patrick.net

On the bad renters, again this is a bullshit false paradigm. Some people are more responsible than other, more honest, harder working. Doesn't matter if they're the landlord or the tenant, those are personality traits. I've known plenty of tenants who get taken advantage of because they don't know the law. And the reason landlords get bad tenants, they don't know how to screen. A credit score is not a good way to screen people. Job history and personal references are more important, as well as past rental history.
Especially when the landlord takes the first person to get their app in. If someone can move in on a moment's notice, that should tell you something...

WookieMan says

Bird-dogging and finding owners that might sell off market it critical.

How does one find owners that might sell off market?

WookieMan says

It's like restaurants. Most fail at it thinking it would be easy. You need a plan and structure.

Nassim Taleb discourages people to go into restaurant business because of the competition. Do you think restaurants pay taxes on cash received as payments from dining customers? I recall reading somewhere that restaurants (hotels too?) have 2 books; I for IRS (doesn't have cash payments etc.) and one that's factual (for internal confidential use)

NuttBoxer says

On the bad renters, again this is a bullshit false paradigm. Some people are more responsible than other, more honest, harder working. Doesn't matter if they're the landlord or the tenant, those are personality traits. I've known plenty of tenants who get taken advantage of because they don't know the law. And the reason landlords get bad tenants, they don't know how to screen. A credit score is not a good way to screen people. Job history and personal references are more important, as well as past rental history.
Especially when the landlord takes the first person to get their app in. If someone can move in on a moment's notice, that should tell you something...

I lived with a roommate who didn't know how to piss in the toilet bowl with accuracy. Needless to say, landlord was happy when he vacated.

WookieMan says

Black people are AWFUL tenants

And awful neighbors.

The only neighbors I ever had problem with were gay whites and Mexicans. The black ones at my complex hang out in their garage and drink beer during the summer. I still owe them a beer.

Bitcoiner says

WookieMan says

I'd love to buy a 2/2 on St. John USVI and have renters pay for the thing

Like that idea! Never been to St John. Have you been to other islands like Turks and Caicos?

If I have to guess, they’re all beautiful. Been thinking of buying a vacation rental/property where it can “almost” pay for itself when not in use. Haven’t figured out the location and asset….yet

WookieMan says

Kind of goes for home ownership as well. Have a water heater blow and not know how to replace it. $2k later for a $500 fix. The list goes on. Not trying to stop people from getting into rentals properties, but it's not a cakewalk. It's like restaurants. Most fail at it thinking it would be easy. You need a plan and structure.

Given our rents are high, our PM charges 5% flat rate for apartments and 6% for SFH/unit. Our market has two of the best PM companies, Zell and Atlantis Properties.

You’ve been out of the biz for too long. There’s no $500 water heaters. Changing a water heater is $1.5k each with our handyman. $925 for water heater and parts. $550 for him and his helper. If we use the plumber from our PM company, it runs $2,250 each.

For 100-gallon water heaters, we have our GC do it for $3.3k. Our PM’s plumber quotes came in between $4.8-$5.5k.

With our handyman, if he can complete a couple tasks a day, he has earned his money. He comes to work at 8-9am and leaves around 2-3pm, but still gets paid for the whole 8 hours. Electrician and plumber bill rates are $145 to $155/hour. Our handyman normally completes 4-5 tasks each day. If there’s not much for him to do, we have him help out with vacuuming and cleaning the common areas, or repairing around the buildings. Always things to do all year around.

Work order from the PM, pass it to him and he’ll take care of it. If he couldn’t take care of it, we have the PM assign it out. It’s great.

Bitcoiner says

Have you been to other islands like Turks and Caicos?

Bahamas, Cayman, Puerto Rico, Jamaica, Dominican, St Marten, Aruba, Curaçao, USVI (St. Thomas and St. John), BVI (Virgin Gorda, Salt Island, Normans Cay, Tortola), Mexico (Isla Mujeres & Cozumel). Been to Cancun region and Costa Rica. I may have been drunk, but I think I've been to Belize.

Covid fucked up 8 other islands for first time visits as the trip was cancelled. Basically all the Lessor Antilles. St. Lucia, Barbados, Antigua, etc. I hate Fauci, but it's one of my biggest beefs with Trump. He fucked up a trip of a lifetime that was cheap based on a little shit New Yorker shit bag. Again shit. Not a death threat, but he's the closet person I'd make a death threat towards.

The Caribbean will be my second home at some point. It's 3-4 hours tops to get to most islands in the Caribbean from Chicago. Maybe a layover and have a beer or 5. You West Coast guys have it easy with Hawaii and Baja Mexico being near. 4 hours is the max I'm on a plane. So San Diego is about it for me. No interest in LA or SF. I want to do the South Pacific and New Zealand. But that's a 3-4 year plan budget thing. We'd take the kids so we're talking $12-18k in airfare for 5 at minimum. Myself and the wife will go first class, kids economy. Not doing 18 hours at 6'3" in a shitty seat.

I totally missed what I wanted to talk about. Turk and Caicos is massively expensive. Massively. I want to go, but a week trip even in a condo, you'll get nailed for $10k even in off season. TC is massively expensive. I haven't been, and likely won't because it's just stupid money to be honest. There's value elsewhere that only one step down from TC from what I've heard at least. I'll go at some point, just not with kids. Get a studio or 1 bed place.

Eman says

Given our rents are high, our PM charges 5% flat rate for apartments and 6% for SFH/unit. Our market has two of the best PM companies, Zell and Atlantis Properties.

You’ve been out of the biz for too long. There’s no $500 water heaters. Changing a water heater is $1.5k each with our handyman. $925 for water heater and parts. $550 for him and his helper. If we use the plumber from our PM company, it runs $2,250 each.

For 100-gallon water heaters, we have our GC do it for $3.3k. Our PM’s plumber (some text omitted to shorten quote...) t 8-9am and leaves around 2-3pm, but still gets paid for the whole 8 hours. Electrician and plumber bill rates are $145 to $155/hour. Our handyman normally completes 4-5 tasks each day. If there’s not much for him to do, we have him help out with vacuuming and cleaning the common areas, or repairing around the buildings. Always things to do all year around.

These rates should be posted on university bulletin boards.

WookieMan says

Bahamas, Cayman, Puerto Rico, Jamaica, Dominican, St Marten, Aruba, Curaçao, USVI (St. Thomas and St. John), BVI (Virgin Gorda, Salt Island, Normans Cay, Tortola), Mexico (Isla Mujeres & Cozumel). Been to Cancun region and Costa Rica. I may have been drunk, but I think I've been to Belize.

Covid fucked up 8 other islands for first time visits as the trip was cancelled. Basically all the Lessor Antilles. St. Lucia, Barbados, Antigua, etc. I hate Fauci, but it's one of my biggest beefs with Trump. He fucked up a trip of a lifetime that was cheap based on a little shit New Yorker shit bag. Again shit. Not a death threat, but he's the closet person I'd make a death threat towards.

Which beach is the warmest and most beautiful in your opinion?

WookieMan says

I totally missed what I wanted to talk about. Turk and Caicos is massively expensive. Massively. I want to go, but a week trip even in a condo, you'll get nailed for $10k even in off season. TC is massively expensive. I haven't been, and likely won't because it's just stupid money to be honest. There's value elsewhere that only one step down from TC from what I've heard at least. I'll go at some point, just not with kids. Get a studio or 1 bed place.

WTF??? Try Ocean Casio in Atlantic City. Way cheaper and better. You'll thank me later.

1337irr says

On a tangent, but former Californian homeowners who sell and move to Texas do complain about property taxes and learn to protest them. Texas puts the "taxes" in Texas. You can't spell taxes without Texas :)

Texans buy a $500k house and complain that 5% taxes on it costs them $25k/year.
Californians buy the same quality house, but it costs $2.5MM. Then they complain that the 1% tax costs them $25k/year for a mediocre house.
Seems like everyone figures out something to complain about.

SunnyvaleCA says

Texans buy a $500k house and complain that 5% taxes on it costs them $25k/year.
Californians buy the same quality house, but it costs $2.5MM. Then they complain that the 1% tax costs them $25k/year for a mediocre house.

Yeah but the Texans don't pay State Income Tax.

Bitcoiner says

Mexicans like to listen to terrible music in their BY’s / patios until early morning. And once they are drunk on cheap beer they start adding singing which is obviously worse than the music.

Tell us your story with gay whites. Lol

Yep on the music, but that's only during fiestas, and only on the weekend. I never say shit if it's on the weekend. The bad Mexican neighbors, one had about 4-5 dogs that would start howling in the middle of the night, and not for just a minute. Loud enough to wake me up with all the windows closed. One time I was talking to my friend during the evening and they started up, and he was like "Holy fuck! You live next to a dog pound or something!?"
The other one was this old piece of shit who acted like he owned the place(he didn't). Asshole did everything from accuse me of dumping a toilet in front of his garbage(keep in mind we're all renting), to yelling at my nine year old daughter, to threatening me. Older guy so I didn't escalate too much, because kind of unfair.

Actually had a white bitch who lived over here, only neighbor we ever disliked, who would always make comments to my daughters about our dogs when they were out using the bathroom. Never to me or my wife though.

So the gay neighbors. Dude got a dog, but had no idea how to take care of him. This was Arizona, and our backyard was rocks, so always let my dogs out in the front yard. My chihuahua's are old, and mostly toothless, all bark, but they do like to act aggressive if someone comes by the yard. Thing is this guy never needed to cross in front of our house. He could have easily walked the other direction. But dude insisted on walking across our property, then would freak out whenever our dogs would be let out to use the bathroom, and would bark at his dog. He wanted me to leash my dogs in my own front yard. Of course fuck him, I never changed anything I did.

Also lived next to a crazy lady, legit crazy, and probably Mexican. But that's it's own story..

Eman says

If I have to guess, they’re all beautiful. Been thinking of buying a vacation rental/property where it can “almost” pay for itself when not in use. Haven’t figured out the location and asset….yet

Dominican Republic is pretty affordable, and not too far from the mainland.

NuttBoxer says

So the gay neighbors. Dude got a dog, but had no idea how to take care of him. This was Arizona, and our backyard was rocks, so always let my dogs out in the front yard. My chihuahua's are old, and mostly toothless, all bark, but they do like to act aggressive if someone comes by the yard. Thing is this guy never needed to cross in front of our house. He could have easily walked the other direction. But dude insisted on walking across our property, then would freak out whenever our dogs would be let out to use the bathroom, and would bark at his dog. He wanted me to leash my dogs in my own front yard. Of course fuck him, I never changed anything I did.

That doesn't sound like it was about his gayness.

When I was in college I had a gay roommate. He was the landlord renting out spare rooms in his McMansion. It got kind of weird when a "friend" who in the Gay Community might be referred to as "a flamer" moved in, to share the master bedroom with the homeowner. This was in 1985-86 when Rock Hudson was sick from AIDS. At the time they were still trying to figure out how the disease was spread. Me and the other two tenants moved out to get away from the milieu.

zzyzzx says

WTF??? Try Ocean Casio in Atlantic City. Way cheaper and better. You'll thank me later.

I've been. No thanks. The Carolinas are one of the few beach areas I've neglected. Honestly anything Atlantic side is pretty shitty as far as my beach standards go and what I've experienced. Mexico beaches generally blow too. Sargassum flows are a massive problem in the Yucatan. You'll get 2' of that shit on the beach overnight and it smells like shit.

If it's a conversation about water and sand specifically. Nothing I've ever experienced is better than the panhandle of FL for sand. On a calm day the water competes with the Caribbean. The Atlantic simply cannot do that. And the sand sucks.

Bitcoiner says

Besides St. John, which ones are your favorite islands where you could see yourself buying a vacation home?

St. Croix or St. Thomas for ease of travel. US territories and all. Vieques or Culabra, Puerto Rico are intriguing, but have yet to go (massive tax advantages). Mainland is eh... Cool spots but it has a more urban feel.

I'd say Cayman or Aruba if going the expat route. Mexico is intriguing for costs but I'm not certain a vacation rental option to get it paid down while I wait would work there. People want resorts. Cayman, Aruba, USVI all have a vacation rental industry that's strong. BVI is an option too, but I'm not a fan of British regulations. Covid for example. They shut that place the fuck down.

I need ease of travel with family and kids back on the mainland. 4 hour flight or under, non-stop or short layover. Aruba is probably the best due to extremely limited hurricane chances. St. John is 3/4's National Park. The only good thing the Rockefeller family did well on. Unless I fall into money I'm looking at a studio or best case 2/1 at $800k on St. John today. I've got people down there now that with a rental I could set renters up with an amazing time.

B.A.C.A.H. says

That doesn't sound like it was about his gayness.

Of course not, anymore than the Mexican experiences had to do with being Mexican, or the white ones with being white. I've said this a lot of different ways, but let me say it again. People act the way they do because of who they are, on the inside. Once you start labeling actions by outside characteristics, be it renters, fags, niggers, arabs, etc, you expose yourself as a bigot.

I guess this is just more hyperbole and rents will NEVER GO DOWN AGAIN!!!

https://www.zerohedge.com/markets/us-rents-verge-first-annual-drop-covid-crash-amid-supply-glut

Eman says

Given our rents are high, our PM charges 5% flat rate for apartments and 6% for SFH/unit.

That's a good rate for sure. It wasn't worth waking up for $200/month on Chicago rents. So rates are higher here. One call could cost you $200 in time and gas so you're negative managing it. Lot of evictions in Chicago and they take a long time.

When I was talking about the water heater I was talking about DYI landlords. I can get 50 gallon units for $600 and put it in myself. Pricing is different everywhere. I'd expect CA to be higher and then factor in labor. I can do it though for the cost of the WH. Do I want to? No.

I've had fucking nightmares. Had tenants throw their air mattress into the furnace closet. Condensation pipe for the AC snapped and pushed the sump pump float to the bottom (empty pit). It wasn't and flooded the basement. Stupid little shit adds up. I'll admit I don't have it anymore, but would be open to 2-3 houses I personally own, not apartments. If you got good management awesome. But everyone starts small generally. You either have it or you don't. I don't like stress even with management.

Have you looked into warehouse and non-retail commercial space? My uncle pumps out $30-40k/mo on hassle free space that the tenants are required to take care of. Like a bus barn for a school district. One building. I'm avoiding personal interactions in real estate beside maybe a couple houses if I can find a deal.

SunnyvaleCA says

Texans buy a $500k house and complain that 5% taxes on it costs them $25k/year.

It's closer to 2.1% depending on what county / school district / medical district you live in. There are also limits on how much it can go up in a single year (just not as generous as prop-13) for people who live in their homes. For landlords like me there is no limit. Also once you reach a certain age, 65 I believe, there are more limits to property tax raises people can use.

WookieMan says

That's a good rate for sure. It wasn't worth waking up for $200/month on Chicago rents. So rates are higher here. One call could cost you $200 in time and gas so you're negative managing it. Lot of evictions in Chicago and they take a long time.

When I was talking about the water heater I was talking about DYI landlords. I can get 50 gallon units for $600 and put it in myself. Pricing is different everywhere. I'd expect CA to be higher and then factor in labor. I can (some text omitted to shorten quote...) not apartments. If you got good management awesome. But everyone starts small generally. You either have it or you don't. I don't like stress even with management.

Have you looked into warehouse and non-retail commercial space? My uncle pumps out $30-40k/mo on hassle free space that the tenants are required to take care of. Like a bus barn for a school district. One building. I'm avoiding personal interactions in real estate beside maybe a couple houses if I can find a deal.

5-6% is an exceptional rate. For friends who I referred to him, he charges them $300 for leasing fee in addition to 5%.

I learned to loosen up and treat it as a business with a smile from our PM. I love the guy and his team members. Fantastic people. PM is a thankless job unfortunately.

The thought of NNN has crossed my mind a few times. Need to build up my cash stash war chest before I take on the next asset class.

Eman says

Have you looked into warehouse and non-retail commercial space? My uncle pumps out $30-40k/mo on hassle free space that the tenants are required to take care of.

How does one go about finding a warehouse and non-retail commercial space to purchase? What does your uncle have?

gabbar says

Eman says

Have you looked into warehouse and non-retail commercial space? My uncle pumps out $30-40k/mo on hassle free space that the tenants are required to take care of.

How does one go about finding a warehouse and non-retail commercial space to purchase? What does your uncle have?

Mediocre deals are listed on Loopnet. There’s a saying in commercial real estate. Loopnet is where good deals go to die.

In general, it’s our job to find the diamond in the rough and polish it. Good deals happen “off-market” in most cases. Your agents/brokers are the ones who tend to source the deals for you. It’s your job to rise to the top of their preferred client list so whenever they have a good deal, you’re one of the first clients they call. You have an hour or less, the quicker, the better, to respond with a yes or a no as they shop the deal to all their preferred clients.

Eman says

It’s your job to rise to the top of their preferred client list so whenever they have a good deal, you’re one of the first clients they call.

How does one rise to the top of their preferred client list?

gabbar says

How does one rise to the top of their preferred client list?

Probably quick answers that are frequently 'yes'.

Bitcoiner says

After such a steep incline it’s expected that rents plateau for a while or even slightly go down year over year.

Finally something I can agree with. Nothing goes up forever. Now if everyone can start thinking in terms of real value, we'd have a revolution overnight. What's the cost of rent in gold or silver over the past five years? What about wages? Now that's a sure way to see if you really are making more, or inflation is eating it all...

gabbar says

Eman says

It’s your job to rise to the top of their preferred client list so whenever they have a good deal, you’re one of the first clients they call.

How does one rise to the top of their preferred client list?

Reputation is paramount in any biz. Agents/brokers don’t get paid until the deal is closed. They’re essentially working for you, as a buyer, for free. That’s how I view it regardless of what others on this website think.

When we first started out, we called all the listing agents in our farm and asked them out for lunch. Do your homework so you can talk intelligently. Ask them why certain deals went down at such great prices while others are at high prices. Then tell them you’re looking for great deals like what you saw. Share with them your strategy.

Then follow up, follow up, and follow up. Then dine them again. Then follow up and follow up. Then dine them again, etc…. Stay in front of them often so they remember you. Whoever brings you a deal, they own that listing for life. Unwritten rules in commercial real estate.

Do what you say you’re going to do. Keep your promise. Be reasonable. Don’t be a pain in the rear to work with so whenever they have a deal, they will remember who to call first, and who will close the deal without being a pain in the rear. They don’t get paid unless the deal is closed. A bird in hand is worth more than 2 in the bush. Be that bird in hand.

Spent some time looking through the property in my area and San Diego. I see people trying to charge thousands more than what they ever got for property, or setting ridiculously high initial prices for property the purchased. Only a few of the listings I checked showed small, reasonable increases, and solid tenant retention. Most of the listings are getting no action, and prices are ping-ponging all over the place attempting to attract attention.

The kind of rampant greed and speculation you only see at the top.

Eman says

Reputation is paramount in any biz. Agents/brokers don’t get paid until the deal is closed. They’re essentially working for you, as a buyer, for free. That’s how I view it regardless of what others on this website think.

When we first started out, we called all the listing agents in our farm and asked them out for lunch. Do your homework so you can talk intelligently. Ask them why certain deals went down at such great prices while others are at high prices. Then tell them you’re looking for gre (some text omitted to shorten quote...) nt of them often so they remember you. Whoever brings you a deal, they own that listing for life. Unwritten rules in commercial real estate.

Do what you say you’re going to do. Keep your promise. Be reasonable. Don’t be a pain in the rear to work with so whenever they have a deal, they will remember who to call first, and who will close the deal without being a pain in the rear. They don’t get paid unless the deal is closed. A bird in hand is worth more than 2 in the bush. Be that bird in hand.

Thank you. This is helpful indeed.

Bitcoiner says

Nuttboxer, looking at - let’s say 50 - properties doesn’t give you any meaningful insight / indications of where the market is headed.

Look at indicators for San Diego such as Active listings, expected market time, purchase application data etc. If you actually want to know where the market is headed you would want to follow people who do market tracking for a living. Altos research, Steven Thomas, Logan motashami etc. make it easier on yourself and follow the pros. I know you probably won’t but I thought I try ;)

San diego’s spring market is sizzling hot. Expected market time is 40 ish days. I am living north of San Diego and yes, the +1M homes sit a little longer but they sell eventually. Often all cash offers. By now, inventory should have increased because seasonality is slowly kicking in. It hasn’t. People are dis-incentivized to sell since they are locked in to much lower rates.

It does if you buy/rent one of them. But you're obviously propagandized to a certain opinion. I say that because when I provide specific examples, you ignore them. When I link to articles showing rents on the decline nationally, you ignore them. So what other conclusion can I draw?

WookieMan says

Roths, 401k, HSA, IRA, etc. If you max those out then fine have $40k or $40M in a savings account that could be seized if you default. At that point there's no reason to default, just pay. I'm strictly talking in strategic senses. Middle class person with $100k family income loses a job and can't pay the mortgage. Leverage the default as much as you can. One by not paying. Two protect yourself/finances. Third is short sell and get all liability waived. I/we did this with probably 90 short sales. (some text omitted to shorten quote...) y party can take those funds. Not one client had a dime taken from their checking or savings. The loans are sold off, but even then I would never bank with who lends me the money unless it's a commercial/business account.

I'm in by no ways promoting dumping debt. If you get yourself in a fucked up situation there is a way out is all I'm saying. Too many think it's doom and gloom and do something stupid including taking their life... over money and credit. You can always make more and repair it.

Let me buy you a beer.

https://www.cnbc.com/2023/05/16/home-depot-hd-earnings-q1-2023.html

Home Depot posts worst revenue miss in about 20 years, lowers forecast as consumers delay big projects

Booger says

Home Depot posts worst revenue miss in about 20 years, lowers forecast as consumers delay big projects

Yeah, home sales are in a freeze. Need for the 30 year mortgage to settle for at least 3 months below or near 5.25%.

Home Depot is about 32% below its all time high set in December 2021 and only about 15% above its February 2020 level. So its real return (or inflation adjusted return) is about 5% since February 2020 (which accounts for dividend).

The S&P 500 is about 15% below its all time high set in December 2021, and only 20% above its February 2020 level.

The S&P 500 has been trading sideways for almost the last 12 months.

,

Bitcoiner says

we also know that videos or articles about an upcoming crash / foreclosure crisis / shadow inventory etc get by far more views/clicks than the “boring” reports that the pros (altos research, calculated risk, Steven Thomas and Logan motashami) publish.

For sure. You do have a more balanced view than Logan, who I would never ever follow or listen to. Guy is too much of a hardliner for markets never go down, doesn't have any grasp of economic history. Stats can be easily manipulated if the source is not unbiased, and there's big money in keeping the market hot as long as possible. Not much profit in my view, so naturally makes it more honest.

I'm so fucking tired of the small space here, can't wait to have some room for the first time in three years.

ad says

Yeah, home sales are in a freeze. Need for the 30 year mortgage to settle for at least 3 months below or near 5.25%.

Now why is this the view, instead of house prices just need to be realistic in light of higher interest rates? Higher interest + more down + return to normal 10 - 15 year mortgage = more affordable, responsible housing purchases.

Why are people so sold on lifelong debt slavery? Oh yeah, greed...

NuttBoxer says

Now why is this the view, instead of house prices just need to be realistic in light of higher interest rates? Higher interest + more down + return to normal 10 - 15 year mortgage = more affordable, responsible housing purchases.

Why are people so sold on lifelong debt slavery? Oh yeah, greed...

I think peak prices were set around 3.5% rate for the 30 year mortgage. If the 30 year rate steadies at 5.5% then that means housing should go down 20% based on affordability standards (i.e., 10% drop in price for 1% increase in mortgage rate).

I am hoping wages go up 3% a year while home prices remain constant at 20% below from peak for at least 3 years. I'd like to see that for rentals as well.

I realize that is ideal for affordability but just like any asset or commodity in a free market, its not going to be the case as it will likely over correct due to market volatility.

Bitcoiner says

During times of low interest rates people said that if rates finally go up, prices have to come down significantly. Now people see that this isn’t the case.

It is the case in a few markets (Austin, etc.). In most places it's going to take more time, as in at least a couple of years.