Newsom announces deal to Cap Rising Rent Prices (neighborhoods, to buy)

[BB_210]

Originally Posted by 2sleepy

Absolutely not but I would expect that you could tell when a person was using an example to illustrate a situation as opposed to making a statistical argument. If you are going to hold every anecdotal statement offered is irrelevant you will have a full time job scolding people in these forums.

Don't want to take that job from you and two others.

[bad debt]

Originally Posted by aslowdodge

I don’t worry about a loan capacity, I own as much as I’ll ever need. I also don’t flip properties, I buy and hold after rehabbing them. I set goals on what I wanted in life and set up monetary goals to reach them . Passed those goals in five years while you still work to pay the higher price in California.

Sounds like your life is over then after you've now acquired a handful of stabilized SFR rentals over the last 5 years. Whoopty doo. So did my grandma. To me that sounds absolutely awful. Just kill me now.

I grew up with this stuff in my blood, and have worked at PE funds, national CRE lenders, and ground up development shops. You seem to think that I don't understand the simplistic model of a SFR acq rehab that only you have been graced on high with while the rest of us in California just can't comprehend.

Originally Posted by aslowdodge

Long before you came along I owned multi family in rent controlled areas in California so I am aware of what you say I know nothing about.

Yeah right, who are you joking? Based on everything you've said about your hatred of rent control why on earth would you ever have bought a rent controlled property? That's completely asinine.

Originally Posted by aslowdodge

I would never involve investment with you.

Don't worry, you weren't offered the opportunity to invest with me. My number one rule is to not do business with people like you.

Originally Posted by aslowdodge

Your reading skills are also pretty bad since I don’t live in Alabama, but then again you probably don’t know much else outside of California. I think I’ll stay in the California forum since it bothers you so much. Posters like you simply don’t like it when someone calls out the king has no clothes.

Alabama Georgia same thing. Full of ticks and fleas and chiggers. Blech.

Originally Posted by aslowdodge

Your vision has too many limits and blinders that you know the best and only way when in fact this is a case of you don’t know what you don’t know.

Lmao now you're going to tell me about my vision? Please, good sir, tell me what my vision is since you know so much about it. See I actually try and learn from people that that have either 1) have done what I want to do, or 2) have done something that I don't know how to do. You are neither.

[bad debt]

Originally Posted by Electrician4you

Lol. Yeah I should of done a 1031 and let them deal with a different partner. Christ I would never hear the end of it. I had partnerships before in other ventures and this by far was the hardest one to deal with. They are absentee and I was managing fir basically $100 a month. Which I never bothered drawing. So when they said the magic S word (sale not the other one) I talked to my wife and said let’s see where it goes. If it doesn’t sell at the price they picked price we can lowball them on the offer since they want out and I can be a complete pric to deal with if you jerk my chain too much. If it sells for crazy price we’re walking away with 850k+ in our pocket and I just shed 300 pounds of dead weight and migraines. If not I may get it for a steal. So it’s a win win for me.

The crappiest thing about this is I lose really great tenants who paid on time and took care of the place. I’m actually more upset about that than I am about selling. When I gave them notices...that was one of the hardest ones for me to give. I know a lot of times people think landlords are heartless and only look at money but that’s not true. I was “losing” about $700 a month by not raising rents on these people. But I didn’t need to bleed them dry. I don’t bleed any of my tenants dry. I make plenty of money from investments and work. At a certain point it’s just a number. It really won’t

I can be very direct and rude a lot of times but it was very emotional for me. I was actually upset for losing them. Most of the time when I gave notices in the past was because some of the tenants were bad. Most gave notice because they were moving away married etc. but 95% of my tenants we parted amicably and I would take them back no problem. Currently most of my tenants have been with me for 5+ years

If this thing sells and I get out before the bottom falls out I may get some smoking deals. And then I can always wait till there is a good correction

Here is what I see happening
What I can tell you is that from every LL I know that I talked to who is sticking with it the and are stuck under what’s basically rent control the basic consensus is tenants are going to get a minimum of 5% and as high as 10% rent raise a year. Which in itself will force people out because most aren’t getting 5/10% raises.
Not to mention the LLs who are not restricted by this rent control I’ll raise rents also. Some will sell out and depending who they sell to that will impact the availability of rentals.
The LLs who are under rent control will diversify in privately need homes and will capture more rentals in that manner as they aren’t restricted by the rent control rules.

Basically if you’re a renter in California you’re about to take it from both ends. This rent control bill will do absolutely nothing to stop rents from going higher and possibly will shrink the availability of private rental. The apartment buildings and homes that are built are most likely rented.

Definitely sounds like a tough situation, but it sounds like you are fairly well protected personally and have a good exit. Good luck!

[bad debt]

Originally Posted by 2sleepy

So you are saying that she could have raised the rent and still attracted tenants but she just didn't? That makes no sense...either she's goofy or the story isn't true. Landlords raise rent as long as there are renters willing to pay what they are asking. My son rents a duplex in Martinez and for the past 4 years his rent has increased between 12 and 15% a year. During that same time his income increased 25%.

Unsophisticated landlords that aren't at market absolutely exist. Those are generally the properties I'm looking to buy as they offer significant upside potential once the tenant base has been turned over and the rent is set to market.

Generally speaking you don't have to be 100% at market as there are benefits in keeping good tenants long term. However, that can be done with a 5-10% discount or other perks. Anyone that is 20%+ below market long term is honestly just a poor operator and leaving money on the table. Now it's their money and property and can do as they wish, but it's just not financially sound and if they had any fiduciary responsibilities could even get in hot water.

[NewbieHere]

Originally Posted by 2sleepy

So you are saying that she could have raised the rent and still attracted tenants but she just didn't? That makes no sense...either she's goofy or the story isn't true. Landlords raise rent as long as there are renters willing to pay what they are asking. My son rents a duplex in Martinez and for the past 4 years his rent has increased between 12 and 15% a year. During that same time his income increased 25%.

She has not raised rent, in fact she’s a “good landlord” that the previous tenant moved out and introduced the current tenant. I don’t think her property management did a good job for her. My family has been telling to raise rent and she never did. She has said when they move out she will sell the place, at this rate they will never move. So if she raises 5% plus inflation eventually they will move out.

[NewbieHere]

Originally Posted by expatCA

Some landlords do not raise the rent every year, but at a point when they need more to cover rising expenses. I have rented for periods of time with no rent increase. My daughter's rent increases about 3% a year.

I have double my rent in the last 15 years. But one of my daughters in the Bay Area has zero increase last year without rent control.

[NewbieHere]

Originally Posted by 2sleepy

They sure raise them around here (Sac County) and where my son lives (SF bay area) It's not unusual here in Sac County for rents to go up 50% in one year, in some cases I think it's an effort to just get people to move out so that the property owner can convert the property to condos - I saw that happen in Reno too, once the rental market got heated more and more apartments were converted to condos, I guess that's where the money is?

Is that why you are so radical? You always think the world is against you. Not me. My daughter lives in a nice area in the Bay Area, she has zero increase last year. Her rent is very reasonably.

[Electrician4you]

Originally Posted by bad debt

Definitely sounds like a tough situation, but it sounds like you are fairly well protected personally and have a good exit. Good luck!

Thank you.

[2sleepy]

Originally Posted by NewbieHere

She has not raised rent, in fact she’s a “good landlord” that the previous tenant moved out and introduced the current tenant. I don’t think her property management did a good job for her. My family has been telling to raise rent and she never did. She has said when they move out she will sell the place, at this rate they will never move. So if she raises 5% plus inflation eventually they will move out.

No, they won't move out if they can afford it and all other rentals increase at a similar rate. The ones who will move out will be those on fixed incomes, namely the elderly and disabled whose income seldom if ever increases. A friend of mine is moving to Utah because her rent here in Sac County went from $1,000 to $1,800 in three years and that's about $500 less than she gets from Social Security. She doesn't want to move because she has grand kids here, but everything similar to what she is renting is also going for $1,800-$2,000

[CA4Now]

Originally Posted by NewbieHere

You always think the world is against you. Not me.

Nah. She just has more empathy for people who happen to be less fortunate than she. (What a novel concept!)