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All Forum Posts by: Andrew Watson

Andrew Watson has started 4 posts and replied 36 times.

Post: CDC's Eviction Moratorium

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

@Rachel H.   Couldn’t agree more - honesty and upfront communication is written into our leases - just tell us if your shower leaks or if you lose your job.  This next year or so is sure to be a “learning experience”. 

Post: CDC's Eviction Moratorium

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

I posted this as a comment on an article, but there is still a ton of misinformation about this NEW eviction moratorium by the CDC.   I thought it might be valuable to create a separate thread.   Since I wasn't comfortable with the answers I was getting, including from our own attorneys, I read the actual order, in its entirety, from the CDC website. Here are a few facts, directly from the CDC order:   1.) The tenant DOES NOT have to be impacted specifically by COVID19. The definition, as stated in the  order, says this: if an individual cannot pay all or part of their rent "due to substantial loss of household income, loss of compensable hours of work or wages, a lay-off, or extraordinary  out-of-pocket medical expenses".  There is NO verbiage regarding COVID19 in the definition of who is eligible. 2.) The tenant does NOT have to "prove" anything or provide ANY documentation - they only have to sign the form, "under penalty of perjury". This form (a "declaration") ONLY goes to the landlord, does not require a witness and does not have to be notarized. It's basically a form letter from a tenant to a landlord saying they can't pay rent.   3.) All a tenant really has to do is make less than $99k and send the declaration to their landlord. 4.) This impacts ALL properties, not just those with Federally-backed mortgages or those receiving Federal rent assistance. This is very different from the CARES act. The CDC defines those properties affected as: "any property leased for residential purposes, including any house, building, mobile home or land in a mobile home park, or similar dwelling leased for residential purposes". The only exemption is temporary rentals such as hotels, seasonal rentals, airbnbs, etc.  5.) Technically speaking, it does not "cancel rent". I had to read it several times, but the order is clear: "These persons are still required to pay rent and follow all the other terms of their lease and rules of the place where they live. These persons may also still be evicted for reasons other than not paying rent or making a housing payment." However, the order specifically says, "Executed declarations should NOT be returned to the Federal Government", so the government won't be getting involved in collecting our back-rent. Being in the affordable housing market, we don't have one resident who would have the near-term ability to repay four months worth of back-rent. We will effectively become a bank or credit card company trying to collect this debt.  6.)  The order goes into effect today, September 4th, 2020.   These being the facts, we will continue working with our residents. Some are going to take advantage of the situation, try to live rent-free until January and then bail with no intention of repaying this "loan" that our fine administration provided them. But most are going to do everything in their power to meet their obligations. We intend to help those that are sincerely in need by temporarily reducing rent and waiving late fees....and while abiding by the letter and spirit of the law, make life as miserable as possible for the freeloaders...

Post: Buying better (more expensive) rentals

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

We go through this with every new investment. There’s something about “nicer” that draws us in, but the numbers of “not quite so nice” are hard to beat. 

In our markets, we can buy 3 SFHs for about 110k and they will cash flow two, or even three times more than a single $110k home. 

They’re not as pretty, but they make good money, aren’t betting on appreciation, AND, low income housing is important - risky at times, but important. 

Post: Running to an issue with a property

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

According to our attorney there is NO moratorium on evictions. And the moratorium that did exist, but has now expired, was only for those who participate in Federal housing assistance programs or those living in properties with Federally backed mortgages. Said moratorium never affected us. 

You may have issues with courts being back-logged, but I would get on it:  get moving on eviction AND, as @JoseClavijo suggested, increase your cash-for-keys offer, making it dependent on the property being left in good condition. This approach will always be cheaper than eviction, because I’d bet my grandmother you have a destructive squatter in your house. 

Best of luck. 

Post: Getting started in Atlanta

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

Hey Rudy,

I’d have to agree with Brenden - the wholesalers that are “only sending me the best deals that fit my criteria” are sending me a bunch of over-priced properties that are ripe with unwelcome surprises. And I operate south of Atlanta where the market is supposedly cooler. 

I would be happy to send you the contacts I have, but in the interest of full disclosure, I've not bought anything from a wholesaler in 3 years. The SFR we just purchased was through a traditional agent, and if we decide to sell it we probably won't go the wholesale route.


Post: Where did I go wrong? Section 8 Horror Story.

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

A lot of investors will tell you to stay away from low income properties, and you have one expensive example why.  There is more risk that has to be managed. On the other hand, they can make very good money, if MANAGED. I’m sorry for your nightmare, but as a previous poster said, it was an expensive lesson - learn from it (Don’t give up, regardless of some of the forum’s flame throwing). 

IMHO, the property management biz is built on a flawed business model. We rent homes for an average of $700 a month -  that’s a fat $70 a month for the PM. It just isn’t much incentive to protect our asset. Is it possible for a PM to do the job we expect for $70 / month?

Making matters worse, in our market, with the added risk of our prospective renters, an asleep-at-the-switch PM can wipe out the entire value of one of our homes. Unfortunately, paying PMs more money doesn’t solve that problem. Our only answer so far is to manage our own properties - our financial incentive is far greater than $70. 

Post: Who is buying rental properties during covid ?? What state?

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

We’re buying SFHs in Georgia, just south of Atlanta. I won’t lie, it was nerve-wracking closing on another home last week - worrying about whether we would be able to find a solid tenant during COVID. 

We’re in affordable housing, primarily in C areas, with caps between 13 and 17. A little risky, but not as bad as we expected. So far, so good. A couple of slightly-late payments, but no major issues...but we’re still prepared for the worst. 

Post: Atlanta Investment Markets

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

We focus on affordable housing and Atlanta metro doesn’t work for us. The “affordable” areas are just too risky and don’t provide adequate cash flow for our model. 

We invest south of Atlanta, from Henry County down to Macon, where we get excellent cash flow and manageable risk (but there is still elevated risk).  We can buy and renovate a home for an all-in cost in the low to mid 30s, and rent it for $600-$700. We choose our tenants very carefully...very carefully...and they deliver great cash flow. 

If you’re willing to go into lower income areas, with some leg-work you can find a decent turn-key home for $40-50k, already leased for $600-$750. They’re not the nicest areas in town, but just because the neighbors don’t make much money doesn’t mean they’re bad people. 

Post: Tenant keeps changing his mind about renting

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

I assume you have termination penalties and such detailed in your lease, so I won’t go there.  And I don’t think I would go off and demolish the swimming pool or sidewalks, or incite someone to spit in my face.  I have had flakey tenants that weren’t worth the hassle...and flakey tenants who stayed and paid. 

You don’t know what Captain Wishy Washy is dealing with, but I would remain fluid as long as you have your bases covered. In such unusual times, a neurotic bird in the hand may be far more reliable than a bird in the bush.  If he’s paying, is able to pay, and you have a deposit, I would be patient. I’m getting ready to put a new home on the market and it always gives me heartburn - A new tenant is like a box of chocolates...or pistol in a game of roulette.

Post: Doubting my C class rentals

Andrew WatsonPosted
  • Rental Property Investor
  • Atlanta, GA
  • Posts 36
  • Votes 44

You’re not alone. I think most of us feel the same way. We’re backed up on a re-hab right now, but on our way over to check on the progress of our new house we had to stop and look at two more...