All Forum Posts by: Account Closed

When your tenants sent in an application, did you ask them for their profession?  You may be able to tell if they will be affected based on their profession so weed out those wanting to take advantage of the situation vs those who may actually need the help.

I saw someone in another thread say that they will reduce payments in the short term, only to be made up later.  So not necessarily forgiving the rent, but readjusting the payment schedule of the lease.

I allow pets in my rentals, due to it being an additional revenue stream.  I would recommend allowing pets for this reason.  Just run the numbers and make sure that your monthly pet rent is enough to cover the increase rate of wear and tear on your unit in addition to a profit.

1. Any way to make money/wealth. My first focus is to find properties that I can cash flow on, primarily through BRRRR. However, if the cash flow is good enough, I am not opposed to buy and hold. If the property cannot cash flow, then I will look to see if I can flip it. Currently, my purchases for down payments will be made by using a HELOC I have on my current rental property.

2. A little over a year.  I purchased a single family house in 2016; lived in it while making renovations to it.  Then in 2018, I moved in with my at the time girlfriend (wife) and rented the property out.  Property started earning me money in December of 2018 and the tenant recently renewed their lease for another year.  I am currently in the beginning stages of purchasing my second investment, which looks like will be a flip candidate.  

3. Biggest lesson, probably building the team.  My property is located in Kansas City, but life changed quickly and my wife and I moved to Rhode Island.  So I went from self managing to outsourcing activities quicker than I anticipated.  I am now in the process of trying to find a general contractor for my future projects while not being located in the city I am investing in.

In a situation like this, you would want to find stocks where the fundamentals haven't been affected, but the general macro economic conditions are pushing the price down.  The reason being is that the underlying business is not affected and therefore, should out perform once the macro elements have passed.  That doesn't give you a specific list of stocks, but a very general idea of how to approach this during a market correction.

For me, I prefer to purchase dividend paying stocks, specifically dividend aristocrats.  Dividend aristocrats are a list of stocks that have met the following criteria 1) they are in the S&P index, 2) they have paid and increased dividend for 25+ years consistently, and 3) have a market cap of over $3 billion.  You can find a list of current dividend aristocrats by googling for it.  If you are looking for a quick in and out, this isn't the approach to take.  If you are looking for a longer term strategy, then this would be my preference, hence why I do this for my IRAs.

Regarding the stock market and the general economy.  I have read some articles that the general global economy has been slowing down a bit, primarily the manufacturing sector.  The coronavirus may just be the catalyst to push global economies in to recession territory if governments have trouble containing it.  If governments are quick to react and contain people with the virus, allowing people to continue to work, then I think a recession could be avoided (at least for a little bit).  If governments are slow to react and contain the virus, causing businesses to shut down (like in China), then the coronavirus will be the catalyst to push the global economy in to a recession.  

What does this mean for real estate, I think you will see a slight decrease in home prices (single digit %) and a general cooling off of new housing starts.  Thus improving rent to purchase ratios for rental investments.  I think middle to high end housing prices will have slight decrease in sales prices (1-4%), while low end housing prices will see more sales and sale prices declines closer to the higher single digits.  

In general, any recession we have I think will be minor to moderate at the worst, but most likely between minor and moderate.  Professional level employment will remain relatively stable, with hourly workers (retail/manufacturing) type of jobs seeing employment losses.

While I am not familiar with the insurance industry itself, with the list of potential companies you already run, they are all very reliant with one another.  In a down economy, mortgage, title company, and real estate activities would slow down.  Potentially causing a rather quick decrease in revenue as they are all operate in the same stream.  While an insurance company (I presume home owners, renters, and landlord insurance would be your targets) would have more reliable income throughout a downturn due to the premium payments.  This in turn would in turn smooth out your revenue across your whole business a little bit as the insurance premiums should be relatively resistant to an economic downturn.  You would probably see less new policies, but still get solid monthly premiums.  

In addition to insurance, I would recommend finding a revenue stream that would provide consistent revenue while other revenue lines suffer.  Property management and bookkeeping would be others I would consider that meet this criteria.  Again, try and find something that would smooth out your revenue out a little.

I concur with this.  My wife's parents own/have grazing rights to about 80,000 acres of cattle land in Arizona, some of which includes properties owned by other people.  If you want the cattle to not be on your land, the property owner is responsible for fencing off their own land from the cattle.  Some of the property owners by the ranch have done exactly this.

Look in to your agriculture laws to see what is allowed.  Maybe have a lawyer look in to it to save time and then proceed accordingly.  

I currently use Buildium and really enjoy it.  One thing that could help you, and looks like your looking for, is communication.  You can set up users in Buildium and restrict their access to only certain modules within the software.  However, some of the formulas you may want to track, I am unsure if they are available in Buildium (although, I have not tried looking for those reports either).  But you will be able to separate and analyze your properties individually.

I give my tenant 5 days.  They pay electronically, so it may take 2-3 days for the transactions at the bank to settle.  So if they pay on the 1st, I should see the money in my bank account on the 3rd or 4th of the month.

For several years now, you have heard general economy market experts saying that a correction or a crash is coming.  If you go to MarketWatch homepage, you probably see such an article on their website at least once a week.  Additionally, because this bull market has been going on for so long (if I can recall, longest bull market in history), that people are anticipating a market downturn soon.  Lastly, because the last recession in 2008 was so bad (worst recession in history) that a lot of people think that the next recession is going to be just as bad, when in reality, 2008 was an anomaly from in how bad of a recession it actually was.  Most recessions aren't going to be that bad.

With those three factors in peoples mind, many who are investing with their own money are are scared of what they could loose, and not what they could gain.  As a result, people are sitting on the sidelines waiting for the market to correct itself so they can come in and buy something at basement bargain prices.  I think these people will be disappointed though when home prices don't fall by 2008 levels.  

Personally for me, I only have a single family rental unit and am in the process of actively looking and buying my second.  So long the unit cashflows even at a discounted rate (if a recession does occur) I will be buying.  I think it would also be important for individual investors to hold on to more cash in the event of a recession, but that doesn't mean to hoard it or stop investing altogether; just increase the reserve amount a little.