All Forum Posts by: John Barrett

I created this post to address a question I get from many other landlords.  What if I have do an eviction (and what will it cost)?

During the pandemic many landlords in WA State were prevented from evicting problematic tenants from our properties.  The attached collage of photos shows the unit when we received possession via the Sheriff, through junk out of the unit and rehab.  I have summarized the actual costs incurred to provide insight as to what reserves people need be prepared for.

Our lost rent amount was larger due to the specific policies of our state legislature.  In this case the tenant issues were not related to COVID but rather drug addiction.  This led to other nonresidents coming and going from our property as well as additional illegal activity.  The police officers were wonderful but very limited in what actions they were allowed to take.  Navigating the new ERPP (Eviction Resolution Pilot Program) is designed to be intentionally complicated to delay evictions at owners expense.  The case workers supporting the program tried to assist where possible but are constrained in what they can do by the rules of the program.  Our tenant never participated in any aspect of the program.  Her sole motivation seemed to be to continue occupying the unit and further her illegal activities with her associates for as long as possible. Unfortunately this meant that the residents of the other 3 units of this building effectively had no right to quiet enjoyment  / safe living environment due to the current legislation.  Obviously this is just one example but I think it can provide insight into what challenges investors should be prepared for.

My hope is you take away from this post:

1.) Ensure you understand the current landlord tenant regulations and importance of tenant screening.

2.) Have sufficient cash reserves / access to capital.

3.) These situations are not insurmountable, but you need to have capital, professional support and a plan.

I hope this specific case study of challenges a landlord will sometimes have to overcome has provided some insight to you.

John

@Brandon Dorman I would suggest following @Nathan Gesner advice.  Commercial property is similar but different from residential.  There are standard forms but they tend to be written as if both parties to the commercial transaction are experienced professionals.

None of this is to say you can't use a form you got off the internet but why would you?  The risk / reward trade off of saving the money by not hiring an expert do not seem worth it to me.  If the deal is good, the cost of getting expert advise will materially change the numbers on the deal.

Best of luck,

John

@Tanner Van Staveren While not exciting advice, I suggest everyone start by focusing on building up your savings.  It takes time to save money but this is an opportunity to practice delayed gratification and build your resilience.  Regardless of what you see online, owning real estate tends to be a long term journey for most investors.  Having capital and showing progress towards saving / learning goals demonstrates to other you are serious about being a successful real estate investor.

Best of luck,

John

@Jamie Laliberte I don't really know any wholesalers personally.  I would suggest starting joining some of the local Facebook investing groups.  I personally like WAREI but there are a number of WA Landlord groups as well.  This will let you see who is actively doing wholesaling and allow you to connect directly with them.

I see a lot of people who look at wholesaling as the way to jump into investing.  Many do not appreciate the amount of work / how difficult wholesaling can be. I often suggest that people find a good paying job and focus on savings as a means to build capital.  Not saying this is what you need to do but just something to make sure you have thought about.

John

@Jamie Laliberte Totally understand and I can't be much help with that.  My strategy is more the save for down payments and then purchase for long term holds.

John

@Jamie Laliberte I am an investor in Snohomish County. Feel free to reach out and I am happy to answer any questions I can for you.

John

@Sean Kelly-Rand Given this is a site for investors (primarily real estate) I don't think there will be much diversity of opinion on this subject.  All the empirical data shows that rent control / rent stabilization / insert latest name for price controls will fail. These policies ultimately cause more harm to the people politicians are trying to help.

As investors it is easy for us to focus on the hard economic facts that these policies are terrible for our customers and communities.  I have to remind myself as I engage people (passionately) on this subject to remember that people's thinking shuts down when they are scared.  Rapidly rising rents are a significant source of fear and stress for our tenants.  We need to engage both tenants and elected representatives with compassion for what they are feeling and provide real policy solutions (expanded housing support & regulatory reforms).  The solutions to our situation will require time to work but we can solve the problem by working together.

John

@Dan Thomas I am really glad to hear you had a positive out come for you and your tenant in a tough situation. I completely understand what you are saving with regards to tenants needing funding to move.

Another option could be seeking assistance from local organizations to help the tenants with moving expenses. The local laws in my area make it easy to be taken advantage of when offer payments ahead of a tenant moving. Each situation will be unique and being flexible will give you the best chance of a positive outcome.

John

@Kelly Cochran This is negotiable between the two parties.  For the landlord obviously the soonest possible date is the best.  The challenge for the tenant is often figuring out where they are going to go next.  I like the option of having an amount you are willing to pay them if they are out by the end of the month and then a higher amount if they are out of the property more quickly (~2 weeks).

Just remember, they only get cash once everything is out of the property and you have secured your rental (new locks).  I have heard of situations where people provided the funds ahead of time and it never (almost never) ends well.

John

@Heather Faires Unfortunately unique / interesting ways of evicting tenants not via the court system opens the landlord up to levels of liability that are not acceptable.

Cash for keys with possibly debt forgiveness is by far the cheaper option than going the eviction route in most cases.  It's better for the tenant and offers the landlord the opportunity to get the property back earning income faster.  While this can seem very unfair, ultimately the sooner the landlord has a paying tenant in place the better for all involved.

John