All Forum Posts by: Jeff G.

Quote from @Andrew B.:

It only applies to those who own more than 50 units, so if thats you I get why you're not happy, but I do believe this is a good thing for Americans. The cost of housing has exploded. 

I'm sure someone will chime in and say "that's going against capitalism and the free market," but I'll remind you tax benefits are not part of the free market. The whole intention behind a tax benefit is to encourage you to do something. If the rental market is extremely profitable, you dont need more incentives to buy rentals, you were going to do it regardless. 

 Nope, I don't have 50 units. I expect to grow to that size eventually, but that day is not today. I'm with you on the tax incentive argument: I'm very much a flat tax guy.

It's not that rent control is "against the free market" that bothers me. That happens to be true, but the real problem is that it introduces artificial inefficiencies in the market that end up severely harming the people that it's allegedly supposed to help.

Wherever there is rent control there is severe market dysfunction. I have yet to see a counterexample.

Apparently the White House is pushing for national rent control. Landlords with 50 units or more would be limited to a maximum of 5% annual rent increases.

The linked "fact sheet" is, well, oddly light on facts. 

For starters, it fails to specify which "valuable tax breaks" would be rescinded for raising rents according to the dictates of the free market instead of ignoring it in favor of an arbitrary limitation. Taking away write-offs for standard business expenses wouldn't make sense. The only thing I can think of is getting rid of the depreciation rule, but that's just an educated guess on my part. I could be wrong. I'm curious if anyone else here has a different take.

Second, I don't see links to draft legislation. Is there draft legislation for this that I just happened to miss?

How seriously should we as landlords take this push? How likely is something like this to pass?

Discuss.

I'm a long distance investor. As a quick-and-dirty approach I use school quality as a way to guestimate neighborhood quality. The downside is this isn't terribly granular so it can be misleading. Some cities can be very different a block or two away but share a school district.

I've tried to find a good crime map, but without much luck. The few Google points me to are either not granular enough or want to change me an arm and a leg for a limited number of reports per year. I'm open to suggestions on this one.

I've started "virtually walking" the street of a property I'm interested in with Google Maps. That helps. I can look to see if there are bars on windows, graffiti everywhere, how well people care for their lawns, etc. That's about where I run out of ideas.

What tools and techniques are you using to gauge a neighborhood's quality from a distance?

Section 8, which has thus far been the best in Canton... Knock on wood. In Arkon, it seems to be another matter. They routinely pay out around the 15th of the month.

One single and pregnant tenant has bounced through a few public and private assistance programs. There was some sort of State rental assistance, I think, for unwed pregnant mothers. That one ran its course. If I'm not mistaken, the United Way was helping her at one point. She just moved to another one and my PM hasn't gotten me the name of that one just yet.

That's probably not an exhaustive list, even my PM is having a hard time keeping track.

I have tenants on various forms of assistance in the Akron / Canton area. As long as rent gets paid I don't actually care who is and is not on assistance. Unfortunately, I'm running into problems that I do care about:

1. Moving between assistance programs usually takes about 45 days. When a tenant switches from one assistance program to another often I don't get paid for a month and a half during the transition. At about the month and a half mark I get paid in full including any back rent. I can plan for this if the tenant gives me a heads up ahead of time — which they usually do — but it's annoying. Thankfully this doesn't happen too frequently.
2. The tenant is doing everything right but the assistance program pays out late. Very late. I've had months were I knew the assistance program was going to pay out but I didn't get the check until the 25th of the month. Unfortunately, it's not just the first month the tenant is on assistance, it's becoming an every month issue for some tenants. How the heck do I put a stop to this? In nearly all cases the tenant is paying in a timely manner.
3. The tenant's assistance check is randomly short and my PM has to hassle their case manager to get it fixed. Sometimes I wonder if the assistance program thinks I won't notice and is trying to get away with paying less to "save the program money." I hope that isn't true, but some moths it sure feels like it is. In other cases this is a clue that the tenant has come to the end of the road on assistance program A and is about to switch to assistance program B. That's not so bad except then I am probably not going to see any rent for another 45 days, see the first problem.
4. It makes real delinquencies harder to spot. It easier for tenants to feign attempts at assistance, thereby extending the timeline for any necessary evictions which does ultimately impact my cash flow. This one hasn't happened yet. Statistically, it will if I don't get control of the situation.

Taken together I'm increasingly in a situation where getting paid rent by the tenant promptly and by the city or state... eventually. 

The assistance payouts are usually just fast enough to make eviction an impractical solution to the problem. This is becoming a problem and my PM is really starting to pull her hair out. What can I do to improve the situation? I realize I probably can't do much about the situation where the tenant is switching assistance programs. But there has got to be a way to fix the second and third problem. Solving those two problems will prevent problem four from happening.

@Jack Smith, can you be more specific on the lead laws and income source protection issues?

I don't mind source of income protections, I don't actually care how tenants make rent as long as they do and it's more or less on time. What sort of problems have you run into with assistance programs? The worst I've had to deal with is payment delay the first month a tenant joins an assistance program. It's annoying, but it's not terrible. Generally speaking my tenants communicate so it's not usually a surprise either.

I do network with locals for local advice, which is why I'm genuinely curious about the lead issue and your experience with renter assistance programs causing problems. What's the backstory here?

@Ryan Arth, I'm interested in multifamily homes in C class neighborhoods or better that are at least economically stable. For now, I'm a cash flow investor first and an appreciation investor a distant second. That said, I buy in cash and then renovate appropriately for the area. As a consequence, I tend to force appreciation in any event. Demographically, very slow (sub 1%) population loss is fine, these things tend to rebound eventually. Also, no "company towns" like Flint, Michigan or Gary, Indiana where a single employer can pull up shop and the town no longer has an economic driver.

I'm just trying to evaluate all of my options. Everything is a balance of looking for new opportunities and not getting shiny object syndrome. Also, since Akron and Canton are sort of downstream of Cleveland's market it's a good idea to keep an eye on it anyway, even if I don't have a presence there. 

Hey @Christian Styles, yes please!

I don't have an specific neighborhood of Cleveland in mind. To give you at least some context to work with: I can tell you I'm much more interested in multifamily than SFH. My existing portfolio definitely hews toward working poor, but in areas where the locals tend to keep their yards up and have at least a bit of self-respect. Some of my tenants are on various forms of assistance and others aren't. I don't much mind either way as long as the numbers work and the property is treated well.

I've had decent luck in West Akron — once I got through the rehab headaches — but I have no footprint in Cleveland at all. It just looks like I can command higher rents more consistently in Cleveland than Akron or Canton, hence my interest. I'm aware that might be an illusion that only exists on paper, so I want to tread carefully. Is that helpful?

I own some multifamily homes in Akron and Canton, OH, all MLS deals. I've read over James Wise's Ultimate Guide to Grading Cleveland Neighborhoods but at 7 years old it's surely a bit dated. I haven't found similar resources — dated or otherwise — for the Akron or Canton, OH markets where I currently invest. Can someone point me in the direction of a similar resource for Akron and Canton? An up to date tenant quality map would really help me make better decisions as I expand; I'm 100% remote from several states away.

I plan on expanding my Akron and Canton holdings, but I might be convinced to start picking up properties in Cleveland too if the numbers work better with similar levels of managed risk. Thanks!

I bought my first BRRRR a week ago. I got it for $35k, I'm putting ~$25-30k into it and it should be worth $100k when I'm done with it. I just had an offer accepted on a second property for $50k that really only needs lipstick to achieve optimal rents. I close in two weeks. All figures are cash, there are no loans involved yet.

My intention was to take out a DSCR loan on each of the properties in order to access the equity and purchase additional BRRRRs. Unfortunately, most lenders I'm hearing from have a lending minimum of $100k that means neither properties qualify. This is frustrating. I'm buying in cash and I have a credit score in the 700's. I was expecting obtaining financing after the fact to be the easy part. Any suggestions?