Will renters strike on April 1? Investment counselor, Sara, joins Jason on the show today to discuss recent market changes and available properties. Interestingly, mortgage rates are on the rise while Fed Rates drop. You’ve heard of trickle-down economics, but let’s discuss trickle-up economics right now. Lastly, the expectation for a home is shifting slightly, as home offices become a much-needed accessory.  

Key Takeaways:

[2:10] Fed Rates drop but mortgage rates go back up

[3:00] Non-owner-occupied investor mortgage rates are different than primary residence mortgage rates

[6:30] Commercial real estate is to be considered more-so a business, and less-so an investment

[12:15] Trickle up economics

[13:17] Property Update: Mobile, Alabama $95k with rent of $950

[15:00] Will there be an expansion in Section-8 housing?

[19:10] The ratio of bathrooms to bedrooms is no longer the same in this world

[21:05] An investment property in the longest-running market for JasonHartman.com: Indianapolis, Projected Cash Flow $259/month

[24:00] On a budget new investors, keep waiting

[26:50] Reach out to one of our investment counselors, ‘therapists,’ for pandemic investing

Key Quotes

Single Family Homes versus Apartments

One of the things I’ve told you when you compare single-family homes to apartments, is that when you have an apartment, even if it’s a small 10 unit apartment…the thing that you have to understand is when you have an apartment complex, you are running a business. It’s much less of an investment and much more of a business. And your business, just like every other business will have a Yelp page where people review it. It will have a Google review page. And all of those tenants, because they’re all together, will be talking to each other. And they can form little gossip groups, form mutinies, do rent strikes, and all this type of stuff.

Single-Family Diversifies Risk

We’ve been saying for years and years at our conferences and on the podcast, not to have all your eggs in one basket. If you’re going to buy a 10-unit apartment building, why not buy ten single-family homes and diversify and be in different markets. I feel really good about that message given the current environment.

If Your Tenants Rent Strike, Call Your Lender

In the current environment, the tenants do have an upper hand. The owner says it’s her sole source of income, which leads me to believe that she’s either paid this property off and it’s free and clear, or it has a fairly low mortgage balance.

She’s put herself in a position where she has lots of positive cash flow. I know that sounds weird, folks. It’s not weird. The better thing would be to have minimal equity and moderate cash flow, because the first thing she should do if I were able to respond to her posting on Facebook is I would say “call your lender and tell the lender”.

Look, this is exactly what happened during the Great Recession. We basically had trickle up economics. In this example, the tenants are losing their jobs. Then they go to the landlord and now the landlord gets hit. Now the apartment owner passes the hot potato to the lender and they say “lender, this is your problem”. Then the lender goes to the government and gets a bailout for $2 trillion. So it’s not going to be their problem. So pass the hot potato. If you own this property free and clear. Or if you have a whole bunch of equity. You can’t pass that hot potato.

Put yourself in the position of power. That’s what we’ll help you do. All of our investment counselors are trained to consult with you on this stuff.

Websites:

TAX SALE Webinar Link

www.JasonHartman.com/Properties

www.JasonHartman.com

Jason Hartman PropertyCast (Libsyn)

Jason Hartman PropertyCast (iTunes)

1-800-HARTMAN