All Forum Posts by: Tracy Munger

Originally posted by @James Hamling:

Originally posted by @Llewelyn A.:

@Linda King

I would like to give an example of a person who loses his $30k per Year Job.

This person will apply for NYS Unemployment. They will get $288 per week.

See snapshot:

On top of that, this person will get $600 per WEEK from the Federal CARES act.

The combined weekly will be $288 plus $600 = $888 per WEEK.

Compare it to the situation where the person WAS employed at $30k per Year. Take $30k and divide it by 52 weeks. That comes out to $577 per Week GROSS.

In other words, the SINGLE unemployed $30k worker who used to make $577 per week GROSS is now bringing home $888 per week CASH. That's an increase of $311 per week!

Now let's take the $311 per week increase and multiply it by 4 to get a rough monthly increase = $1,244.

Now, imagine that it's a couple who both make $30k each AND are now both unemployed. Their Monthly NET income increases by $1,244 each or a total of $2,488 per month!

In fact, because of this situation, a few friends told me of people that they know who had begged their employers to lay them off. When the employers chose to keep them, they called the various City departments ANONYMOUSLY to get the businesses to close down!

In other words, instead of wanting to work to keep the business going, because they were making more money in Unemployment they chose to force the business to close so that they can just get better pay.

This is CRAZY but it's actually happening.

What's even WORSE is that there are rumors the Advocates who have sponsored these Bills seem to be the ones that are showing them how to do this.

NOW, throw on top of that the Unemployed Tenant Couple who is now making $2,488 MORE monthly than when they are working gets FREE Rent!

Something is wrong in our Politics. If we don't fix this, we are going to wind up like Venezuela.

I think what's really happening here is that the Progressive LEFT in the Democratic party is buying Votes on the backs of the Landlord.

In other words, despite the FACT that the Unemployed Workers who are Renters are getting MORE money than what they were making before, let's screw the Landlords to ensure that these same Renters vote for the Progressive LEFT (whom they call themselves Democrat Socialists) down the road!

That's what's happening. The Progressive LEFT party is at War with anyone that doesn't think their way. They don't believe in Capitalism or Entrepreneurship. They know that when people are hurting, if you give them a lot of money, they will vote their way.

It certainly looks like buying votes to me.

I believe you touched on the root of this issue, and it's a sh#* terrifying one. You said it, the policy makers and promoters refer to themselves as SOCIALIST Democrats, review the history of any and every Socialist movement ever in history anywhere and a universal fundamental of Socialism in any and every form is the REMOVAL of private property ownership. 

Go ahead, say I'm a nut and wrong because I can not tell you how much I hope I am so totally wrong, but it is the only plausible explanation because the math and facts simply don't make a drop of sense in any other scenario. This thing we see acting out right in front of our faces answers the question "how do we collapse a private property ownership system and grow a socially accepted socialist property system", this is how, or more accurately said this is a perfect step 1 to create a scenario of financial harm that creates that event, the last ingredient is a "Gov. Bail-out for LandLords" where it says don't worry landlord, just sell your rental to the government, we will pay you for it. 

Already capital for acquisition is drying up, now all that has to happen is accentuate the problem so there is a form of mass tenant rent defaults and as groundwork is in place for no remedy for landlords, thus a financial catastrophe situation. Than the solution will appear, government corporate ownership of property. You say "but no way, that can't be done, it's not legal", and your correct, at this time. "yeah, but no one would allow such a law" right again, under normal circumstances, but if faced with a catastrophe, people will not only allow it but will applaud it especially as they will add in how they can affect rent controls and this and that, it will be championed as a great thing. And poof, there you go, the beginning of the end. 

Funniest thing, Adolph wrote a book that literally detailed every step he was going to do and published it years upon years before he did any of it and everyone said "oh my gosh, we had no idea, if we only ever knew" yeah, like maybe of he wrote about it in a step by step book... And now today there is this nifty book out there called "Rule Book For Radicals" that all but details everything we have been experiencing the last while, a guide book on how to turn a democracy into a Socialist/Communist "utopia", and everyone says "gee, I wonder why all this is being done, it just doesn't make any sense"..... If only we had an idea what the socialist democrats were after, like, if there were some way we knew, like, a book maybe (yeah, intense sarcasm here people).

When hubris meets power.......

As easy as it is to yell omg they're getting more money than they deserve, you should also realize the majority have YET to get any money at all and still don't know when they will - and many have been off work for 2 months at least. Heck with things opening up (before they should in my mind) people are going back to work before they've received 1 cent from unemployment or stimulus. However, as usual, the big wigs seem to have got their money first.

In the realm of real estate, what is happening here is the potential punishment to property owners for living by the 'use your debt to your advantage' scenario that everyone is used to. Perhaps this is a wake up call, however the stimulus has already given big benefits to rental property owners. It's a tough situation where everyone (including property owners) expect people to have 6 months of bills available in savings, but most of the the companies and property owners don't.

The issue is for something like this to work, it needs to be done from top to bottom, not just one or the other. All parties need to agree otherwise it's not going to work. Really a 'pause' on all financials is what needs to be done, and essentials subsidized by the government, but obviously that isn't going to happen, so we're left in this limbo...

I think if things go like people are thinking, you're going to find that peoples ability to pay rent is going to drastically be in question in a month or so. While the long time players may be fine, I think 'new' people trying to jump in might be in for a rude awakening since as everyone states, you screw up your first deal and you probably used up most of your resources getting that deal. I'm feeling a bit relieved my recent attempt at a deal went south, because this makes it feel like really bad timing.

At this point no one knows how long this is going to last, but places are already shutting down, going out of business, and schools are being closed the rest of the year. The outlook is not positive. The money being thrown to the market isn't going to help the majority of the country.

As a follow up to this I ended up backing out of the offer.

I do not know what the issue was with getting the information, but I finally got it. I do not think they were being dishonest. They actually were making great money. However, the key piece here (for me) was that the owner pays utilities, and I initially ran my numbers based on the highest bill of each, and added another 50 to it (each month) with the assumption that this was mostly fully rented. This was because there were unknowns at the time that became clearer after receiving the information.

Their past business model was to rent them by the week at a much higher price than what renting by the month would get them. This appears to have been working great for them, however at a great amount of management on their part.

I knew up front that their current AirBNB type model would not work for me, and was not sustainable past a few more years (due to changing job markets in the area). So I always planned to change to regular by the month leasing. The problem I saw early on was that 2 of the units were really really small and I only envisioned a few personality types would live in such a place long term (essentially they were like hotel rooms). When I finally got the financials, they were nice enough to provide 2 years worth, but what became very clear was only 2-3 months out of 24 had all 4 units been rented - and in much of the time, only 1 or 2 were rented out at a time. This didn't hurt their bottom line because of the inflated income. However, doing math showed me that my utility calculations were WAY off because of this. When I figured in these new numbers, it tanked all the income. In this area there was no room to increase rents, they are already at the top of the market. I was looking for ways to value add to make it work, but I couldn't get it to work.

In this same period of time, the bank went from telling me 20% to 25% which was a considerable difference and would wipe out my savings. All of this together didn't leave me feeling like I was going to be in a good position. I'm still not sure if I made the right decision or not though. I do feel I jumped the gun on the offer, not having all the information, however, I feel that this type of calculation 'guesswork' is common - especially when dealing with owner paid utilities (which is almost all that is available in my area in my cost range).

I will continue to keep looking!

We put an offer in on a 4 plex that is currently being used as a by the week rental (mostly). The numbers the owners gave us for current rent prices and utilities is based off of that model. The price of the property is at a premium because of their claimed high rate of income and mostly turnkey business model. However, we do not intend to continue the weekly rental practice (for various reasons). We want proof of financials to to mostly see vacancy rates they've experienced to compare the utilities (all utilities are included in rent and paid by owner) and make sure our numbers are close because 2 of the units are rather small and are high priced for the area (again, based on their current rental price claims). There were also some issues on the disclosure sheet (which was not completely filled out) that we had questions on as well. The selling realtor has claimed that those were mistakes and there are no issues with the dwelling. We have asked for this to be updated to protect us.

When we put the offer in we asked (outside the offer) to provide a years worth of financials as well as fixing the disclosure sheet. We did not sign the disclosure sheet. The sellers accepted the offer and signed it, but after 2 or 3 times of asking for the info and fixing the disclosure sheet, we still did not get any information or the disclosure sheet filled out properly. Our agent went back to their lawyer and wrote up a new offer. The only changes made were to include a years worth of financials and updating the disclosure document (both of which we had already asked for). The selling agent is apparently upset thinking we already had a deal (even though the original offer was never fully signed).

We know our first mistake (being new at this) was that these asks should have actually been written in the original offer, but we also made the assumption that the selling agent would know it is important to have a properly filled out disclosure document and would fix this quickly. After asking for these things 3 times now and still not receiving it, we are beginning to get the impression information is being withheld on purpose. Our agent has repeatedly said that the selling agent has been difficult to work with and has suggested that if we do not get the information we are asking for that it might be in our best interest to walk away.

We don't want to put down earnest money and pay for an inspection until this information has been provided. Are we being paranoid here?

I usually don't like to talk about things I'm doing with others. This has been a big change of mindset for me. I've been telling everyone my investment plans though. I have been pleasantly surprised that no one has been negative about it (including family members who usually are about anything). The few concerns that have been spoken are around bad tenants, but most feedback has been positive and actually helpful in some cases.

Hello fellow BP'ers!

We just had an offer accepted on a 4 plex. This will be our first rental/investment property. It is a newer duplex that was converted to a 4 plex. The upper units are 2 bedrooms and fine as they are.

My question is around the lower units. They are rather small 1 bedrooms with 1 car garages (15'x13' each) that are part of house on that level. The living room/dining area/kitchen (15'x17') are all in one room and they feel fairly small to be used as a living space. The previous owner rented these mostly by the week which I do not plan to do. Overall I feel these are not competitive units in this market.

I'm looking to value add on these units by possibly converting the garages to living areas instead and hoping I can bump the rent by doing so. I assume I would convert to living rooms even though I know a bedroom might be worth more, however with the current layout as described I think a living room makes more sense.

If I do convert this would mean the tenants would park outside. My question is basically, which is worth more generally? More living area or a garage? Which would add more appreciation? As this is early in the buying process I haven't gotten any quotes to do the work yet so I can't speak to how much it would affect the returns. I am just curious if it is even something that I should even be considering since it most likely won't be bedrooms.

Thank you!

I'm struggling with this. Where I live is...not optimal for what I'm looking for. I think it is easier to say this when you live in major metropolis areas. It's difficult to get good data on smaller markets and your pool of available options is quite a bit smaller. As I continue to look at properties and learn more, it actually makes me question even stepping into it around here. While I am sure there is some opportunity to be had, I am unclear what that actually is. 

What did the solution end up being to this? Any new advice in the last year? Many of the properties I'm currently looking at have single water. 

I would be interested as well.