All Forum Posts by: Sam Yin

@Peyton LaBarbera

For what it's worth, I have gone through this scenario. It has become more frequent. Not sure if that is a sign of things to come in the apartment rental space...

The Landlord Agreement has already been posted and it was what I did. It may be called different things in different areas, but it's the same. The utilities revert to the landlord automatically, and you save the activation fee.

HOWEVER, base on my recent experiences, I am finding it less problematic and more profitable to NOT do a Landlord Agreement. Instead, I ask for a "Clean and Show." This is where the utility company does the same thing as the the Landlord Agreement, BUT YOU have to make the request each time and set the parameter dates. It avoids conniving tenants, and still allows you the keep the utilities on for rehab and open houses.

Just my 0.02 cents from the limited landlording experience. But I have dealt with several tenants that turn their utilities off and I get the bill. They were still living there. They did not know I had a landlord agreement on file with the utilities. It was another annoyance to resolve. Same goes for vacant units that new tenants had to be reminded a few months after move in to change over utilities. More annoyance to resolve. I always get paid, one way or another. But it's just the annoyance to deal with it and the aggravation of all the parties involved, tenant embarrassment, and Property Management frustrations.

Where there is a will, there is a way.

@JD Martin

I totally agree. Just like you and @Nathan Gesner, I feel this is something we do as landlords because people have unique life situations. However, we just need to be weary of potential red flags based on the totality of the circumstances and understand what may potentially come of people's special requirements.

I always collect the security Deposit and first months rent, before I commit to reserving the unit.

@Steve K.

Steve, I think buyers/investors will continue to invest or hold momentarily or do what it is their strategy says they should do. Nay Sayers and excuse makers will continue to make excuses no matter what the market offers.

I do agree with you that those who are well capitalized will have the advantage. But those that are not should not sit and wait. I feel you should always pick up what you can afford, when you can afford it. Kind of like how some of yours are now performing well and you have chipped off a few. You couldn't do that if you didn't pull the trigger in the first place.

At the same time, I also feel that there is a backyard market for everyone out there. The hardest barrier for many is the unrealistic expectations of perfection when they first start out. Find something affordable in your backyard and make it work.

In my opinion, starting out, 60 to 90 miles away is still more of a learning experience than 100s of miles out of state. You can get more hands on training, control, and force appreciation that way. Relying totally on distant Property Managers is not often the best bet. Their mission may not be aligned with yours, if your trying to aggressively grow.

Quote from @Henry Clark:

@Mike Dymski

Although we are retired and backing off our REI push, still doing deals.

Point is there are tons of opportunities in the market.  You just have to look at the angles.

Well stated. My sentiments exactly!

@Jane Fenati

I happen to know this area very well. I live next to it. I go to the gym there right when they open. The kids do Jujitsu there. AND I have been in a similar situation, with properties in the area.

The correct course of actions to take. Serve them with a 60 eviction notice. The reason is the sale. Then put your house up for sale and let the agent know if you will be doing it while they are still there. Wait until they move if you want to clean it up for sale.

Now, after having gone through some nonsense related to this situation, here is what I would do: Have an Eviction Attorney deal with it from start to finish. I should cost about $1000, but youight get results immediately upon service and only be out $150. Either way, don bank on cooperative tenants. This is a business. Treat it as such. You will have less headaches in the long run.

I learned from being too nice/generous to my tenants.

@Steve K.

Hahahahahah.

Seriously though, this thing is concerning.

@Alan Asriants

I think there is another perspective that is not mentioned. 3% IS NOT the golden ticket. It can easily be looked at as the devil in disguise.

Let's all take a moment and breathe. Now that the rant has settled, let's try and look at the big picture through different glasses. This may not apply to every investor, but I bet many fell prey to this:

3% down allowed higher affordability/cash flow projection. Locked long term, it provided a sense of security. HOWEVER, what has many of the veterans touted, again and again... Wealth is built off the equity!

Don't get me wrong, a purchase should always cash flow for you to keep this business going. This does not apply as much to those that are in REI as a hobby and still live off of/depend on a W2. This is for the full time investors. When I decided to make REI my livelihood and wealth building machine, I was able to see through the fog.

Many who bought at those low rates and cash flow will likely feel safe and hold for the long term. And they should, likely will, and it's OK. However, with higher rates currently, it makes it difficult to trade/extract that equity to grow. Many will be reluctant to refi into a higher rate to pull out the equity because they are holding on to that low rate with their eyes closed. OPPORTUNITY COST. A few may be willing to open their eyes and look around...

Think about it, higher rates will depress the valuations/limit buyer pool if you want to move it along. Your cash flow will only grow at a rate equal to the limits set by governments (or market) X current rents X number of units. Even if it increases your NOI, the CAP rates will adjust because the lending rates are higher and there is a limited amount of investors willing to put in 30, 40, 50, or 60 TO 80% to make their margins work. Especially when stable bank/bills pay high yield with low risk. Dont get me started on the CAPex risks of long term holds...

Remember, equity is what builds wealth. But you need to understand what that statement means... That equity needs to perform, not just sitting there idol for you to say you are worth $10M, but you only cash flow $100-$200K a year. That's false wealth. Courageously extracted and worked, that net worth of $10M should only be sitting idol if it's working and generating $500K to $1M+/ yr in cash flow. AND that's only if you are done with REI. If not, turn that $10M to $20M, and so on.

I'm not sure how many people will follow me on this, but that is my opinion. Buying now at a higher rate, making sure you cash flow and have upside, will put you in a way stronger position when the rates drop, which we all expect it to. That can give you a double home run. My guess is that the rates will likely drop by 2025, may be 2026 at the latest. That's perfect timing if you bought it now. But then again, everyone has their own strategy. It has to work for you. I respect everyone's POV. I just wanted to share my perspective.

Quote from @Anyny Guedes:

Hi! We have a tenant who is a Spanish speaker and he just can pay the rent with a physical rent. However, we will manage the properties ourselves so I would like to know where the tenant can go physically and pay by check, so the money comes to the landlord's bank account, even if we need to pay a small fee. The tenant is located in Houston. Thank you for your help in advance!

 Depending on your bank, any person can deposit their rent into it. Just advise the tenant to notate their address/name for your tracking. I have many tenants that do this. I also know that BofA , Chase, and Wells Fargo allow it. In fact, BofA can issue a deposit only card for you to issue to your tenant which will allow you to accurately track which tenant it came from.

Quote from @Nicholas L.:

What if you're both a mogul and a guru?  A moguru?  Or a mogul and an influencer?

 You need to trademark that! 

Quote from @Nathan Gesner:

Quote from @Sam Yin:

It's been a while since I've heard a "Napster" reference!

I honestly do not know why I wrote that when I posted. It just popped into my head. But you must admit, we all loved it and used it back then. It was how we got out music to burn on our CDs to show off to our friends.