All Forum Posts by: David Jay

I agree that it is the responsibility of real estate investors to be prepared for changes in market conditions.  As Buffet so aptly puts it "when the tide goes out you will see who is swimming naked."  So that means preparing for recessions, having reserves, and living with your financial projections.  However, in this case the Government has removed the functioning of free market forces.  Currently if I own a property and the tenant is month to month I cannot ask them to leave for any reason unless they are presenting an eminent danger.  If I want to have a family member move into the property I cannot force the tenant to move out.  If the tenant stops paying rent I cannot evict them.  If I want to sell the property again I cannot ask the tenant to leave to fix it up and make it more marketable.  So this really is different, our property rights have been suspended.  Don't get me wrong, I am fine with doing my part and working with tenants to move through this together.  I'm not looking for a handout, but fair compensation for suspension of my property rights during this crisis is a reasonable ask.

So basically what is happening now economically is that the government is printing money and handing it out. Some of it strategically and some of it not so much. 50 percent of the unemployed workforce are currently earning more not working then they were earning punching the clock. Perhaps that’s strategic but where is the landlord in this. I’m currently in a no eviction state. I’m OK with that in the sense that I think this is not the time for people to be without shelter. But since I’m providing an essential service shouldn’t I get the same bail out as airlines etc.....It would be reassuring if the government would guarantee my expenses in providing this plus another 20% to live on.  Landlords unite. Not sure what the dollar will be worth when the dust clears and the printing press turns off, but for now some guaranteed Benjamin’s is a fair ask. 

This is not just another flu. Until there’s a vaccine or a cure there won’t be large conventions. The strip will be closed, as it should be, also. The Las Vegas economy will take a big hit. On the other hand the smartest minds are working on this so maybe effective treatment is not that far off. I guess it’s a gamble, the house money is sitting back and waiting for the prices to drop way down. That”s the smart money, no lose bet.  If a cure comes quick and life returns as it was who cares that they sat on their cash too long, and if prices drop a lot you can buy then. I sure wouldn’t be investing in Las Vegas RE anytime soon. 

@Christian D. Yes you are absolutely correct.  I am at 80% for the month.  And I agree that because of current market conditions that is a good figure.  I appreciate your comments because previously there were some that may have considered an upfront discount an "amateur move".  I'm just posting to say I think there may be an option where you can treat tenants well while still maintaining your business through this.  We each need to make our own decisions as to how to navigate this.  The words thoughtful, kindness and grace can also have a place in navigating your business.  

Well now we're at the point where the metal meets the road.  Perhaps I'm reading this wrong but it seems there are two schools of thoughts on these posts.  Those that are proactive and reaching out to their tenants and offering discounts and those that are holding fast.  There are some in the middle considering case by case.  I also get the sense that there's a lean towards "professionals" (with some notable exceptions as outlined by Jay) as holding fast and "amateurs" leaning towards discounts.  I was proactive across the board, 20% discount, and now on April 5 100% of rents are paid. This covers my five figure nut, maintenance expenses, reserve funds and a cushion.  This is much preferable to me then waiting on rents and funding my expenses out of pocket while I wait.  I call that a win-win.  Were there some tenants that didn't need this, perhaps.  But I'm happy with my strategy on many levels and at least for me it was sound business.  Be safe.

Hey here's what I did.  Two weeks ago I told all of my tenants that there rent was discounted 20% in April.  I have 13 houses.  Five I manage myself, and eight in a neighboring city are managed by a property manager.  Of the ones I self manage I've collected five of five rents already.  We'll see how my property manager does.  Did I leave some money on the table, perhaps.  But my friend who was not proactive was just told that none of his tenants were paying since they were awaiting benefits etc.....and would pay later when they were received.  Our state is currently under a no eviction and no late fee order so he'll just have to wait.  Now of course, my discount is only applicable if they pay on time, otherwise they owe full rent. I'll consider other arrangements if they've documented and explained their situation, it needs to be more than I'll pay later.  Our governor just extended stay at home another 30 days and tomorrow I will let them know the discount applies to May also.  It doesn't leave much profit, but it pays all the bills.  My monthly nut is five figures so I can hold on a whole lot longer with that covered every month.  I think now is the time to be thoughtful and kind.  If I put a couple hundred in someone's pocket who didn't need it I'd hope they'd share it with someone who did.  Frankly, if I get through this with my loved ones and myself alive and the only hit I take is financial I'd feel blessed.

This will take way more than 3-6 months to shake out.  It may depend on location.  But you're not just going to flip a switch and have things back to normal.  

I'm going to sit back and wait and see how he does.  I have 13 rentals, I manage 5 and he manages 8.  I've already collected 100% of my April rents from the ones I self manage.  I was proactive with my tenants and gave him my playbook to do the same with the one's he manages.  So if he can match my record he will earn his fees, and if not he can explain why.

Covid could be a RE disaster      You think?   As Warren Buffet said "When the tide goes out you will see who is swimming naked."

Hey here's what I did.  Two weeks ago I told all of my tenants that there rent was discounted 20% in April.  I have 13 houses.  Five I manage myself, and eight in a neighboring city are managed by a property manager.  Of the ones I self manage I've collected five of five rents already.  We'll see how my property manager does.  Did I leave some money on the table, perhaps.  But my friend who was not proactive was just told that none of his tenants were paying since they were awaiting benefits etc.....and would pay later when they were received.  Our state is currently under a no eviction and no late fee order so he'll just have to wait.  Now of course, my discount is only applicable if they pay on time, otherwise they owe full rent. I'll consider other arrangements if they've documented and explained their situation, it needs to be more than I'll pay later.  Our governor just extended stay at home another 30 days and tomorrow I will let them know the discount applies to May also.  It doesn't leave much profit, but it pays all the bills.  My monthly nut is five figures so I can hold on a whole lot longer with that covered every month.  I think now is the time to be thoughtful and kind.  If I put a couple hundred in someone's pocket who didn't need it I'd hope they'd share it with someone who did.  Frankly, if I get through this with my loved ones and myself alive and the only hit I take is financial I'd feel blessed.