To start the show, Jason Hartman talks about contracts and how tenants should uphold them; otherwise, the landlords may need an eviction service. He also debunks Peter Schiff’s “The Great Decoupling Theory” and gives out a few points about the Business Insider article, which addresses China’s middle class. In the second half of the show, Jason interviews David Merrill of Nationwide Eviction Services. David shares the benefits of his company’s software platform, allowing investors who self-manage their properties to pay a small fee to file an eviction from anywhere, online. They also discuss which states are landlord-friendly and which are tenant-friendly.
Announcer 0:00
This show is produced by the Hartman media company. For more information and links to all our great podcasts, visit Hartman media.com.
Announcer 0:12
Welcome to the creating wealth show with Jason Hartman. You’re about to learn a new slant on investing some exciting techniques and fresh new approaches to the world’s most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine self made multi millionaire who’s actually been there and done it. He’s a successful investor, lender, developer and entrepreneur who’s owned properties in 11 states had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason’s footsteps on the road to your financial independence day. You really can do it on now. here’s your host, Jason Hartman with the complete solution. Real estate investors.
Jason Hartman 1:03
Welcome to you. This is episode number 719 719. And this is your host, Jason Hartman, thank you so much for joining me today as we dive into a Another handy service for real estate investors. You know, things don’t always work out perfectly with our rental properties, do they? Sometimes we have some bumps in the road. Certainly we all know that as investors, because we manage our own expectations. And we understand that income property is the most historically proven asset class in the world. But that doesn’t mean it’s perfect. It has its problems. And occasionally, if you haven’t had one happen to you yet, you’re going to get a bad tenant and you are going to have to consider whether or not you should evict them kiss. kick them out. Don’t kiss them. boy that was almost like avoiding slip, wasn’t it? kick them out of the property and get a tenant who can uphold their contract and pay as they have agreed to. You got to do this. You got to make people uphold their contracts. And we as landlords, we have to uphold our part of the bargain, too, right? We have to provide a working property that has its appliances working and so forth. And there are two sides to every story out there. But when it comes to a tenant not paying if they’re just simply being a deadbeat, and they’re thinking that, hey, Bernie Sanders said everything would be free. You know, we got to kick them out. And so we are going to talk about another service. That would be very handy if you are self managing your property. But even if you have a property manager, this is a really handy service to it is a nationwide eviction service. Now certainly, you can go and you can just Go online and search and find an eviction service. Sometimes the property manager handles the eviction, but whatever it is the point of this show and the point of all the work we do is to make you a more empowered investor, so that you have tools at your disposal. So you can make choices, you can be efficient, you can make them quickly, you don’t have to spend a lot of time on things. Because remember, ROI doesn’t just mean return on investment. It means return on involvement. And so we don’t want to be spending a lot of time agonizing over these little things. We want to be an efficient business person, in efficient manager of our managers or in efficient self manager. And as you know, if you are a regular listener, I learned many years ago that I could efficiently self manage my property’s from thousands of miles away. I could self manage with tenants I’ve never met properties I’ve never even seen. Again, not perfect, but it can be a very good alternative. You’ve heard us talk about that on prior episodes. And of course at our live events, we’ve gone into self management in detail. In fact, if you are a member for a whopping 120 bucks a year of GHQ online, Jason Hartman University online, then you have heard some of our conference calls where we talk about self management, as well as talking about it on prior episodes here of the podcast. So we will get into that in just a moment. But first, I want to just chat with you. Briefly. Nothing is brief with me you’re thinking right, as I go on my various rants, first, I will chat with you, in an attempt to be brief about this concept that good old Peter Schiff was promoting many years ago about the great decoupling and I have debunked that theory many times. Peters got some good stuff to say. But also he’s been way wrong about a lot of things to anybody who’s predicting stuff is going to be right and wrong, folks. Soon. We’ve got Harry dent coming up on the show. I recorded that episode last week. So you’ll hear what he’s writing wrong about to the great decoupling. Two, what does that refer you ask? If you do not know and you have not remembered me talking about it on prior episodes? Well, what it refers to in this case is the Chinese economy. Why does that matter? You say, Well, it matters a lot because it has a lot to do with the US dollar. It has a lot to do with our trade policy. It has a lot to do with inflationary pressures. Now, the concept is basically this and Peter, you’re welcome to come back on the show and debate this with me and correct me if I’m saying anything incorrectly, but here’s the basic idea that Peter Schiff was promoting money years ago. It’s the concept that look, China is growing their middle class. And that is true. And they are growing their middle class and eventually they will decouple from the US. They will not need the US as their customer. They will not be dependent on us imports well, their exports to the US but our imports here in the US from China, because they could be couple if they can develop, in other words, their own customer base, where Chinese goods can be produced. I mean, there’s massive amounts of Chinese manufacturing. We all know that, as ross perot talked about that giant sucking sound and he was absolutely right. You know, Ross Perot needs more credit. I don’t hear anybody talking about how right he was. He’s probably one of the guys that helped the clinton crime syndicate really become a stablished in the United States, when good old bill was president, right, because a lot of people say he’s the reason Bill Clinton became president was really ross perot. Well, whatever. Lest we go on another of the Jason Hartman tangents here, right. Okay. So the idea is, they’ll create their own middle class economy, and they won’t need us anymore, because they can sell directly to their own population and create an economy within their country. That is not dependent, at least not so much on exports to the US. And what would that mean to China, always try to put yourself in the other party’s shoes, right? Whenever you’re in a deal. Try and think, put yourself in the other party’s shoes whenever you’re in an argument. Whenever you’re in a debate. Whenever you’re negotiating anything. It’s always good to As the old saying goes, walk a mile in that person’s moccasin. It says the quote goes right before passing judgment on him or her. Well, what China would be thinking here is, gosh, if we can decouple from the US, then we don’t have to take all of their rotten dollars that they are debasing. And they are going to be paying us back in ever cheaper dollars, as they debase them, due to their reckless, wanton spending. The spending that ronald reagan says was, what was the saying? He said that, too, to say that the US government spends like a drunken sailor is an insult to drunken sailors. Well, that I’d say is certainly true. And so China doesn’t like this do very well, right? Because they sell their goods, we get the lifestyle benefit. We get the goods here in the US. We pay them in Monopoly money, right fake paper. dollars not backed by anything except aircraft carriers and, and the such that I’ve talked about before people say old small backed by gold Peter Schiff says, whoo, gosh,
Jason Hartman 9:13
these people think we live in like 400 BC, I guess. Yeah, gold. That’s the big thing. We gotta have gold. No, you know, gotta have gold. What you need is the largest military on the planet. That’s what the dollar is really backed by. Alright, unless we get off on another tangent, but there’s a Business Insider article I saw just yesterday. And it’s pretty interesting about the Chinese middle class. So Peter, maybe you’re right. I don’t think so. But let me just share a couple of points of this article. It says China’s middle class is exploding. China’s middle class is exploding, and the article talks about largely due to age The world’s middle income population doubled in the past decade, from 399 million people to 784 million people, according to Reuters. Reuters. I think you say Reuters, even though doesn’t look like that. Yeah, that’s the new service like the AP, right. Okay. China’s middle class is on fire. According to a study by consulting firm McKinsey and Company 76% of China’s urban population will be considered middle class by 2022. That’s defined as households that wait for it. You’re ready, folks. By the way, this is obviously my editorializing not what the article says. But now back to the article. Wait for it. households that earn and this is in US dollars between 9030 $4,000 per year parentheses, that might not sound like a not a lot, but adjusted for prices, it delivers roughly comparable, quote, middle class unquote, existence to other countries. In 2000, just 4% of the urban population of China was considered middle class. Okay, fine. Let’s take a look at how it breaks down. Now, this is a little graph here and it says 2012 and 2022, the projection, right? So this this projection over the course Now, of course, as I’m reading, this is 2016. But I guess the last time they did the survey was 2012. So 10 years between these two surveys, the number of affluent people in urban China was 3% in 2012, projected to be 9% in 2022, upper middle class 14% up To get this 54% Now what is the upper middle class mean? They didn’t define that one, because middle class means 9000 to 34,000 a year. So upper middle class must mean 34 to $50,000 a year, then your upper middle class in China, right? The mass middle 54% in 2012 actually declining, because a lot of them went to the upper middle number, right? Oh, by the way, it has to find this so I’ll be with you in a moment on that.
Jason Hartman 12:35
Oh, that’s not impressive. Wow. Okay. Hang on a moment because I’m gonna blow you away with some numbers here. But a lot of the move from the mass middle to the upper middle, so that’s good news, right? And then the poor in 2012 29% and 16% projected in 2022. But wait, here are McKinsey and Company numbers, the definitions for each of these four classes on the socio economic ladder in China, right? affluent, above $34,000 a year and household income. Now remember, that’s household income. So that could that means probably husband and wife, two parties. If there are any wives left in China, I mean, their one child policy means they have a shortage of females. Yeah. Where are all the women at? Okay? Not enough of those. And that one child policy just horrific, okay, but let’s not get on that tangent, upper middle class defined as 16,000 to 34,000 a year. Wow. That’s upper middle class. The mass middle defined is 9000 per year to 16,000 per year and the poor below nine thousand dollars per year, China had an urban population of 730 million people in 2015. Even if that figure doesn’t change, and it will only grow by 2020, over 550 million people in China will be considered middle class that would make China’s middle class alone, big enough to be the third most populous country in the world, folks. This is so unimpressive. I can’t even begin to tell you. I mean, look, it’s impressive. If you live in China, it’s certainly impressive. And I mean, this is great news that globalization is pulling people out of poverty. As I’ve talked about, you know, I used to say this back in 2004. When I was giving seminars, I used to talk about how globalization has lifted 375 million people around the The world not just in China, but most of it was in China a lot in India and other places. 375 million people out of poverty. This is wonderful. It’s an amazing time to be alive. But does this Bode for the decoupling? theoria? No freakin way, man.
Jason Hartman 15:18
Not even close. Not even close. Not even close. Why? Well just ask yourself, if you’re a Chinese company, and you make widgets, by the way, listeners who do know what a widget is, right? Do you own any widgets? I hope you own some widgets. I own lots of widgets. A widget is simply an economic unit. It’s a thing, a gadget widget, whatever. You know, that’s what the economists call stuff. They call stuff widgets, right? So if you make widgets at your Chinese factory, and you’re now exporting 90% of your widgets to the USA and you’re selling your widgets for $100. And the household income in the US for middle class is, I don’t know, what is it $58,000 a year or something like that I can’t even remember, if it’s 58,000 a year, and the mass middle class in China is 9000 to 16,000. From a percentage of income standpoint, who do you think’s really going to be able to buy your widgets? Yeah, this is great news for China. But if you think that you’re going to be selling iPhones to the mass middle Chinese market, that makes 9000 to 16,000 a year, and you’ve got a $700 iPhone, which by the way, is the real cost of your iPhone. When you take out your calling plan that basically finances the cost of your phone for you And locks you into some rotten carrier. They’re all kind of rotten in different ways. But yeah, this is this, this decoupling ain’t happening anytime soon. That’s my point. And this is good for peace. Why? Because trade is good for peace. Now listen, you’ve heard me many times criticize these trade agreements that you can mostly blame Bill Clinton for and listen. Looking back on good old slick Willy Bill Clinton. I didn’t like him at the time. But looking back I I like him a lot better than I used to. Now his wife. No, please No, Hillary, the criminal known as Hillary Clinton. God, no, please. You know, the Clintons want so established in the world of? Well, the clinton mafia wasn’t so powerful back then as it is today. Anyway, that’s another discussion obviously, but look, folks You’re not likely to destroy your customer. That’s why global trade is good. But the trade agreements are not a very good deal, because our wimpy politicians from Clinton on word did not negotiate very good trade agreements for you. And guess what? That’s why the American jobs market sucks. It largely sucks. And you know, it may not suck in your world. It probably doesn’t if you’re listening to this show, but by and large, there are very qualified people with college degrees, working at retail jobs. Now these are not considered high end jobs. Those used to be temporary jobs. There are people getting you to sign up for the airline credit card at the airport that have degrees in psychology. What I My point being that they’re not using their degrees. They’re driving Uber and Lyft cars. This is not the highest and best use for these people. This is not a good thing, right? But that’s what these trade agreements have done. Now listen, love them or hate them. And I can see why you might want to hate them. But good old Trump ski. The Donald. The you know, the guy with a tiny little ego. Yeah. Anyway, him, he would probably negotiate much better trade agreements for the good old US of A. And that would be a pretty good deal. But you can see why foreign leaders criticized them, because they know he would not let them have these awesome deals they have today. This is a very complicated issue. We’ve discussed it many times on prior episodes, we will discuss it in the future trade agreements, incredibly complex, but basically, it comes down to two essential concepts. You can either have more jobs in America and higher paying jobs in America, or you can have cheap stuff at the store cheap widgets. All right. You can’t have both There’s a lot of middle ground there, though, where you can negotiate. And if our government was actually looking out for the people, it would negotiate better deals for the people. Now, why did I even bring this up today? Because as you know, we talk a lot about the impact of the three basic economic scenarios on our real estate investments, inflation, deflation, stagnation, this matters, this stuff is big, it’s bigger than any of us, obviously, it’s huge. It’s global. It’s massive. And it makes a big difference as to what we will see in our lives in terms of return on investment, overall quality of life, what we can afford, what we can afford. And, you know, by proxy, you could lump Western Europe into a lot of this discussion, you could lump candidate into it, because that’s all sort of to some degree, connected on the same plane, whereas the east and countries like China, that’s that’s the different plane. Okay, interesting stuff here. Let’s talk about property management, and what to do and another thing you can use when you experience some tough times. Again, if you are not familiar with some of our self management training, take advantage of that you can go to Hartman education comm or Jason hartman.com. And take advantage of a lot of that stuff. Also, we’ve got a couple events coming up. Our venture Alliance trip in Seattle is right around the corner. And that’s gonna be a great trip we’ve got I think we’ve got the biggest group ever on a venture Alliance trip. That’s gonna be awesome. That’s in Seattle, check out venture Alliance mastermind comm for details there you can join us as a guest for a one time $2,000 fee. And then if you want something much less expensive. Come join us in Phoenix the following weekend. September 10, and 11th for our Real Estate Software and Buying Event, check that out at Jason Hartman, calm. Okay, let’s go to our guest.
It’s my pleasure to welcome David Merrill to the show. He is Director of Business Development and national account executive at Nationwide eviction. And would it be great if you could have a single provider to help you with eviction services nationwide? Welcome, David. How are you?
David Merrill 22:27
I’m doing well. Jason, hope you are
Jason Hartman 22:29
good. Good to have you. And you’re coming to us from Charlotte, North Carolina. You know, in the past, as we had talked about before, this has always been a one off deal either either property owners could handle the evictions themselves. Well, when they come up, hopefully that’s not too often, but occasionally, it’s gonna happen to all of us. You can do it yourself. You can have your property manager handle it. If you have a property manager and you’re not self managing, or you contact a local attorney service. That is usually set up as kind of a mill where they do flat fee evictions for anywhere from maybe four to $600 or so. And they can do it. But if you have a portfolio in, say, three to five different metro areas nationwide, which is a good strategy for investors to be properly diversified, it’s a little harder because you got to have different parties and deal with different companies everywhere. Now, I assume you’re not a law firm, right? Your company that is correct when I’m not an attorney, and our company is not a law firm. Okay. And so, so you’re, you’re a tech company, basically. And what do you do? Do you match customers with eviction service providers? Is that how you do it? To a degree? Yes, so we’re software solution to that age old eviction problem.
David Merrill 23:37
Tell us more about that. How does it work? Well, it really depends on the jurisdiction where your properties are. So as I’m sure many of you listeners are very well aware, especially if they have portfolios and multiple areas of issues can be handled very, very differently, not just across state lines or county lines, but even sometimes in one business certain city. As an example, the city of Houston has 16 different jaypee courts. And it seems like each one of those courts handles evictions just a little bit differently. So our solution for that is to allow you to file evictions online in a very standard and streamlined method. You file it from anywhere in the country or outside of the country, if you’d rather. And then we provide we send that information to a local attorney or service provider. If you know the courts, they know the laws in that area. And they actually service the case for you.
Jason Hartman 24:21
So So you’re basically a referral networks and right, would that be a proper way to to understand the business model?
David Merrill 24:28
Yes or no. There are some states where you do not have to be an attorney to handle these issues. So in some areas where service providers allowed, so we may use a third party firm, or we may actually handle them ourselves. It just depends on that specific market.
Jason Hartman 24:42
Okay, great. And does the cost vary in different markets? Or is it one price nationwide?
David Merrill 24:48
It varies widely. So as an example, in a city like Chicago, you might see evictions cost. Even with our attorney who handles bulk cases, they’re about $350 per case. As we’ve seen, Since I mentioned Houston, we handled multifamily additions that are for $75 per case or single family evictions for $85 a case, the most popular attorney in that area. We just had a client, leave him and sign on with us yesterday who have been working with that management company for some time that they listed that he was charging him $936 per case plus the Oh my God, that’s outrageous. Wow. I’ve never heard of him. Yeah, Dream examples.
Jason Hartman 25:27
Wow. Yeah. So 75 or $80 boy folks, and 350 in Chicago, that’s actually pretty reasonable to because I’m used to seeing services that are about four to $600. That’s that’s kind of what I’m, I’m used to seeing. But these are all attorney services. Now. When you talk about Houston being 75 $85 that’s not no attorneys required right. And your company is doing that is that strictly a paperwork process or tell us why the price varies so much.
David Merrill 25:59
Well, To be completely transparent, which we always try to do, the numbers that I mentioned do not include court costs, because those can vary from one county to the next beside each other. But essentially, the pricing for the services is going to be the same. So in Houston, when you go online, you need to file your eviction for your property. To take two to three minutes provide us with the information we need for your case, including giving us the documents that we need, will populate the correct forms that you need. And one of the best parts of our value is if you find any evictions yourself or you came property manager who may oversee a single portfolio properties. You have to deal with payment issues, we prepay your court costs for you. And then we’ll let you know when we get the hearing scheduled for we’ll update you with the court date. And we’ll attend that hearing for you as well. One of the things that still surprises me in Texas is that a lot of property managers are wasting anywhere from 10 1520 hours per week or per month. I’m sorry, just dealing with evictions and there’s a lot of other things that could be doing during that time.
Jason Hartman 26:56
Yeah, so you have someone go and attend them. hearing is that an appearance attorney that you’re using, by the way, folks, for those of you who may not know, I only recently learned about this idea, because I’m trying to collect from a guy in Texas right now, actually. And this is not an eviction. This is just on another matter. Then one of my California Attorneys actually told me that there are these people called appearance attorneys where for 65 bucks, maybe 95 bucks, depending on what they’re doing. They’ll just go and appear for you. There are actual journeys, and they all appear at a hearing or even a deposition or all kinds of things for you. I can’t imagine they would be it would be possible for them to know anything about what’s going on in any real detail, but they will appear so that’s kind of interesting. Is that is that how you’re doing it with appearance attorneys or, you know, how can you be in all these areas that’s an incredibly
David Merrill 27:50
complex cases can be handled with appearance attorneys in states like Georgia and Florida. But in Texas when we represent you for your case, not only do We find out the case where the court on your behalf, but our staff attends a hearing for you as well. And the reason we’re able to do that is because of the way Texas law is listed. It allows for non attorney representation so we can provide that service to you acting as an agent on your behalf. And it saves you quite a bit of money.
Jason Hartman 28:16
Wow. So so 75 $85 plus court costs. And I know this varies and you may not know this off the top of your head, but any idea what the court costs are, I just want to get some sense for the listeners. In Texas, it varies from 111 to 131. Okay, so for about 200 bucks, you can get your eviction done. David, that’s fantastic. What about after the eviction? You know, one of the things I see so many investors, just leaving it on the table is they don’t bother to get a judgment against the tenant. Can your company help with that? Or do you strictly get them out and then the judgment is up to the owner to go and pursue that
David Merrill 28:58
we will really try To stay away from the judgment part of it, because there can be so many potential fatal flaws with that. I personally feel that people should go after that as often as they can. But of course, that’s going to be an individual decision. Right? Right.
Jason Hartman 29:11
And just to explain that to the listeners, you know, there, this is really a two step thing, not in all cases, but in a lot of them, you know, the tenant stops paying your rent, and then you file for eviction. And eviction basically just stops the bleeding, you’ll want to get them out. So you can get the property ready and lease it to a new tenant and start producing income again. But a lot of times that tenant is obviously behind on rent, and they owe you money and their security deposit may not, but not always, may not be enough to cover it. Maybe they’ve left some damage to the property too. And you’ve got to pay for that. So that’s when you can go to court and get a judgment against them. And you know, those judgments can be renewed forever. Folks, I’m telling you, you’ll collect a lot of these things. If you if you just pursue them. It’s it’s worth it. Don’t just let them off the hook. You know, too many investors, it seems like they’d rather have a story about how they got screwed over by a tenant than have the money, I’d rather have the money. But, but yeah, that’s true. So you don’t deal with the judgment part, but at least
David Merrill 30:13
you’ll get the eviction done for them. Right? That’s correct. We’ll handle the case from really the end of the, the notice all the way through the writ. And then we’re working on a couple other products. And I’ll be happy to call you back about in the future that may help with other areas of property management, around the eviction areas. Fantastic. Can you give
Jason Hartman 30:32
us any clues on that? Or are they top secret? They’re still top secret right now because they’re in development, but we were very, very excited about them. And one of the products that we’re working on we think is going to absolutely revolutionize the way single family homes are being managed. Wow, fantastic. That sounds pretty darn exciting. This is single family homes, I believe are the most historically proven asset class in the world’s single family income properties done right. And the the part that makes her brain The thing is in the management, that’s the frustration of most investors, you’ve got to learn how to manage your properties, or learn how to manage your managers one or the other. Do you have any thoughts about some of the more landlord friendly markets and, and least landlord friendly markets around the US in the markets you do business? And if you have any thoughts on those, of course, my former home the Socialist Republic of California, very landlord, unfriendly, New York, very landlord, friendly, Texas, very landlord friendly. Any thoughts about that and in different places around the country, Arkansas, the most landlord friendly state in the entire country? In my opinion,
David Merrill 31:42
the thoughts there? Well, you definitely right. And you mentioned a lot of the same states that I would highlight as well. I think that’s one of the things that you look at as you’re buying investment properties. Certainly one of the things that I look at, I would certainly be a lot more interested in buying property in a state like Arkansas, Texas, Florida, Georgia, the Carolinas than I might be in somewhere like Illinois, someplace like New York or Connecticut or Massachusetts, California. And actually just one of your colleagues, Fernando Eric is in California, in San Francisco for the National Apartment Association. And he and I had some pretty interesting talks about that. And in preparation for the tradeshow. I was speaking with a law firm there, the senior partner, and he was telling me about some of the very interesting things that California does to protect residents and I’m all for protecting residents. But ultimately, this is something we’re all doing for investment. This is it’s a business decision. I was very shocked to hear that in California that somebody’s eviction records is actually sealed, I believe it is for 60 days so that they can go find another property. That seems like that’s information that a property manager or an investor would want to know about a potential resident before allowing him to move in.
Jason Hartman 32:47
Yeah, I agree. You know, I thought about that one. And I that’s an interesting that’s interesting that you bring that updated, in a way it kind of helps get that tenant out, though. It may not be a great service to the new landlord. But to the old one, it kind of is. Because if that’s not on their record for 60 days, they can go get another property and get out of yours, you know, so it’s sort of a catch 22 I can see that from both sides. And listen, I’m no apologist for California. There. I mean, it’s just, it’s, it’s ridiculous. Look, it’s my I live there, the vast majority of my life, but it’s a ridiculous state. It’s very hard to do business there. As long as I employed people in California, I swear to God, the state did not want me to employ anybody. They made it so difficult. It was absurd. But yeah, you know, invest in markets that are friendly to your cause. As a landlord, that’s one of the elements. You mentioned, Illinois, and I agree with you that it’s not the most landlord friendly market for sure. But it’s not as bad as some others. Interestingly, and we resisted doing business in this market for a long time, but in some of the Chicago land areas, the deals are pretty good even as mismanaged. And as you Left wing as it is, the numbers are just, they’re good. So, you know, you you look, you look at a variety of factors. And it’s sort of like finding the perfect spouse right? The perfect spouse does not exist princess charming and Prince Charming do not exist, right. But you know, you take a little bit of bad for mostly good. There’s some things that bug you about your, your your spouse, probably, but you know, overall it’s a it’s a it’s a good deal hopefully. And, and then that’s the way it is with a property you’ve got to you’ve got to kind of weigh this stuff out. And it’s a trade there are always trade offs in life. But yeah, some of these trade offs are just too vast. And interestingly, the landlord unfriendly markets tend to have very poor cash flow. So in very bad what I call LTI ratios land to improvement ratios. So they they really don’t make sense in in any way at all. So I just want to know how A couple of features. Tell us about smart eviction technology a little bit, if you would. I know you’ve alluded to this, but is there anything more you want listeners to know?
David Merrill 35:08
Certainly smart eviction technology is a very easy concept. And I did allude to that a little bit. Simply put, that’s what allows you to file your evictions for your Miami properties the same way you would view San Diego properties and the same exact way you would for St. Louis. It’s a standardized form that will adapt itself based on the local needs. So as an example, in Georgia, you do not need a lease a ledger, or notice when you’re filing your eviction. But in Texas, you need all three of those plus an S CRA form. So our system adapts based on what the requirements are there, and also the type of issue you’re doing. So if you’re filing a non payment of rent eviction, that’s going to be very different than what it would be for say a criminal activity eviction.
Jason Hartman 35:50
Yeah, right. So a criminal activity eviction is like a breaking a covenant. If you find that your tenant is your drug dealing out of the property, you can evict them for that even if they’re paying you You know, but you might just negotiate with them and see if you can get percentage rent on the drug dealing, that is a joke. I always thought those meth labs with percentage rent would be a pretty good deal. Listeners just understand that I say some of this stuff for purely entertainment value, okay.
David Merrill 36:22
You know, Breaking Bad. Okay, so it simplifies that process, and makes it easy. How many evictions has your company done? How old is this give us an idea as to, you know, the company a little bit. The concept started back in 2009. When we started doing business in 2010, because we are a private company and we try to keep things, some things close to the chest. We don’t really divulge that information. But I can tell you there are some major markets where we are handling between a quarter and a third of all of the admissions done in those major metropolitan areas. And then when you consider states like Maryland, where Maryland, you may file an eviction on some Several times before you get the judgment absolute, they should give you a pretty good concept that we’re doing quite a few cases every month. Wow. Yeah, I bet you are. Wow. That’s amazing. That’s amazing. You have a video on your website about collections. I know that you don’t handle the judgment part of it. Do you have any suggestions on collections or how people should handle the judgment aspect of an eviction if there is a judgment opportunity, the first thing I always recommend to people is make sure you’re handling all of your cases the exact same way you never want to handle things for one property differently than you handle the previous with the next property. And I think that goes with collections as well. We’re not a collections company. We have an interface with a collections provider National Credit systems, that allows you to file your evictions through our system, and then any information you’ve put in our system will then get sent to NCS when you select it. I really think it’s finding what solution works best for you. So if you are somebody that owns a handful of properties, You’re looking to get more into it, I would definitely send those out to a professional service provider. It’s really good companies that are that mid size range that try to do it internally. I think those may be a good fit in those cases. But most of the time, using a professional service provider like that is almost always going to be your best bet. And especially from what I’ve seen in collections, there are so many things that could potentially go wrong, and potential liability concerns. I’d want to make sure there’s all handled the right way every time.
Jason Hartman 38:26
Okay, so first of all, what do you mean by a professional provider there? What do you mean by that? debt collector hire a collections company is that we mean
David Merrill 38:36
a debt collector, a collections company or an attorney that handles those types of things. We have a great attorney in the Tidewater area, Virginia that does a great job with collections. He is definitely somebody that I would recommend or companies like pro collect NCS rent recovery solutions. All of those companies do a great job and they don’t get paid on it on the collections until you do so it’s in their best interest to be to do everything. They legally can help you get paid.
Jason Hartman 39:03
Right? Right. Fantastic, okay, any tips that you want to give the listeners just on, on anything, maybe something I haven’t asked you just any tips about how to deal with their tenants how to possibly prevent an eviction and, and and make sure that you don’t get there. Of course, that’s your business. So this may be kind of counter to your ultimate goals, but just any any suggestions you have on how to better manage properties, manage evictions and so forth.
David Merrill 39:31
I would definitely recommend use standard forms whenever possible. So that could include something like a notice to vacate all the way through your lease anytime you can use something like that, that’s accepted generally in your area that helps set you up to be successful. And that’s ultimately the best way to win cases like this to either be successful with your eviction or be successful in getting paid so you don’t have to file an eviction. And ultimately, that’s the best case scenario for everybody including for us. So that One of the first things I would say, and then, just because you, you’re about to file an eviction on somebody doesn’t mean that you can’t talk to them. If you have a handful of properties, and you’ve got a relationship with the renters, I would always say talk to them work for them. Just because you’ve provided a notice to vacate doesn’t mean that you can’t accept money from them. In most cases, again, that could vary based on states. But again, try to have a relationship with them. Because if you can avoid filing in the first place, that could potentially save you some money and get you paid. And I’ve heard of people do cash for keys.
Jason Hartman 40:35
Yeah. And I just want to say, okay, that’s a good one. I will get back to that. But I just want to expand on what you were saying there. You said that in in many states, even if they’re in the eviction process, you can accept money from them. Be very, be very careful with that. And I’m sure you would echo this, because, for example, I believe it’s California if you accept any money from them, you got to start the whole process over and that could just be You know, if they give you 50 bucks at the end, and they owe you 3000, you might have to just start over. And that’ll buy them another 60 days, possibly, right? So you got to be careful with that. But I do agree with you keep the lines of communication open. One of the big mistakes when people get into dispute so so many of these things could just be prevented if people would just talk. You know, it’s, it’s, it’s amazing to me how that how that is in the world. But
David Merrill 41:27
any any thoughts there? And then I want to ask you about cash for keys to this. That was a very good point, I think you really covered it. And if somebody knows that you’re willing to work with them, and they’re not one of those people that will just try to take advantage of you because unfortunately, those people do exist. People want to be happy where they are, they want to live in a nice place. And personally, I hate moving so if I can avoid moving, I’m going to do anything I can to prevent myself from having to move.
Jason Hartman 41:52
Yeah, absolutely. Good point. You have a great little sort of calculator if you will, almost on your website where someone can Just go. And they can put in the zip code of the property. And it instantly calculates the fees. And so the fees consist of the the court fees, okay, that are just a public court what they charge plus the attorney or service provider fee. And so for example, I put in my zip code here in Arizona, and I see that the eviction will cost and this is the breakdown $58 as a court fee, $25, Sheriff fee and attorney fee of 135. So that’s $218. And then, if necessary, the writ of possession, and that consists of three things a court fee, a share fee, and an attorney fee, totaling 191. So for both of these, it’s 218 plus 191. Is that how that works?
David Merrill 42:47
That’s correct, in bright, but the writ of possession
Jason Hartman 42:49
is not always necessary, I guess. Tell
David Merrill 42:52
us about that a little bit. It’s not sometimes after you get possession, your resident will go ahead and move out as per the order of the court, but they don’t always do that. Sometimes you do have to have law enforcement, a sheriff or constable come to the property. And you have to physically remove that person from the property. And that means moving your things out depending on the state that can vary based on how you have to store it, how you remove it, and then you change the locks. Unfortunately, we see that happening more often than we think it should. But one of the things that I think partially property managers should do more often is making sure that they’re going through that process. In some states, Texas being a good example of this, you can file an appeal on losing possession as a resident, and do So up until that red is filed. So if I get possession for case today, you can go to the court on Friday, appeal that case, and then you have to hear that case, all the way over from the beginning on a different level court. But if I get that writ filed, how much
Jason Hartman 43:50
how much time how much time would you lose in that case? Would you lose another three weeks or a month I mean that’s that’s could be disastrous for a landlord
David Merrill 43:58
right. It can be in most cases that you are losing several weeks on that process because there’s going to be a prime is money it is, there’s a process to get that scheduled, there are certain steps that can be taken as well. But ultimately, you may be going from a magistrate or JP level court up to a county level, depending on again, what state that’s in. And you’ll see a lot of additional delays. And then when you see other things that happen that tend to be a little bit more resident friendly.
Jason Hartman 44:24
I want to share a mind blowing example with listeners. You know how I did that calculation, and I’m just using your website. This is fantastic. I love this. I’m using your website to do the calculation. I plugged in my old zip code in Orange County, California. And it just shows you landlord friendliness versus non landlord friendliness, right, Arizona being far more friendly than the Socialist Republic of California. You remember those fees I just said a moment ago. This is gonna blow your mind less nervous. Oh, wow. Wow. Listen to this. Remember, there’s two sets of fees. There’s the eviction and the writ of possession if it’s necessary. Okay, so this is in the nine to 660 zip code which is Newport Beach, California. Okay. The court fee get the light like
David Merrill 45:13
the the difference is amazing and I don’t have any other fees in front of me but I did save them just a moment ago. The quartzite in, in in Newport Beach is you had mentioned I believe was $58 for your current zip code in Arizona. And I believe 25 for the sheriff and 131 for the attorney fee.
Jason Hartman 45:31
Yeah, absolutely. So get this ready listeners. I hope you’re sitting down. Because just for the eviction in Newport Beach, the court fee alone is 240 bucks. The sheriff fee instead of I think being $25 or something is now $145 and the attorney fee is $310 the total cost being 695. On both believable and then the writ of possession somewhat in line with the Either of $175 total, but $695 versus I think what we say in the last one 191 or something unbelievable. It was 280 than 195. Wow, just unbolt, that’s insane. That is just insane. So you can go and you can plug in the different zip codes in which you own or thinking of buying properties. And you get an idea that’s a barometer right there for the tenant friendliness versus the landlord friendliness of that court system. Very telling and very interesting.
David Merrill 46:35
Tell us about cash for keys. Now, this is something that if you watch that documentary I recommended or that movie maybe it’s not really a documentary might be more of a movie 99 homes or 99 houses. It’s on Netflix. It’s great. talking all about the ground zero for the foreclosure crisis in Orlando, Florida, which was fascinating. And you know that during the Great Recession, lenders, giving borrowers or tenant occupants of properties that were foreclosed on what’s called cash for keys to just get them to move out was a common practice. And people also occasionally do it with tenants as well. And the more landlord friendly the market, the less likely you’ll have to do this, the more tenant friendly, the more likely you might have to do something like this. Any thing you want to tell us about cash for keys, I don’t hear about it very frequently. And my first exposure to it was before I got into the industry, I was during the end of the economic boom and the beginning of the Great Recession. I was dating a foreclosure attorney and she told me that she was doing this with a couple folks that they were just offering cash for keys to get people to move out of foreclosure properties. And the concept just amazed me and then I saw the same thing happened to one of my best friends. The property that he lived on in Wrightsville Beach, North Carolina. The owner of the property wasn’t paying a mortgage to the property was being foreclosed on even though he was renting it and paying rent. So the foreclosure company offered them cash for it. And they were out within 10 days. Yeah, yeah.
Jason Hartman 48:03
It’s money makes the world go round. It sure does. Yeah, good stuff. Well, David, let’s wrap it up. give out your website. Any closing comments you have,
David Merrill 48:12
you can always find us nationwide eviction. com www dot nationwide eviction calm. And I think the final best practice that I really do want to offer to everybody is set a standardized eviction filing date. Depending on the state, you may be able to file evictions as early as eight, sometimes sooner than that. But the faster you file your eviction, the faster you get to court, the faster you get that non paying resident out, and the faster you get somebody back in that property that will pay you rent. So definitely something I recommend is very, very highly. And if you’re doing these evictions yourself, that’s fantastic. But just ask yourself, what else could you be doing with that time? Absolutely. There’s always that opportunity cost question and that highest and best use question. And this is not the best use of your time.
Jason Hartman 48:57
So this is a great service. I’m really glad we had you on the show. And I think a lot of our, our clients will be interested in taking advantage of it. Thank you so much for joining us, David Merrill.
David Merrill 49:05
All right. Thank you, Jason.
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