Any Landlords?

There is potential for people gaming anything and everything where money is involved. From the pulpit to political and charitable donations, to taxes, there will be "gaming." As long as people are involved, there will be problems. That's life.

Tenant Bob apparently can do anything he wants with his money. However, I think some percentage has to be paid to Landlord Lucy. I thought that was a stipulation in the moratorium.... I dunno. Tenant Bob is supposed to be experiencing some kind of hardship.... loss of employment, ideally Covid related. Again, I dunno.

I was looking at your chart, and I would have liked to see who is putting the stimulus in savings, and who is using it towards food and housing. Tenant Bob is most likely spending it on essentials, food. People like me, who don't need it, just set it aside, wait for the Covid to go away, and will spend it on vacations or some new toy.

As to what happens in the end, when the moratorium ends, who knows. Will Tenant Bob skip town? Anyway, unless there is divine intervention, it is extremely unlikely that Tenant Bob or anyone who has not been able to pay their rent for months obtain the wherewithal to pay all the back rent to Landlord Lucy. They might also lack motivation. Garnish wages until debt paid perhaps????? Landlord Lucy needs an advocate in high places. I have an idea, rollback those tax cuts given during the previous administration to the very rich and famous and divvy it out the revenue amongst struggling landlords (and bar owners and restaurant owners).....

Edited 1 time(s). Last edit at 02/18/2021 10:24AM by 1forum1.

Create an Account or Log In

Membership is free. Simply choose your username, type in your email address, and choose a password. You immediately get full access to the forum.

Already a member? Log In.

@shoptastic wrote:

@1forum1 wrote:

Seems like that $1400 dollar stimulus non paying renters receive should be redirected directly to their landlords or something for example.
This was the most recent stimulus check usage polling I could find:

I mean, if the $1,400 stimulus is needed because they can’t pay rent, they were a problem even before COVID. Are we forgetting that if work is an issue, there was a $600/week stacked on top of state unemployment last year? And now it’s $300/week, which will offset most people earning lower incomes to essentially make what they’d normally make if they were working their normal hours?

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 31 year old male and willing to travel!
Tenant Bob has bills that need to be paid this month, unlike his rent.

Tenant Bob has a car. He cannot get a stipend for gas, but he can skip a few payments.

Tenant Bob can get food from a food bank every month at no cost to him. Tenant Bob has to pay for gas and electric to keep and cook his food. These utilities have to be paid this month or next.

Tenant Bob has a few credit cards that were well managed at one point. Not any more, for various reasons.

Tenant Bob has internet, cable and a cell phone bill. Are these necessities? I say yes, most say no. Those bills have to be paid.

When Tenant Bob tallies the bills that he has the the best interest in paying, it is likely that some bills will always get paid and others will not.

Tenant Bob knows where his stimulus/unemployment/pandemic funds are going.

"There's so much trouble in this world; surrounded by miracles" - Citizen Cope
Here’s another aspect on real estate... Is leveraging it to pull equity from your property via Cash-Out, Refinance. Recently, I refinanced 2 of my properties, so here’s the breakdown of one of my properties with actual numbers:

2018:
- Purchased the home for $303k with 25% down (~$75k), 30 year fixed conventional mortgage.
- Total mortgage payment was ~$1,400 for principal, interest and escrow.

2021:
- Principal is now down to $244k just paying the bare minimum $1,400 mortgage over the past 2.5 years.
- For a max cashout refinance for a owner occupied home, you need 80% Loan-To-Value (LTV). Will explain below. For a rental, LTV is 70%.
- Refinance will still be a 30 year fixed conventional mortgage.
- Proceeded ahead with loan process and came back at $384k appraised value.

This means... 80% LTV = $384k * 0.8 = $307k.

Thus, “new mortgage” - “old mortgage” = cash out
$307k - $244k = $63k cash out, tax free.

And of course, close out costs. You can tinker with the interest rate, but paying more in close out for a lower interest rate, or the other way around.

In the end, closing costs will be ~$12k, but mortgage payment (principal, interest, escrow) will be -$1,600/month. And $63k -$12k = $51k cash in my pocket when it’s all said and done, and the mortgage reset to 30 years again.

And then if the house appreciates again, I’m going to repeat the process and pull cash out.

So the benefit of refinancing? You try to maintain a similar mortgage payment as your expense, write off the mortgage interest off your tax returns, and pocket equity you “cash out” with and is tax free.

Many people don’t like this mainly because cashing out and refinancing is optimal when you “reset” your mortgage back to 30 years. But my view? Pull the cash out with a similar mortgage payment, then use that money to make you more money (stocks, buying more real estate, etc.)

Hope that helps give you guys insight on the power of real estate!

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 31 year old male and willing to travel!


Edited 1 time(s). Last edit at 02/19/2021 04:41AM by Tarantado.
What was the interest rate on the mortgage in 2018? And the rate on your new mortgage? I'm guessing it was probably a couple of percentages higher in 2018. I know current rates on a 30yr fixed is in the 3% range. The plan is easier to work if there is a change in rates from higher to lower. I think we can plan on rates slowly rising in the upcoming years.....as the economy becomes more normalized.
@1forum1 wrote:

What was the interest rate on the mortgage in 2018? And the rate on your new mortgage? I'm guessing it was probably a couple of percentages higher in 2018. I know current rates on a 30yr fixed is in the 3% range. The plan is easier to work if there is a change in rates from higher to lower. I think we can plan on rates slowly rising in the upcoming years.....as the economy becomes more normalized.

2018: 3.8%

2020: 2.6%

I mean.... My main property that I’m also refinancing again have been pretty low too....

2013: 3.5%

2020: 4.3%

2021: 2.6%

On my end, I guess I’m used to rates always being under 5% my entire time being an adult, as I’m a millennial.

Overall, the percentages haven’t budge that significantly. The main factor on why cashing out has been worth it has been more so due to appreciation of the property values. It’s actually been pretty crazy that I literally just refi’d last year in one case and somehow still pull out $70k+ since the appraisal came be another ~$85k-ish higher from just last year. That’s just the reality of the Denver market as it hasn’t honestly stopped booming since 2011? Crazy times we’re in....

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 31 year old male and willing to travel!


Edited 1 time(s). Last edit at 02/19/2021 11:42AM by Tarantado.
Sorry, only registered users may post in this forum.

Click here to login