[bearishgurl]

[quote=CA renter]The whole “I’m a landlord with negative cash flow ‘investor'” comes with bubble territory. My parents were RE brokers, landlords, and investors for decades. They would NEVER have purchased a property where rents didn’t cover all expenses and provide a profit on top of that. They never had a negative cash flow in any of their properties, and I know many other long-time landlords who are in the same boat (my current landlords, included).[/quote]

CA Renter, did your parents purchase the bulk of their rental portfolio prior to the passage of Prop. 13 (April 1978)? Until about 1983 or 1984, it was difficult to get a loan of more than 60% LTV on rental properties. In addition, the interest rates were high during that time period. Did your parents get low LTV purchase-money loans or pay cash for some of their properties? If so AND they didn’t bleed the properties, obviously some of them would be paid off by now and generating very good profits.

Could they also have purchased properties with more amenities with other equity partners? These properties tend to attract a higher-quality tenant.

I say “kudos” to your parents for hanging around long enough managing, for doing the repairs themselves and for their patience with flaky tenants and their (hidden) pets, etc. in good times and bad. My “negative” cash flow scenario presumes a 25% vacancy rate. This is in line with more a transient (low income and military) tenant population, which I am most familiar with.

My 12-year “landlord-stint” had nothing to do with bubbles. I myself have been a licensee since 1984. I’ve owned two rental properties, one duplex, sold ’90 (small loss) and one triplex, sold ’94 (break-even). In both cases, I HATED dealing with tenants and their lame excuses for late rent payment, when I am observing standing in their doorway that they have more cable channels and a much newer vehicle than I do. Never had to evict but hung several “3-day notices” and wrote letters to commanding officers. And I HATED spending my weekends cleaning, repairing and painting the units between the frequent vacancies.

I believe we will soon enter a very favorable period in which to purchase working-class SFR’s for rentals, but I no longer possess the “DIY” patience or personality for the landlord thing.

[bearishgurl]

[quote=CA renter]The whole “I’m a landlord with negative cash flow ‘investor'” comes with bubble territory. My parents were RE brokers, landlords, and investors for decades. They would NEVER have purchased a property where rents didn’t cover all expenses and provide a profit on top of that. They never had a negative cash flow in any of their properties, and I know many other long-time landlords who are in the same boat (my current landlords, included).[/quote]

CA Renter, did your parents purchase the bulk of their rental portfolio prior to the passage of Prop. 13 (April 1978)? Until about 1983 or 1984, it was difficult to get a loan of more than 60% LTV on rental properties. In addition, the interest rates were high during that time period. Did your parents get low LTV purchase-money loans or pay cash for some of their properties? If so AND they didn’t bleed the properties, obviously some of them would be paid off by now and generating very good profits.

Could they also have purchased properties with more amenities with other equity partners? These properties tend to attract a higher-quality tenant.

I say “kudos” to your parents for hanging around long enough managing, for doing the repairs themselves and for their patience with flaky tenants and their (hidden) pets, etc. in good times and bad. My “negative” cash flow scenario presumes a 25% vacancy rate. This is in line with more a transient (low income and military) tenant population, which I am most familiar with.

My 12-year “landlord-stint” had nothing to do with bubbles. I myself have been a licensee since 1984. I’ve owned two rental properties, one duplex, sold ’90 (small loss) and one triplex, sold ’94 (break-even). In both cases, I HATED dealing with tenants and their lame excuses for late rent payment, when I am observing standing in their doorway that they have more cable channels and a much newer vehicle than I do. Never had to evict but hung several “3-day notices” and wrote letters to commanding officers. And I HATED spending my weekends cleaning, repairing and painting the units between the frequent vacancies.

I believe we will soon enter a very favorable period in which to purchase working-class SFR’s for rentals, but I no longer possess the “DIY” patience or personality for the landlord thing.

[bearishgurl]

[quote=CA renter]The whole “I’m a landlord with negative cash flow ‘investor'” comes with bubble territory. My parents were RE brokers, landlords, and investors for decades. They would NEVER have purchased a property where rents didn’t cover all expenses and provide a profit on top of that. They never had a negative cash flow in any of their properties, and I know many other long-time landlords who are in the same boat (my current landlords, included).[/quote]

CA Renter, did your parents purchase the bulk of their rental portfolio prior to the passage of Prop. 13 (April 1978)? Until about 1983 or 1984, it was difficult to get a loan of more than 60% LTV on rental properties. In addition, the interest rates were high during that time period. Did your parents get low LTV purchase-money loans or pay cash for some of their properties? If so AND they didn’t bleed the properties, obviously some of them would be paid off by now and generating very good profits.

Could they also have purchased properties with more amenities with other equity partners? These properties tend to attract a higher-quality tenant.

I say “kudos” to your parents for hanging around long enough managing, for doing the repairs themselves and for their patience with flaky tenants and their (hidden) pets, etc. in good times and bad. My “negative” cash flow scenario presumes a 25% vacancy rate. This is in line with more a transient (low income and military) tenant population, which I am most familiar with.

My 12-year “landlord-stint” had nothing to do with bubbles. I myself have been a licensee since 1984. I’ve owned two rental properties, one duplex, sold ’90 (small loss) and one triplex, sold ’94 (break-even). In both cases, I HATED dealing with tenants and their lame excuses for late rent payment, when I am observing standing in their doorway that they have more cable channels and a much newer vehicle than I do. Never had to evict but hung several “3-day notices” and wrote letters to commanding officers. And I HATED spending my weekends cleaning, repairing and painting the units between the frequent vacancies.

I believe we will soon enter a very favorable period in which to purchase working-class SFR’s for rentals, but I no longer possess the “DIY” patience or personality for the landlord thing.

[bearishgurl]

I would like to comment that in South County, the voting population that was at least 50% responsible for passing the school construction bonds in recent years, were. . . you guessed it, RENTERS! Of course, as renters, they want improvements in their own children’s schools but this tax doesn’t come off their backs. Only owners pay it in their property taxes.

And no, I don’t buy the argument that rent is usually enough to cover the owner’s mortgage(s), HOA dues (if applic.) and property taxes. In my experience, it’s usually negative.

Neither do I buy that apartment rents are necessarily a positive cash flow for owners, unless they own a very large complex and/or purchased a long time ago and didn’t bleed the property.

[bearishgurl]

I would like to comment that in South County, the voting population that was at least 50% responsible for passing the school construction bonds in recent years, were. . . you guessed it, RENTERS! Of course, as renters, they want improvements in their own children’s schools but this tax doesn’t come off their backs. Only owners pay it in their property taxes.

And no, I don’t buy the argument that rent is usually enough to cover the owner’s mortgage(s), HOA dues (if applic.) and property taxes. In my experience, it’s usually negative.

Neither do I buy that apartment rents are necessarily a positive cash flow for owners, unless they own a very large complex and/or purchased a long time ago and didn’t bleed the property.

[bearishgurl]

I would like to comment that in South County, the voting population that was at least 50% responsible for passing the school construction bonds in recent years, were. . . you guessed it, RENTERS! Of course, as renters, they want improvements in their own children’s schools but this tax doesn’t come off their backs. Only owners pay it in their property taxes.

And no, I don’t buy the argument that rent is usually enough to cover the owner’s mortgage(s), HOA dues (if applic.) and property taxes. In my experience, it’s usually negative.

Neither do I buy that apartment rents are necessarily a positive cash flow for owners, unless they own a very large complex and/or purchased a long time ago and didn’t bleed the property.

[bearishgurl]

I would like to comment that in South County, the voting population that was at least 50% responsible for passing the school construction bonds in recent years, were. . . you guessed it, RENTERS! Of course, as renters, they want improvements in their own children’s schools but this tax doesn’t come off their backs. Only owners pay it in their property taxes.

And no, I don’t buy the argument that rent is usually enough to cover the owner’s mortgage(s), HOA dues (if applic.) and property taxes. In my experience, it’s usually negative.

Neither do I buy that apartment rents are necessarily a positive cash flow for owners, unless they own a very large complex and/or purchased a long time ago and didn’t bleed the property.

[bearishgurl]

I would like to comment that in South County, the voting population that was at least 50% responsible for passing the school construction bonds in recent years, were. . . you guessed it, RENTERS! Of course, as renters, they want improvements in their own children’s schools but this tax doesn’t come off their backs. Only owners pay it in their property taxes.

And no, I don’t buy the argument that rent is usually enough to cover the owner’s mortgage(s), HOA dues (if applic.) and property taxes. In my experience, it’s usually negative.

Neither do I buy that apartment rents are necessarily a positive cash flow for owners, unless they own a very large complex and/or purchased a long time ago and didn’t bleed the property.

[bearishgurl]

[quote=briansd1]That’s the argument for Prop 13. It allows people on fixed income to remain in their homes.

If they heloc’ed away then the next generation won’t be living there.[/quote]

Briansd1, I agree with you that this was the intended purpose of Prop. 13. HOWEVER, the original “Greatest Generation” purchasers, in my ‘hood, could AFFORD gardeners, roofers and handymen on their fixed incomes. ON the OTHER hand, their CHILDREN (my fellow “baby boomers?) don’t appear to be able to maintain the property on a similar fixed income. What’s the difference?

Illustrated, plain and simple, the difference is in VALUES. Even though children of “savers,” the heirs I am observing here are NOT savers and, for the most part, have NO ASSETS. Several of them have (admittedly) never had a full-time job. Even given no mortgage and Prop 13 tax treatment, once obtaining deed to real property, they IMMEDIATELY SEE IT AS A MONEY MACHINE AND BLOW THE $$. Now they are trying to pay it back on a fixed income. Never having been homeowners, it never dawns on them (until it happens) that water heaters break, roofs leak, etc.

NOW, WITH ALL THE TD/HELOC $$ SPENT, they are trying to pay back the encumbrance(s) AND live on their (yes, same) fixed income.

Their parents never would have done this, just so they could leave behind this “legacy.” And for what? The parents would have been better off selling while they were still alive and going around the world and then settling in a Sr. complex or an assisted living facility. The whole thing is just sad and I feel that my block is a microcosm of many thousands in the state just like it, all due to Prop. 13, which allows heirs to live nearly FREE in their parent’s (unencumbered) property (+ utilities, of course).

As a market-rate owner and taxpayer, I don’t enjoy having all these “unmotivated overgrown-children” neighbors and am reluctant to make improvements to my own property because of this. Even though properties in newer neighborhoods wouldn’t be eligible for Prop. 13 tax treatment and having an HOA would do away with some of the problems I am mentioning here, I AM grateful I don’t have to pay MR and HOA dues and would NOT choose a property that had them, in any case.

[bearishgurl]

[quote=briansd1]That’s the argument for Prop 13. It allows people on fixed income to remain in their homes.

If they heloc’ed away then the next generation won’t be living there.[/quote]

Briansd1, I agree with you that this was the intended purpose of Prop. 13. HOWEVER, the original “Greatest Generation” purchasers, in my ‘hood, could AFFORD gardeners, roofers and handymen on their fixed incomes. ON the OTHER hand, their CHILDREN (my fellow “baby boomers?) don’t appear to be able to maintain the property on a similar fixed income. What’s the difference?

Illustrated, plain and simple, the difference is in VALUES. Even though children of “savers,” the heirs I am observing here are NOT savers and, for the most part, have NO ASSETS. Several of them have (admittedly) never had a full-time job. Even given no mortgage and Prop 13 tax treatment, once obtaining deed to real property, they IMMEDIATELY SEE IT AS A MONEY MACHINE AND BLOW THE $$. Now they are trying to pay it back on a fixed income. Never having been homeowners, it never dawns on them (until it happens) that water heaters break, roofs leak, etc.

NOW, WITH ALL THE TD/HELOC $$ SPENT, they are trying to pay back the encumbrance(s) AND live on their (yes, same) fixed income.

Their parents never would have done this, just so they could leave behind this “legacy.” And for what? The parents would have been better off selling while they were still alive and going around the world and then settling in a Sr. complex or an assisted living facility. The whole thing is just sad and I feel that my block is a microcosm of many thousands in the state just like it, all due to Prop. 13, which allows heirs to live nearly FREE in their parent’s (unencumbered) property (+ utilities, of course).

As a market-rate owner and taxpayer, I don’t enjoy having all these “unmotivated overgrown-children” neighbors and am reluctant to make improvements to my own property because of this. Even though properties in newer neighborhoods wouldn’t be eligible for Prop. 13 tax treatment and having an HOA would do away with some of the problems I am mentioning here, I AM grateful I don’t have to pay MR and HOA dues and would NOT choose a property that had them, in any case.

[bearishgurl]

[quote=briansd1]That’s the argument for Prop 13. It allows people on fixed income to remain in their homes.

If they heloc’ed away then the next generation won’t be living there.[/quote]

Briansd1, I agree with you that this was the intended purpose of Prop. 13. HOWEVER, the original “Greatest Generation” purchasers, in my ‘hood, could AFFORD gardeners, roofers and handymen on their fixed incomes. ON the OTHER hand, their CHILDREN (my fellow “baby boomers?) don’t appear to be able to maintain the property on a similar fixed income. What’s the difference?

Illustrated, plain and simple, the difference is in VALUES. Even though children of “savers,” the heirs I am observing here are NOT savers and, for the most part, have NO ASSETS. Several of them have (admittedly) never had a full-time job. Even given no mortgage and Prop 13 tax treatment, once obtaining deed to real property, they IMMEDIATELY SEE IT AS A MONEY MACHINE AND BLOW THE $$. Now they are trying to pay it back on a fixed income. Never having been homeowners, it never dawns on them (until it happens) that water heaters break, roofs leak, etc.

NOW, WITH ALL THE TD/HELOC $$ SPENT, they are trying to pay back the encumbrance(s) AND live on their (yes, same) fixed income.

Their parents never would have done this, just so they could leave behind this “legacy.” And for what? The parents would have been better off selling while they were still alive and going around the world and then settling in a Sr. complex or an assisted living facility. The whole thing is just sad and I feel that my block is a microcosm of many thousands in the state just like it, all due to Prop. 13, which allows heirs to live nearly FREE in their parent’s (unencumbered) property (+ utilities, of course).

As a market-rate owner and taxpayer, I don’t enjoy having all these “unmotivated overgrown-children” neighbors and am reluctant to make improvements to my own property because of this. Even though properties in newer neighborhoods wouldn’t be eligible for Prop. 13 tax treatment and having an HOA would do away with some of the problems I am mentioning here, I AM grateful I don’t have to pay MR and HOA dues and would NOT choose a property that had them, in any case.

[bearishgurl]

[quote=briansd1]That’s the argument for Prop 13. It allows people on fixed income to remain in their homes.

If they heloc’ed away then the next generation won’t be living there.[/quote]

Briansd1, I agree with you that this was the intended purpose of Prop. 13. HOWEVER, the original “Greatest Generation” purchasers, in my ‘hood, could AFFORD gardeners, roofers and handymen on their fixed incomes. ON the OTHER hand, their CHILDREN (my fellow “baby boomers?) don’t appear to be able to maintain the property on a similar fixed income. What’s the difference?

Illustrated, plain and simple, the difference is in VALUES. Even though children of “savers,” the heirs I am observing here are NOT savers and, for the most part, have NO ASSETS. Several of them have (admittedly) never had a full-time job. Even given no mortgage and Prop 13 tax treatment, once obtaining deed to real property, they IMMEDIATELY SEE IT AS A MONEY MACHINE AND BLOW THE $$. Now they are trying to pay it back on a fixed income. Never having been homeowners, it never dawns on them (until it happens) that water heaters break, roofs leak, etc.

NOW, WITH ALL THE TD/HELOC $$ SPENT, they are trying to pay back the encumbrance(s) AND live on their (yes, same) fixed income.

Their parents never would have done this, just so they could leave behind this “legacy.” And for what? The parents would have been better off selling while they were still alive and going around the world and then settling in a Sr. complex or an assisted living facility. The whole thing is just sad and I feel that my block is a microcosm of many thousands in the state just like it, all due to Prop. 13, which allows heirs to live nearly FREE in their parent’s (unencumbered) property (+ utilities, of course).

As a market-rate owner and taxpayer, I don’t enjoy having all these “unmotivated overgrown-children” neighbors and am reluctant to make improvements to my own property because of this. Even though properties in newer neighborhoods wouldn’t be eligible for Prop. 13 tax treatment and having an HOA would do away with some of the problems I am mentioning here, I AM grateful I don’t have to pay MR and HOA dues and would NOT choose a property that had them, in any case.

[bearishgurl]

[quote=briansd1]That’s the argument for Prop 13. It allows people on fixed income to remain in their homes.

If they heloc’ed away then the next generation won’t be living there.[/quote]

Briansd1, I agree with you that this was the intended purpose of Prop. 13. HOWEVER, the original “Greatest Generation” purchasers, in my ‘hood, could AFFORD gardeners, roofers and handymen on their fixed incomes. ON the OTHER hand, their CHILDREN (my fellow “baby boomers?) don’t appear to be able to maintain the property on a similar fixed income. What’s the difference?

Illustrated, plain and simple, the difference is in VALUES. Even though children of “savers,” the heirs I am observing here are NOT savers and, for the most part, have NO ASSETS. Several of them have (admittedly) never had a full-time job. Even given no mortgage and Prop 13 tax treatment, once obtaining deed to real property, they IMMEDIATELY SEE IT AS A MONEY MACHINE AND BLOW THE $$. Now they are trying to pay it back on a fixed income. Never having been homeowners, it never dawns on them (until it happens) that water heaters break, roofs leak, etc.

NOW, WITH ALL THE TD/HELOC $$ SPENT, they are trying to pay back the encumbrance(s) AND live on their (yes, same) fixed income.

Their parents never would have done this, just so they could leave behind this “legacy.” And for what? The parents would have been better off selling while they were still alive and going around the world and then settling in a Sr. complex or an assisted living facility. The whole thing is just sad and I feel that my block is a microcosm of many thousands in the state just like it, all due to Prop. 13, which allows heirs to live nearly FREE in their parent’s (unencumbered) property (+ utilities, of course).

As a market-rate owner and taxpayer, I don’t enjoy having all these “unmotivated overgrown-children” neighbors and am reluctant to make improvements to my own property because of this. Even though properties in newer neighborhoods wouldn’t be eligible for Prop. 13 tax treatment and having an HOA would do away with some of the problems I am mentioning here, I AM grateful I don’t have to pay MR and HOA dues and would NOT choose a property that had them, in any case.

[bearishgurl]

[quote=UCGal]Bearishgurl…
None of us (to my knowledge) have ATM’d the house. My neighbors across the street have the same stated goal we do – pay it off before retirement. That’s hard to do if you’re pulling cash out rather than paying off the balance. I don’t see a lot of fancy upgrades in the garages indicating HELOC madness on our block.[/quote]

UCGal, my post above wasn’t directed to any one poster.

I think if you grew up in UC, the OLDEST properties up there might be circa 1968 or 1971. My block was built in 1949. Thus, the “heirs” on my block are probably a generation older than your one neighbor “heir” who cared for his mom. All of the “heirs” I am speaking of here are living on a small FIXED income. This type of income by itself cannot maintain a house and utilities, much less market property taxes. A person with this type of low income can only obtain a “sucker” equity loan or reverse mortgage, if old enough. These “heirs” are too old NOW to EVER pay off the loans they took out on their free and clear “bequest.” (The banks knew this, obviously, but that’s another story.)

Two of my neighbors as “heirs” even qualified for “lifeline” utility rates. One “heir” actually moved out of his van that he had lived in for seven years into Dad’s house, as soon as he died!

Re: maintainence, I’m not even talking about weeds after a rain. I’m talking about real eyesores such as long-unfinished room additions, never-running vehicles, etc. This was all started or parked after the heir moved in.

UC’s younger demographic is evident in that you and your neighbors purchased your childhood home while your parents were STILL ALIVE and you are still employed and have kids in school. My neighbor “heirs” are retired and/or long-disabled with grown children.

Acc. to your post, your neighbors don’t appear to be trying to run their entire households on $800 – $1500 (fixed income) per month.

[bearishgurl]

[quote=UCGal]Bearishgurl…
None of us (to my knowledge) have ATM’d the house. My neighbors across the street have the same stated goal we do – pay it off before retirement. That’s hard to do if you’re pulling cash out rather than paying off the balance. I don’t see a lot of fancy upgrades in the garages indicating HELOC madness on our block.[/quote]

UCGal, my post above wasn’t directed to any one poster.

I think if you grew up in UC, the OLDEST properties up there might be circa 1968 or 1971. My block was built in 1949. Thus, the “heirs” on my block are probably a generation older than your one neighbor “heir” who cared for his mom. All of the “heirs” I am speaking of here are living on a small FIXED income. This type of income by itself cannot maintain a house and utilities, much less market property taxes. A person with this type of low income can only obtain a “sucker” equity loan or reverse mortgage, if old enough. These “heirs” are too old NOW to EVER pay off the loans they took out on their free and clear “bequest.” (The banks knew this, obviously, but that’s another story.)

Two of my neighbors as “heirs” even qualified for “lifeline” utility rates. One “heir” actually moved out of his van that he had lived in for seven years into Dad’s house, as soon as he died!

Re: maintainence, I’m not even talking about weeds after a rain. I’m talking about real eyesores such as long-unfinished room additions, never-running vehicles, etc. This was all started or parked after the heir moved in.

UC’s younger demographic is evident in that you and your neighbors purchased your childhood home while your parents were STILL ALIVE and you are still employed and have kids in school. My neighbor “heirs” are retired and/or long-disabled with grown children.

Acc. to your post, your neighbors don’t appear to be trying to run their entire households on $800 – $1500 (fixed income) per month.

[Author]

Posts