All Forum Posts by: Anthony Gayden

Originally posted by @John Nachtigall:

Originally posted by @Anthony Gayden:

Originally posted by @John Nachtigall:

Originally posted by @Daniel Weaver:

Interesting survey, but, as noted in the survey these broader trends could vary widely by neighborhood even within a specific city. I don't doubt that Memphis has a high eviction rate, because we do have more than our fair share of poverty-stricken C class neighborhoods. There are other areas where eviction risk is likely much less than the national average. Overall trends are nice to be aware of, but it's the details that make or break a deal.

 All real estate is local, I get that.   But I was surprised by the breadth of the distress.   9% of people making more than 60,000 a year missed at least 1 of 3 rent payments in the last 3 months.  To me that is a shocking statistic.   The median average household income in the US is 59,039 a year.   So that means that for the population of people who ALL make above the average, almost 10% missed a rent payment in the last 3 months.   

I think we are really reaching a point where rents have caught up with income.   As a result buying instead of renting will once again become the cheaper alternative.   And and also think that there are a lot of current real estate strategies that rely on the assumption that rents will not go down.   Is that a valid assumption at this point?

 A household who makes $60,000 a year may struggle to pay rent in San Francisco or NYC, but be fine and maybe even a homeowner in Kansas City or Indianapolis. That is why it is hard to make assumptions with an article like this one.

I don't think the data bears that out.   Looking at the eviction map, it is the south and the midwest that have the biggest issue.  San Francisco was actually one of the lowest eviction rate which is not surprising considering it is probably the most tenet friendly city in the nation.  

Regardless, they took geography into account

 Do you think that affordability just might not be the factor here? The south and the Midwest have landlord friendly laws that make eviction easier. It is darn near impossible for someone to be evicted in San Francisco. In many cases people get five figure payouts to leave.

Of course evictions are higher!!!

Originally posted by @John Nachtigall:

Originally posted by @Daniel Weaver:

Interesting survey, but, as noted in the survey these broader trends could vary widely by neighborhood even within a specific city. I don't doubt that Memphis has a high eviction rate, because we do have more than our fair share of poverty-stricken C class neighborhoods. There are other areas where eviction risk is likely much less than the national average. Overall trends are nice to be aware of, but it's the details that make or break a deal.

 All real estate is local, I get that.   But I was surprised by the breadth of the distress.   9% of people making more than 60,000 a year missed at least 1 of 3 rent payments in the last 3 months.  To me that is a shocking statistic.   The median average household income in the US is 59,039 a year.   So that means that for the population of people who ALL make above the average, almost 10% missed a rent payment in the last 3 months.   

I think we are really reaching a point where rents have caught up with income.   As a result buying instead of renting will once again become the cheaper alternative.   And and also think that there are a lot of current real estate strategies that rely on the assumption that rents will not go down.   Is that a valid assumption at this point?

 A household who makes $60,000 a year may struggle to pay rent in San Francisco or NYC, but be fine and maybe even a homeowner in Kansas City or Indianapolis. That is why it is hard to make assumptions with an article like this one.

@Bradley Sindt

I sent you a PM.

Back on the market.

Great Investment Opportunity! 3 Bedrooms,1 Bath, Newer Furnace and Water Heater. Covered front porch. This house is solid. House being sold "as is" "where is" with no warranties implied or expressed.

Open House Sunday 10/29 at 12pm-2PM.

At the end of the day I do not believe raising taxes will have the intended effect of helping those in need. Government is slow and inefficient in a lot of its social programs. I do believe in helping those in need, but I do not believe that raising taxes will accomplish that goal.

Originally posted by @Ihe O.:

@Anthony Gayden

Most insurers won't insure you and I am only able to stay with my current insurer because I am grandfathered in.  My broker found insurers that were $200 cheaper but they were not offering the coverage  I wanted (e.g they  would have excluded the claim I had on Rental 2 in my initial post).

Basically the 3rd option of paying neither higher taxes nor higher premiums is usually not going to be there. 

What I can discern from your answer is that you are not willing to pay higher taxes and would rather pay higher premiums. 

 The less expensive coverage was available if you wanted it, but you chose not to take it. If your taxes are higher, you can't do anything about the cost. You have to pay it. Meanwhile there would be no indication if the tax was even fixing your problem.

Imagine that your city decides to create a big tax against all property owners to fund homeless shelters. Your property taxes go up $2000 a year. However at the end of the day, the house next to your is still abandoned and your insurance company would still charge a higher rate. So now you are hit with a double whammy. Not only that but the homeless drug users and mentally ill don't like sleeping in the shelter because they aren't allowed to use drugs and alcohol in there, so the homeless issue is not solved.

@Daniel J.

Why not team up with someone with experience then who can help you along the way? It would also allow you to go bigger.

Originally posted by @Ihe O.:

@Anthony Gayden

OK. 

Would you pay higher taxes to address mental illness, drug and alcohol abuse. 

Or would you rather pay higher premiums to your insurance company because the house next door became vacant and insurance companies are afraid someone from that demographic will break in an accidentally start a fire whilst trying to keep warm.

 I can shop around for different insurance providers. I can pick and choose the features of my insurance plan and the deductible. I can also purchase the house next door and rehab it.

If a tax goes up to support the homeless, there is nothing I can do but pay it, whether it helps the homeless or not.

@Ihe O.

No, I would not pay higher taxes to house the homeless.

The problem is not rooted in homelessness, it is rooted in mental illness, drug and alcohol abuse. Merely giving a homeless person a place to stay doesn't actually solve the problem and as @Jay Hinrichs said, many of them would not stay in provided housing anyway.

I have listened to all of the podcasts and I love the knowledge that is brought, even from investors with vastly different styles than me. I also am an avid follower of Grant Cardone and have read most of his books and watch his programs on Facebook and Youtube. While I don't agree with everything he says, in general I have been very motivated by his story and his message.

You have to start somewhere

I love large multifamily and I want to eventually get into that space, however I see no problem with starting in single family. Grant believes that any cash flow you get from doing a small deal such as a SFR, duplex, triplex, or quad will not be worth the effort and time you have to spend. I disagree and I think that he completely disregards the "snowball" effect, and the power of buying at a substantial discount and BRRRRing it. I also think that the education and experience that a person obtains by doing these smaller deals will help you greatly when doing a larger deal.