All Forum Posts by: Mary White

Any landlord that's worth his salt will or already is working the situation out. Both landlords and tenants are responsible to cover their expenses. It all comes down to what kind of people do you choose to rent to. 

I have a lot of college students and OIT has taken everything online so the students are leaving. This means breaking their leases. My agreement with them is that if they will take the time to leave the property really clean and in good shape, that I will let them out of their leases so they can go home to families. My tenants are happy and I will have an easier time with turn over. So far, the tenants have left the units in excellent condition. It's not a good scenario for me, but I'm making the best of it. 

I do have some regular working folks and a couple have notified me that they're laid off and will do their best to pay rent. I told them to get it to me as they can and there wouldn't be late fee. The plan is to make monthly payments and I'll have the full amount by the end of the month. 

My point is that if you rent to good people, this isn't hard to work through. I treat them with respect and they return the favor. Jerk landlords will get weeded out just like bad tenants run out of good places to live. People should back off each other and let the economic crisis clean house. 

That being said I do have two tenants that told me that they're laid off and will do their very best to get rent in on time. I let them know to do the best they can and to keep me posted. I have great tenants and have treated them very well so that many stay with me for years. Hopefully, we can treat each other like human beings and work through this with minimal trauma.

Thank you for the thought provoking post. The problem I see going on right now other than the pandemic itself is the massive sense of entitlement in this country. I worked my butt off to get scholarships to help with college and worked again to pay them off. Yet, people are crying everywhere about their student loans and how they were duped into getting them and demanding relief. I worked my butt off for years to build a rental portfolio. I did not take my family on vacation, we lived in a very uncomfortable home with our kids, and I can personally remodel a home from top to bottom (except for electrical, plumbing and foundations) because I spent 60+ hours a week getting stuff done. Now what I hear and see is a lot of people complaining and demanding free rent, which is food off of my children's table. 

The worst part is that they are demanding it when they've been laid off for two seconds and there are a lot of resources to help them. No people should not share in the suffering equally. I hated group projects in high school where I did all of the work and the jerks in my group shared the grade I earned. How is this any different? 

We have a moral obligation to care for those in need and I treat my tenants very well, but can I carry their burdens, no. If we just forgive student debts and rent payments while also preventing evictions, we are just enabling so many people to stop contributing to society. Where does the cycle stop? 

Done, I know personally I'm looking for as much information as I can find on the market. It's okay that it's changing rapidly. I need to keep my battle plan up to date. :) 

I spent last year upgrading and cash out refinancing all of my properties. While others spiked their rents up significantly, I did only a modest increases despite the renovations. My advice is to offer modest rent reductions to tenants for lease extensions if a good tenant shows signs of nervousness. My rents are under market for the condition intentionally so that when things like thus happen my tenants are more likely to stay put. If I had an Airbnb I'd look for a month to month tenant to offset the costs. 

This situation will test everyone's business plans. I suggest you all take a worse case scenario view and start planning for it now and hopefully it doesn't happen. My worst case is unpaid rents with mortgages still due. I am stockpiling cash as fast as I can to hedge against this possibility.

The response in our area has been appropriate for the threat level. Schools closed last Thursday and will remain closed for two weeks at least. High school basketball State Championship tournaments were not allowed to happen this weekend. We were all urged to distance ourselves and diligently wash our hands. We've had one confirmed case from somebody who was passing through the area so a community infection is unknown. It's tiring hearing all the criticism of the government response time. In our area, the response has been appropriate. There is only so much Trump can be expected to do to stop a virus that has delayed symptoms like this. I am just hopeful that the virus is way overhyped and we can all get back to real estate investing soon. 

A lot of people seem to be reacting in pure fear. I urge everyone to accept the danger, prepare and then just wait it out. As for the comparison to H1N1, I can say from personal experience that I almost lost my then 2-year old daughter who's 107 degree fever wouldn't come down. The doctors told me that my nursing her while pregnant likely saved her life. I also was in the middle of a high risk pregnancy and had to give myself daily shots in the leg to keep it away from me. A woman I chatted with in the waiting room was very sick with H1N1 and when she was 23 weeks pregnant and in the ICU in a coma, they had to kill her 23 week gestation baby in order to save the mother's life. If the baby had been just a couple of weeks farther along it would've had a chance at life, but the mother was deteriorating too fast to wait. This isn't some virus that will just eliminate the old and weak. And even if it was, you cannot just disregard their lives. They need all of us fighting and praying for them.

That being said, I will deal with the financial fall out if my renters cannot pay and thank God I have a lot of wiggle room between expenses and mortgages. 

I'm a local investor in Klamath Falls. What kinds of professional contacts are you looking for? 

I've been in your situation twice. The first time the market had dropped and we were forced to rent the property. We sold that house in 2017 to purchased a 4-plex BRRRR opportunity with cash. At the end of the day we made a profit on the 4-plex and it was a very good re-deployment of capital. However, the house was in a higher appreciating area and has gone up $75,000 in the past three years. If I could do it again, I wouldn't have sold the house. The only real positives are a strong cash flow on the 4-plex, zero dollars left in the deal, and the fact that the new property is in my current home town.

I just purchased a new primary residence and we have $125,000-$250,000 in capital in the previous home. Rather than sell and take the gains for future investments, I've chosen to keep it and do a cash out refinance. I know I'll get much less cash to work with, but this home is in a very desirable area and will have a healthy $500/month cash flow once refinanced. It will also need next to nothing in terms of my personal work load. I self manage my properties and this is very important. 

I shared my story because what I've learned is to hold whenever possible. Also, it's a good idea to think about whether you want to diversify your holdings. As in use some for cash flow and others for appreciation. If I hold some single family homes along with my multi-family homes then I can liquidate a property quickly if needed. Sometimes the best thing is to let the cash flow build up in your savings along with the cashed out money and just wait for the right deal. 

Best of luck! 

My biggest frustration with Zillow is it's inability to account for multi-family properties. I have a 4-plex listed as being worth what one unit would be worth. For some reason they won't allow me to adjust the square footage to the honest amount. It's also been fully remodeled, but Zillow won't adjust the value to reflect this. This has greatly affected me getting a terribly low (over $100,000 less) appraisal value on the property since the appraiser directly referred to the Zestimate. It's a complete waste of my time to even look at it.