|
So given how insane 2020 has been so far, it's nice to get some good news from ABC News, ABC News looked at data from the following states: South Carolina, Montana, Georgia, Mississippi, South Dakota, Arkansas, Colorado, Idaho, Iowa, North Dakota, Oklahoma, Tennessee, Texas, Utah, Wyoming, Kansas, Florida, Indiana, Missouri, Nebraska, Ohio. Nice. That being said, this doesn't sound like what would happen in a massive, super-deadly pandemic.
Yeah, I think it's pretty damn obvious we waaaaaaaaaaaaaaaaaaaayyyyyyyyyy overreacted to this.
This is probably the most depressing topic regarding property management there is. No one wants to do collections and no one ever wants to evict someone, although it is. That being said, collections are still part of the job. On this video, my brother Phillip and I discuss how to systematize it so you are not treating people unfairly (and possibly illegally) while collecting what's owed to you and staying sane in the process to boot.
Check it out!
This is a great video from Charisma on Command (which is a great Youtube channel which I've highlighted before by the way) on how to increase, and more accurately, properly use
My latest article for BiggerPockets is up on why and how to screen potential tenants. This is not the most fun topic, nor is it pleasant to turn someone down for a rental. But it's definitely critical to do and master. (And you should consult your local laws and talk to an attorney to make sure you are in compliance with the law.)
As I note, You can’t accept everyone and expect to have good residents, and you can’t simply wait for the perfect prospect to come around and expect to ever have an occupied property. Tenant screening is a balancing act—and it’s a balancing act for which you need to determine the rules ahead of time.
The article also has the following video that goes over the same information for those who like to learn by hearing. But why not both? Check out the article here too.
The Coronavirus and subsequent lockdowns decimated the US economy, sending unemployment spiraling to 14.7 percent, the highest its been since The Great Depression. Despite unprecedented government stimulus and bailouts (much of which found its way into the hands of giant corporations), many small businesses failed. Indeed, you can easily order something on Amazon during a lockdown. You can't go down to the locally owned store when it has been deemed "non-essential."
Entrepreneur Dan Price sums up this disaster as well as anyone could:
As The Street noted going into the Coronavirus lockdowns, small businesses were not prepared for this kind of shutdown,
According to a widely cited 2016 study by JP Morgan Chase, half of all small businesses have enough cash on hand to survive for only 27 days without new money coming in the door. The bar and restaurant industry tends to be particularly vulnerable. The average small service business has enough money on hand to survive just 19 days without any income.
Then there's this from a Chamber of Commerce survey at the beginning of April,
On the other hand, here's how Amazon and Wal-Mart performed over the last three months alone:
An annualized growth rate of 134% and 61% respectively. Not bad at all!
Then, on top of that, you have the recent protests-turned-riots over the last few weeks to exacerbate this issue. (And yes, George Floyd was murdered. I'm glad the cop who did it was arrested and he should go to prison for a very long time. But that's not the topic of this post.) Many of the stores and businesses that have been looted and burned were small businesses, most of which were probably already struggling from the Covid-19 lockdowns. Yes, an Autozone was burned down and a Target looted and CNN's headquarters were attacked. Many big companies were hit too, but they'll be fine. Insurance will cover their losses. And insurance will cover the losses of small businesses too... but only to a certain degree. Insurance policies have deductibles. Autozone can cover their deductible easily. Can Joe and Tracey's Antique Shop cover their's? In most cases, deductibles will be $5000 plus. Furthermore, looted shops will be unable to do business for some time. Insurance policies usually (but not always) cover such operating losses... but only for a certain amount of time. Will it be enough for all of them? And what if the areas these businesses are in lose a substantial amount of foot traffic for a long time afterwards? This is almost bound to happen and will hurt their sales even more. Small businesses are in really bad shape right now. The Internet and technology made it much easier to manage and operate huge firms and that, along with a wave of mergers, has lead to a general trend toward industry consolidation for quite some time leading up to 2020. The Coronavirus and subsequent lockdowns sent that trend into overdrive and the recent riots will only make things worse. This is something we need to be very vigilant about. No one should support a handful of super firms dominating the entire marketplace. Vibrant economies and successful countries have a strong small business sector. And we are in danger of losing ours. My new article for BiggerPockets lists the first ten books I would recommend a new real estate investor read and in which order to read them. This is my recommendation:
I think that's a pretty good list and give reasons why I recommend each list. And then I go on to recommend the next 10 in the "honorable mentions" section at the end. Check it out!
So where do we go from here? Cities and states are reopening all over the United States and entrepreneurs and real estate investors are looking at a changed landscape. Many small businesses went under, the markets are in turmoil and there are still risks of Covid-19. So how should we approach this situation? That's our topic of discussion on this episode of The Good Stewards Podcast:
Episode 27: Building a Business
Episode 28: Are Real Estate Values Changing? Episode 29: How we Got April Rents to Match February Episode 30: How Has the Mortgage Industry Been Impacted By Covid-19 Episode 31: Are Airbnb's a Good Opportunity Now? Episode 32: Never Let Money Stop You Episode 33: Apartment Due Diligence Should be Done Episode 34: Why We Sold a Couple Properties Episode 35: Developing or Pivoting Your Business Strategy Episode 36: Due Diligence
I've complained before about these fake gurus selling $2500 courses to people who have no idea what they're doing for real estate before. Unfortunately, these clowns are back.
And they're not just in real estate. That embarrassing Tai Lopez "Here in My Garage" video apparently started this Godawful trend and those awful tech companies who love censoring just about everything they can find that ain't "woke" will let these gurus ads go just fine because, well, they're getting paid too. This video by James Jani is the best breakdown I've seen on these fake gurus scam artists. Before even considering one of the "education courses" you absolutely must watch this: This was a response I gave on Facebook (see here) to the argument that Trump's milquetoast Executive Order on social media censorship was "increasing regulations," and doing so "on free speech." And further, that private businesses "should do whatever the hell they want, so long as they aren't discriminating against a protected class. Private business owners have a responsibility to their customers and shareholders -- not the government."
Yeah, I wasn't impressed. I have to disagree. After all, having "protected classes" in the first place is "socialism" by this definition. So would prohibiting the sale of heroin to 10 year-olds. And while I have criticisms of civil rights law and lots of criticism of the War on Drugs, those are still major government restrictions on private business. I think this line of thinking fails with the tech companies for a few reasons: 1) The above, such regulation is not out of the ordinary given other regulations. 2) Twitter, FB, etc. are close to monopolies and these handful of tech companies based mostly in Silicon Valley dominate traffic. Given network effects and economies of scale, this is unlikely to change soon (plus many startups competing with them have had payment processors cut them off). They are basically the public square and resemble something like a utility. (Good luck starting a competing power company in you city.) A utility company can be private, but it can't choose its customers. No utility company can turn off someone's gas or water because they are a dissident, hold unpopular opinions or like spreading conspiracy theories. 3) Many of these companies are only sort of private. Pretty much all have taken big subsidies from the government, some started from government grants (i.e. Google) and have big contracts with government agencies, particularly the intelligence agencies (like Amazon with the CIA). They are very much tied into the establishment and somehow I doubt they would have censored opinion pieces about "Iraq having WMD" back in 2002-2003 as "fake news" and "conspiracy theories." And 4) Section 230 of the Communications and Decency Act separates out platform from publisher. If they want to have an editorial policy (other than direct harrasment, illegal activity, etc.) then they need to lose the label of platform and be subject to all the same liability every publisher is subject to. Of course, the number of lawsuits that would come at them would be close to infinite and they would be bankrupted. So they exist in this grey area, allowed to censor and suppress certain types of dissent, unpopular opinions (or sometimes popular opinions) and bias things toward the woke but establishment left that's so popular in Silicon Valley, but do so while being protected as a platform. That's just corporate welfare. I could add a 5th too despite this post becoming obscenely long. Google in particular is becoming something close to the "government of the Internet" with enormous powers to sway elections and public opinion. Back in the 18th Century, the East India Company became the government of India until the Sepoy Rebellion. Yet I doubt anyone would say, they were a private company so no one should be telling them how to run their business. It's not a perfect analogy, but given Google gets 90% of search traffic, it's definitely worth pondering how much power we should let one company like that accumulate. |
Andrew Syrios"Every day is a new life to the wise man." Archives
August 2018
Blog Roll
Bigger Pockets REI Club Tim Ferris Joe Rogan Adam Carolla MAREI Worcester Investments Entrepreneur The Righteous Mind Star Slate Codex Mises Institute Tom Woods Consulting by RPM Swift Economics Categories
|
The Blog of Andrew Syrios
RSS Feed
