@Antonio Pressley JR
I started off working with a local real estate agent, looking on realtor.com/zillow and drove around looking for properties.
Nowadays, if I see something I like, even if it's off the market, I'll find out who the owner is and call them to see if they want to sell. However, most of my deals have come from the MLS. I'm a real estate agent in Michigan, so I have immediate access to MLS. In order to contact off market owners, I use click2mail.com and send postcards into the neighborhoods I chose. I am working my way up to mailing more frequently to get more callbacks, but I haven't personally landed a deal through direct-mail marketing yet. Although, many people are using this as their primary source for finding deals and I'm someone will be able to speak more on this subject.
Lastly, I've analyzed and found several deals through networking with real estate agents, rental property investors and wholesalers. Join your local REIA (Real Estate Investment Association) and start talking with people.
Any advice about what to look for in a potential market, or how to find multi-family properties?
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I started off by looking locally at 2-4 family houses. I could still use residential financing options, and I could live in one of the units to cut down on living costs. At the same time, this gave me an opportunity to try my hand at landlording and developing a system.
I bought a duplex to rent out the bottom unit and live in the upper unit. After collecting rent for the month and paying all my expenses (mortgage, gas, electric, water and trash) I was responsible for paying $125 per month. Since my tenant living below covered the majority of my expenses I saved a lot of money, which afforded me the financial ability to buy more properties.
These type of draconian anti-free market laws result in one of only two outcomes: (1) Higher Rents For Tenants to compensate Landlords for the higher costs of doing business, or (2) Mass Exit by Landlords from the Landlording Businesses. Either way, the people who will suffer the most in the long-run will be the tenants who cannot afford, or simply cannot find, rentable accommodation. Often in these situations, welfare oriented governments will then try and step-in with public housing programs and become the defacto landlord for these otherwise homeless tenants. As rents go unpaid, or public funding runs low (as there is no one to pay the property taxes), this invariably leads to slum-like, crime ridden housing estates, much like happened in the UK in the late 1960's and 1970's, before Margaret Thatcher began selling off these 'Council Houses' to private owners and investors. I doubt however that this leftist type of legislation will pass the US Senate while it remains under a Republican majority. Still similar measures may or have already passed in some Democrat controlled cities, counties and states, so I would suggest that investors start divesting from those ASAP. Remember if such measures do or have become law already in such jurisdictions, it may already too late to cash-out and secure a decent sales price for such properties. Rest on your laurels on this matter at your own risk.
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@Barry Gazzard you nailed this on the head. US renters spent $12 billion more on rent in 2019 than they did in 2018. The government wants to step in and control more of the housing market. We need to learn from what hasn't worked historically in other countries. Thank you for sharing!!!
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I don't need the FEDERAL government to control any of my day-to-day or tell me what to do with my property. Local municipalities do just fine for eviction and tenant/landlord regulations. Feds are getting too big with horrible ideas.
Suggest all of you join your local and the national rental owners, multi fam orgs that work to protect our rights
also, how many of you actually have unpaid rent right now ? (we did this i think on another threas and if I remember most folks were getting paid) The point is if you think that such a bill could become law then do something about it! Write letters, make phone calls..... there are many many many bills that never make it out of committee, that get voted on but never become law. Many of these bills are just marketing pieces used to let the base know “we hear you” .... i am fairly sure the most basic idea of property rights wont be erased without a fight. Also again, most people pay their rent. Most people are not seeking a freebie, most people are decent. If this is something you worry about, be sure to screen, buy in good areas, etc etc. then save a years worth of expenses just in case we have another black swan event.
Great suggestion. Most people will pay. What is wrong about this entire proposal is the involvement of Federal government and their idea of being able to mandate how we manage our properties. It's an infringement of property rights IMO, and they don't need to be involved. Where I live most evictions are executed in 30 to 60 days for non-payers. It's fair and simple. If you don't pay - you lose your privilege to occupy.
These are just proposals thank God, but I don't like the future thinking Democrats at all. The federal government should have very little involvement in how I manage my income producing asset.
My view is that it is not that the government has gotten involved but how they are going about it. It would be a disservice for maximum evictions due to impacts from Corona virus. The issue is that so far, the regulations have placed this burden on the landlords instead of on the government.
We have received all of our LTR rents, so I do not yet have an impact. However, it does not mean next month will be the same. I also am on record having indicated that I would not be evicting anyone that was missing their rent for a legitimate Corona impact. It does not mean that I feel the government should force me to pick up this risk/expense (doing it voluntarily is different than it being forced on LLs).
There are LLs who have not received rent from many tenants. Some of these tenants may be taking advantage of the situation.
The government does not have infinite funds. However, this burden should fall on the government and not LLs. Would you have the same complaints if the proposal was that the tenants had to show the government that they have been financially impacted by the virus after which the government paid the rent? I suspect most LLs would not have any issue with this government involvement.
However, instead the government wants the LLs to not be able to evict the tenants and the LL to be responsible for later collecting the past rents. Most tenants do not have the resources to pay current rent and make up for past missed rent payments. The government figures we can lend money to address this problem. However, if they lend money to the tenants they are in the same position that they are putting the LLs in. A position that is unlikely to end up in full collection and therefore would cost the government more. Therefore, the government thinks how can we reduce the odds of not getting paid on the loans? Let's loan the money to the LLs. It may prevent the LL from losing the property, but the expense will still fall on the LL if they are unable to collect back rent from the tenants. LLs get screwed.
I do not believe this will make it through the senate being this LL unfriendly. However, I expect the hero Act that does get passed will be LL unfriendly (less unfriendly than the current version, but LL unfriendly). The government does not want to be stuck with all of the unpaid rent expense. The tenants likely will not ever be able to make the delinquent rent payments. The LL is bound to get screwed.
I am glad my LTR tenants are all paying rent and, if some did not, that we are in the position to be able to handle many months of missed payments. I was willing to lend rent for tenants with real impacts (realizing it is not highly likely that I will collect all missed rent) without it being forced on me. I do not like that it is being forced on me.
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My complaints would be similar in the sense that I think any involvement from the federal government in how I manage my property evictions and how I collect rent is unnecessary. There are people running into the harsh reality that they cannot pay rent or they cannot afford the place they are currently living. There is also the harsh reality that not everyone is entitled to a 1000 sqft home, so unfortunately they will have to make alternative living arrangements and/or lifestyle adjustments in order to cover the cost of living. We don't need more people relying on the Federal government to find a home, but the Feds seem to want to control that. I think Equal Housing Laws are great from a macro standpoint of "treating everyone equally" and the HUD rights surrounding people with mental or physical disabilities, but it's unnecessary for the federal government to micromanage landlords in the SFR and multifamily space.
I believe tenants should have reserves, but the reality is that tenants do not have the means to easily build up reserves. A tenant who has dual earners that have both been laid off likely never envisioned a San Diego unemployment rate of 38% to 42% (last estimate that I am aware of). San Diego unemployment is at an all time high. Significantly higher than the Great Recession and significantly higher than the Great Depression. The tenants likely always believed that one wage earner would be able to find/keep their employment. They may have suspected a long unemployment would be a couple of months. They likely have never had issues finding work previously. They failed to plan for the all time worst employment situation in San Diego.
A family impacted like this possibly could have handled any other economic down turn in San Diego history but not this one. You would have no issues evicting this family? If you have no issues evicting this family, I hope you are in a minority.
Mass eviction and high homeless rates does not benefit anyone including LLs. Rents would fall as units could not be rented. Housing prices would fall as eventually rental properties owners would not have the reserves to carry the properties. The economy would take longer to right itself.
So my issue is not that the government is doing something to prevent evictions. My issue is the government is placing this burden primarily on the LLs rather than placing the burden on the government. So while you advocate less government intervention, I am advocating more government ownership (not sure if I would call it more intervention).
I do not want to see those truly impacted from the Virus get evicted! We have a large enough homeless population already.
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To answer your question right off, I think anyone would have a hard time evicting a tenant(s). However, that's part of the gig as you already know. Thankfully, I haven't had to deal with any evictions during this "global pandemic", but if needed I would be willing to work with my tenants since we are in uncertain times.
My whole point is more focused on the future and the forward thinking of our business. It sounds like we have different few points on government involvement, which is obviously normal and I respect your perspective. But you're making my point as to why I think the Federal government shouldn't pass blanket laws (and remember this is a proposal still lol) that dictate how we manage our assets for the future. Not one municipality or geographic area is the same. Sounds like San Diego is in a bad spot and I'm really sorry to hear that. On the other hand, Port Huron, MI (my market) is fairing well and we have moved passed this virus. We've had lay-offs and furloughs, but life has returned back to normal now and real estate is booming again.
Bottom line, the federal government's involvement in the eviction process and how we collect rent (or what I do with my property for that matter) should be minimal. The reality is the ownership is on us and that's why we need to take pride in being Landlords and home providers. We provide the best home for someone to live in, but if they do not follow the basic guidelines, we would be doing a disservice to them if we just allow them to deliberately disobey the rules. When I was younger, I was served not one but two eviction notices from the apartment complex I was staying at. Instead of trying to place the blame on someone else, I decided I never wanted that to happen again, so I worked very hard to get to where I am today. Sometimes eviction notices serve as a catalyst for a better life.....
Suggest all of you join your local and the national rental owners, multi fam orgs that work to protect our rights
also, how many of you actually have unpaid rent right now ? (we did this i think on another threas and if I remember most folks were getting paid) The point is if you think that such a bill could become law then do something about it! Write letters, make phone calls..... there are many many many bills that never make it out of committee, that get voted on but never become law. Many of these bills are just marketing pieces used to let the base know “we hear you” .... i am fairly sure the most basic idea of property rights wont be erased without a fight. Also again, most people pay their rent. Most people are not seeking a freebie, most people are decent. If this is something you worry about, be sure to screen, buy in good areas, etc etc. then save a years worth of expenses just in case we have another black swan event.
Great suggestion. Most people will pay. What is wrong about this entire proposal is the involvement of Federal government and their idea of being able to mandate how we manage our properties. It's an infringement of property rights IMO, and they don't need to be involved. Where I live most evictions are executed in 30 to 60 days for non-payers. It's fair and simple. If you don't pay - you lose your privilege to occupy.
These are just proposals thank God, but I don't like the future thinking Democrats at all. The federal government should have very little involvement in how I manage my income producing asset.
My view is that it is not that the government has gotten involved but how they are going about it. It would be a disservice for maximum evictions due to impacts from Corona virus. The issue is that so far, the regulations have placed this burden on the landlords instead of on the government.
We have received all of our LTR rents, so I do not yet have an impact. However, it does not mean next month will be the same. I also am on record having indicated that I would not be evicting anyone that was missing their rent for a legitimate Corona impact. It does not mean that I feel the government should force me to pick up this risk/expense (doing it voluntarily is different than it being forced on LLs).
There are LLs who have not received rent from many tenants. Some of these tenants may be taking advantage of the situation.
The government does not have infinite funds. However, this burden should fall on the government and not LLs. Would you have the same complaints if the proposal was that the tenants had to show the government that they have been financially impacted by the virus after which the government paid the rent? I suspect most LLs would not have any issue with this government involvement.
However, instead the government wants the LLs to not be able to evict the tenants and the LL to be responsible for later collecting the past rents. Most tenants do not have the resources to pay current rent and make up for past missed rent payments. The government figures we can lend money to address this problem. However, if they lend money to the tenants they are in the same position that they are putting the LLs in. A position that is unlikely to end up in full collection and therefore would cost the government more. Therefore, the government thinks how can we reduce the odds of not getting paid on the loans? Let's loan the money to the LLs. It may prevent the LL from losing the property, but the expense will still fall on the LL if they are unable to collect back rent from the tenants. LLs get screwed.
I do not believe this will make it through the senate being this LL unfriendly. However, I expect the hero Act that does get passed will be LL unfriendly (less unfriendly than the current version, but LL unfriendly). The government does not want to be stuck with all of the unpaid rent expense. The tenants likely will not ever be able to make the delinquent rent payments. The LL is bound to get screwed.
I am glad my LTR tenants are all paying rent and, if some did not, that we are in the position to be able to handle many months of missed payments. I was willing to lend rent for tenants with real impacts (realizing it is not highly likely that I will collect all missed rent) without it being forced on me. I do not like that it is being forced on me.
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My complaints would be similar in the sense that I think any involvement from the federal government in how I manage my property evictions and how I collect rent is unnecessary. There are people running into the harsh reality that they cannot pay rent or they cannot afford the place they are currently living. There is also the harsh reality that not everyone is entitled to a 1000 sqft home, so unfortunately they will have to make alternative living arrangements and/or lifestyle adjustments in order to cover the cost of living. We don't need more people relying on the Federal government to find a home, but the Feds seem to want to control that. I think Equal Housing Laws are great from a macro standpoint of "treating everyone equally" and the HUD rights surrounding people with mental or physical disabilities, but it's unnecessary for the federal government to micromanage landlords in the SFR and multifamily space.
Suggest all of you join your local and the national rental owners, multi fam orgs that work to protect our rights
also, how many of you actually have unpaid rent right now ? (we did this i think on another threas and if I remember most folks were getting paid) The point is if you think that such a bill could become law then do something about it! Write letters, make phone calls..... there are many many many bills that never make it out of committee, that get voted on but never become law. Many of these bills are just marketing pieces used to let the base know “we hear you” .... i am fairly sure the most basic idea of property rights wont be erased without a fight. Also again, most people pay their rent. Most people are not seeking a freebie, most people are decent. If this is something you worry about, be sure to screen, buy in good areas, etc etc. then save a years worth of expenses just in case we have another black swan event.
Great suggestion. Most people will pay. What is wrong about this entire proposal is the involvement of Federal government and their idea of being able to mandate how we manage our properties. It's an infringement of property rights IMO, and they don't need to be involved. Where I live most evictions are executed in 30 to 60 days for non-payers. It's fair and simple. If you don't pay - you lose your privilege to occupy.
These are just proposals thank God, but I don't like the future thinking Democrats at all. The federal government should have very little involvement in how I manage my income producing asset.
Prove out the process. When you're closing on property after property she'll ask "What's going on? What are you doing?" She'll come around when she sees the success. Be a leader and she will follow.
@John Lyszczyk, I started out that I was a single family investor looking to move into larger projects and would like to pick their brain about market conditions, opportunities, and general just a "getting to know you" meeting.
Every one that I reached out to said yes. As has been brought up before, be conscious of their time, make sure you have a general understanding of what you are looking for, and how real estate works. They shouldn't have to explain a cap rate to you, but be clear that you are just starting your journey into larger deals. I went in with a general idea of how I would plan to structure a deal (preferred returns, equity splits) for equity investors. And I had a basic knowledge of financing, but also met with several loan brokers to do the same thing (what are market conditions, what type of products are you mainly offering, what are standard underwriting provisions, etc).
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Thank you, Evan! That's very helpful!
@John Lyszczyk to tag onto what Taylor mentioned, I would start your networking. It is easier to build relationships in person than virtually, although certainly possible. I know that is challenging with everyone cautious of gatherings.
Meeting with brokers, heading to meetups and REIA groups when they come back around, and asking for referrals to others to meet with can all help you start to get in front of people you ultimately want to meet.
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When meeting with Brokers what is your general approach? I know that's a tough question, but what are a few things you want to convey to brokers that are in areas you want to invest in?