All Forum Posts by: Shiva Bhaskar

So when does an anecdote stop becoming an anecdote that's akin to winning a lottery? So many people have invested in primary markets on a long-term basis and have made a crapload of money. Anyone can lose their shirt when making a bad investment...it has nothing to do with investing in CA vs. the Midwest or South. If investing here is nothing more than gambling, why are syndicators so active here? There is development going on in literally every block in my neighborhood. Like Account Closed, I now only invest in CA after I realized that investing OOS just isn't for me. And the deals that I invest in cash-flow and generate long-term wealth. It's not gambling, it's not taking a chance... it's an investment strategy that's been backed up with nearly a century of data. 

What I consider real gambling is buying TK properties and underestimating PM costs, underestimating long-term cap-ex costs, underestimating tenant turnover costs and also believing everything the provider says....not to mention, purchasing an SFR in an area with demographics primarily composed of renters and a median income that will never drive up SFR prices (which typically happens when neighborhoods are predominantly owner-occupied), and in the middle of neighborhoods whose appraisals are artificially inflated by other TK property transactions.

In 10 years their lease should be month to month by now. Is it not possible to terminate the lease and have them vacate? 

If the situation above is possible, no tenant will ever move unless paid. What am I missing?  Is it because they are not market tenants? Apologies if the question is naive, I am new to RE and have investments in SF Bay area and this has got me worried.  For out of state, I agree with @Shiva Bhaskar.  Investing in TX and Chicago has worked out well but have different kind BS with the upside of cash flow with leverage 

Hi BP,

I'm in the process of purchasing a duplex in LA.  The owner passed and left the house to her 95 year old sister, who is selling it.  The front unit is empty, but the back unit has been occupied by a couple and their mother for 10+ years.  They pay a ridiculous $650 in rent.  I opened conversations of what's to come - complete renovation of both units, including foundation repair on the front.  I asked them what they were thinking about a relocation fee and they came back to me with $50K.  I told them that was about of my budget and I was looking more at $15K.  They took a few days to think about it and said they could do $40K.  Needless to say, I think this amount is insane.  

Based on a conversation with LA County Consumer & Business Affairs, I was under the impression they qualified for relocation assistance amounts under the guidelines they set.  After speaking with LA County Housing & Community Investment Dept, they said that's not the case.  That only applies if I evict the tenant, which based on my reason (renovation), I cannot evict.  

Has anyone had a similar experience?  Is it true I can't evict (putting aside eviction moratorium)? It seems crazy that a tenant can just stay in the house if a landlord wants to renovate and will only leave if they're given a ridiculous amount of money.  Any insight would be helpful, even if it's to contact a lawyer.  With that being said, if we can't come to an agreement, I'm ready to cut my losses and walk - I won't be giving this tenant $50K.  Thanks!

Serious question. Why would anyone in their right mind invest their hard earned money in such an over regulated environment? Masochism? Everyone knows it only going to get worse. Does anyone but me think giving some renter who has had a bargain basement rent for 10 years 40 thousand dollars to move out is ridiculous? Even if it makes economic sense it's certainly immoral.

Why not just invest the money in a syndication in a normal state? 

I'm trying to work through some investing thoughts and would love to hear other people’s thoughts/opinions!

Theoretically, right now, I could sell one of my rent houses and not have to pay capital gains on it (because I lived in it for 2 of the last 5 years.) I think I could sell it for $175,000 or so. I owe ~$76,000. So after selling fees and repairs, I should end up with at least 75,000. So here is what I'm seeing in "keeping" vs "selling"

Keep: cash flow 5-6k per year. After 25 more years the house will be paid off and worth probably $400k. I will also probably have spent ~50k on repairs and renovations in that time. So house value + 25yr cash flow - expenses should be about 500k give or take...

Sell: Put the 75k into something safe (probably just a mix of index funds) assuming an average of 8% per year for 25 years, should come out to over $500k. And I won't have to deal with clogged toilet phone calls for the next 25 years haha

Am I missing something? Even keeping the house after it's paid off and cash flowing $20k/year doesn't compare to the average gains of the $500k in the s&p. Also, I haven't factored in the tax benefits of keeping it, but that gets complex and hurts my brain.

I always lean toward holding my properties, but the recent surge in DFW prices and the closing window of being able to sell this one without CG taxes has me re-thinking..

I rented to a work-from-home attorney and I quickly learned why he worked from home. He was late on rent for the third time, and this is the response he sent me:

Dear Nathan:

Thank you for your recent correspondence. You have contacted me on several occasions to collect an outstanding debt you claim is owed. I am contacting you to formally request validation of the alleged debt concerning this account and to inform you that I hereby dispute the validity of this debt.

I am also requesting you provide documentation showing I am, and should be, the party responsible for paying for improvements made to the property I rent. As you recall, I spent $1,130.00 for the removal of the tree, stump, petrified wood, installation of more gravel and labor associated therewith. See attached Invoice.

Through this letter, I hereby request proof that I am indeed the party you are asking to pay this alleged debt, and for proof that there is a binding contractual obligation to pay this alleged debt. Please provide adequate validation of this alleged debt, including but not limited to documentation of:

• Complete payment history, the requirement of which has been established via Spears v. Brennan, 745 N.E. 2d 862 (Ind. Ct. App. 2001);
• The agreement bearing the signature of me, wherein I agreed to pay;
• The letter of sale or assignment from the original creditor to your company. (Agreement with your client that grants you the authority to collect on this alleged debt.) Coppola v. Arrow Financial Services, 2002 U.S. Dist. LEXIS 26788 (D. Conn. 2002) - Information relating to the purchase of a bad debt is neither proprietary nor burdensome. Debtor must clearly phrase their request to obtain: the source of a debt and the amount a bad debt buyer paid for plaintiff’s debt; how amount sought was calculated; where in issue a list of reports to credit bureaus; and documents conferring authority on third party to collect debt.
• Documentation of the creation of the debt with your collection agency.

Under FDCPA Section 809 (b), you are not allowed to pursue collection activity until the debt is validated. You should be made aware that reporting a collection account is indeed considered a collection activity. Boatley v. Diem Corp., 2004 U.S. Dist. LEXIS 5089 (D. Ariz. 2004.

Please be advised that I am enforcing my rights under the FDCPA and under Wyoming's Landlord/Tenant Act, and that this correspondence shall in no way reflect a waiver of any of the rights prescribed under either of those Acts which are not expressly asserted herein. Please cease your collection activity until I receive confirmation through the above information requested. Please also direct any future correspondence to me in writing.

Sincerely,

Ambulance chaser (name changed to protect the guilty)

Here's my response:

Dear Ambulance Chaser,

Our lease agreement allows you the use of the property at 123 Straight St in exchange for rent. That's my authority.

The landscaping improvements were requested by you and approved by the owner. You specifically told us - in writing - that you would pay for these improvements yourself. Perhaps the attached agreement signed by you will jog your memory.

I'm a simple guy and don't feel threatened by legal jargon or $5 words. Pay according to our agreement or we can finish this discussion in front of Judge Hammer. Perhaps he'll be more easily swayed by your legal gymnastics.

Best regards,

Nate

Needless to say, he paid and he stayed for another six months.