All Forum Posts by: Alan Grobmeier

@Steve Morris, my cpa has told me that there is a form you have to file w Cali Ftb for every year you own an out of state property where the proceeds of a 1031 were from a Cali property.  Only way out: death! 
Welcome to the ‘Hotel California’.

I don't think it is retroactive.  Only for ppl who inherit a property moving forward.

If you add your children now, I believe you will trigger a reassessment.  

I think your best bet would be to do a 1031 exchange and move the $$ outside of Cali.

Looking for a CPA to chime in.

@Christopher Smith, it appears they want prop 13 dismantled, big time.  If they get their wish, most of the rest of the middle class will leave.

@Christopher Smith, very sad.  :-(

I'm in AZ.  My properties all have home warranties on them.  Despite this fact, I MIGHT not be able to get an AC guy out there on the next day.  After all, AC problems don't happen in winter.  They happen in summer when all the tradesmen are overloaded.

In AZ it is mandatory to have AC available over a certain degree.  In my case I have purchased portable AC units that I deploy at my places so they can stay in their homes.  This is a quick, but temporary, fix.  I've had units down as long as a week waiting for parts or replacement.

As Joe stated above:

Fix problems quickly.

Leave tenants alone.

I also send gift cards to outback for Xmas or for an extraordinary inconvenience.  Just had a water leak at a property that ruined a ceiling in a bedroom.  Fixed the leak immediately.  Took a few days to replace drywall.  One more trip to paint the drywall.  I'll send them a gift card as they helped and were inconvenienced.

I believe it will be at least a year before you see residential RE taking big hits, IF it even happens. I see many buyers (and sellers) acting like there’s nothing to see here.  If the properties are being purchased as residents, that’s probably ok.  But if they being bought as investments, I can see that becoming problematic at some point.

The stimulus will be extended thru at least December of this year.  You read it here first.  ;-)  Trump, without a decent stimulus package, has zero chance of winning.  The govt has allocated (borrowed is a better word) almost $50k per taxpayer for Wall Street while making sure we got $1200.  That’s kind of like ‘mom went to Disneyland without me and I got was this lousy t-shirt’.  Not a good talking point in November.

Like many, I have a good sized war chest/reserves.  But how can I deploy them if I can’t figure out who is going to pay rent every month?  We are in the first inning of a very long ‘game’.  Although most ppl that have been laid off thus far are ‘blue-collar’, this will eventually reverberate.  We are already seeing it as IBM has announced layoffs.

What happens when these ppl lose their jobs?  What happens when your white-collar renter loses their jobs?  I can see how this could be bad for a very long time.

I can’t look towards ‘next’ while I am being ‘chased’ by a tiger.  The only ppl that will be able to buy these deals will be the ultra-rich.  Many of the rest of us may need our reserves just to keep our properties out of foreclosure.

Not a great time to sell, but not a great time to buy, either.  Don’t over-extend and you will be ok.  The problem:  what does ‘over-extended’ mean now?

@Joey Copper, I self-manage my properties and do NONE of the work!  ;-)  I farm out all work, mostly via home warranty.  It takes me 15 minutes a month to collect my rent.  I spend more time w my cpa than I do on my rentals.  All properties are B+/A- in good schools that I bought years ago.

Sounds like you are trying to start a property management company to me.  Lol

@Darin L., I think Dent was looking at a ‘free market’ situation.  What we have today is anything but free market.  There is no such thing today as price discovery.  It doesn’t exist today.

Normally you have deflation prior to inflation.  The feds have papered over the deflationary cycle.  Do we get it later?  I don’t know.

My own experience:  I have a small, speculative stock trading account.  I bought put options in December and January based on the upheaval in Hong Kong, cruise line issues and probability of airline slowdowns.  I was up 40% on March 23rd.  By April 1, 1 week later, I had lost most of my gains & had to change my strategy.  There is no way, imho, that the govt could have ever responded in less than 2 months unless they planned it OR planned for it.  Either way, there was bi-partisan support.

The govt, with this shutdown, has picked the winners & losers.  The longer this shutdown goes, the more small business goes out of business.

Imho this will become an unprecedented transfer of wealth TO the 1%.  You can’t fight this recession with the same philosophy as the GFC.  It won’t work.  Too many wildcards in play.

@Craig S., I am in pretty good shape at this point.  I have good reserves, so I should be able to make it to the other side of this pandemic/recession/depression.  I am thinking more for others.  

Many ppl created AirBnb business models in Cali and elsewhere. Some had as many (or more) than 20 properties. LTR won't cover their mortgage note & won't even create a slow bleed. I looked at buying one a few times. The only way they make money is STR and even then the profit is not that much (IMHO) vs the risk involved. They made bank during the past few years. And now they are probably getting crushed.

@Steven Lowe, it's toward the end.  It took me awhile to find as well.  The whole bill yells, "I'm Santa Claus'!

https://leginfo.legislature.ca...

Here is the part:

SEC. 5.

Section 1174.10 is added to the Code of Civil Procedure, to read:

(a) For any residential unlawful detainer action that includes a cause of action under paragraph (2) of Section 1161, any defendant may, at any time between the filing of the complaint and entry of judgment, notify the court of that defendant’s desire to stipulate to the entry of an order pursuant to this section.(b) Upon receiving notice from the defendant in accordance with subdivision (a), the court shall notify the plaintiff and convene a hearing to determine whether to issue an order pursuant to subdivision (c).(1) At the hearing, the court shall first determine whether the defendant’s inability to stay current on the rent resulted from increased costs for household necessities or reduced household earnings due to the COVID-19 virus. The defendant shall bear the burden of producing evidence of increased costs for household necessities or reduced household earnings due to the COVID-19 virus. In the absence of evidence to the contrary, if the increased costs for household necessities or decreased earnings took place at any point between March 4, 2020, and March 4, 2021, then the court shall presume that the increased household costs or decreased household earnings was due to the COVID-19 virus.(2) If the court finds that the defendant’s inability to stay current on the rent resulted from increased costs for household necessities or reduced household earnings due to the COVID-19 virus, the court shall next permit the plaintiff to show cause for why the court should not issue an order pursuant to subdivision (c) due to material economic hardship on the plaintiff. If the plaintiff has an ownership interest in just one or two rental units, then the court shall presume that issuance of an order pursuant to subdivision (c) would constitute a material economic hardship.(3) If the plaintiff has an ownership in 10 or more rental units, the court shall presume that the issuance of an order pursuant to subdivision (c) would not constitute a material economic hardship. The formal rules of evidence shall not apply to the introduction of evidence at this hearing, but the court may look to the formal rules of evidence in determining the weight that it shall give to the documentation presented by each side.(c) If the court determines that the tenant’s inability to stay current on the rent is the result of increased costs in household necessities or decreased household earnings due to the COVID-19 virus and the court finds that it would not be an material economic hardship to the plaintiff and if the court determines that no cause exists after review of a timely response from the plaintiff, then the court shall make the following order:(1) The tenant shall remain in possession.(2) The rent for the rental property at issue shall be reduced by 25 percent for the next 12-month period.(3) The tenant shall make monthly payments to the landlord beginning in the next calendar month, in strict compliance with all of the following terms:(A) The payment shall be in the amount of the monthly rent as adjusted pursuant to paragraph (2), plus 10 percent of the unpaid rent owing at the time of the order, excluding late fees, court costs, attorneys fees, and any other charge other than rent.(B) The payment shall be delivered by a fixed day and time to a location that is mutually acceptable to the parties or, in the absence of an agreement between the parties, by no later than 11:59 pm on the fifth day of each month.(C) The payment shall be made in a form that is mutually acceptable to the parties or, in the absence of agreement between the parties, in the form of a cashier’s check or money order made out to the landlord.(4) If the tenant fails to make a payment in full compliance with the terms of paragraph (2), the landlord may, after 48 hours’ notice to the tenant by telephone, text message, or electronic mail, as stipulated by the tenant, file with the court a declaration under penalty of perjury containing all of the following:(A) A recitation of the facts constituting the failure.(B) A recitation of the actions taken to provide the 48 hours’ notice required by this paragraph.(C) A request for the immediate issuance of a writ of possession in favor of the landlord.(D) A request for the issuance of a money judgment in favor of the landlord in the amount of any unpaid balance plus court costs and attorneys fees.(5) The case is dismissed with the court retaining jurisdiction to enforce the terms of the order pursuant to Section 664.6.(d) For purposes of this section, “material economic hardship” mean that persons enduring the economic hardship would have to limit spending on household necessities. Reduction in savings, profit margins, discretionary spending, or nonessential assets shall not constitute material economic hardship. In determining whether issuance of an order pursuant to subdivision (c) would constitute an material economic hardship for the plaintiff, the court shall bear in mind the Legislature’s intent that the common economic hardship resulting from the COVID-19 virus is not the fault of any one person or group of people and so must ordinarily be born by both landlords and tenants.(e) This section shall be operative only while there is a state or locally declared state of emergency related to the COVID-19 virus in the jurisdiction in which the residential real property is located, and shall become inoperative 15 days after the state or locally declared state of emergency ends.