All Forum Posts by: Leonard L.

@Account Closed  I think landlords are universally disliked.  I remember a BP podcast episode where one of the guests, maybe it was even Josh, said he always claims he is the property manager to develop a rapport with the tenant, never admitting he is actually the owner.  It is human nature to resent having to pay rent to the landlord every month.  

At the end of the day, there are thousands and thousands of small landlords like myself who simply won't rent to someone who has an unlawful detainer on their record.  That is actually a very large number of potential tenants.  Something like 3% of all rental units each year in the Inland Empire where I work have an eviction filed against them.  So over about 3 years, that is 10% of the units.  That is a helluva lot of people who have a hard time getting housing. 

So I don't think it is failure to give receipts.  I think it is left-leaning legislators who want to give a break to who they see as "the little guy" i.e., the tenant.  

And there are plenty of stories, trotted out when lawmakers are considering issues like this, about "innocent" tenants who had legitimate disputes with unscrupulous landlords, but ended up tarred with the irreversible stain of an Unlawful Detainer lawsuit on their record.  I have sat through hundreds of these cases in court and I think they are rare, but they do happen.  So that also plays into the thinking behind laws like this.

A little known fact -- most landlords are also the "little guy" in that they have only a single rental.  Much of their life savings is often wrapped up in that one asset.  But no one thinks of landlords as people who need (or even deserve) protection.

@Vamshi Ananth and other looking to invest in CA.  This was meant as an update to those already active in CA.  For those newbies out there, don't let this one issue deter you from buying something in CA you otherwise like.  You have to put this recent and admittedly negative change into perspective.  Despite its reputation to the contrary, CA law is actually relatively favorable with regard to evictions compared to other states.  You file a 3 day notice, wait 3 days, pay about $250-300 to file an Unlawful Detainer (closer to $1,000 if you use an attorney service), and in vast majority of cases, tenant will be gone in 40-60 days.  In some other states, this process is much longer.  So, yes, this makes screening for deadbeats harder, but CA law retains the same time-frames that generally allow pretty quick eviction of non-paying tenants compared to some other states.

I do worry that it will encourage tenants to fight and drag out the process longer, but we will have to see how that actually plays out. 

@Raman Bindlish - It is not just the politicians who drove this.  The socialist wing of the Democratic party (tenants' rights, low-income advocates, non-profits, unions, etc) got this over the finish line over the objections of landlord organizations.  I would argue that, along with the politicians, these groups also do not understand the impact on tenants.  By taking away this very useful information, the landlords will be more cautious on other factors like credit and income, as you and @Jeff B. suggest.

But I predict we will see more well-intentioned social and legal efforts in this field in the near future.  The book "Evicted" is one of the most talked-about non-fiction books of the year.  And more and more people of the Sanders/progressive wing of the Left think the landlords have too much power over their own property.  Housing is seen as a social good that happens to be privately owned.  One idea that has gained tractor, now the rule in Oakland for example, is that if the tenant is paying his rent, the landlord has no "just cause" and cannot evict him/her even at the end of the lease term.

@Nick C. @Jeff B.

Still pretty damn disappointing.  If you read the legislation that our fine representatives in Sacramento voted for, it pretty much says outright that the "housing crisis" in California means they have to make it as easy as possible to get into housing, including hiding rental litigation from future landlords.

Landlords in California beware.  The current CA law is that unlawful detainer actions are publicly searchable unless they are resolved within 60 days of the first filing.  If the tenant fights, this easily takes it past 60 days, the court fight shows up on public records, and future landlords will be aware of the fact that this guy applying for your property has an eviction history.  

Under the law that takes effect Jan 1 2017, tenant evictions (called unlawful detainer) cases will no longer be searchable in the majority of cases.  (I won;t go into the limited exceptions here)  The CA legislators felt like it was unfair to the tenant to have disputes with the current landlord impair their right to get credit and future housing, so they made essentially sealed these cases from public view.

This will have two impacts.  First, and most obviously, it will make it a lot harder to screen tenants. Right now, I take felons and bad credit history.  My only ABSOLUTE NO is prior evictions.  Now prior evictions will remain hidden.

But a second impact may prove to be just as damaging to us property owners.  As any attorney, I also litigate Unlawful Detainer actions in court.  In the vast majority of cases today, the tenant settles (whether pay-to-stay or move out)  for one reason - because as part of the settlement, the landlord agrees to seal the case.  His/her history will remain clean.    Now, there will be precious little to motivate a tenant to settle, and eviction cases will become longer, more drawn out, and of course more expensive.  And suffering no consequences, the tenant will be able to do it again and again.

To be successful, you need two things - leads and buyers. You will find lots of tips on this webside about lead generation. On buyers, they are found two ways -- MLS for retail buyers and networking for investment buyers. On the buyer side, my advice would be to have one or two really strong investors ready to pull the trigger on short notice, so that when you find something in distress, you have ability to place it quickly, often while earning the entire commission with no split. I work with a broker in Lake Elsinore area, young guy, who has built a really strong business doing this.

@Rick H.  Don't know if it changes your view, but the HERO program lien automatically subordinates to any future mortgage.  So, no subordination necessary.  Every FH/Conventional lender ALLOWS the HERO lien to stay in place; it is just that agents sense a weakening market and are writing offers that require sellers to pay-off.

Also, my current thinking is that if I cannot get a buyer to assume or pay full value, I will strip off the panels and re-sell.  Apparently they are worth $16k.  So I am running numbers assuming I will either (1) find a buyer willing to assume; or (2) pay off the $30k lien and strip out the panels, losing only $14k on the solar issue rather than the full $30k.

I am looking at potential fix/flip, but it has recently installed roof and solar.  Problem is that in Riverside County, this is a "HERO" program where the government fronts the money but then imposes $30k lien on your house, collected through tax bill.  A few years ago people were assuming, but now virtually all buyers in my market write offers that require the seller to pay off the lien.   Their thinking is that this is a financial lien, and sellers must clear title of financial liens.  So, solar screws the house value by $30k, which is a windfall to buyers who get new solar, no electricity bill, and pay nothing for it.  So, what do I do?  Since buyers are paying effectively ZERO for the solar amenity, do I remove the panels and reuse somewhere else?  Buy and rent until market shifts backs to buyers assuming these liens again?  Try and negotiate some sort of power purchase agreement with the buyer where I do pay off the solar lien, but they pay me $200 a month for electricity for next 10 years?  Creative ideas needed.

I have read the threads already but it seems my needs may be different than most.   I have a medium sized portfolio of rentals which are all managed by a third party.  I have full financial reports available from my manager.  But I also fix and flip, although I use a GC so the accounting for that is pretty easy.  So really I just need accounting software which tracks various assets, my basis in those assets, and gain/loss when I sell.

I have used Quicken for many years but upgraded a year ago to Quickbooks for one of my entities just as an experiment.  I have found that it is more than I need.  Plus, I paid $250 for the QB Pro 2015 just a year ago and found out yesterday that when I reinstall Windows to solve any computer problems, a disc more than a year old will not reinstall.  Customer Support said the year of the disc must match the calendar year!  I feel that was not disclosed.

Anyway, I am giving up on QB and thinking about just going back to Quicken.  But I admit Quicken is not great for real estate in terms of tracking basis of myself and my investors in each partnership (capital accounts), etc.  But I also do not need 95% of the capacities of QB.  Because of my use of property managers, don't need to track most property expenses in any sophisticated way.  But I would love to have something more useful for tracking real estate accounting than just Quicken.

Anyone else in my situation?  What do you use??? 

I find most Realtors are highly localized, so really depends exactly where you are looking.  I do a ton of work along I-15 corridor especially South Corona, Lake Elsinore, and Wildomar.  I don't think there is any doubt that the best investor agent in Lake Elsinore is Jarrod Whitehorn.  No one touches the number of investor deals that he does in LE.   Having said that, he has many, many investors already clamoring for deals from him, of which I am one!