All Forum Posts by: David Barnett

The rent is still due and any rent relief is temporary.  If the tenant does not pay, the rent relief cannot be permanent.  When the restriction is lifted, you start the process of ensuring that the tenant brings their rent payments current.  If they do not bring their balance current, the landlord goes through the process of eviction.  If your tenants use this as a way to try to take advantage, they are not good people anyways.  It's probably best that they are out of the property once the restrictions are lifted.  The whole COVID-19 situation has been ridiculous (in my opinion), and I wouldn't focus energy/mental head space on something that isn't fair or right.  Our elected officials have decided this is how they want to fix this, and this is what reserves are for...

Reserves, reserves, reserves!  This whole situation screams out why all investors should retain some of their earnings as a buffer for economic situations.  In addition, are you expecting 100% non-payment?  I really don't think non-payment will be as pronounced as people are fearing, unless the assets are in low C/D areas.

I'm going to be very interested to see how the STR asset class plays out during the duration of COVID-19. I wonder if there are going to be any landlords that might also get stung when the tenants who signed leases to turn around to AirBnb the properties default on their mortgage payments. Given the run up in prices of real estate over the past few years, and if COVID-19 is longer term (and impacts discretionary/vacation travel), some landlords might not be able to service the mortgage (or have to go into forbearance). All of this could end up with some deals for more capitalized investors to come in and solve some problems. Very interesting times in this real estate niche.

Here's my to the point response, whether the story is fabricated or not.  These regulations and the like are temporary.  If you act like you are entitled to something and try to take advantage of a situation, you'll soon find out once the regulations expire that the shoe eventually ends up on the other foot.  I'm not advocating throwing people out during this situation, and think that regulation goes to the lowest common denominator.  My opinion in general is that regulation in general protects the scummiest of business people, landlords, etc.  I'm more of an advocate for letting people act how they would like to act and then being called out for it (if you are going to act like a scumbag, everyone should be able to see that is who you are).  Nothing better than someone's true colors being exposed and people being able to choose whether they want to do business with them or not.  This whole COVID-19 thing shows how important it is to have a good amount of cash reserves.

Two positives in my portfolio.  First, I talked to the property management company and don't believe there will be rent payment issues.  If there are, I have enough reserves to cover substantial payment issues.  Second positive, just received word that a tenant group wants to renew (and might get another renewal in the next few days).

I'd probably put down a few bucks to talk to a local real estate attorney and have them give you their advice.  I'm not asking for the name of the selectman, and if the lawyer that you consult with is in Boston, they might have had a run in with this selectman, or can look at their history in the courts.  I think it would be money well spent because regardless of what you do (outside of just rolling over), this selectman is going to fight you and make it difficult for you.

If it were me, and depending on what your counsel suggests, I would probably turn any unpaid rent over to a collection agency just so it gets on the tenant's credit score.  I have very little patience for politicians who think that they are "above the law" so to speak.  It would be nice for this selectman to see that they need to pay rent just like everyone else, and their actions have some consequences.  

That's about the price that I pay for my entity and W2 together.  I also do most of the bookkeeping myself.

You're welcome, Michael. I'm certainly not a loan officer, and please fact check what I'm about to say with a lender. My understanding is that they can count I think 75% of the rental income into your income, allowing one to qualify up to 10 properties. As long as this is correct and one can keep their personal debt down, it is possibly to qualify in the acceptable DTI range to continue up to 10 mortgages. I would schedule a call with a lender or mortgage broker to schedule out your plans. My experience is that a savvy lender/mortgage brokers can allowably work wonders to get you to your goals (if you want to take title in your personal name).

 This is what I was able to find really quickly.  Try this link:

https://bsaonline.com/?uid=305&sitetransition=true

You should be able to type in the property's address and find the owner and where the tax bills are being sent.  I tested out a random property on the internet, and was able to find where the tax bills were being sent.  I have no skin in this property, and if you'd like for me to do some internet sleuthing, I can do a search of the property and send you what I'm able to find out (in a direct message).  I've found that most assessor's websites, especially in the midwest are pretty similar.  This way, you should be able to view the information without having to call into the city (usually the least efficient way to find the information).  Good luck!

@Cody Feist How would you be taking title on this property? It is true that a 1-4 unit would be considered residential, while 5+ is commercial. HOWEVER, if you are going to be taking title of the property in an entity (LLC, Corp, etc.), that would be financed by the commercial financing group.

@Michael Y. My understanding is that you can currently have 10 residential finance loans (Fannie/Freddie/conventional) prior to having to go over to the commercial side.  Once you get more than that many loans, one's loan profile doesn't fit within the guidelines, making it necessary to go over to commercial financing.  If you buy in an entity, you pass go and go right to commercial financing.