We discuss how COVID19 is impacting College Towns, Senior Facilities and Low Income Housing.
We discuss how COVID19 is impacting College Towns, Senior Facilities and Low Income Housing.
Have you ever dreamed of owning a rental property, flipping or opening a successful business people. Are you ready? Meet your personal coach and trusted attorney Andrew Lieb, ready for leave on the loose go. We'll help you get started in building your real estate empire. Grow your self confidence. Find your grit and get the skills needed to dominate the real estate world. Your applier is real estate investing with Andrew Lieb.
Andrew Lieb (40s):
It's the weekend. I wish that this weekend would just not end. This is Andrew and Lauren Lieb with real estate investing with Andrew Lieb. It's just glorious to be on the weekend. I could just do weekend forever. And I'm going to tell you why in such a good mood, Lauren, this guy, Brad Hunter wrote an article in Forbes that made me happy bread. If you don't know, as a housing economist and he tracks and forecast housing demand, he's been doing this for 35 years and he advises home builders nationwide. Here's what Brad writes in Forbes and Forbes.
Andrew Lieb (1m 11s):
You know, this where the smart, rich people read. So I'm going with that. Well, when I was little, my father used to have, he would get these magazines. You have money magazine, have Forbes and put it on the counter. And I used to think, I don't know if he ever read them, but just putting them on the counter made us feel sophisticated until I found out that you have to pay to be in there. Well, let's talk about that a whole different day. Like I was in some of these magazines, they're like, would you like to give us $10,000? And anyway, so Brad writes this article and I don't know if Brad paid because it's a good article. So Brad writes the rental housing outlook is bright, but look below the surface.
Andrew Lieb (1m 46s):
And so what he does is he goes and crunches the numbers and he tells you why. And I like rental housing being bright. And so I'm gonna give you some highlights this article, but if you're a real estate investor, I recommend you picking up Brad's article in Forbes because it gives you real data. And, or you could just use your brain as I'm going to show you in 10 seconds already. So Brad, first of all says that rental housing overall is not seen as being as, as bad shape as commercial real estate doll. Like, think about that for a second. Commercial real estate is not opened everywhere. It's still closed.
Andrew Lieb (2m 16s):
There's restaurants that went out or small businesses that went out. Yeah. Commercial is having a hard time. We were just debating. If the bowling alley is ever going to open again, like we were driving by the bowling alley, like commercial real estate. Even when you are open, I still got people working from home. They got health issues, they got things and there's articles about. But anyway, he says that rental housing is doing better. Well, yeah, because rental housing is where you have to go when you, they tell you to stay at home. So that's a real way to go somewhere. Like the entire policies have been, go stay in your home. So if you don't have a home anyway, so then here's some interesting tidbits that he gives us as he's going.
Andrew Lieb (2m 49s):
He goes co-living and micro units are murky. If you don't know what a co-living our micro unit is. That means when you live on top of each other, we're in this pandemic where you have to stay six from each other. So the hardest hit of the residential market are Columbian. Do you remember? We had this buddy that came to our house. He's a, he lives in Connecticut and he came to our house in the stand, I think last year or the year before. And he was like, I'm brilliant. He was thinking so smart, not me. He was thinking he was so smart. And he's telling us about how we work. You know, we work, what they do is that they rent big spaces from big commercial landlords.
Andrew Lieb (3m 25s):
And then they sub them out into small, different units that give services. And like they had the free beer. I think they stopped the free beer. That was my favorite part. And they had, it was great. So he was going to do this for housing. This is happening in San Francisco. Actually, when I was on the show would Dottie Herman. When we were co-hosting iron real estate, our cohost ACE was investing. He was talking about investing in these people from California, that we're going to bring it to New York. And I said, at that time, I said, good luck. We're getting zoning. That's going to allow you to have all these people living in a small little shoe box because we have rules throughout all of New York that it's based on people per bedroom or people per square foot in the city.
Andrew Lieb (4m 4s):
And I was like, it's just never going to be allowed on zoning. But anyway, he's saying that these units, assuming they are allowed are problematic. Well, I didn't need a study to tell me that in COVID what are you going to do? You know, live in like a youth hostel, tell them what these units are like.
Lauren Lieb (4m 16s):
The concept is it's a luxury hostel. So people who are, you know, in college or after college, they travel around the world. They co live together and they have no problem not having their own place. That's exciting for them. And so the concept take into big,
Andrew Lieb (4m 30s):
It's actually the opposite. Well, not opposite. More of what you're saying. You're saying that they don't have no problem living in small flips space when you're out of college. If you remember, you want to live on top of people, the idea is to have as many people, you could be lying on top of as possible. And these hostels, you could end up on the wrong bed someday. Like it's good times. But the thing of it is Lauren is that when you have a pandemic where they're telling people to stay away from each other and you know what else he says in this article, he says, student housing is a bad place. They're not doing well in student housing.
Lauren Lieb (4m 58s):
Yeah. Think about every single college town. You have your main campus. And then outside of the campus, within a mile from the campus is these little houses that rent to students.
Andrew Lieb (5m 7s):
And I was in Indiana. Our favorite, most important thing was moving off campus like,
Lauren Lieb (5m 13s):
Yeah. Yeah. I went to university of Michigan and freshman year, you lived in the dorm sophomore year, you lived outside of the dorm and you lived in one of these homes or you lived in a sorority or fraternity house either way. You were in house. And the house was owned by a real estate investor and they rented it out to the students.
Andrew Lieb (5m 29s):
And I want you to know it's a great investment traditionally, because you get new tenants every year, there was always demand for it. And when you have one person has to pay rent, it's a challenge. But if you put 15 people in a one bedroom and hold the house up with ticky tacky, it's fine. And students don't care to live in filth. Like they actually care about location. If it's and location doesn't mean anything besides close to bars.
Lauren Lieb (5m 50s):
Yeah. How far is it from bar? Can I walk home? Can I have keg?
Andrew Lieb (5m 55s):
So I moved out of my fraternity, Ashley Lauren, and my mother was like, why are you moving out of your fraternity? It's going to be a bummer. So I moved in with two roommates and a kegerator. It was the way to go. We would forget to buy milk sometimes. And we'd have Cheerios with beer. It was Ryan. You listened to the show with one of my roommates, Greg Ryan. And he, he and I, we would have beer with, and you know, beer is very healthy. It's got the weed in it and it's, it's good stuff. So anyway, here's the thing, a landlord for these housings, they're going to have all sorts of problems. They're gonna have all sorts of problems. Why?
Andrew Lieb (6m 25s):
Because now they're saying all the classes are online and yes, you read, you read something about how they're dealing with dormitories now. Right?
Lauren Lieb (6m 32s):
I heard that some colleges are only allowing one hour increments for move into dorm. So you get your 12 o'clock to one o'clock time stamp. You go and you have to close door. I mean, what kind of life is that?
Andrew Lieb (6m 44s):
I guess you could see it when you're acclimating to college. But if you were going to move off campus, you can't go to the bars because I don't know if you remember, but bars, the whole point is to be in someone's face. And it doesn't work real well with COVID. And so you can't have house parties because of COVID and you can't go to class because all the online classes are the way to go. So I think the demand and don't misunderstand, I'm not saying there's gonna be zero people living on campus housing, but you're gonna have a great percentage of parents going to their kids. You're not going back to college, even if they do open, because going back to colleges, looking to get COVID.
Lauren Lieb (7m 17s):
Now psychologically, a lot of parents still want to send their children to college because they are fearful of their mental health. But the demand will still say, stay exactly the same.
Andrew Lieb (7m 27s):
Well, it's going to go down is what you're saying. The demand is going to go down. So we're not saying no one's going to because people, they call us up and they go, well, I listened to your show and people are still going to college. We're not saying it's going to be zero. We're saying to you that when demand goes down, that fact that you're a landlord means you're going to have higher vacancy rate. You're going to have harder collectability rate. And your rent's going to go down. Another place that this guy is talking about. Brad Hunter Z says senior housing is going to be a problem. Why? Again, because in senior housing, people are nervous that they don't want to live in a congregate facility. They don't want to live up on top of each other,
Lauren Lieb (7m 59s):
Petrified to send a parent to a senior facility right now. It's just, it's like a COVID spread. I'd want to have them home with maybe a health carried or something. But
Andrew Lieb (8m 8s):
It's a key from Brad's article. You want to be in single family houses. That was the dog. Like I said to you, I didn't need to read Brad's article. The key is that everyone's leaving the city in droves right now. They don't want to live in condos and co-ops and they don't want, they want to get a big house. They want to get lawn. Bidding Wars are going everywhere. The theme of today's show is we're going to be having a lot of talks about these bidding Wars and how appraisals are problematic. And you can have an offer, an acceptance. You make an offer on a house. So you go to buy the house. They say yes, on the house. And before you blink, someone makes a higher offer.
Andrew Lieb (8m 39s):
And guess what? An Ona means, nothing until you're in a written contract. In most States, they have this law called the statute of frauds. Lauren. The statute of frauds has been around since the 16 hundreds, as an act of parliament in England. And the point of the statute of frauds is to say, Hey, oral, for real estate, aren't valid. They could be fraudulent. They could be problematic. We need a signed writing. And so when you just get an offer an acceptance on a house, that means an agreement to agree. Well, an agreement to agree is an unenforceable agreement. So at the end of the day, there's just demand everywhere for these single family houses.
Andrew Lieb (9m 12s):
I'm gonna tell you what landlords of single family houses are doing. They're saying, how do I retain my tenants? Because I want to keep my tenants there's issues with showings right now. I keep getting calls from clients that go the current tenants, not letting perspective tenants come see the place they're obstructing it. They're becoming a problem. And they go, can I do anything about it? And I go, well, what are you going to do? Are you going to Sue them? Are you going to go spend $5,000 to Sue your tenant? And by the way, assuming the judge says that they have to let it months later when the judge finally hears your case, assuming the judge says, do you think they can leave it without their smelly socks everywhere?
Andrew Lieb (9m 46s):
Do you think they're going to make the place appetizing to so here's what operators are doing. They're offering tenants payment plans. I have a body that told me on one of his rentals. He said to the tenant, if you can't make a, give me a payment plan and the guy was like, why would you do that? And he goes, because you know what? I'm trying to make it work for you. So you work for me and you know what the tenant did for my buddy gave him the money. The two weeks later, he goes, you know what? You looked out for me. So I'm looking out for you. They're waiving late fees. They're giving discounts. If you give an on time payment, they're accepting credit card payments. They're allowing security deposit conversions.
Andrew Lieb (10m 18s):
We talked about in New York, how that's a law that you have to allow them to convert a security deposit to a rent payment. There's all these goals that people are doing to try and make things work out. But the key is the single family houses. We own one of these single family rentals and they are booming. I'm going to tell you what new York's doing now, Lauren, they just created a new law, the COVID rent relief program, and it's available right now. The COVID rent relief program. And what it is is it's a subsidy to help a rent burden for four months up to four months. And what they're talking about, what is a rent burden?
Andrew Lieb (10m 48s):
If your income goes down as respect your rent, meaning your income gross income, how much money you're making in relationship to the amount of runoff they have this program that's funded by the cares act, and it's going to be available. It's going to be available for only a little time longer. So what I want you to do is if you are struggling, you're out of work and you're saying to yourself, I need relief. Your landlord wants you to ever leave too. So landlords, please tell your low income tenants that need this. What they need to do is they need to go onto the New York state website.
Andrew Lieb (11m 19s):
I'll give you the website, each CR dot N y.gov forward slash RRP. Or you can just go to the COVID rent relief program because we want to keep people in their single family housing. We want to keep them there. We want to keep the landlords getting paid. And when you stay with us, we're going to talk about this astronomical demand. After the break. This is Lauren Andrew Lieb. We'll be back in a few seconds.
0 (11m 41s):
Have you ever dreamed of owning a rental property? Flipping our whole opening? A successful business is real estate investing with Andrew Lieb.