So true! Drove me crazy... Not every real estate investor or an inspired real estate investor is a football fan. I had no idea what were all those analogies were... LOL
This guy is so right. I'm in California and my tenants continue to pay their rent. I reduced their rent several times to help them. But they pay exactly on time each month. Adjust, adjust, adjust. And share the pain.
That's very nice and reasonable of you. That is someone a tenant can work with. In the long run it should benefit you because it is more costly to keep swapping out tenants.
In that first segment, I wish David would have talked about not just adapting and overcoming the adversities of gov't impositions, but also the need to let them know that what they're doing is wrong and destructive. If you don't push back and just take it, then the likelihood of it happening more often and with greater impact will continue.
My thoughts on this past year with all the real estate craziness is..... Is it worth paying double the price for a house/condo just because your getting a mortgage at 2.5 percent. My answer in No! However, that might not be the situation for others. Alot of recent real estate purchases.... the buyer got a 2.8 percent mortgage but the bank made the buyers put 50 percent down because the place didn't appraise for the amount they paid for it. This market is gonna POP. I really am not sure when the feds are gonna make the mortgage rates go back up. When the eviction moratorium ends and the mortgage forbearance ends.... we will see foreclosures. But I really wonder if Sleepy Joe will do another extension. Also, with everything going on with Afghanistan we are on high alert of an attack on America. Not sure what kind of effect that would have on everything.
I agree. I have yet to buy my first home ever. I am waiting. I refuse to pay WAY more just to get the low rates. NOT worth it in my opinion. I qualify for a VA loan. I have excellent credit. I am waiting. The HVAC just went out in the place I am renting... kind of made me smile. :)
Are u so sure? Could it be that when the forbearance ends then the modifications kick in - all the non payments go to the back of the loan and everybody moves on (i have already experienced this as a a rei). As for the person whose looking to buy a home (other replying person before me) - go for it! Ur not over paying depending on ur market (inflation is gonna be around for a while , some would say is a reasonable conclusion). Ur comment(s) is the very reason why u do it now, maybe (do ur research too but don’t just assume it’s that way)- u make money by being “in the market” not necessarily “timing the market”. But I get your point! All the best!
So Ken help me out. I didn’t hear anyone mention what happens to “housing” prices once the eviction moratorium ends. Doesn’t that mean housing prices will drop? Wouldn’t it make more sense to buy when housing prices are low AND interest rates are low?
The housing market is a factor if supply and demand and it mainly effect SFRs. Multi-families structures are treated as business. The renal segment in SFR is significant but not necessarily the dominant one, depends on in what market the house is. As long as the supply of houses is low, prices will go up especially in states and cities where there is a trend of population migration. Cities in Texas, North Carolina, Georgia and others will continue to have prices increase, while other state will have a slow down.
Great discussion! Section 8 is the answer. I just picked up two in Maryland. I will do a video to help those who need to see end to end process. Check comes in the bank on time! #askakhow
As Robert Kiyosaki always says, "Find a way to begin replacing your ACTIVE income with PASSIVE income ASAP. If not, you're going to wake up and staire at a 50 year old guy in the mirror wondering where all the time went...."
I love to watch your videos and the David Green's Videos. All of them are very informative and interesting. This video offers a wealth of knowledge, great tips and resources! Thank you Ken, Danille and David!
We have several section 8. Be very careful. Section 8 tenants sometimes don’t pay their portion and they will break things to get repairs or new appliances because section 8 requires it of landlord. If tenant does not pay or take care of property then YOU are stuck with this tenant and have to get rid of them. We have one we were evicting before Covid and have been stuck with this person well over a year. Section 8 is government and you are dealing with a lazy mentality bureaucracy that completely sucks. Be very careful with section 8 people!!
Spectacular insights! I don't get the numerous sports metaphors, though. You likely have a diverse subscription base. It would be good to keep content as relatable as possible.
It's hard to argue with David that real estate is increasingly for the rich only. But when I drive across the country I saw a vague amount of undeveloped land but they all seems to be fenced up like someone already own it. I was going to disagree with him, but maybe he is right that the time to buy is now. What's the worse that can happen? Vacancy, cashflow negative, and worse.. squatter? Who care right? The government will save us all. God bless the USA.
Im bitter because the rules have skewed to the wealthy. I educated myself, currently in a masters program. worked 7 years in my job, working overtime and doing extra to promote, and i cannot afford a house. this is fucked!
Spoken like a true victim. Take advantage of your opportunity to make money any grow your wealth going forward. It was the same for me and most of us others. All the best to you.
@@chrishealy2061 i dont see myself as a victim, this is just the way our society is today. it falls to us to do our best to be successful in any environment and i am currently working to do that. Im just frustrated.
The reason RE prices go up is vastly due to the large demand low interest rates create, exactly because it becomes affordable. If it becomes less affordable, demand falls and RE prices suffer. How can prices become unaffordable to most, and buying demand be maintained?
Somebody please educate me on this matter. I can’t find this answer anywhere on the web. Is your second home property taxes higher than your current one? If so, by how many percent? Or I’m misinformed about this.
Have you ever thought about borrowed money on a depreciating asset and renters unable to afford your rent?....That can never happen right? This time is different, right? ...hmmm, seems I've heard that before. Oh it was 2007.
Stock market investors talk about TINA (there is no alternative). David proposing the only way to survive is by leveraging yourself to the hilt seems as dangerous as buying stocks on margin when they are already at all time highs. This might be the maximally productive investment strategy, but to ignore discussing the potential risk possibilities of such a strategy could wreck the less sophisticated investor.
This is funny.. when Ken is introducing David, Ken is all excited with the introduction and David is like all shut down.. :-) then Ken looks at Danille and they both smiled.. :-)
Section 8 will come in and make you pay thousands to upgrade your property to meet their requirements. This after the tenant is in. If they decide you must make your property "green" you may be totally screwed,
"Debt is an asset"... This is not an imperial fact! Yes, if you are in your 30s, 40s or perhaps even in your 50s, debt can certainly be an asset depends on your goals and how you structure it, but if you are in your late 60s and up, debt can be detrimental especially if rent is a big part of your income.
you agreed with the rent freeze? WTF?! The govt should never, ever, ever, be able to tell me what I can and cannot do with my own property! The precedence has been set, what's to stop them from doing the same thing in the next pandemic? Or next time unemployment goes higher than they want? That said, everyone who got put out of work also got umployment benefits and most made 2-3x more than they had when they had a job. Making the same, or more money, what would the reasoning be to stop rent payments? Is that not the 2nd most priority for people (after food)?
In the 'future of housing' segment, do you share that reality with your tenants? I'd be curious to know how many, if any, started finding a way to pay rent if they had some perspective of their quality of life potentially going down should they have to find a new place. BTW, David is spot on in regards to gov't housing being the gov't's response to complaints. More people dependent upon gov't is where the Dems want to go so they will jump at the chance to get more people on the gov't teat.
I dissagree. Market crash in 2008 affected the rental mkt. People moved back in with their parents. Government is dictating what you can do. If they are talking about great credit. That is not section 8.
This situation has been tough for lots of people, I made more money than ever in 2021 ironically I worked less hours too. My job was never effected by the pandemic other than they eliminated overtime which was a good thing for me at the time. I definitely feel bad for people who had their lively good taken from them. Restaurant owners work very hard in a tough business and they suffered greatly. So I gotta give a big shout out to landlords that worked with people through this! I’ve seen landlords saying “guess what rents still due” like they’ve never experienced hard times?! This mentality is just disgusting.
30% towards house payment is the equilibrium - historically. Do you see that changing in the future? Mortgage changes and landlords altering standards? It feels that way, but I tend to have the belief that once all this fiat printed currency works through the system - it will equalize out again at around 30% of income towards housing again. It's going to be a rough ride for lots of people though in the meantime. Great conversation! Enjoy the thought provoking videos!
I don't know alot of people and I know 4 families that are moving back in with family when their lease is up because of huge rent increases. I don't think this is talked about enough.
I have a question about section 8, I heard it's easy for people to get kicked off the program and then they're in your property with no way to pay. Is this true?
Two questions (Great video by the way)? David said you got to look at everything, so if you Borrow now at 3% and inflation is currently at 6%+ but in the future interest rates rise 2-6%+ causing deflation back down to 2% but the housing market will follow like always what the people will pay. So housing value goes down 10% for every 1% rise in interest rates, we would be looking at a 20-60% drop in housing, would it not be better to buy in a market that the house is worth 20-60% less then it is now at higher interest rates, because you can always refinance when interest rates fall again? I ask because nothing can keep going up forever, and housing market to me seems oddly familiar to 2006/07 not the same but familiar. Second question debt can be a very great tool and asset, but one thing i noticed is if you cant cover the debt and solely Rely on the tenant, debt can quickly become an liability and potentially wreck you. I am more wondering how you would handle this situation we are all in with recorded high mortgages, lowest interest rates and slow return of inventory, rental and mortgages potentially going to start hitting the market and the looming foreclosures in 2022/23?
Erik, I guess I think like you do. I went to contract with Zillow without a plan to buy again. I also found it almost impossible to compete here in Raleigh for a home and the rental market is too high. It's all unstable. You make sense and some very smart people agree but at the end of the day, one must live somewhere and have stability. I just created a major headache for myself.
If your tenant suddenly suffers financial hardship, can he/she apply for Section 8 to continue renting your property? Someone told me that there is a waiting list of Section 8
The next thing to look out for is tighter anti-discriminatory laws. In California, you can no longer outright disqualify section 8 tenants without a valid reason. The saving grace was that credit/income checks would typically disqualify them but what if those checks are no longer available? The more you try to get in front of it, the government will also try to mitigate against it. It's just going to take an iron will from landlords to consider leaving it vacant for longer periods of time, if that is required.
I've lost my job a few times and since it wasn't part of the majority, I never got help but I had to pull on my savings. Why is it that just because it happens to more people that I now have to fund those masses? This is Proletariat policy.
The media should encourage saving and frugality so more people are encouraged to buy a home. Explain to your children that owning gives you the most choices and freedom in the long run.
15:39 I could not agree more. They've already talked about expanding the section 8 pool and this makes so much sense. Also, for landlords we get more assurance that we will get paid on time. Literally all of my tenants on section 8 have paid, not one person asked to skip rent.
@@fuqutube not necessarily. I have tenants that are past military that were honorably discharged and have had trouble getting back on their feet that are on vash. I also have a few elderly. And if you are a landlord in California, you cannot eliminate a family based on source of income (section 8). Everyone has a story and it's not my job to judge them.
I can live in a shoebox but I doubt many baby boomers can. They can keep bidding prices to infinity but I won’t join the mania. Nomad is the only thing that makes sense to me.
It seems odd that more homes will be rented versus owned. I’d bet more on a housing market decline than a sustainably over priced market where people can’t afford homes. It seems like deja vu from 2006.
Low-income tenants catch a bad rap. Not all low-income ppl are irresponsible and actually paid rent during the pandemic. This is irresponsible. If section 8 tenants have income and don't pay their rent, they are removed from the program. Don't generalize poor people.
There will always be more tenants than landlords, which means politicians will always do more for tenants!!! Look at the laws governing mobile home parks in California, you'll doubt that there is a such a thing as Constitutional protections!!!
So.... Looking for the Section 8 housing to boom. Kind of goes against trying to get "A" or "B" tenants? Or is section 8 a 100% guarantee that you get your income? Sounds to me that providing section 8 will be a GOLD mine!
I'm about to start renting out my first 2 properties in the next month I have rehabbed over the past 2 years myself. I am very thankful for all of you for these podcasts. I am nervous about getting good tenants but I am willing to use a property manager. Luckily I have no mortgages on either property. Thank you all!
Property managements are all night mares. Learn to do it yourself. My experiences: One property management lucky I didn’t hire her. Her company disappeared. I will lost thousands deposit money if I hire her. One property management company try to move a tenant has two big dogs, income lower than the rent to my one bedroom property so in stead evict that tenant. Just easier to move to my property. Luckily I didn’t hire that one either. The one I hired, second day after signed with me left the country on vocation for 6 months. My property sitting there vacant for 6 months. During lockdown, two tenants contacted me and asking me did I already paid their rent for them. The management company told them that they don’t need to pay during lockdown. Good luck with management company. I had three realtors and 2 management company told me that I can get most tent is $2500 a month. I rented out myself get 3 years lease for $3000 a month to a very nice military family. One other property took 7 months for management company find tenants for $3500 a month. I take over after lease up. Rented myself without lose one day rent for $4000 a month. I will never never hire a management companies
I know government handouts are paying rent for now, but long term I can't see how that's affordable in the govt budget when medicaid payouts for the elderly are set to double as baby boomers get to their 80s and need assisted living etc. My feeling is governments will probably raise property taxes to the point the tax is as high as the full rent amount and nothing goes to the landlord.
That last football analogy about the GM paying 20% more for a player because they would sell more tickets when you could get the same production shows he’s clearly a casual. The salary cap is a thing and directly impacts teams ability to get more talent and keep their players so overpaying for someone who will sell more tickets but hinder your ability to acquire or keep more talent is going to cost your in success. Which in turn means you don’t go as far in the playoffs which means you actually in turn will likely sell less tickets because you didn’t make it as far and played less games smh stick to real estate David. Not to mention the GM wouldn’t be worried about selling tickets the owner might be but the GM’s sole goal is to try and build a culture and team to win Championships. I’d fire my GM immediately if he did some dumb shit like spend 20% more money on a player who gives me the same production as a player who cost less lmao
