All Forum Posts by: John Kunick

Levi, thanks.  I have reached out to Hunter Warfield and will see how they respond.  We are okay if we don't collect much, but our bigger goal is to have a negative rating of the tenant to try to avoid future negative situations for other landlords.

What good would sending mail to him be if it is simply forwarded?  How would I be able to get a small claims court to declare a judgment or get a collection agency to collect?

So, I've been fortunate over the years and have never had a tenant vanish.  But, this past week, I encountered my first.  Sad thing is there was no warning.  This tenant had paid like clock-work for over a year.  Then, he lost his job and got a month behind in rent.  He was communicating with me and then went radio silent.  Apparently, he moved out of state and did not leave a forwarding address.  So, any suggestions on potentially using a collection agency?  I would go to small claims court except, from what I understand, I have to have a forwarding address?  I would like to figure out a way to have this hit his credit report so other landlords don't have to encounter this with him in future.  Would appreciate any advice or ideas!

 Hi Cynthia, first of all, I agree with most of what you have read on this thread.  Full disclosure: Tracy Streich and I are tennis friends, but have no business dealings, and he knows what he's talking about since he has a broader portfolio than I do.  

But, I do have an extensive portfolio in South Tulsa and have done extremely well with them.  I did venture to North Tulsa last year and did well, but not well enough to off-set the extra hassles that come with that level of house/tenant.  That is a personal preference, IMO, but I know I can make more than enough in South Tulsa with minimal headaches.  Therefore, I am in process of converting my North Tulsa properties to other less headache investments.

Overall, Tulsa still offers tremendous opportunities, but don't expect significant appreciation of sales price.  For that reason, my strategy has been buy and hold for long-term superior cash flow.  On the opposite side, don't expect to see significant depreciation.  These markets just don't have the price volatility that you see in more coastal markets.

So, yes, Tulsa is a GREAT (not just good) rental market.  But, it all depends on what your objectives are and what you are willing to put up with.  Like I tell everyone who asks me for advice:  know your objectives and know your tolerance for hassles.

Best of luck!

 No, what I mean is there any way for investors to profit from helping bail out students or from picking up the pieces?  For example, investors could easily make money by buying up distressed housing after the stupidity of early 2000's.....  I don't see any opportunities, but just wondering if others might?

 Good points, which support the buy and hold strategy (that's all i do).  But, do you see any chance of avoiding the specific student loan collapse?  If it does collapse, do you see any specific "non-real estate" opportunities for investors?

Aaron, yes there are FHA loans without significant equity. But, as you mentioned, they are not the majority of loans. Compare that to 2000's, when people were getting not only zero down loans, but actually 110% loans. It was like a feeding frenzy with both government and mortgage lenders (as well as credit rating agencies) putting lots of fuel on the fire. Have you seen the movie "Big Short"?

@Nicole Heasley Beitenman, RE: student loan crisis.

Per my post above, I was one of those shaking my head at the stupidity of those taking loans out for real estate in early-to-mid 2000's.  While I understand their motivation, the key is they were like sheep being led to financial slaughter due to government intervention.  Therefore, I was setting a lot of money aside to buy up cheap homes once the house of cards fell.  I am thankful for the opportunity that was presented.

I know there will be some that will find my comments troubling as they may think I was looking to profit off of someone else's misfortune.  Unfortunately, I was telling lots of people back in early 2000's not to invest nor to take the easy money to buy a personal residence unless they could put a large downpayment.  To be honest, I think many of them deserve what they got as there were lots of people telling them not to do it.

However, on the student loan crisis - which I see a lot of similarities in terms of government intervention driving up college costs due to easy money - I don't see any ways to either prevent a collapse or how an investor can find opportunities by picking up the pieces.

Anyone see any good ways to avoid the collapse?  Any ways to pick up the pieces?

@Kraig Kujawa, totally agree about resting easy via cash flow.

Here are other key things perhaps many on this thread will consider about how different we are now vs. 2007:

1.  The real estate bubble in 2007/2008 was primarily based on government-induced loans that were then backed by government via taxpayer.  In short, due to government intervention in the market place and the consequent greed, money was too easy to get.  There were people getting loans that had no business getting loans and the house of cards fell.  This is not currently the issue.  While loans are easier now than they were five years ago, they are nothing like it was in the early-to-mid 2000's.  No comparison.

2.  Those people that were getting loans that shouldn't have, are now renting and that has propped up the rental demand and thus the cash flow for investing.

3.  Savings rate - In mid-to-late 2000's, the savings rate was 1-2%.  It is now almost 7%

4. Not all markets are like California - Like many have commented on this thread, CA seems to be out of bounds. Perhaps there are other markets like that. But, there are still many markets where real estate has acted normally the last ten years. Even in Tulsa, where I own a significant portfolio of SFH, the prices still have room to run up. Sure, they are not as attractive as they were after the crash, but there are still bargains to be had - and rents have increased as prices have gone up.

5.  Equity - In early 2000's there was very little equity in most rental properties (and real estate in general).  That is not the case now perhaps due to loan requirements.  This will curb panic selling should a recession hit.

So, all in all, I see a lot of differences between now and 2007.  That is not to say that a recession or correction might not take place (they are usually psychologically driven), but I do believe the fundamentals are significantly different now

David Dietrich/Mr. Fix It