All Forum Posts by: Michael Gansberg

@Jose Contreras - look up the requirements for becoming a real estate professional. When I qualified, one of the ways to qualify was spending over 900 hours per year working in the real estate industry(there were a few other ways to qualify, I don't remember them though.) I can state pretty confidently that 2 doubles in Cleveland wouldn't impact your tax situation dramatically either way(for example- $100k of investments into those properties in a calendar year would likely be mostly capital improvements, and not allowed to be taken as expenses against income in any event.) Consult your tax professional, yada, yada, yada...

@Matthew K. - if you read that story closely, you'll see that Invitation filed over 500 evictions, but they said nothing about how many were successfully carried out. They did note that the vast majority of the evictions filed were worked out without having to remove the resident. So it's possible they've not done a single eviction throughout the moratorium.

However- Invitation is kicking butt. I suspect it's primarily driven by product type and geography. They rent single family homes. My single family rentals are outperforming multifamily dwellings right now(small sample size- I'm almost exclusively in multifam.) And I believe Invitation primarily invests in locations other than the Northeast(which had a pretty draconian shutdown in early 2020 compared to most of the country.)

Proper vetting wouldn't have solved this- the world changed, and the laws as well. Tenants who were able to pay became unable to pay, then tenants found out they didn't have to pay, so why would they? If you own in B/C neighborhoods, no amount of vetting would get you tenants who can resist free rent. 

The media makes this noise about millions being at risk of eviction, so the politicians decide to stop evictions. Guess what? All those people who are behind are only gonna fall further behind. The band-aid should be ripped off. Those tenants who have been mooching off their landlord(and saving their dough or splurging on big screen TVs) should at least be inconvenienced and forced to find another place to live.

My tenants are currently stiffing me for about $100k - annually - due to the moratorium. When evictions start rolling, I'm gonna toss all that deadweight, and anyone looking for a place will have tons of dough in their pocket from not paying for over a year. I'm going to jack up rents SUBSTANTIALLY for all new tenants and I will TAKE the money back that was taken from me, and the best part? It'll be taken from those who took advantage of other landlords. Landlords will have their revenge for having their property taken and being taken advantage of. Most landlords will feel like I do- I will reprice my apartments to account for the future risk that government will steal my primary source of income when government feels it's convenient, and since many other landlords may feel the same way... buh-bye affordable housing!

TENANTS WHO ARE MOVING WHEN THIS IS OVER - YOU ARE ON NOTICE. Karma - it's a bit$h.

@Account Closed - you might benefit from a recent article in the NYTimes. The title is "The D.I.Y. Developers," and the article relates what a couple(Preston Jones and Ariana Diaz) are developing in the Northern Catskills- your neck of the woods. It sounds similar to what you're trying to do. Maybe reach out to them and see if any synergies develop?

MG

@Account Closed - check out the Passive House concept. It's a way of building a home that uses about 90% less energy- so in Albany, for example, heating demand may be as little as 2 kW, on average, through the winter, for a home around 2000 square feet in Albany. The reduction in mechanicals allows for a quieter and lower maintenance home, and the building method also creates healthier air for the occupants(great for people with breathing issues like asthma.)

MG

Anyone aware of a coalition of property investors seeking to overturn the eviction moratorium in NY State? I spoke to an attorney about it a few months ago, he suggested with 20-30 property investors, it could go pretty far(and hopefully be successful) while being affordable for each plaintiff.

I'm putting out this question because I just read that there's a consideration by Biden to extend the moratorium through July(and in July, maybe until who knows when?), and I think the time has come for investors to become more assertive regarding their property rights. I also read that the investors in Ohio(and somewhere else I believe?) who sued and won have become able to carry out evictions, but nobody else can do so. I want to be a part of the class in any class action suit, if that's the most effective way to assert my rights.

@Daniel Fridrij - your handle says "Investor from Israel and Argentina." Investing in other countries presents complexities, such as tax issues and other issues. I can't think of any scenario where it would make sense to allocate $50k(US?) as a direct real estate investment in another country. Stay local, or if that $50k really wants to go to real estate in the US, consider a publicly-traded REIT.

@Steve Morris - I am mildly optimistic about the near-term future of rental property investing. Negative factors include(but are not limited to) higher unemployment rates and government interference in the eviction process. Positive factors include a declining unemployment rate, monetary policy which throws everything including the kitchen sink at the problem, and generally stimulative fiscal policy as well.

To wit: interest rates are so low(due primarily to loose monetary policy) that investors can obtain loans with interest rates around 3%. The intent of said monetary policy is partially to buoy the housing market, and from the data I've seen, it's working quite well. An investor can pay quite a bit for a property, and due to low mortgage rates, the cash flow will still be acceptable to the investor. 

The Fed is doing all it can to promote inflation- if the Fed is successful, owners of real estate stand to benefit. Renters? Not so much. If the Fed is unsuccessful, then my optimism will fade.

@Steve Morris - it appears to be a biased sample. People who aren’t having problems can lounge about on BP all day. People like me  - who own and operate lower and middle income rentals - are getting clobbered, and we’re too busy banging our collective heads into walls to post much on BP. It’s a slog.

Dear Thread;

My tenants owe me $100k of back rent right now. That wasn't a typo. Evictions are starting to move forward again in NY, I will be proceeding against the worst of the non-payment offenders.

MG