who has been in your situation (except I quit)...

It is going to be easy to get sucked into busy work...studying stuff...meeting people for coffee...etc

all that matters right now is revenue generating activities.

RE agent? Knock on doors for leads..

if you can afford it, flood nearby neighborhoods with postcards showing how prices are as hot as ever...

Wholesaler? Door knock some more...Cold reach online to people on FB or Nextdoor who sound like they may be motivated...

all that matters is generating cash. All other things are busy work and a waste.

I use a pre screen google form questionnaire before showings...weeds out 75%.

I dont do showings myself anymore...waste of time.

Use a site like Rently, and they tour themselves. They put in their DL amd sometimes CC if you're worried they will steal...but hence a good present screen questionnaire weeds out bad.

Don't spend your time doing showings with bad quality tenants...your time is better than that

To be blunt...

Why would you do this? 

Buy a house to hold it for 10 years, rent it out, then move into it...?

At 400k...the rent you'll fetch most is 3k per month...so you'll have a hard time cashflowing, as well as taxes are higher there. 

You're assuming in 10 years this area will be the only 'good' area for schools etc.

Alot has changed in just 10 years around here...just in Cherokee County where I am, these schools are making a splash...when 20 years ago, they didn't. 

If you want to invest around Atlanta for rentals, you might as well invest in a great deal that cashflows, pour that money back into paying down the mortgage if you don't need the cashflow...then in 10 years, sell it off and put money into primary. 

If you intend to move into it anyway, I believe 1031 laws are automatically cancelled...but I'm not an expert there.

As someone who trades and study charts...saw this one pop up last night...

of course no one has a crystal ball 

Is the moratorium only for unpaid rent? 

Could you find something else to evict her for?

Damage? Unpermitted pets? Maybe if she posts something on social media, you could 'cancel culture the lease?'

I kid...only a little...since it's LA. 

----

I don't get these tenants who are happy to live rent-free...

One because they probably won't find a place to rent again...

Two, if something in the apartment breaks...do they really expect you to come calling to fix it?

In Atlanta, this is a huge battle at the moment. As more investors drive values up, affordable housing communities are (supposedly) "shrinking" thus pushing out the old guard --- and, of course, minorities who may not be able to afford more housing or the tax increases. 

It seems there's a struggle between the average American seeing a home as an investment vs. just a place to live. You could argue the former is never the case especially if you buy at 100% ARV, but that's besides the point.

As you allude to, Steve, affordable housing laws only makes things more complex vs. simply building what the area demands at the time. If the area demands more 5,000 sq ft houses, why not build more of those. 

It's tricky, as it quickly goes to a social justice argument and things rarely get done after that starts... 

The jitters are usually the fear of the unknown...

We blow up the fears and think it's reality...

In REI case..."Oh my gosh...I'm going to lose all my money. What if this rental rests on an Indian burial ground and the ghosts come out and slay my tenants...then for good measure poke holes in my plumbing while they're at it!"

You'll find taking action each day makes those problems seem very small. And you look back and laugh. 

Even in the cases where you lose a lot of money on a house (like when we lost 30k on a flip)...turned out, we were okay at the end...and still are. 

Congrats :)

Pretty great insights, Joe. 

Do you feel the same way with your own personal home since no rent is coming in? i.e. letting it run for 30 years, or paying it off faster?

What ultimately will happen...

If we take a look at history of when we saw mass unemployment...1929. 

In the Roaring 20's, house prices were rising at a rate of 60% in 8 years (much like we see now). Difference was...like 2008...mass financing and loose lending. 

So there's no comparison, right? "Supply is low, real estate can't crash." 

...

Right now, the market is propped up by low interest rates and the Fed buying mortgage securities from banks so banks don't have to hold them on their books. 

We haven't seen a flood of foreclosures yet because 1) Forbearances 2) Foreclosures take 6 months or so

Banks are hoarding credit reserves at their highest ever expecting problems in the next 12 months. Banks don't like having money sitting around dormant. 

The reason they need it is for solvency. 

I was talking to a banker a few days ago, and she was telling me a lot of their mortgagees (as they're a portfolio lender) are requesting forbearances. 

I told her flat out: "No offense, Deb, but you guys aren't our friend. You're going to find a way to get your money no matter what the government says." 

She responded "You're right, Joe. We're here to make money. We're not a charity business." 

The more the government tries to let people not pay mortgages, the more pressure is put on banks to remain solvent...

To do that, they tighten up lending (much like in 4Q 1929)...

When they do that, stocks will likely take a hit. That collateral is then shot again. We already saw that happen in March when the markets tanked 30%. Many lenders became insolvent. So did businesses who relied on credit to float their business. 

Eventually, real estate would then need to crash as there won't be enough buyers who will have money...and banks willing to lend to them...

Then, sellers who can't pay their mortgage as unemployment stays high...

Thus lowering demand and raising supply.