All Forum Posts by: Brad Gibson

Did today's executive order that puts a moratorium on evictions just good and rightly screw landlords across the nation?

While he also signed an EO that extended extra UI benefits to those unemployed, it is maxed out at $400 per week and is not fully funded by the Feds. It also relies on the states to come up with a large extra contribution each week. Many governors claim they have no money to contribute and the order also doesn’t bind the states to contribute. 

Finally, there is no relief for landlords in the executive order which might provide funding in the event that tenants don’t pay and cannot be evicted. 

I’m worried about Congress’s inaction & EO’s that are clearly hostile To the rights of landlords. 

@Ric Ernst Agreed. I usually like to close on the tenth of the month and stipulate that the pro-rated rent for the month be included in the closing.

It gets you started with some income right off the bat and allows for the rent to likely be collected prior to the close date.

 Actually, they already do that. Taxes are only due on the appreciation of your property right? It’s not due on the actual amount you paid (your initial investment). 

You might not be aware, but you get a tax bill for the interest made in a savings account. Considering rates on savings accounts are minuscule, most are not making significant profit from them, but they do generate a tax bill. 

Same concept. You made $$ on the appreciation of a property while you held it. The government taxes that at helluva favorable 15% tax rate instead of at your personal rate according to AGI. 

Buy a slightly cheaper property to upgrade into and take taxes on the initial sale into account.

I would offer them choices. 

Offer them a 12 month lease that increases their rent some toward market rate. Offer a second option for a six month lease at a rate that is a step higher than the annual lease rate offered.  Finally, offer to transition them to month to month at full market rate. 

I’ve found tenants respond better to tough news (your rent will be rising) if there are some options. They of course have the opportunity to walk at the end of their current lease, but this way gives them a chance to stay  This is especially good if they’re a great tenant who pays on time & takes care of the house. 

My $.02

@Joe Splitrock  I'm sure.  Here's the link: https://www.texastribune.org/2...

Texas will require search for work starting on July 6th.

You are right on the minimum wage amount.  Your figure of $15,080 is if the person worked five days a week, every week for the entire year with no time off.  That's not a living wage, but there is very little hope of that amount changing in Texas in the near future.

I went to TWC and did their calculator for benefits.  State benefits for someone who made minimum wage prior to being laid off are $151 per week.  If the feds supplement by $600 per week, then it would be double what someone at minimum wage would make in a 40 hour a week job.  I can see that there would be a disincentive for someone to trade unemployment for a minimum wage job.

I agree that some assistance needs to be given to those who are without a job through no fault of their own and whose prospects are diminished due to Covid.  I just don't know what that balance is & get annoyed when folks want to end legitimate aid to avoid some getting a "free ride".

It reminds me of hanging out at the cotton gin after working in the fields and hearing landowners ***** about the food stamps some of their laborers received.  They called it an undeserved handout.  What they did not ***** about were the government CRP (crop rotation programs) that paid individuals six figures per year to NOT plant, grow, & harvest.  Talk about disincentive to work.

I learned early on, that it isn't an undeserved handout if someone else gets it.  It's a necessary aid and assistance if you get it.

How many people are refusing to come back to work because their benefits are better with the federal supplement of $600 per week?  I'm hearing anecdotal claims that some folks won't come back to work at jobs that pay less than unemployment, but no hard facts. 

The fact is that we have unemployment in the US at a rate that is on par with the Great Depression.  Across the US it is at 11.1%.  In Texas it is 12.8%.

The person who makes minimum wage in Texas gets $69 per week in state unemployment laid off.  If no federal supplement, then that individual is staring at $280 per month.  That's a pretty tough stretch to pay rent, food, & basics on $280.

 Why are states not enforcing the curtailment or ending of benefits if someone has been offered their job back?  That is a basic piece of the unemployment system and is easily done.  In Texas, those receiving benefits are required to seek employment to continue receiving benefits and document their efforts.  The rule was temporarily suspended in March/April, but it is now required. And employers are fearful of telling the workforce commission that they've offered an employee their job back and they refuse to return?

Why are folks so opposed to ensuring some protection for workers at the lowest end of the wage spectrum?  The thought seems to be that we should kill benefits for everyone regardless of need because there are claims that a few could get benefits in excess of their old job's pay.    With 11% unemployment...be careful what you wish for.  The rent checks may stop rolling in.

If you're looking for fix and flip or BRRR, there are some choices out there that lend in Texas. Terms have significantly worsened since Covid 19 struck, but there are some that are still lending. Send me a pm & I'll share some that I have experience working with who lend in Texas.

 Not to be purposefully obstinate...What is your solution then?  Cutting the federal supplemental benefits off to prevent some who are gaming the system and not returning to work?

When the housing and loan industry melted down the world's financial system in 2007, George W said if the choice was between being Herbert Hoover or FDR....he was damn sure going to be FDR.

The same principle applies here in my opinion.

I know the system is overwhelmed, but it isn't really that difficult.  If the employer says they've offered the employee their job back, then benefits cease.  It is electronic and straight forward. 

I realize that unemployment is $200 to $300 per week (capped at $500 in Texas for high wage earners...$100 per week for minimum wage earners) as a measure to encourage folks to go back to work, but for many...there is no place to go back to currently.  For a wage earner who made $1,000 to $1,500 per week prior to Covid, going down to $200 per week means non-payment of rent and eviction.  For a minimum wage earner, to drop from $290 per week to $100 also means eviction.

You'd rather cut the federal supplemental benefits than just implement a fairly quick check to see if employment has been offered?  Seems worth the trouble to me.

Pretty easy fix.  You max their benefits at what they would have earned if working full time & then check with employer to see if they've been offered their old job. 

Unemployment in my state always checks with the employer to confirm separation before paying benefits.  Every two weeks, ping the employer and ask a simple question: "Has this employee been offered their job back?"

If so, benefits end.  If not, then benefits continue.  Easy peasy, lemon squeezy.

Plus it continues a program that is very needed instead of an all or nothing solution.  It seems the R's want to end all support for working person.  D's want to ensure a universal income.  WTF?  There is a practical solution in the middle.