All Forum Posts by: Zac Boelkow

Congrats!!! How exciting!! Good luck with everything

@Simon Obas

You can waive your inspection but why? Typically the inspectors are on your team. They find issues that can be used as negotiations. For $300-$400 it’s no money and typically I’ve never gone through an inspection where there wasn’t some issue. Even if it’s a small issue that does not warrant reduction negotiations it’s still the sellers burden to fix whatever issues.

@Jessica Edwards

I raised rents during the purchase process. I was very open about the purchase price being paid (I never told the actual amount) for the property meant that the rents must increase. Almost as if it were out of my hands. Also I just did a good job on taking care of the duplex and fixing the issues needing to be fixed. I did what I said I was going to do and both tenants willingly agreed to rent raises, signed 12 month leases, and tell me all the time I’m the best landlord they ever had...

Also I knew what rent was going for in the area (New port richey) and knew that I keep a better property for less than they could find elsewhere.

Saving healthy reserves is a continuous juggle and balance with repairs, maintenance, taxes, etc... My first property, as probably with most of us, I went all in. I had 15k in cash and I bought a 44k property and went in with 13k. Leaving me with 2k in reserves. At the beginning I was desperate to "get it" at all cost. I would not do that today. That deal worked out great for me but should have crushed me financially... 

The more mistakes we make as we go the more we adjust and decide to have healthier reserves or what ever system in place because we do not want to be bitten again. I have been actively buying/selling/renting deliberately for the last 7 years and the more traction I make the more reserves I net. It gets a lot easier the further down the road from when you first are just starting out. Remember investing is "long term" its slow and at times it can be boring. Which "boring" is a great position to be in because that means everything is working :) 

12 months of expenses per property in reserves. I think I am overkill and 6 months cash reserves would suffice. Then again I like buying property for all cash as well. As a general rule of thumb I keep 50-100 thousand cash in a money market or online savings account because when a deal presents itself, RE or otherwise, I want to be able to jump on it. Everything past my cash reserves in the stock market. : )

I should also mention that REI for me is my part time job as I have a good 9-5 job that I can live off of. 100% of my rental returns gets recycled into new investments or saved and then put in to the stock market. I have never spent one dime of my rental returns on myself or my lifestyle. Obviously I use the returns on maintaining the properties...

I was in contract to sell my house in Feb 2020 when all the covid was just starting. The buyers agent just notified me that the buyer is backing out now because he was using his 401k money to retire with and now that he has lost 35-40% he is not comfortable moving to a new location and buying a house. Which cant say I blame him. I notified my realtor who is just helping me walk through the deal and my realtor said he lost 4 of 5 deals last week because of covid-19 issues... 

I am moving forward with snuffing my property up and getting it listed and hoping that I will be able to sell it in all of this. I can see obvious issues selling currently. I am in good position so if I need to turn this place into a rental it will be fine. Not what I prefer on this house but hey idt covid cares what I prefer currently... 

I am assuming that lots of house sales are going to be affected by covid issues and not every seller will be in a position to hold or convert into a rental. That being said how much inventory will be available and how low will real estate actually go???

So I have decided to take a reactive approach to dealing with and handling the covid issue at hand. I decided why confuse the situation with a strategy for my tenants that may or may not require help. I have been fortunate that all my tenants have paid except one. Because I trained my tenants to call me ahead of time with issues and confront the issue, instead of lying or avoiding them, that is exactly what my tenant that could not pay the rent did. He called me and said he has $500 that he is giving me tomorrow and once his unemployment starts up he will pay me the $100 balance. At this point I asked questions if he was being impacted by the covid issue.  I also informed him that because this is an act of god/nature and out of our control that I would be waving late fee's. He was surprised and grateful. 

I like the proactive approach. Typically I am very proactive over reactive. This time, regarding covid 19, I will be reactive. Some of my tenants are not financially affected by this while others will be. I have already established, with my tenants, the proactive approach in regards to paying rents or being late. Personally I have my tenants trained to call with issues and they know that I am understanding and willing to negotiate or help figure out whatever situation we get in to...

Personally I believe in being debt free with emergency funds. If people have that then rents are not an issue. My issue is I need to pay my bills on time. My tenants issues are my tenants issues until they call me... 

No one approach is going to work across the board.  I am researching rent assistance programs so I can give any info to my tenants if they fall short during this time..

This will be a crap storm at best. The government will send emergency stimulus package with a bunch of crap attached to it with out much help to the people in need. Yes people should have an emergency fund for these types of scenarios and we know that people/tenants/landlords wont. This is also why I am a cash investor and do not like leverage. Basically if I have tenants that cant pay then I will work with them because I am in a position to do that. I took a lot of time vetting my tenants and have great tenants in place. To me that is priceless. I will not allow anyone, unless the government tells me I have to, to miss payments. I will 100% work with my tenants within reason. At the end of the day whoever said that "its not my fault that people are not prepared" I agree with. Hopefully real estate will be on sale soon because of this :)

I am curious what others are hearing and doing during this coronavirus time. Personally I am watching what businesses are being forced to close. I am not sure what I will do if my tenants are impacted. I may wave late fee's and also considering waving rents. Also wonder how I could wave rents for some that are out of work and still collect from others. This is going to be interesting...