All Forum Posts by: Matthew McNeil

You’re missing the point of my original post. It’s not about people feeling cheated or the other things you listed. My premise is that something else is feeding the Rent Strikes aside from those bullet point arguments. I’ll give you an example. I used to work the packing lines at a Nabisco factory. I was only on the job a few weeks when word of a possible strike made its way down the line and permeated the entire factory. The reasons given to call the strike was utterly baseless, but I was intrigued by how quickly the fervor and intensity grew as people signed up calling for a strike. It was the psychology or emotions that fed the Strike fever as people were swept up in the sentiment rather than looking at it realistically. Eventually it died down and the strike was called off.

The premise of my post was to point out that regardless of whatever reason is cited, it will be fed and driven by emotions. Why? Because the moratoriums on evictions seemed to be the catalyst to empower Rent Strikes. For example, “No Work, No Rent” is reportedly being graffitied around the city in Portland, Oregon. The movement will begin to feed itself. Perhaps not from Entitlement, but because the tenants’ perspective is locked down and controlled by emotions. It’s a knee jerk reaction that sidelines LLs. However, in fairness, some of the “strikers” are also pushing the idea that Lenders suspend mortgage payments in consideration of LLs.

@Nathan Gesner

Thanks for your story Nathan!  I'll share my wife's;

My wife grew up in a house made from rough-sawn lumber without running water or electricity. Interior lighting was provided by propane gas lights that were hung from exposed ceiling joists. Solar panels on the roof charged several car batteries in the sun room situated off the front of the kitchen. The refrigerator ran on propane, using ammonia as a coolant, while a back-up generator powered the house whenever the battery output was unable to meet the electrical demand.

Just prior to my first visit to her home, my wife confided they had used an outhouse for years, only recently converting it to house the generator. This was rural Montana where the economy is historically depressed, and the locals referred to the area as "poverty with a view." Her parents struggled to find multiple income streams that barely kept food on the table.

My wife would never tolerate the idea to entrench herself into the feeling that she doesn’t need to pay rent or any other obligation. She would look the landlord in the eye and tell them plainly; “This is what I can honestly pay right now, but I assure you I will pay you in full as soon as I can.” 

Fast forward to now; my wife is now a landlord owning a 1M plus dollars of rental properties, and she remembers her roots. She would not tolerate someone positioning themselves with an excuse of not being responsible to fulfill their obligations. She’ll work with them if they ask.

I’ve read a few articles reporting that the idea of Rent Strike(s) is gaining momentum. Apparently, advocates have moved past a request seeking deferred payments, or other options, to simply demanding that rent be waived altogether.

My concern is that regardless of whatever is offered in an attempt to explain that LLs have obligations as well, emotions are going to feed this issue and automatic unchallenged waivers of rent will be demanded by tenants on a massive national scale.

In other words, the logic used to counter the argument will not be tolerated.  It will become an emotion-fed entrenched position by tenants.  

 A new phrase on BP:  "Having zero debt is king."

If you look at it based on a portfolio of properties, calculating how long Reserve Funds would last is somewhat subjective based on various scenarios. I doubt all tenants would simultaneously notify me of their inability to pay.

Reserves I have directly tied to my properties;

If I calculate a 50% loss of portfolio rental income, I have funds to last me 10 months.

7 months at 75% loss.

5 months at 100% loss.

But I also have investments in the stock market I can draw from to get me through a worse case scenario

You're right. I've been harsh. Brandon's advice offer's at least something in a time when we are all scrambling for answers. We all need answers right now. What I've done and suggesting others do as well is something that most landlords are not ever going to even consider, no matter how much sense it might make in hindsight - I know that - I suppose I just said it anyways. I'd guess any operator with tons of units who might have read it would have had a good laugh of it - well that's worth something then. I'm scared. We're all scared. I worry about things much worse than a virus or money to be honest. The stuff I wrote is like a long-shot from mid-court at the last second sort of hope. The reality is that this thing is going to be messy. I wrote this post and a few like it in other threads, I'm done, not that many read my long-winded posts anyways - lol.

Thanks Matthew.

I live by the teaching; “To whom much is given, much is required.” I genuinely believe that ethical RE investors are held to a higher expectation and, therefore, we need to step up and forward in difficult and trying situations. We’re all scared and concerned. We’re intelligent people and I think we’re beginning to see what’s coming, and it’s not good.

If we don’t help each other, we’re all going to suffer. If I can help by enabling you to be better leveraged knowing it’s also going to help me in the end where-by we both mutually benefit then why not?!  As I wrote previously; some will get it and many won't. I tip my hat to you for offering a bold step of faith in helping your fellow man.

I've read a few articles that foreclosure freezing also applies to Freddie and Fannie.
https://www.bloomberg.com/news...

@Account Closed 

Merritt, so often I see BP threads that are playbacks of the same stuff that's being restated and rehashed in differing formats, or they're spelled out again for newbies who could be doing a simple search before posting their LLC question for example.

My takeaway from Brandon’s Emergency Rent Deferral Plan is that its a new topic.  We're all navigating unfamiliar territory and he’s laid out a plan when many of us are scrambling to come up with any plan at all. So, congrats to him for at least getting some semblance of a framework on the table.

I also agree with your lengthy discourse. Maybe not everything you wrote, but you have made some valid points. In particular, I agree with the offer to give tenants one month’s rent free of charge because it allows the tenant to be better positioned to pay the following month’s rent. The key word being positioned. In other words, it acts as a leverage tool that actually empowers them because it gives them time to look for solutions whether it be applying for relief, seeking unemployment benefits, inviting a family member to move in with them, etc. It also sets a course that will end up being mutually beneficial for the tenant and property owner.

I see its value. Other's may not. 

Thanks for sharing.

Thanks @Kenneth Garrett.  It all seems somewhat fluid at this time regarding owners trying to formulate a plan to deal with the problem.  Lots of suggestions being offered. I hadn't considered the partial payment precluding you from filing an eviction notice if needed down the road. Good point.  Thanks!