All Forum Posts by: Joe Splitrock

@Amanda Thompson I have never had tenants insist on being at the property, but I have had tenants who asked if they could stay due to their own convenience. I have shown the property with tenants there and successfully rented. I just explained to the perspective tenants, that we normally like to show without the tenant there, but they asked if they could be there. Most potential tenants are not bothered by this. If you encounter a combative tenant or property in bad condition, it may be necessary to wait for showings until the current tenant moves out. Most 3rd party property managers do not show occupied properties. It is just too difficult to coordinate. As an owner/manager, I always show and rent the property before the current tenants move out. We have near 0% vacancy by doing this. 

I would not force the current tenant out during the showing, because it could open you to liability later. They could claim something was stolen, for example. If they insist on being there, let them stay. This is your same policy for repairs. I tell people they have a right to be there, but they also have to accommodate the time that works best for me.

 There is a misunderstanding about the housing crash. There were indicators that people ignored, specifically inventory. We reached record low inventory levels in 2005 with around 4 months inventory on the market. By 2007-2008 we were near 10 months inventory. So people who bought in 2007 had plenty of warning signs, they just ignored them. Inventory wasn't considerably higher in 2011, but it takes time for inventory build to affect prices. That is great news, because today we have lower inventory levels than 2005. That means even if the market starts shifting, there will be time to react. 

As far as currency collapse or nuclear war, those are catastrophic events that will not be a buying opportunity. If you believe those events will happen, buying food or bullets is a better investment. In that situation, nobody will care about real estate, but they will shoot you for your food when they are starving.

Nobody can predict the future and crowd sourcing advice from strangers is even less predictable. Most people follow a herd mentality. When a market is going up, everyone will tell you it will go up forever. When it is going down, everyone will tell you it will keep going down. This is literally why markets flow up and down. 

 I was going to say that you should qualify for prorated amount even though you didn't stay two years. It could cost more to do the 1031 than your tax burden in this case. 

@Matt Sora most people responding are basically saying the same thing. A hard money lender is for when bank financing is not possible. Banks will have more stringent lending requirements and are less likely to accommodate strange lending situations. Hard money lenders are more flexible but also charge more. Lending is a risk based business, so anything that increases risk will increase costs. 

 Ask your broker or potential brokers.

 That $2B transfer was done anonymously and was most certainly a taxable event. I saw the same article and nobody ever talks about the tax burden, probably because tax evasion was involved. A wire transfer costs around $20 within the US and $50 internationally and would require proof of identity plus IRS reporting of the transaction (if the US is involved). It is not that Bitcoin transactions don't cost money, it is just how the miners are compensated. The miners get paid with crypto, but in the case of Bitcoin the rewards diminish over time. That forced scarcity makes the system get more expensive to operate and eventually will have an impact on transaction cost. 

The Russian invasion of Ukraine is a great example of why Bitcoin faces challenges. The Russian banks were cut off from Swift, which allows international wire transfers. Russians are buying crypto to bypass and evade detection. People argue this helps crypto, but I would argue a system that attracts criminals (including tax evasion) is not sustainable. The exact reasons people love Bitcoin are its weakness.

I think blockchain and crypto are here to stay, but I am just not sure Bitcoin will be the winner. You use the analogy of Amazon, but it is easy to predict a winner looking back. There were hundreds of other dot com companies that failed. You are just conveniently only citing the one that succeeded. Book Stacks Unlimited was selling books online several years before Amazon through BBS went online at Books.com. They were eventually acquired by Barnes and Noble. We all know how the story ends. In 1994 there was a guy just like you telling people that Book Stacks was the future of book sales. In this story it is important to understand why Amazon succeeded. It wasn't because they had a superior website and they were not first. It was how Jeff Bezos built the company and deployed a strategy.

 I travel 1-2 times a month, but I am generally not taking long distance trips and my only first class travel is only free upgrades. Since I am in the middle of the US, it is harder to log massive miles with domestic travel. It is definitely easier if you are flying coast to coast. I fly Delta which will accelerate for higher tier seats, accelerates when you have Gold status and accelerates if you book with their credit card. I also have my Lyft and hotels set to give me Delta miles. I still think the cards are over sold by the travel sites. They get a lot of benefits from just traveling a ton. The casual traveler will not see anywhere near the same perks. 

@Rich Hupper in my experience the travel rewards have been steadily getting worse over the last 20 years. Most of these travel guru are full time traveling outside the US, which racks up tons of miles and higher status levels which accelerate your benefits. 

The majority of the benefit with any card is the sign up bonus. For this reason, I move between card, get the benefit and close the card. You can be eligible for the benefit again two years after closing the card. Another way to get benefit is hitting massive spend levels, like $25,000 or $50,000 on a credit card. Some cards have accelerators when you get to these higher spend levels.

I really like the direct cash back cards. I can get between 1% and 5% depending on spend category. I only use airline cards to get the welcome bonus. 

 Church is a tough business and even worse through COVID. They are closing across the world as younger people are rejecting religion. Even successful churches are non profit and have at tendency to give away any money they take in. They survive "donation to donation". The other problem is collecting money or evicting a church can be difficult because of the negative public perception on a landlord. 

I once suggested that my church should run more like a business, which didn't go over well. I thought that the preschool and child care tuition should cover the cost for the their use of the building. That would be very reasonable in a business world, but non profits run with a different mindset. 

I have wording in my lease that basically says tenants are inseparable, meaning they come and go together. I would have a candid discussion with the remaining tenants around ability to pay rent. If they don't meet your rule 3X or whatever you follow, then they may need to leave. Other options are additional deposit or cosigner. I would try to work with them.