All Forum Posts by: Robert Steele

Marc Bodinger - population growth and jobs, jobs, jobs. Half of my vacancies over the past 2 years have been filled by tenants moving here from out of state.

As Jon Klaus pointed out, Dallas/Forth Worth is number one in the nation for population growth.

http://bizbeatblog.dallasnews.com/archives/2012/04/d-fw-first-in-population-growt.html

154,774 new residents through mid last year over the prior 12 months.

Damn I wish it would slow down. :)

I have 1 year leases and cannot play catchup on the rent increases fast enough!

The biggest shocker was my section 8 rental in a blue collar neighborhood. I have been getting $1,095 for years and prices never went anywhere. Now comps show I could get $1,295 at the upper end of the range so I applied for a rent increase to $1,295.

They said yes and came back with a range of between $1,334 and $1,556! I knew section 8 paid a premium but not that much? I left $250 sitting on the table! All up I could have raised the rent $450 or 40% ...

I have turned down applicants that rely on child support payments for income. To be comfortable with this I would need to analyze the income of the individual paying the child support and I think in most cases there is no chance of them agreeing to that.

This is going to of course depend on how much financing you use and the rent of the property so this number is pretty much meaningless. But what the hey, mine is $466 and I probably wouldn't structure a deal unless I could make at least $300.

Other measures such as capitalization rate, return on investment, return on equity, rate of return and return on assets might make for better comparisons. My average cap rate is 8.1%

Yes; if they don't past the smell test move on. Getting the wrong tenant is always worse than a vacancy.

I had a unit that a prospective tenant was looking at. He was a trucker and told me that he would be the only one living there. Funny thing was he was taking video footage as he looked through the place. I asked him why; because he wanted someone else to see it. He applied. I said no thanks. Why? because his story didn't add up.

I struggle with this dilemma too. I am usually a strict hard *** when it comes to following the letter of the lease. But I have good tenants so on the one hand when they fix something minor without charging me or screwing it up I figure; alright that's one less hassle/trip I had to do so maybe it's OK to let it slide.

I agree that if you give a tenant an inch they will take a mile and them getting it in their head that they can do "repairs" to lower the rent is a very bad idea. Next thing you know your rent will be getting smaller and smaller as the tenants undertake more improvements.

Interestingly I have this one tenant, the first and only of his kind that I have seen, who has done so many improvements to my property on his own dime that I'd say he has raised the value several thousand dollars and he wants to do more.

He is an older guy and very persuasive. I knew he was going to be hard to manage when he made his application and wanted some things changed. He wanted me to tear out the brand new carpet in one room and put in hardwoods to match the hallway. Err, no. Then he wanted me to take down an Ethernet rack in the laundry; OK.

So here is what he has done to my property; mostly with permission and all at no cost to me;
1. Painted the front door.
2. Cleared out junk in the garage and put up peg board.
3. Installed landscaping; fish pond with pump, fountain, trees, shrubs, flowers, retaining walls, stone patios, paved walkways, vegetable garden. The grass looks in better shape than I have ever seen it.

Next he wants to:
1. Install a sprinkler system.
2. Rip up second patio that has cracked tile and replace with new outdoor pavers.
3. Raise the height of the fence from 6' to 8'.
4. Install an outdoor kitchen.

He has been there about 3 years and plans to be there another 3 years. Has anyone else had a tenant who thinks the house belongs to them?

Great post Tiger M. I have been trying to peel back the layers of this thing and the implications of it for months now. I first caught wind of this early this year when a neighbor got involved in buying up these SFR for a VC he was working for.

What does it say about our zero interest rate world when VC's see nice juicy yields in SFR. Of course, I want those yields too - that is why I am in this landlord business.

But like any good thing - too much of it can kill; and we know how much these wall street types love to squeeze as much money out of a good thing as they possibly can. Do too many VC's get into the game and spoil it for everyone else? Maybe. I would not risk leveraging up to the hilt and then find out.

The increase in rental supply from the VC's should begin to balance the market at least. I imagine this will put a damper on the rising rents we've seen this yeart. While my biggest fear is that the oversupply and drive rents down I don't think the VC's will drive the rents down across the board. Not unless they find an army of great property managers somewhere. I am guessing that these SFR will probably not be particularly well managed. In any event there will hopefully always be a market for the discerning tenant and if not; I can always start a property management business. If you can't beat em, join em ;)

Yes.

See the previous link I posted.

Real estate expert Fabian Calvo says there's more to the story about rising prices in the housing market than what's reported by the mainstream media.

Calvo charges, "There's a tremendous amount of manipulation . . . Yes, prices have gone up 3%. I see it, but it's because the inventory has been suppressed on purpose by big players . . . not foreclosing on properties." Calvo should know because he runs a company called TheNoteHouse.us. It buys and sells $100 million annually in distressed debt and real estate.

Calvo says, "Over 20 million houses, on any given night in America, are completely sitting vacant."

According to Calvo, the economy is being helped by "shadow stimulus." It's coming from millions of underwater homeowners who have stopped making mortgage payments. Calvo says, "Money that would have been otherwise allocated towards a housing payment is going into consumer spending."

The Fed is also propping up housing by suppressing interest rates. Calvo says the fragile real estate market would crash if rates rose just a little, and he adds, "That's why you're going to see low interest rates . . . through 2015 or until there's some kind of dollar or bond crisis."

http://www.youtube.com/watch?v=uMpaaGr6YBs

Good post Tiger M. Lets continue the discussion there.

http://ctcredit.net/